T8681
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Australian Municipal, Administrative, Clerical and Services Union BUSINESS SERVICES AWARD
Award variation - insertion of new clauses - wages and conditions - arbitrated - definitions - probationary employees - classification levels - hours of work - shift penalties -Saturday work - Sunday work - piece work provisions - award varied - operative date 30 March 2001 REASONS FOR DECISION On 1 November 1999 an application was lodged by the Australian Municipal, Administrative, Clerical and Services Union (the union) pursuant to s.23 of the Industrial Relations Act 1984, to vary the Business Services Award re the insertion of new clauses. This matter first came on for hearing on 23 November 1999, followed by a further seven days of hearing, finishing on 5 October 2000. The first four days of hearing were before Westwood P. On 7 July 2000 the application was referred to me. There was a further conference on 22 November 2000 to clarify a number of matters raised during the hearing. Additional written submissions were received by the Commission on 22 December 2000. Mr I Paterson appeared on behalf of the applicant union and Mr A Flood, Mr M Watson and Mr A Cameron appeared at various times on behalf of the Tasmanian Chamber of Commerce and Industry (TCCI). BACKGROUND This application is a continuation of the process begun in 1998 when an application was made to make a new award - T No 7445 of 1998. On that occasion clauses in relation to Title, Scope and Award Interest were determined, with an operative date of 26 October 1998. The current application concerns the insertion of conditions into the award and the insertion of wage rates and classifications for Business Services Employees. Telemarketing, telesales, and fund-raising services employees are part of the "Business Services Employee" division of Part III - Wages and Related Matters. Classifications and wage rates for a "Call Centre Employee" division will be the subject of a separate application. This application seeks to import into the Business Services Award the relevant provisions of the occupational award - the Clerical and Administrative Employees (Private Sector) Award (C & A Award), with some appropriate changes. The scope clause of the Business Services Award is expanded, by agreement, to include telemarketing. The agreed new Scope clause reads: "3. SCOPE
The Business Services Award, as it stood prior to this Decision, had within its Scope Clause:
The union submitted that the C & A Award was prima facie the existing rates and conditions. Mr Paterson said that, to a large extent, organisations within the scope of the award have a considerable number of employees subject to the C & A Award. Where the award application may be subject to contest, the C & A Award is often relied upon as a guide, for instance, in the area of telesales and fund-raising there is in existence a registered agreement (The Red Cross Telemarketing Agreement) which draws heavily upon the C & A Award as the "parent" award and as a basis for negotiating the rates in that agreement.1 Mr Paterson said that organisations in the business of providing administrative services (to other employers or community organisations) would employ secretarial and administrative staff. Prior to the making of the Business Services Award those employees were covered by the C & A Award, which is an occupational award. The new Business Services Award is an industry award and will take precedence over the occupational award, therefore those employees employed in the Business Services industry who were previously covered by the C & A Award would now be covered by the Business Services Award. The parties, in their submissions, relied upon Principle 10 - First Award and Extension to Existing Award, of the Wage Fixing Principles determined by this Commission, relevantly Principle 10.1:
A number of agreed clauses within the award reflect standard provisions across awards of the Commission, as well as reflecting what is in the C & A Award, for example, grievance procedures, supported wage clause and leave provisions, Mr Paterson said. Mr Watson, for the TCCI, agreed that existing standards in the industry were derived by using the C & A Award as a guide and that the Red Cross Telemarketing Agreement, a section 55 registered agreement, was modelled on the C & A Award in relation to terms and conditions and rates of pay.2 Mr Cameron of the TCCI said, however, that it was not just a matter of superimposing an existing award onto an industry that was not previously covered by an award and that there were two major areas of difference between the union and the TCCI relating to piecework rates of pay and span of (ordinary) hours. He said that the industry had been operating for a number of years according to a certain pattern of hours which suited the industry.3 The parties were unable to agree on the following provisions, which are the subject of this decision and the reasons which follow: Provisions in Dispute Part II - Employment Relationship and Associated Matters Part III - Wages and Related Matters Part V - Hours of Work, Penalty Payments and Overtime All other new clauses are inserted by consent between the parties. The differences between the union and the TCCI are summarised below: Part II - Employment Relationships and Associated Matters Permanent Employee The union's position is that "permanent employee" should be defined as an employee engaged on a regular, continuous basis. The TCCI contends that such a provision would be breaking new ground and is not necessary, because the nature of the employment is already set out in terms of casual, full-time and part-time employees, and such terms are generally understood in industrial relations circles. Part II - Employment Categories and Associated Matters Probationary Employees The parties are agreed that there should be a probationary clause in the award, but there are differences as to the form it should take. The union's position is: that the provision should contain a requirement for the employer to provide the probationary employee with feedback about their work performance; that there should be a review before the end of the probationary period specified in the contract of employment; that the employer should inform the employee of the outcome of the review; and that where the review is not satisfactory the employee should be given two weeks notice, or, if their performance is satisfactory, informed that their employment will continue. The TCCI contends that the clause should merely say that there may be a probationary period of up to eight weeks for ongoing employees, specified in the contract of employment, and able to be extended by mutual agreement. Part III Clause 1 - Classification Descriptors The union's position is that the classification structure should be modelled upon the C & A Award (with minor modifications to suit the business services industry). The TCCI contends that a new lower classification level should be inserted before Grade 1 of the C & A Award, with a consequent renumbering of the levels, ie Grade 1 of the C & A Award would become Grade 2 of the Business Services Award. This classification level would apply to employees whose work is limited to telephone calls only, without a requirement to perform data entry or to use a computer. Part III - Wages and Related Matters The union's position is that the wage rates should be based upon the wage rates in the C & A Award. The TCCI contends that, consistent with their position regarding the classification structure, there should be a new Grade 1 rate set at $4.20 per week less than the Grade 1A rate in the C & A Award. Piece Work Rates The union's position is that piece work rates are exceptional matters and should not be part of any safety net standard, and that any approach which allows for lower than award rates to be paid should be dealt with through the various mechanisms for enterprise bargaining. If piece work rates were to be established in the award, then there should be a guaranteed minimum level of payment, which should be in excess of the minimum payment in the award. The TCCI contends that the award should contain the ability for employees to be paid piece work rates with no guarantee of a minimum payment, without reference to the hours or times worked. Such rates to be established by agreement between the employer and the employee in such a way as to allow an employee of average capacity to earn, for an ordinary week's work, not less than the appropriate weekly base rate for the class of work performed. Part V - Hours of Work, Penalty Payments and Overtime The union's position is that the spread of hours should be as expressed in the C & A Award, ie ordinary hours of work would be between the hours of 7.00am and 6.30pm Monday to Friday inclusive. The TCCI contends that the spread of hours should be 7.00am to 8.30pm. Part V Hours of Work, Penalty Payments and Overtime The union's position is that, as with the C & A Award, all time worked on a Saturday should be paid at one and a half times the ordinary rate for the first two hours and double time thereafter. The TCCI contends that all hours on a Saturday should be paid at the rate of one and a quarter times the ordinary rate. Part V Hours of Work, Penalty Payments and Overtime The union's position is that, as with the C & A Award, all time worked on a Sunday should be paid at the rate of double time. The TCCI contends that all hours on a Sunday should be paid at the rate of one and three quarter times the ordinary rate. Part V Hours of Work, Penalty Payments and Overtime The union's position is that an afternoon shift is any shift that finishes after 6.30pm and at or before midnight and that a night shift means any shift finishing subsequent to midnight and at or before 7.30am. The TCCI contends that an afternoon shift is any shift that finishes after 8.30 pm and at or before midnight and that a night shift means any shift finishing subsequent to midnight and at or before 7.30am. The parties are agreed that afternoon or night shifts shall attract a shift allowance