T862
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IN THE TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984
This application was the subject of a decision handed down by me on 23 October 1987. Later an appeal was lodged against the decision by the Tasmanian Confederation of Industries and a Full Bench of this Commission upheld the appeal and referred the matter back to me for further consideration. The Tasmanian Confederation of Industries' original application was made for the purpose of inserting a new clause in the Miscellaneous Workers Award. This clause was titled "Special Provisions Applicable to Video Hire Establishments". The special provisions relate to:-
It is not my intention to traverse the history associated with the making of this award as it was covered in my earlier decision, but one thing is certain, and that is, the Miscellaneous Workers Award does cover employees engaged in the video hire industry and at this moment they are entitled to the rates of pay and conditions of employment contained therein. The practical effect of inserting this new clause into the award would mean, prima facie, a reduction in existing award conditions for some employees and a significant reduction for others. Most of the Tasmanian Confederation of Industries' submissions and evidence in support of the application centred around the operations of one business named Classic Video Pty Ltd operated by Mr Terrence Ewing. Mr Abey, representing the Tasmanian Confederation of Industries, presented a statistical overview during the earlier hearings of Mr Ewing's trading patterns which were as follows:-
However, the role of the Commission is not to determine the trading hours of the industry, but rather to decide what rates of pay and conditions of employment should apply to employees who are required to work those hours. I gained the impression, and I put it no higher, from the submission presented in this case, that it would be more commercially viable for the employer to operate those extended trading hours patterns if certain employees were to have their current award entitlements reduced. However, I noted the comments made by Mr Ewing under examination that since he had been observing the provisions contained in the Miscellaneous Workers Award, he had made changes to the hours his business was open and the days on which it operated. These changes were in the form of certain stores being closed over the Easter period and reducing trading hours in some stores on all public holidays. Mr Abey showed the cost structure of his client's business as follows:-
This was shown to demonstrate that 61% of his business was undertaken on Saturday and Sunday and 78% outside the hours of 9am to 6pm. I was not shown the trading patterns of other establishments in the industry, nor could I establish that Classic Video Pty Ltd trading patterns were the same as other operators. Under the Industrial Relations Act 1984, the opening and closing hours of the employer's business premises are excluded from the jurisdiction of the Commission. However, one cannot help but make the observation that if it was not a viable proposition for the employer to open his establishment for trading on seven days of the week, up to 14 hours per day, and sometimes even longer, then the employer would exercise his discretion and make a commercial decision as to whether or not it was profitable to trade those hours. A whole range of factors would have to be taken into consideration when making such decisions, including labour costs. I find it difficult to reconcile these amounts as I am not able to establish what percentage "costs" are to total income of the business they purport to represent. To use an example, it could mean that "costs" are 40% of income, and of that 40%, 15% is spent on rent; 35% is spent on stock; 25% on labour and 25% on other items. In the circumstances, it is nearly impossible to ascertain whether labour costs are significantly disproportionate to the total income of the enterprise. Whilst the figures may be of interest, very little weight can be placed on them as it is not possible to see the total picture. Except for some minor observation, I was not shown the impact of labour costs on other companies in the industries, but I was often reminded that Mr Ewing was one of the larger employers of labour in the industry. As part of Mr Abey's statistical overview of his client's business, I was informed that the purchase price of new video titles in 1981 was approximately $32 and that price had risen to $95-$99 in 1987. (The Miscellaneous Workers Award was not in operation for most of that time). He said that the hire charges were $9-$13 per night in 1981 and averaged only $3 per night in 1987. The conclusions drawn from this line of argument were that Classic Video Pty Ltd had suffered some reduction in income although no factual, statistical evidence was forthcoming. Under examination, Mr Ewing acknowledged that during the earlier years of the industry, and in particular 1981, business was reasonably profitable. He also stated that since that time the hiring rates had dropped, but turnover had increased 80-90%. I found the evidence on purchasing and hiring rates inconclusive. As the industry was in its infancy in 1981, it should not have been unexpected it would undergo some changes, especially with the increased number of operators in the industry and the growing trend towards "racking"; all this seems to have lead to increased competition. In support of his application, Mr Abey took comfort from certain provisions contained in some State awards and one Federal award which could be described as departing from what might be called by some people as the "norm" or as Mr