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TA19

 

IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984

 

TA.19 of 1987

IN THE MATTER OF A REFERRAL FROM ANOMALIES CONFERENCE N0. 6 CONCERNING THE ABATTOIRS AWARD AND THE MEAT TRADES AWARD

   
 

RE: FORMULA USED FOR STATE WAGE CASE ADJUSTMENTS TO PIECEWORK RATES

   

COMMISSIONER R.K. GOZZI

HOBART, 17 December 1987

 

REASONS FOR DECISION

 

APPEARANCES:

 

For the Australasian Meat Industry Employees Union,
Tasmanian Branch

- Mr J Swallow

   

For the Meat and Allied Trades Federation of Australia,
Tasmanian Division and the

Tasmanian Confederation of Industries

- Mr T J Edwards with
  Mr M. Flynn

 

DATE AND PLACE OF HEARING:

 

15 September 1987
18 November 1987
11 December 1987

Hobart
Hobart
Hobart

   

This matter was referred to me by the President, as an arguable case, from Anomalies Conference No. 6 held on 24 July 1987, and concerns an application by the Australasian Meat Industry Employees' Union, Tasmanian Branch (AMEIU), for a revision of the formula used to increase piecework rates in the Abattoirs Award and the Meat Trades Award consequential to increases being granted in State Wage Case decisions.

This formula was introduced by decision of, as he then was, the Chairman of Wages Boards, Mr J. Miley, and has been utilised for each State Wage Case increase granted since that date by the agreement of the parties and at their request.

In essence the formula provides for the increases granted to the appropriate weekly wage rates to be divided by the piecework weekly tallies, in order to calculate the increases to be passed on to the piecework rates.

When flat money increases are awarded in State Wage Case decisions, a formula of this kind is required in order to calculate increases to the piecework rates.

However, when percentage increases are awarded application of the formula results in the piecework rates being increased by less than the full percentage prescribed.

This occurs because the formula is tied to the weekly wage rate which is inevitably lower than the weekly return for processing the piecework tally (i.e. the awards provide for an incentive for working piecework).

Whilst the AMIEU is agreeable to the continued use of the formula where flat amount increases are awarded in State Wage Case decisions, Mr Swallow now argues:

1. that the formula should be dispensed with where State Wage Case increases are expressed in percentage terms. (i.e. that the percentage awarded should be directly applied to the piecework rates concerned); and

2. that the application, to date, of the formula has resulted in a decrease in the 'percentage penalty (incentive) gap' between the weekly wage rates and the weekly returns for processing the piecework tallies; and that this deficiency needs to be rectified.

Mr Edwards, appearing for the Meat and Allied Trades Federation, Tasmanian Division, and the Tasmanian Confederation of Industries, advised the Commission that he acknowledged the effect that the application of the agreed formula has had on the piecework rates, and submitted that he was in a position to settle this claim by agreement in the following terms:

1. that the formula continue to be utilised where flat money amounts are awarded in State Wage Case decisions;

2. that where percentage increases are granted in the future that they be directly applied to the piecework rates;

3. that in full settlement of this claim he could agree to a rectification of the alleged anomaly through a recalculation of the current piecework rates by directly applying all percentage increases, awarded since 1982,onto the rates which applied immediately prior to the Principles of Wage Fixation established in 1983.

Mr Edwards tendered Exhibit E1 which provided a reworking of the rates and details of resultant increases which would be necessary to give effect thereto.

He advised that on his rough calculations an overall increase to pieceworkers of approximately 1 per cent would be involved, and he submitted that he saw such increase as forming part of the 4 per cent available under the second tier.

Mr Edwards also advised that the cost impact involved for the abattoirs, whom he represented, was approximately $100,000 per annum. He submitted that given the state of the industry at present such cost was clearly not negligible.

Whilst I agree that the cost implications are not negligible, and bearing in mind the public interest considerations outlined in Section 36 of the Industrial Relations Act 1984, I am of the opinion that this aspect should not mitigate against the correction of what is clearly an anomalous circumstance brought about when percentage increases are awarded in State Wage Case decisions.

Accordingly I endorse the agreement of the parties in settlement of the claim specified in TA.19 of 1987.

The variations to the piecework rates in the two awards will be in accord with the rates set out in Exhibit E1, which were calculated in consultation with Mr Andrews of the Commission.

The rectification of the 'anomaly' in the manner endorsed has the effect of giving full effect to State Wage Case decisions since the inception of wage indexation in 1983; no more and no less.

In other words, the relativities between the weekly wage rates and the weekly returns for processing piecework tallies have been narrowed, not as a result of State Wage Case decisions, but in spite of them (by application of the formula). Hence there is no 'restoration of relativities' provided by the rectification of the anomaly in any sense that is proscribed by the Principles.

In relation to the effect of this decision on the second tier, I should indicate that I consider the correction to the rates provided herein to be of a special, isolated and extraordinary nature. Consequently I do not believe it equitable that pieceworkers be hereby deprived from the 4 per cent maximum second tier increase possible under a restructuring and efficiency exercise.

To decide otherwise would mean that the anomaly, now being rectified, is to be 'paid for' from the percentage increase available under the second tier.

I reject this approach. The correction of the anomaly is a matter that stands alone.

The anomaly proceedings before the President, prior to this matter coming before me as an arguable case, clearly did -not arise as a consequence of a second tier anomaly application. Simply, the President found an arguable case for the rectification of an anomaly which, if able to be substantiated, would be corrected by the Commission in accordance with the Anomalies and Inequities Principle.

To go further than that and seek to encroach on the available 4% arising from the second tier is not acceptable to the Commission as constituted.

I have made the above comments as a second tier exercise is in fact envisaged in respect of both awards in applications T.1062 and T.1063 of 1987. I hold the view that pieceworkers should be able to gain increases to a maximum of 4 per cent providing that, along with all other classifications, sufficient offsets are able to be negotiated.

The variations to the piecework rates herein determined will be operative from the beginning of the first full pay period commencing on or after the date of this decision.

The orders giving effect to this decision are attached hereto.

 

RK Gozzi
COMMISSIONER