of 15% more than the ordinary time rate. The Evidence The Evidence for the Union All witnesses gave lengthy and detailed evidence. Set out below is a selection of relevant parts of the witness evidence: John Andrew Cotton Mr John Andrew Cotton testified that he was employed in 1996 by Australian Red Cross to set up and run their call centre, which was basically used for fund raising purposes, primarily through conducting raffles. At the time of the hearing Mr Cotton was employed with TAFE Tasmania as a project manager in their call centre project. Mr Cotton gave evidence regarding Red Cross telemarketing, that is, fundraising by telephone. The Red Cross program was run using a computer-based system. Four raffles were conducted per year, involving six to eight telemarketers. The program was purely involved in "outward bound" call centre work, ie, the making of telephone calls as opposed to the receiving of them ("inward bound"). Initially, in the absence of an award, the telemarketers were paid $10.00 per hour using the C & A Award as a guide. After 6.00pm penalty rates of time and a half were paid, so, in effect, the work was remunerated at $10.00 per hour for day work and $15.00 per hour after 6.00pm. There was occasional but very rare weekend work, which was paid at the $15.00 per hour rate. The general hours of operation were 9.00am until 8.00pm. When the Red Cross (section 55) agreement was put in place a base rate was created. Shift penalty rates were paid. Overtime payments were maintained (in certain circumstances), as was the Saturday 50% loading. Prior to the agreement being entered into, work after 6.00pm was paid at overtime rates. After the agreement a shift penalty rate applied, in effect, for all the evening hours, reducing a 50% overtime loading to a 15% shift loading for the whole of the shift. Following the implementation of the agreement the return rate on investment remained about the same. Under the terms of the (Red Cross) Agreement, the rate for a permanent part-time employee (without loading) working on their first raffle was $11.50 to $12.00 per hour, including the average bonus, with penalty loadings paid on top of that. Due to Gaming Commission rules there was a three month period in which a raffle could be telemarketed. The first three to five weeks would involve intense telemarketing, which would taper down until about a month before the drawing of the raffle. During the intense period two shifts would operate, one in the morning and one in the afternoon. After a break of a few days there would be a reminder period of 10 to 15 days during which the telemarketers would call people back (for the return of raffle books and/or money). Most of that effort was concentrated during the evenings. The skills the employees required for telemarketing work at Red Cross were sales skills, including the ability to very quickly build a rapport with the general public. Anything up to 100 calls could be made in a four hour shift. Other skills were identified in a document which Mr Cotton had prepared, which comprised a list of skills for successful telemarketing for a charitable organisation. He said that, in the document, he had attempted to identify the competency standards required by the national training package "Communication Call Centres". These are:
Each element of the competency standards is accompanied by performance criteria. The competency standards were from the National Training Package and were at Certificate II level, with one at Certificate III, and were skills used and needed by a telemarketer in a call centre. At the Red Cross centre the operators used a computerised telemarketing system, with auto-diallers and pre-loaded databases. The operators would modify the data base and build up information about clients, updating information as required. In order to access the information, keyboard skills would be used. The telemarketers would be provided with scripts, however they would develop their own styles. In addition the employees were required to have product knowledge, which included knowing when to refer people on to other contacts within the organisation. The operators also processed credit card transactions; in these circumstances accuracy was very important. The average conversion rate (phone calls to raffle book sales) would, on average, be 20% to 25%, however there was a large range of variables, including the nature of the raffle, the price of the tickets and the type of data being used, eg whether the people being called were previous customers or whether they were "cold calling". The staff turnover rate at Red Cross was 30 to 50 per cent per year, with a number of employees staying for long periods. Red Cross paid an hourly rate, as opposed to a piecework rate, plus a sales performance based bonus, averaging around five per cent of salary, plus incentives, eg for credit card sales. Red Cross had not, during Mr Cotton's time there, contemplated moving to a piecework system. Employees had to achieve call and sales quotas, which were worked out on the sales performance and return rate over a raffle, based on the overall average of what a raffle should achieve, ie 20 to 25 books per shift. It was possible to work out an average of raffle books per hour or per shift. Permanent part time workers could opt to be paid a 20 per cent loading rather than take pro rata leave and the bonus system applied to both casual and part time workers. The most effective time to work was between the hours of 4.00pm and 8.00pm, which was when the bulk of the employees worked.5 Caroline Terese Everett Ms Everett's evidence was that she had been employed as a telemarketer with Red Cross for approximately 18 months. She said that her work involved telemarketing raffles and that there was a daily quota to be met. She described the daily work of a telemarketer at Red Cross. The first thing, she said, is to ascertain the daily quota, then to log on to the computer, then to begin telephoning and marketing according to the script. The ratio of a blunt no and a "soft" no is about 50 per cent. Each call takes about 60 seconds. Whilst there is no strict time limit per call it is important to make as many as possible, but the operators have the flexibility to make a judgment as to timing. About one hundred answered calls are made per four hour shift. There is variation depending on whether it is a morning or an afternoon shift, and depending upon whether the operators are "cold-calling" or calling back. Ms Everett said that communications skills were "up there" for an effective telemarketer. Basic keyboard skills were also required and basic data entry, requiring accuracy, was performed. She was provided with an induction course and training, with refreshers every six month or so. Ms Everett worked 24 hours per week, comprising four single shifts and a double shift during the week - 9.00am to 1.00pm and then from 4.00pm to 8.00pm in the afternoon. The best hours for selling tickets were "definitely from 4.00 to 8.00"6 Ms Everett was a Telemarketer Grade 2 (under the Red Cross Agreement) and had been receiving bonuses at the end of each raffle, averaging five per cent.7 Documentary evidence Mr Paterson introduced a number of documents into evidence. These were:
The Evidence for the TCCI All witnesses gave lengthy and detailed evidence. Set out below is a selection of relevant parts of the witness evidence: Witnesses Mr Cameron said that his witnesses were mainly involved in telemarketing services, and that the evidence would revolve around the main points of contention - hours of work and piecework rates. John Leonard Pockett Mr Pockett testified that he is the senior partner at ESP Marketing, which is a family partnership formed to raise funds for various charities in Tasmania. All of the fundraising is done through telemarketing. ESP employs 20 casual telemarketers plus an administration staff of seven. Six telemarketers work a morning shift from 9.00am until 1.00pm and 14 telemarketers work the evening shift of 4.00pm to 8.00pm. The work is basically Monday to Friday, with occasional Saturday work. Mr Pockett said that it was the employer's policy to employ people for only one four hour shift in a day, because:
The casual workers are employed for the duration of each fund-raising campaign. There is a very high turnover of staff, due, Mr Pockett said, to the type of people employed, who include people on benefits, single mothers, university students and housewives. Mr Pockett said that (the company's) 10 years' of experience had shown that between 9.00am and 1.00pm was a good time (for telemarketing) and the best time was in the evening between 4.00pm and 8.00pm. The telemarketers are provided with pre-printed sheets, usually a photocopied sheet of a phone book and their job is to telephone people from that sheet and to make as many raffle book sales as possible. A good telemarketer would make around 25 calls in an hour. The rate paid to telemarketers is $10.50 per hour plus a credit card bonus of $1.50 per credit card transaction. The hourly rate increases to $12.50 per hour based on years of service. Three-monthly reviews take place, and, based on performance and loyalty, wages are increased in 50 cent per hour increments up to a limit of $12.50 per hour. The hourly rate had been struck based upon the maximum the employees could be paid which would allow the business to remain viable, taking into account overheads. The target set for telemarketers is seven sales per hour. Experience had shown that telemarketers usually average that number of sales. No bonus is paid. Mr Pockett said that if the business was required to pay the rates as set out in the union's claim, including penalty rates, "it would certainly put us out of business for sure." 14 Anthony John Wright Mr Anthony John Wright testified that he is the Executive Officer of the Royal Guide Dogs Association for the Blind in Tasmania, which position he has held since 1994. His evidence was that Royal Guide Dogs has been operating a telemarket for goods and raffle books since 1985 in relation to their own goods and services, and, since 1995, in