Abey described it, "Non-standard penalty rate prescriptions in industries with special circumstances". The awards which he relied on were the Agriculturists Award and specifically the special provisions relating to work on Saturdays that was essential for the good husbandry or tending of stock; the Dairymens Award - which I was lead to believe, during the course of the hearing, may be superseded by an agreement operating within the areas covered by the Scope of the award; the Entertainment Award; the Estate Agents Award; the Welfare and Voluntary Agencies Award; the Vehicle Industry - Repairs, Services and Retail - Award 1980. Whilst these awards did show some departure from the normal standard, I was not convinced of their relevance to this industry. Mr Abey then embarked on a comparison of interstate awards that applied to employees in the video hire industry. Whilst I found these of interest, nevertheless, I do not believe this to be a comparative wage justice case. Mr O'Brien, representing the Federated Miscellaneous Workers Union, opposed all aspects of the claim and cited a number of decisions from other jurisdictions relating to consent awards and agreements. He argued that this award was made by consent and it should not be overturned unless there were good and cogent reasons. This onus, he believed, had not been discharged by the applicant. He also took the Commission to various trade journals in an attempt to rebut some of the evidence on the cost of new releases. Mr O'Brien made some observations in respect to the observance of the award by other employers in the industry. Conclusion: At no time during the course of the hearing was the question of "incapacity to pay" an argument. Indeed, under cross-examination by Mr O'Brien, of the Federated Miscellaneous Workers Union of Australia, Tasmanian Branch, Mr Ewing acknowledged that even though he was observing the terms and conditions of the award, and apart from the two outlets that were closed because the profit margin was not satisfactory, all other stores were operating profitably with a satisfactory margin. The industry, or more accurately, one employer in the industry, was seeking what was believed to be more equitable award provisions as to those currently appearing in the Miscellaneous Workers Award. The overwhelming majority of evidence lead by the Tasmanian Confederation of Industries centred around one business in the industry albeit one of the larger employers of labour. Just how indicative of the industry this employer was is hard to ascertain from the evidence, as a number of inconclusive observations and assertions were made in respect of not only Mr Ewing's business, but also several other operators. In the Reasons for my Preliminary Decision handed down on 17 September 1987, I had this to say:-
As can be seen from the above, even by Tuesday 18 August 1987, not all employees of Classic Video Pty Ltd were in receipt of the proper award rates. Mr Ewing, the Manager of Classic Video Pty Ltd, gave evidence on a few occasions. A considerable amount of the evidence adduced on those days related either to (a) cost structures, trading patterns and the cost of product and hiring charges, prior to the observance of the provisions contained in the Miscellaneous Workers Award or (b) observations and future predictions for his business if required to observe the existing award. As stated previously, this evidence was inconclusive and contained a number of observations and assertions. The most relevant evidence was presented when the hearing was re-opened on 11 April 1988 as a result of the Full Bench appeal decision. Mr Abey informed the Commission on that occasion of his intention to recall Mr Ewing as a witness to give evidence as to the impact of the Miscellaneous Workers Award on his operation over the last 7 or 8 months. This point was made clear on pages 355 and 356 of transcript through the preamble to his first question to Mr Ewing. "Mr Abey:
Mr Ewing's evidence on that occasion was that:-
I had great difficulty in establishing why the industry as a whole wanted the award reduced and the effect on the industry of not agreeing to the claim. I only had the view of one operator who, under examination from Mr Abey, stated:- "Mr Abey: Well if the decision was to stand without significant relief, would you comment on the effect, if any, that this would have on your outlets? Mr Ewing: The effect would be significant in that from our point of view, I cannot afford such a substantial increase in a cost which I can't pass on. I'd be less than frank and honest to say that we are not looking at reducing the number of outlets that we currently have. We are certainly looking at reducing hours. We are, as one of my fellow colleagues in the North has already done, look at employing juniors because of the relief in the wage structure that juniors offer." In exercising my discretion on this application, I have arrived at the conclusion that, on balance, there was insufficient, conclusive evidence to vary the award in the manner sought. Whilst there is an entitlement on the part of the applicant to pursue this matter and to seek a reduction in the current award standards, whether introduced by consent or arbitration, nevertheless, I believe a strong and compelling case would have to be made out before employees have their current entitlements reduced. In the absence of agreement, the burden of proof falls heavily upon the applicant to demonstrate that appropriate, alternative arrangements should be made within this or any other industry. In my view, this onus has not been discharged in this matter, therefore, I dismiss the application.
R J Watling |
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