commercial telemarketing for other parties - "telebureau" work. The telemarketing of goods involves ringing people on a cold call basis and offering them a range of merchandise over the phone, for example, manchester. The telebureau employs different people to those employed to telemarket raffle books. The system is computerised, with the database generating the phone numbers for the operators. The operators go through a script, take orders and credit card details, which they enter using a keyboard. People employed for more than 15 or 16 hours per week are on a permanent part-time basis, those who work less are employed on a casual basis. Casuals are paid a loaded rate of 20 per cent in lieu of paid leave. Approximately 30 people are employed, 14 are permanent part-time, the balance are casuals. A number of staff have been employed for a considerable period of time, up to 20 years. As far as the Royal Guide Dogs' telemarketing is concerned, there is no day work, all work is done between 4.00pm and 8.00pm in the evening. Generally the operators work a three or four hour shift. The work is performed five days a week, Monday to Friday. Most employees do 16 hours a week, some do 20 hours. The best time for telemarketing is between 5.00pm and 8.00pm. If a shift is worked between 4.00pm and 8.00pm the unanswered call rate will be 43 per cent, but if a shift is worked between 5.00pm and 8.00pm the unanswered call rate drops to 36 per cent. Daytime calls are "expensive" in terms of the number of unanswered calls. At different times, since the organisation commenced telemarketing, daytime work and Saturday morning work have been tried and found not to be cost-effective. The base rate of pay for permanent part-timer telemarketers is $10.91 per hour, increasing to $11.46 per hour after three years. The casual employees receive the 20 per cent loading on top of those rates. Employees receive a bonus if they sell more than $500 worth of goods or raffle tickets in a single night - the bonus being $50 worth of goods from stock. During the previous year about $6,000 in bonuses had been paid. In setting rates the organisation had used the Retail Trades Award (for their retail shop activities) and the "Admin Services Award" (C & A Award) (for administrative and supervisory staff); these rates moved according to state wage case increases. These award rates were taken into account when setting rates for telemarketers, as was the budgetary process and the competitive pressure to keep good people. The telebureau work operates on a different basis. The work is done during the day as well as the evening. The work is done on a piecework basis, as a consequence of which the high number of unanswered calls during the day is not so important. The telebureau work is confined to raffle sales. The piecework work is $2.50 per book "sold", irrespective of whether it is eventually paid for or not, and an additional 80c when and if the book is eventually paid for. There is also a 50 cent credit card bonus. At four or five books per hour, which is what is expected of the telemarketers, they would earn between $10 and $12.50 per hour for books "sold", plus the 80 cents when the book is paid for. Mr Wright said that that the way it was structured a person on piecework would make about the same sort of money as a person who is an average performer. Subsequently Mr Wright provided the Commission with a document setting out the minimum, maximum and average rates that had been paid to the "commission only" employees for two months during 2000. This showed that, for that period, the minimum rate paid was $8.45 per hour and the maximum rate paid was $21.36 per hour. During July the average hourly rate paid was $15.83 and during August it was $12.31 per hour.15 He said that the draft award caused some concerns, which were lack of opportunity to pay piecework rates and the Grade 1 and 2 levels. The Grade 1 level, he said, should include the operation of a visual display unit and a keyboard - persons performing those functions should not have to be placed at Grade 2. The work performed required very limited computer skills and basic data entry work. Mr Wright claimed that inability to pay piece rates would limit the organisation's willingness to take on work for other charities. Another concern, he said, was the loading for an afternoon shift, not currently paid by the organisation, which would effectively add an extra 15 per cent to the wages bill.16 Graham Francis Innes Mr Innes testified that he is the Fundraising and Development Manager for the MS Society of Tasmania. The MS Society raises approximately $1 million per annum from raffles. Aside from government funding, the income received from raffles is the key revenue source. Mr Innes said that the society employed, at any one time, 20 to 25 people as telemarketers. In addition there are two team leaders, plus one other person in a clerical capacity for 20 hours per week. These people are paid according to the C & A Award. The telemarketers are provided with two sources of data, one source being the in-house computer system, which is "hot calling". The other source is data downloaded from the Testra white pages. The telemarketers are provided with a work space, a telephone and sheets to call from, plus sheets to record their sales. The operators are employed purely on a piece rate basis. They are provided with a two or three hour induction session. The employees are drawn from a broad cross-section; including students, housewives, people seeking a second income, and, from time to time, people on forms of benefits, such as disability benefits. Mr Innes said that the skills required are "fairly basic", including an aptitude for the job, a pleasant telephone manner and clear handwriting. The hours that the telemarketing operates are five days per week, plus Saturday mornings. Monday to Friday the hours are 9.30am until 1.30pm, being the morning shift; and 4.30pm to 8.30pm for the evening shift. Saturday morning work is from 9.00am until 1.00pm. People are requested to work one Saturday morning a month. Mr Innes said that Saturday mornings were fairly lucrative. These are the optimum times for telemarketing work. The Society requires people to work five shifts, that is, five days, either five mornings or five evenings. A roster system operates, with some flexibility. The work force is "fairly transient", with the longest serving employees being there for two years. Others stay a fairly short time, averaging three to six months. Eight to twelve people are taken into induction training about every six weeks; half of those people would still be there after a week, representing a high turnover. The rates paid are $1.50 for a "strike" - a "sale" which is, however, not completed until the money is actually returned, which it is for about 60 to 70 per cent of "strikes". The $1.50 for a "strike" is paid fortnightly. In addition, $1.00 is paid for a credit card sale. The third component is a bonus paid at the close of a raffle, which can take up to three months to be paid. The bonus equates to $1.00 for every book that has been returned with the full payment. Mr Innes said that it is possible to work out the performance of an average telemarketer, who ought to be able to achieve eight strikes per hour, however, locally the rate is lower - possibly six or seven per hour, but eight an hour is possible. The highest amount earned, in Mr Innes' experience, was in excess of $20.00 per hour, including all commissions. When Mr Innes took responsibility for the area in 1996, the rate paid was $12.00 per hour. He had based the piece work rate of $1.50 per strike rate on eight strikes per hour, giving the $12.00 per hour rate. Anything over that was, he said, a bonus. At any one time, he said, half the telemarketing force might earn $12.00 per hour and the other half less, but there were a number of variables, for example, whether or not the person was cold calling, the time of year and the raffle itself. Mr Innes said that the award, as proposed by the union, would, based upon his calculations, have increased the wages bill for raffle No. 65, from $20,356 to $33,528. However, he agreed that he had based his calculations on time sheets that may not have been accurate and the actual number of hours upon which he had based his calculations may not have been valid. The effect of the award, he said, would mean that the Society would need to employ more supervisors to ensure that the eight strikes per hour rate was achieved, which would also increase labour costs. It was far easier, he said, to budget based on a piece work system, making labour costs a fixed cost similar to printing or other costs.17 Submissions Mr Paterson for the Union Mr Paterson said that there were three main issues (plus some minor ones) separating the union from the employer parties to the matter. TCCI's proposed new Grade 1 Mr Paterson submitted that there had been no evidence presented as to the reason for the lower rate proposed by the TCCI, which was merely a mid point drawn between the adult entry second six months rate and Grade 1A of the position articulated by the union. The difference in the hourly rates is 11 cents per hour and the difference in terms of relativities is one percent. Mr Paterson said that there is no basis for the rate in terms of established relativities. In Mr Paterson's submission, there is no basis for departure from the skills base standard that was developed initially in the C & A Award and subsequently applied across a diverse range of industries, including real estate, printing, wholesale trades and disability services. Mr Paterson conceded that words could be included in the Grade 1 definition which would allow for the use of a computer to transact and record activities consistent with the other duties in that classification. The Commission must take account of the range of existing rates and conditions, he said. Employees who are currently covered by the C & A Award will continue to be so until the Business Services Award comes into place. There is a significant proportion of employees (in the industry) who are clerical and administrative employees. Mr Paterson referred to agreements already in place (in the telemarketing/call centre sector) - the Red Cross Industrial Agreement, the Watts Telecommunication Agreement and the Vodaphone Agreement - these demonstrate that there is a very wide range within the industry. The Watts Agreement at the time of certification was very close to the Grade 1A rate in the C & A Award. The Vodaphone Australian Workplace agreement has a much higher commencement rate. The industry covered by the scope of the award is extensive and diverse, he said, ranging from the family operation run by Mr Pockett to a multinational telecommunications company such as Vodaphone. The award must establish a safety net to underpin workplace bargaining, and the the union's position is that the rates for grade 1A and 1B are the appropriate minimum, bearing in mind that there are junior rates in the proposal, he said. Piecework Rates Mr Paterson referred the Commission to a decision of the Australian Industrial Relations Commission (AIRC) regarding payment by results (PBR) in the Footwear - Manufacturing and Component - Industries Award.18 The AIRC decision, he said, contained a number of features which are important features of a fair and equitable PBR system. A particular issue is that in a PBR system there should be a minimum level (of payment) which is guaranteed. The decision said that regard should be had to the need to ensure that the scheme in question operates equitably and the issue of equity involves workers receiving reasonable compensation over and above the award. Mr Paterson referred in some detail to other awards of this Commission:19 In the case of the Automotive Industries Award, the piecework clause is subject to the minimum wages and conditions prescribed and the rates must be struck to enable workers of an average capacity to earn at least 10 per cent in excess of the hourly rates in the award. In the Timber Merchants Award there are provisions which allow for 25 per cent above the average weekly time rate, and further, there are provisions which deal with the times when a pieceworker is working in a situation where no result is attainable (in which case they are paid at ordinary rates). In the Furnishing Trades Award the piece work rate provides for workers to earn 12 ½ per cent more than the minimum weekly rate, with a guarantee of at least the minimum weekly rate prescribed in the award. In the Estate Agents Award there is a system which allows for a commission basis for engagement, and in that case the minimum wage is underwritten and guaranteed. In Mr Paterson's submission, should there be a PBR system in the Business Services Award, it needs to provide for more than the minimum under the award. Of concern, he said, was that the evidence led was from a very narrow sector of the coverage of the award, when the scope is considered. It applied to only one area - the fundraising services. To put a blanket provision in, such as that proposed by the TCCI, would extend that provision to the whole of the award coverage. Mr Paterson said that there were other provisions within the Industrial Relations Act that provide for arrangements such as registered agreements, supported wages, or other provisions, which allow for people to be paid less than the award wage. The union would not oppose alternatives, such as a sunset provision, which would allow organisations which currently operate a PBR system to be allowed to continue to operate such a system for a defined period, perhaps six to twelve months, to enable them to negotiate registered agreements which would more appropriately deal with (a system) which has enterprise-based application. Mr Paterson expressed concerns about the definition of an average worker, he said the TCCI's proposal does not deal with any of the issues that go to how a system of average results may be determined in an industry such as this and it does not address such issues as availability of work. As the evidence of the MS Society had shown, there are periods of time when people are working, such as on call-back and follow-up, when there is, in fact, no result attainable in terms of the PBR system. Shift Work Mr Paterson tendered a document which outlined some of the shift loadings (on weekdays) applicable to selected awards of the Tasmanian Industrial Commission.20 He said that the document identifies awards where there are loadings which apply either outside ordinary hours or have the equivalent of an afternoon shift. There are four awards listed in the document which apply a 15% shift to a shift that finishes at or after 6.00pm - these awards are Aerated Waters, Butter and Cheese Makers, Community Services and Disability Services awards. The Civil Construction and Maintenance Award has a different spread (of hours) but still provides for a defined afternoon shift with a 15 per cent loading. In Division A of the Public Vehicles Award a 25% loading applies outside of the ordinary hours of 6.00am to 6.00pm. The Retail Trades Award has loaded rates which apply to different people, depending upon the circumstances. Where they do apply to the hours of 6.00pm to 9.30pm the range of the loading is 17 to 35 per cent. Mr Paterson submitted that despite the fact that an industry may have ordinary operating hours which extend beyond 6.00 or 6.30pm, there remains widespread recognition within awards of this Commission that the interests of employees who work outside a normal day work pattern attract a loading which is compensation for a degree of inconvenience - social, personal, family etc. The spread of hours between 6.30pm and 8.30pm is the norm in the telemarketing part of the coverage of the Business Services Award. However, there are issues to be considered - the public transport system remains geared to day workers getting to work by nine o'clock and leaving work at five pm, and child care is largely geared to day work. For workers with family responsibilities there are considerable disadvantages in working between 6.00pm and 8.30pm. The Wage Fixing Principles clearly establish that there are at least two considerations when establishing a new award - existing rates and conditions and ensuring that the employees' interests are taken into account. Mr Paterson contended that it was through the provision of the shift loading (which rate was considerably less than the overtime rate) that the employees' interests were taken into account. The shift rate was a compromise between the overtime rate and the ordinary rate, he said. The shift work provision had been adopted from the Metal and Engineering Award. The union's proposal allows for some flexibility, he said. There is no impediment to split shifts, in recognition of the fact that in this industry work can, and does, occur in two peak periods, with a break of around four hours between each shift. Saturday Rates and Sunday Rates A written submission was received from Mr Paterson dated 22 December 2000, in which he argued that the classifications and wages as agreed (between the parties), with the exception of the TCCI's proposal for an additional lower grade, are aligned to the wage rates in the C & A Award and that there is a nexus with the conditions in that award. Mr Paterson said that the scope of the Business Services Award is wide; witness and documentary evidence reflected only a small sample of the award coverage, and whilst the union acknowledges that the proportion of clerical and administrative employees has not been determined, nonetheless, employees who currently fall within the scope of the C & A Award are a significant component of the industry. Therefore the C & A Award is tangible evidence of existing rates and conditions. To deviate from the conditions as set out in the union's claim would be to reduce the conditions of those employees currently covered by the C & A Award who will fall within the industry coverage of the Business Services Award. It has been acknowledged by both parties that the individual award history needs to be taken into account before any reliance can be placed on other award standards, Mr Paterson said. For example, in other awards of the Commission: The Community Services Award has provisions for Saturday work to be paid at a 50% premium if it falls within the definition of shift work, and time and a half for the first two hours, then double time if it is overtime. Sunday work is double time. These were consent provisions, he said. Other awards which provide for Saturday at time and one half and Sunday at double time include the Disability Service Providers and Nursing Homes Awards. In the Automotive Industries Award, where the employer's premises are regularly open for normal business on a Saturday, then the rate is double time; when the premises are not open for normal business then the rate is time and half for the first two hours and double time thereafter. Mr Paterson said that there was clearly a range of standards in industries where weekend work is a normal part of operational requirements. However, the examples show that there is little deviation from the standard of double time for Sunday work. It is the union's contention that penalty rates are a matter of fair and reasonable compensation for employees working inconvenient hours. In relation to arguments by Mr Cameron, that the growth of call centres in Tasmanian had been on the basis of weekend work not being determined by "draconian" awards, Mr Paterson said that this is not supported by any evidence provided to the Commission, and that the reasons for the location of call centres are complex. Mr Paterson said that Mr Cameron had provided no evidence as to why weekend penalty rates should be less than those proposed by the union. The witness evidence, he said, related solely to the fund raising sector. No objective evidence was led that supports the assertion that the standards in the C & A Award amount to an imposition of high or prohibitive or unreasonable weekend penalty rates.21 Mr Cameron for the TCCI TCCI's proposed new Grade 1 and rate of pay Mr Cameron said that the intention of the proposed new grade was to cover those employees who are not using any form of technical equipment, apart from a telephone, such as those employed by the MS Society. Those employees are not using a computer and are not inputting even basic data. The intention, he said, is to create a level specifically for those people using non-technical skills. What the employers were seeking was a classification level at which those people would remain; with the union's proposed structure, a Grade 1A person promotes to Grade 1B, which is a more substantial pay difference in relation to the employers' proposed Grade 1. The work contemplated was at a very much more basic level than the union's proposed Grade 1B, he said. In Mr Cameron's submission, the wage rates referred to by the union as being substantially higher, such as in the Vodaphone Network Pty Ltd Australian Workplace Agreement, were usually as a result of trade-offs of other terms and conditions, or for productivity reasons. Mr Cameron pointed to some examples, such as annual leave entitlements, compassionate leave and overtime provisions. There were similar examples in the Watts Communication Agreement, which did not provide for shift loadings on afternoon shifts, which go from 4.00pm to midnight. There may be higher rates of pay but these are offset by the reduced loadings for shiftwork, he said. Similarly there is no annual leave loading provision and a reduction in overtime payments after the first three hours. The Commission cannot look at an enterprise agreement and consider only the rates of pay as an indication of what is being paid in the industry - all other terms and conditions and trade-offs need to be considered, Mr Cameron said. Piecework Rates Mr Cameron said that there were other awards of this Commission (apart from those referred to by Mr Paterson), which have piecework provisions. He said that the Fish, Aquaculture and Marine Products Award allows for piecework provided that an average worker can earn 15 per cent more than the relevant hourly rate. The Meat Processing Award has piecework rates according to particular products, based on team levels, with the rates tied to a weekly rate and an average employee earning those rates, with the proviso that an employee receive at least the minimum award weekly rate of pay. The Farming and Fruit Growing Award has piecework rates, as does the Metal and Engineering Industry Award, and the Horticulturalists Award enables an average employee to earn 12 ½ percent above the hourly rates, as does the Timber Industry Award. Mr Cameron said that the piecework proposal was not novel, and the witness evidence of Mr Cotton, Mr Innes and Mr Wright indicated that they knew what an average worker could do. What was being proposed, he said, was no different to those other awards of the Commission which allowed for an average employee to earn at least the hourly rate; however, it (also) provides opportunities for employment in this area for less than average employees who would not be covered by supported wage provisions. Referring to Exhibit C2, (the figures provided by Mr Wright from the Royal Guide Dogs Association), Mr Cameron said that the average rate (for the month of July) was $2.00 per hour higher than the award rate of pay. Mr Cameron said that the opportunity should be there for employers and employees so that those that have in the past earned more than the award could still do so, and so that those who had not earned the award rate could still be employed, rather than "moved on". In Mr Cameron's submission, whilst acknowledging the relatively high level of staff turnover in the fundraising area, this was not because of employee dissatisfaction but because they (the employees) regarded it as "stopgap" work - university students, single parents etc. Mr Cameron said that "at the end of the day" the submission that he was putting forward would still allow an average employee to earn the hourly rate (in the award). He said to exclude the possibility of such a piecework provision would be contrary to the Wage Fixing Principles, because, when making a first award, the existing rates and conditions should apply, and, in the industry of fundraising in particular, piecework applies at the moment and has done so for many years. The evidence was that, in the absence of piecework rates, businesses that have been operating under them for many years may not continue to exist. Mr Wright's (of Royal Guide Dogs) evidence was that they may not get the returns necessary to continue to justify that part of its operations. Shift Work - Hours of Work Mr Cameron handed up a document22 setting out the TCCI's proposal in relation to hours of work, which differed from that of the union in increasing the spread of hours from until 6.30pm until 8.30pm, and which differed in respect of days on which ordinary hours can be worked. Mr Cameron said that evidence of all the witnesses indicated that, in relation to fundraising, the best hours for operating are until 8.00 or 8.30 at night. In his submission, Principle 10 of the Wage Fixing Principles means that the Commission should take this into account because it is what currently exists in the industry. A document was presented which set out a list of awards of the Tasmanian Industrial Commission which have varying commencement and finishing hours.23 Mr Cameron said that it should be borne in mind that different industries have different demands and requirements in terms of production, the provision of services and facilities, and the span of hours in those industries had been set to suit their circumstances. In particular, he drew attention to the Meat Processing Industry Award, which has a span of hours from 5.30am until 7.00pm. Similarly, in the Meat Retailing Award the spread is from 4.00am to 7.00pm Monday to Wednesday and 4.00am to 9.00pm Thursday and Friday. In the Baking Industry Award, he said, the loaded rate only applied for the hours between 8.00pm and 3.00am. Mr Cameron gave a number of other examples which, he submitted, highlighted the needs of the industries, and the people they were servicing, to have finishing hours to suit, and ordinary pay applies within those hours. Mr Cameron said that the practice in the industry, especially with fundraising, was that the ordinary hours of work are until 8.30pm at night and that ordinary hours are paid until that time. Penalty rates may prohibit employers employing people after 6.30 at night, reducing their potential for income. The expected hours in the Business Services industry pm. I is not a case where some people "knock off" at 4.00pm whilst others are having to work longer hours - everyone can work until 8.30pm, he said Saturday Rates and Sunday Rates A written submission was received from Mr Cameron, dated 22 December 2000, in which he argued that the industry, and more particularly, the enterprises, bound by this award have been in operation for a number of years, have operated on the basis of the needs of the business' customers and clients, and have engaged staff to work on weekends. One area to be covered by the award is the internet services industry, which, due to its international application, knows no time boundaries. To date, in the absence of award coverage, the terms and conditions of employment have been such as to have staff working to cover all hours necessary, without the imposition of high weekend rates. Similarly, call centres are required to provide a 24 hour a day, seven days a week operation, with Saturdays and Sundays forming part of the employees' normal week. In Mr Cameron's submission, the penalties set for weekend work should take into account the needs of the business and not be set at a level which would "throttle" the opportunity for employers to set up business in Tasmania. Mr Camerson cited a number of awards which, he said, recognised the need for staff to work on weekends without the higher standards of weekend penalty rates which applied to traditional Monday to Friday operations. They are the Retail Trades, Licensed Clubs, Restaurant Keepers and Security Industry Awards. He said the awards varied as to the ordinary hours of work, the penalties payable on weekends and the requirements to work on weekends, but they highlight the fact that industries in Tasmanian have awards which recognise the needs of industry and the needs of society. Mr Cameron pointed out that the three enterprise agreements tendered by the union have provisions which recognise the need to employ staff on weekends without high penalty rates. The Vodafone Network Pty Ltd24 has a seven day roster with standardised roster allowances for Saturday work, thus, there is no additional penalty for working on Saturdays. The Watts Communication (Australia) Pty Ltd (Tasmania) Agreement 199825 has a shift extending over Saturdays which attracts a 15% loading and shifts extending over Sundays attract a 25% loading. The Australian Red Cross Society - Australian Services Union - Telemarketing Agreement 199926 allows ordinary hours to be worked Monday to Saturday with ordinary hours on a Saturday attracting a loading of 50% for all time worked. The union's position, by comparison, was that Saturday work should be treated as overtime, ie time and a half for the first two hours, then double time thereafter, and Sunday at double time for all hours worked. Mr Cameron said that the TCCI was not saying that there should not be a penalty of some significance for weekend work, but that traditional hours of work are changing. The opportunity exists to make a new award that can meet the requirements of both employers and employees, which disadvantages neither, but which provides the industry's customers and clients with a service at the times they require them at a reasonable cost.27 Determination When considering the evidence, it has become very clear that the range of evidence presented concerned only a very narrow section of the scope of employees covered by the Business Services Award. Witness evidence was confined only to the fund raising sector of the telemarketing industry - raffle selling in particular. The scope of the award is far broader than that, even in so far as telemarketing is concerned, where a number of businesses market goods and services through telesales. Mr Paterson said that there are a number of employees whose functions are clerical and administrative who are covered by the Business Services Award. This assertion was not disputed. The evidence was that even in the fundraising telemarketing sector a proportion of the employees are administrative and clerical employees, not telemarketers. In the case of ESP Marketing, according to the evidence, 35% of their staff fall into the clerical and administrative category. Even with employees the subject of most of the evidence and argument, that is, employees whose only function is telemarketing in the fundraising/raffle selling sector, there are currently very significant differences in the wages and conditions which are applied by the various enterprises. Remuneration ranges from rates of pay which have been set, at some stage, by reference to the C & A Award, to piecework rates which, on the evidence, in at least one enterprise, have been set against a target which is higher than the average generally achieved. I have borne these factors in mind when considering provisions that will have general application across the entire range of the award's coverage, not just to fund-raising telemarketers. I have also borne in mind Principle 10 - First Award and Extension to Existing Award, of the Wage Fixing Principles of this Commission, which states that the main considerations shall be the existing rates and conditions. I accept Mr Paterson's submissions that the wages and conditions of a proportion of the employees covered by the Business Services Award are already set according to the C & A Award. Indeed, this is specified in the Scope Clause that applied to the Business Services Award prior to the publication of this Decision. There was no evidence as to the existing rates and conditions for other employees covered by the Scope Clause of the award, for example, those employed in paging services, visitor, customer and consumer services, or internet services. Whilst I could assume that the rates and conditions for many of those employees are currently drawn from the C & A Award, in the absence of evidence, such as a survey, I cannot be certain that that is the case. Principle 10 also states that other considerations shall be the needs of the particular industry or enterprise, and requires me to ensure that employees' interests are taken into account. As I have said above, there are significant differences between enterprises within the fundraising sector, according to the evidence. I do not intend to adopt the "lowest common denominator" approach, because, in my view, that would fail to take the employees' interests into account. Some organisations pay lower rates than others. I consider that the rates struck in the award should be at some reasonable point between the highest and the lowest rates currently paid in the industry. One employer witness opined that the changes to rates of pay and conditions, as sought by the union, would result in their enterprise ceasing to be viable. I find the evidence presented in support of that view to be inconclusive and I am unable to conclude that the award would necessarily have that effect, especially in the light of other evidence, which showed that when a similar operation introduced wages and conditions essentially drawn from the C & A Award "we continued around the same sort of mark of our return rate on our investment."28 Part II - Employment Relationships and Associated Matters Clause 1 - Definitions Permanent Employee I have decided that the definition of "Permanent employee" as proposed by the union should be included, on the basis that the definition makes it very clear exactly what is meant. The definition reads: " `Permanent employee' means an employee engaged on a regular, continuous basis." Mr Cameron claimed that such a definition is not necessary because such terms are generally understood in industrial relations circles. This may well be the case, however awards are (or should be) widely referred to by many people whose understanding of industrial relations may not be particularly sophisticated and whose understanding of industrial relations terms cannot be assumed. Definitions, such as this one, which aid understanding, make the award more "user friendly" and should help to avoid unnecessary disputation. Part II - Employment Relationships and Associated Matters Probationary Employees A clause which allows for probationary employment is not a feature of the C & A Award, and, as such, is breaking new ground. The TCCI's preference is for a "minimalist" approach, which simply allows the employer and the employee to enter into an agreement that a probationary period may apply for up to eight weeks, able to be extended by mutual agreement. The union proposes a clause which requires the employer to provide the probationary employee with feedback about their work performance; and which specifies that there must be a review process and that the employer must communicate to the employee the outcome of the review and its consequences. Having considered the positions put by both parties, I have decided that the union's proposition is to be preferred. In my opinion, the clause as proposed by the union is fair and reasonable to the employer and employee and does no more than set out what should occur during and at the end of a probationary period. Part III - Wages and Related Matters These two disputed clauses are related, in that they concern the TCCI's proposition that there should be a new lower Grade 1 level (lower than Grade 1 in the C & A Award), which would apply to those employees who are not using technical equipment, such as those employed by the MS Society. The hourly rate proposed by the TCCI is $11.42 per hour ($433.80 per week), compared to the rate in the C & A Award, which is $11.53 ($438.00) for the first twelve months' service and $11.86 ($450.50) after the first twelve months. The TCCI's proposal is that a Grade 1 employee would remain at the same rate, with no increment after twelve months' service. The rates paid, according to the witness evidence, for telemarketers in the fundraising sector only are:
The evidence was that telemarketers who are employed in the fundraising sector are paid amounts generally within the range proposed by the union - some lower, some higher. The hourly rates paid (or that should be paid) to Grade 1 clerical and administrative staff across the whole of the coverage of the Business Services Award are $11.53 - $11.86, as per the C & A Award. During his evidence Mr Wright, of the Royal Guide Dogs Association, expressed the view that the Grade 1 level should include the operation of a visual display unit and a keyboard; he said that employees (who used a computer) should not have to be placed at Grade 2 (as is the case with the C & A Award). The parties subsequently reached agreement that the descriptor for Grade 1 - Business Services Employee - should be amended to include the words:
The amendment to the descriptor for Business Services Employee - Grade 1 - removes the concern referred to by Mr Wright, namely, that an employee performing base-level computer tasks would have to have been placed at Grade 2. The Classification Descriptor for Business Services Employee - Grade 1 - as proposed by the union, has, as "General Requirements":
Under "Skill Requirements": "Technical Skills Machine Operation
There was clear evidence that telemarketers perform tasks as directed, according to established routines, methods and procedures, with direct supervision. Also, that they operate telephones, and, in many cases, computers using basic operations. In addition, the evidence was that the telemarketers require and use sales skills and communication skills and also require some product knowledge. There was no evidence before me in relation to the skills required of the remainder of the employees who would be covered by the Business Services Award. The Call Centre division will be the subject of a separate application, for that reason I have not taken into account the documents presented relating to Call Centre agreements. I also note that agreements reached for particular call centres reflect the circumstances at those enterprises only. For the sake of completeness I simply note that the weekly rate for the Vodafone Network Pty Ltd Customer Care Australian Workplace Agreement 199829 is considerably more than the union proposes for the Business Services Award, and the Watts Communication (Australian) Pty Ltd (Tasmania) Agreement 1998,30 at time of approval, cites the C & A Award as the relevant award for comparison, and says that the minimum rate in the agreement is $11.00 per week in advance of the minimum rate in the award. The Hallis Call Centre Staff Salary Survey31, at Table 4, Telesales and Telemarketing, Basic Level, Base Salary Average - "Other", has average salaries higher than the rates sought by the union in this application. I note that there was no information before me as to the methodology used in obtaining this data, and that the breakdown by location lists only New South Wales, Victoria, Queensland and South Australia. I have, therefore, when reaching my decision, given more weight to the evidence presented by the witnesses, when considering the existing rates for telemarketers. I accept Mr Paterson's submission that there is no basis for departure from the skills base standard initially developed in the C & A Award and subsequently applied across a diverse range of industries. I do so for four main reasons, based on the evidence summarised above, and taking into account Principle 10 of the Wage Fixing Principles which requires me to consider existing rates and conditions, the needs of the industry and the employees' interests:
Accordingly, I have decided that the Wage Rates and Classification Descriptors should be those proposed by the union, with the amended descriptor for Grade 1. Piecework Rates The Wage Rates clause, as proposed by the TCCI, includes a piecework provision, in these terms:
...Remuneration.
...Payment of Wages to Pieceworkers
Section 50(3) of the Industrial Relations Act 1984 says:
The Act requires me to be certain that rates for piecework are set so that an average worker would be able to earn the award rate. I need, therefore, to be convinced that it is possible to establish what an average worker covered by the Business Services Award would be able to earn based on piecework rates, or, conversely, that it is possible to establish the work output level of an "average" worker paid according to award rates. The evidence in relation to the existence of piecework rates was confined to the fund-raising sector, mainly raffle selling, with some goods also being sold on this basis through the "telebureau" activities of the Royal Guide Dogs Association. There was no evidence brought concerning the existence, or otherwise, of piecework arrangements in the other areas of coverage of the Business Services Award. Within the fund raising sector, the evidence was that Red Cross and ESP Marketing do not operate a piecework system, although performance and credit card sales bonuses apply on top of the hourly rate. The Royal Guide Dogs Association pays its employees an hourly rate for its normal fund-raising activities, plus a performance bonus. Those employees who work in the "telebureau" doing work for other organisations are paid on a piecework basis. The MS Society pays its telemarketers on a piecework basis only, plus performance and credit card bonuses. Where piecework rates are applied to raffle sales, the evidence was that there are many variables which can affect the rate of sales, for example, the nature of the raffle, the timing of the raffle, the price of the raffle, the time of the day, and whether or not the telemarketers are "cold calling". There are also periods when no sales are possible, such as the "call back" times. Whilst the employer witnesses claimed that it was possible to estimate what sales an "average employee" could achieve, the evidence showed a considerable disparity as to what that was, even when the employees were selling the same commodity, ie raffle books for charitable organisations. The evidence of Mr Cotton (formerly of Red Cross) was that, based on the average call rate of 100 calls per shift (of four hours) there would be an average of a 20 to 25 per cent success rate, giving a sales rate of raffle books of five to six books per hour.32 Mr Pockett of ESP Marketing testified that the target for sales was seven books per hour and that ten years of experience had shown that employees usually averaged that amount.33 Mr Wright, of the Royal Guide Dogs Association, said that the expectation was that sales of four or five books per hour would be achieved.34 Ms Innes, of the MS Society, said that their rate had been set based upon a "strike rate" of eight strikes per hour, but he also said that the employees are actually getting only six to seven strikes per hour. He said that eight strikes per hour "is possible".35 The rates set by those organisations which apply piecework rates for the sale of raffle tickets also differs dramatically:
Even if it were to be assumed that all books "sold" were paid for, which is not the case, then the difference for the rate per book is 80c. per book. The evidence of Mr Innes was that only 60 to 70% of books are paid for. There was no evidence as to the proportion of books sold using credit cards, however the witness evidence seems to suggest that while credit card sales are the organisations' preferred method of payment, they are not the norm. Where books are not paid for (presumably 30 to 40% of books) then the difference in payment per book between the two organisations is $1.00 per book. The lowest estimate of the number of books an "average" worker would sell in an hour is four and the highest is seven. Clearly, this indicates a substantial difference in the pay rates currently being received by "average" workers, not taking into account the many variables previously referred to. In my view, the evidence indicates that the setting of a rate for "an employee of average capacity", to enable a reasonable return for their labour and, indeed, a reasonable return for the employer, is far from an exact science so far as the telemarketing of raffle books is concerned. There is no evidence before me to indicate whether or not that is also the case across the breadth and depth of the scope of the Business Services Award. Having considered all of the evidence, I am not persuaded that, in the circumstances, it is possible to establish piecework rates based on what an "average employee" covered by the Business Services Award would be able to achieve. Even if it were possible to establish what an "average employee" would be able to achieve, Mr Paterson submitted that piecework rates should be struck in such a way as to enable an average employee to earn an amount in excess of the award rate. Mr Paterson referred me to a decision of the Full Bench of the Australian Industrial Relations Commission36, which concerned an application to effect changes to the Payment By Results (PBR) provisions in the Footwear - Manufacturing and Component - Industries Award 1979, which dealt with the question of whether or not supplementary payments should continue to be offset against PBR earnings. The Full Bench found that the calculation (based on the expectation that employees should be able to earn 10% more than time-rate workers engaged on the same task) should be based upon the total award rate.37 The focus of that case was on PBR schemes wherein the individual employee's earnings are determined - subject to a minimum level of payment (which is the ordinary time rate) being guaranteed - by the person's measured output. This type of scheme typically requires that the rate be set so that the individual can have some expectation of the ability to earn more than the ordinary time rate. This involves the use of work-study techniques to determine a standard per-minute output. The Full Bench, in this case, stated at Page 16:
In Mr Paterson's submission the decision said that the issue of equity involves workers receiving reasonable compensation over and above the award. This is somewhat different to Mr Cameron's proposal, which is that a rate be set to enable an ordinary worker to earn not less than the appropriate weekly base rate. Both Mr Cameron and Mr Paterson referred the Commission to a number of other awards of the Commission which have within them piecework provisions. However, neither of the advocates indicated to the Commission whether these were arbitrated or consent provisions, or what the principles were that had been applied when setting the piecework formulae. The awards referred to are:
An examination of these awards shows that none of them have a provision exactly like that proposed by the TCCI for the Business Services Award. The awards, excepting for the Estate Agents Award (which has a sales commission-based system), require the piecework rate to be set in such a way as to allow an average employee to earn rates higher than the award (between 10% and 25% higher). The Automotive Industries, Timber Merchants, Estate Agents and Furnishing Trades Awards guarantee payment of at least the ordinary time rate in the award. The Meat Processing Award requires that piece rate workers be paid 10% more than the award rate whilst on paid leave. Another consideration is whether or not the systems being applied in the telemarketing sector are, in fact, "piecework" rates, as provided for in the Industrial Relations Act at s.50. The Act does not define "piecework". The Macquarie Concise Dictionary defines "piecework" as "work done and paid for by the piece". The CCH Macquarie Dictionary of Employment and Industrial Relations defines "piecework" as:
and defines "payment by results" as "piecework". It is arguable that the systems currently in place in the fund raising telemarketing sector are not, in fact, piecework systems, in that the workers are not paid according to their work output, but, rather, according to their sales success rate. The actual tasks performed by the telemarketers are the making of telephone calls and the recording of data. The success of the telephone calls is reflected in the number of raffle books sold. I am not convinced that the work output is the sales result. The rate being paid to the worker is based on the number of successful telephone calls made. In my view, in order for it to be a piecework system according to the above definitions, the work output should more properly be measured by the work performed, rather than on the sales success rate. The system used could, perhaps, be more accurately described as a sales commission system, rather than a piecework system. The "piecework" systems in place, in the absence of a guaranteed minimum payment, do not deal with the question of "downtime" when, as the evidence shows, the raffle is in its "callback" phase and no new sales are being made. However, the telemarketers are still performing work, and there is still "work output". Neither party put forward any alternative draft clause, although Mr Paterson did say that if a piecework provision were to be inserted it should allow an average employee to earn more than the award rate. There was no evidence or submission before me as to what the amount above the award should be. There is a large variation in existing awards of the Commission that have such a provision (between 10% and 25% above the award). In the absence of any arguments or evidence in relation to what the amount should be, I am unable to seriously consider such a proposition. After considering the evidence and the arguments, and taking into account the way the "piecework" rates are currently operating in the telemarketing section of the funding raising sector, I am not convinced that the piecework provision proposed for the Business Services Award by the TCCI is either fair or equitable. Aside from the difficulties in establishing what an "average" employee should be able to achieve, the evidence shows that the number of variables that exist within the telemarketing subsection of the fund-raising sector mean that an employee's earnings could vary considerably for reasons beyond their control. In the absence of a guaranteed minimum level of wages, this, in my view, makes the provision unfair. The Wage Fixing Principles require me to have regard for existing rates and conditions. The evidence before me was that only one enterprise operated solely on a "piecework" basis for all of its telemarketers, and one other enterprise did so for only some of its telemarketers. Three of the four organisations had a set hourly rate for telemarketers. The evidence was confined to a very narrow area of coverage when considering the scope of the award. I do not consider that a piece rate system with no "floor", as proposed by the TCCI, represents the standard which currently applies for employees covered by the Scope clause of the Business Services Award. I have considered Mr Cameron's arguments that such a provision creates employment opportunities for workers with limitations who might not otherwise be employed, were they to have to be paid award rates. I consider that there are other alternatives that might more properly achieve that result, such as the Supported Wage System clause within the award. For the above reasons, I have decided that the proposed piecework clause should not be included in the award. Mr Paterson said that the union would not oppose a sunset provision, which would allow organisations which currently operate a PBR system to continue to do so for a defined period, to enable them to negotiate appropriate enterprise agreements. No submissions were made in relation to this suggestion. I have, however, given it some consideration, and am of view that the operative date of the award should be just that. The situation in relation to this award is, no doubt, no different to that of any other new award. There will be some employers who will need to make adjustments. In the case of employees of those organisations who do not achieve set targets, there will now be the requirement to pay those employees the award rates. This is the same situation as for other organisations who may have had rates and conditions less than those in the award. I do not think it fair or reasonable that some organisations be relieved of the requirement to comply with the award rates and conditions from the operative date, simply because they operated under a PBR system. I am not, therefore, prepared to include a "sunset" provision in the award. Part V - Hours of Work, Penalty Payments and Overtime These two clauses are related in that they concern penalty rates to be applied after 6.30pm. Under the terms of the C & A Award, work after 6.30pm, being outside of the spread of ordinary hours (7.00am until 6.30pm Monday to Friday), attracts an overtime rate of time and one half for the first three hours and double time thereafter. The TCCI argues that the spread of ordinary hours should be 7.00am to 8.30pm, with, therefore, overtime rates not applying until after that time. The parties are agreed that there should be an afternoon shift provision, which attracts a 15% penalty (rather than overtime rates). The difference, however, is that the union's position is that the penalty should apply to shifts finishing after 6.30pm and the TCCI's contention is that the shift penalty should not apply until after 8.30 pm. The union argues that the shift penalty rate is a "compromise" which enables work to be performed after 6.30pm without attracting a 50% overtime penalty, yet still compensates workers for working "unsociable" and inconvenient hours in terms of access to, for example, public transport and child care services. The TCCI argues that it is the nature of the industry for the work to be performed until 8.30 at night and that the optimum hours are between 4.00pm and 8.30pm, therefore these hours should be regarded as ordinary hours and attract no penalties. There is no doubt that the evidence of all of the parties was that the best times for fund-raising telemarketing are between 9.00am and 1.00pm and 4.00pm and 8.00pm, (excepting for Mr Innes of the MS Society, who said until 8.30pm). The evidence was unanimous and unchallenged in relation to the normal hours of operation for telemarketing. The majority of employees work afternoon shifts and many employees work just the afternoon shift, usually 4.00pm to 8.00pm. Mr Paterson presented evidence which showed that there are a number of awards of the Commission where shift loadings apply to shifts that finish after 6.00pm, even when the "normal" hours of operation of that business extend beyond 6.00pm. Mr Cameron claimed that there were other awards which showed that the demands and requirements of the particular industries had been taken into account when determining the span of hours, for example, the Meat Retailing Award and the Baking Industry Award. Both these awards were made by consent and nothing was put to me as to the circumstances which prevailed at the time, or which, if any, principles in relation to shift work, established through precedent decisions, were applied. The evidence before me as to existing telemarketing industry practices differs, with one organisation currently operating with a 15% loading, and another claiming that such an impost would put them out of business. There is no doubt that for some organisations it would, indeed, add to their wages bill, although not 15% in all cases because some of the work is performed during the 9.00am to 1.00pm time slot. No evidence was put to me in respect of the remainder of employees or employers covered by the Scope Clause of the Business Services Award. The Call Centre division will be the subject of a separate application. Those employees whose tasks are purely administrative or clerical would, presumably, be more likely to work "normal" business hours. Shift work has long been a feature of working life in Australia. Shift work is work that is performed outside of the hours normally worked by most members of the workforce, ie, outside of 9am to 5pm Monday to Friday. In many circumstances an "afternoon shift" is defined as a shift finishing after 6.00pm and at or before midnight, as in the Metal, Engineering and Associated Industries Award 1998. Variations on this theme occur in a number of awards of this Commission. I accept Mr Paterson's arguments in relation to employees working unsociable hours - indeed the existence of penalty rates in awards shows that, historically, that has been recognised by industrial tribunals as a disability. The problems of shift work have generally been recognised as including social and domestic inconvenience, for example, restrictions placed on sporting and general social, private and family activities, particularly for those workers with young children. Industrial tribunals in Australia have recognised that shift work has disabilities which require special remuneration, and have continued to regard those disabilities as a key justification for penalty rates. In assessing what that remuneration should be, tribunals have had regard for whether the shifts have been afternoon, night, rotating or some other combination of shifts. In addition, the circumstances of each particular award have been examined when fixing appropriate penalty rates. The 15% sought by the union is, in my view, conservative, and is generally in line with what is paid by way of afternoon shift penalties. In this jurisdiction the following awards (and the list is not necessarily exhaustive) attract a 15% afternoon shift loading for working a shift which finishes after either 6.00 or 6.30pm. Butter and Cheese Makers There are other awards with variations on this theme, for example, slightly higher shift penalty rates, depending upon whether or not the afternoon shift is a permanent or rotating shift. It is self evident that in a number of the industries covered by the above awards there is a need for employees to regularly work shifts outside of "normal" hours. Whilst there are exceptions, I think it fair comment to say that the general standard of awards of this Commission is that a 15% shift penalty applies to afternoon shifts and that afternoon shifts usually are shifts that finish after 6.00pm, and that, generally, such provisions exist in just those industries where shift work is an industry requirement. Many industries cannot function effectively on the basis of a 9am to 5pm Monday to Friday working week. Clearly, the organisations which gave evidence fall into this category. In balancing the needs of the industry and the needs of employees the alternatives are:
No other alternatives were put before me. I accept that the needs of the telemarketing fund raising sector are such that work needs to be performed, to a great extent, in the evening hours. In my view, employees covered by the Business Services Award who work the afternoon shift should be paid a premium above that of employees who work the day shift. I have decided that a 15% afternoon shift penalty should apply to shifts that finish after 6.30pm and at or before midnight. I have also decided that the span of ordinary hours should be between the hours of 7.00am and 6.30pm Monday to Friday inclusive. In reaching this decision I have taken into account: the fact that shift penalties are being paid in some cases but not others; that the award is not just confined to telemarketing but is the underpinning safety net for the entire coverage of the award; general industrial standards; the needs of the industry; employees' interests; and the long-established recognition of compensation for working unsociable hours. Part V Hours of Work, Penalty Payments and Overtime These two clauses deal with the question of what penalties should apply in the case of work performed at weekends. The union seeks to maintain the provisions in the C & A Award, that is, that time worked on a Saturday should be remunerated at the rate of time and a half for the first two hours and double time thereafter, and on a Sunday, at double time for all hours worked. The TCCI argues that the rates should be one and a quarter times the ordinary rate for all time on a Saturday, and, on a Sunday, one and three quarters time for all hours worked. The situation is somewhat different to that of the shift work penalty, which was introducing a penalty rate not currently in the C & A Award. In this instance, what is sought by the TCCI, if granted, is a reduction in the weekend penalties which already apply to clerical and administrative staff employed in the Business Services industry. There was no evidence led as to why the weekend penalty rates should be less than those in the C & A Award. Mr Cameron made certain submissions in relation to call centres and internet services, but brought no evidence in support of his arguments. In the case of the call centre agreements referred to, they are of interest only, because, as noted earlier, they were made according to the particular circumstances that applied at those enterprises. The evidence was that, in the fund-raising telemarketing sector, work was generally not performed at weekends, apart from the MS Society who require their employees to work one Saturday a month. Mr Wright, of Royal Guide Dogs, said Saturday work had been tried at various times and was found not to be cost effective, whereas Mr Innes of the MS Society said that Saturday mornings were "fairly lucrative". The evidence of Mr Cotton, in relation to the operations of Red Cross, was that a 50% loading was paid for Saturday work. There was no reference in the evidence to work being performed on a Sunday. Mr Cameron referred to a number of awards which, he said, recognised the need, due to the nature of the industry, for staff to work on weekends without the higher penalty rates traditionally incorporated into Monday to Friday occupations and industries. Again, no evidence or information was put before me as to what principles were applied when making those awards, and whether or not they were consent, rather than arbitrated, award provisions. Also, there was insufficient evidence me before which would enable me to make a positive finding that the Business Services industry is of such a nature as to require regular weekend work. Mr Cameron also referred, in his written submission, to the Saturday and Sunday penalty arrangements in the Vodafone and Watts agreements, in the context of existing practices and provisions that, he said, "recognise the need to employ staff on weekends without high penalty rates". But, as Mr Cameron himself said:
Principle 4 of the Wage Fixing Principles, says that:
I am reluctant to accept the weekend penalty rates in an agreement as a basis for an argument that the award should contain similar weekend provisions. The award is the safety net which underpins workplace bargaining, not the other way around. Awards of jurisdictions throughout Australia recognise that workers who work at weekends suffer a disability, for the same reasons I have already referred to in relation to shift penalties, and that the disability should be compensated for in recognition of the interference with family and social life. There is general recognition that Sunday work is remunerated at a higher level than Saturday work. As Mr Paterson pointed out in his submission, the scope of the Business Services Award is wide; witness and documentary evidence reflected only a small sample of the award coverage. In the circumstances of this case, having regard for the evidence, I am not persuaded that the industry, as set out in the Scope clause, has needs which require weekend work as part of its normal operations to such an extent as to justify the reduction of the weekend rates which currently apply to at least part of the award's coverage. Further, the award will apply to a range of sectors regarding which no evidence was led. For all of the reasons above, considered in conjunction with Principle 10, I have decided that the weekend penalty rates should be those as proposed by the union, that is, those as set out in the Clerical and Administrative Employees (Private Sector) Award. Order The award shall be varied in the manner set out above. The operative date shall be the first full pay period on or after the date of this Decision. The Order is attached. Correction Order (10.4.2001) Correction Order (26.2.2003)
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