T9520, T9531, T9532, T9533 and T9521 - 20 August 2002
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Construction, Forestry, Mining and Energy Union, Tasmanian Branch (T9520 of 2001) (T9521 of 2001)
Award variation - structural efficiency principle - award review process - demarcation - separate awards created for on-site and off-site work - operative date ffpp 1/10/2002 REASONS FOR DECISION [1] On 1 May 2001 applications were lodged by the Construction, Forestry, Mining and Energy Union, Tasmanian Branch (CFMEU) (T9520 and T9521), pursuant to s.23 of the Industrial Relations Act 1984, to vary the Building Trades Award and the Building and Construction Industry Award, respectively. On 7 May 2002 applications were lodged by the CFMEU (T9531, T9532 and T9533), pursuant to s.65A of the Industrial Relations Act 1984, for the determination of award interest in the Building Trades Award. [2] When these matters came on for hearing, Mr B Bodkin, with Mr J Long, appeared for the applicant union. Mr R Flanagan, appeared for The Australian Workers' Union, Tasmania Branch. Mr T Edwards and Mr M Watson appeared for the Tasmanian Chamber of Commerce and Industry Limited, The Master Builders' Association of Tasmania, The Retail Traders Association of Tasmania and the Tasmanian Sawmillers Industrial Association. [3] These matters were first listed for hearing on 28 June 2001 at which time, and with the consent of the parties, the Commission determined that all applications be heard together. [4] In his opening submission, Mr Bodkin for the CFMEU, said that the purpose of the applications was to complete an award rationalisation program which began in the industry in 1988. The applications, if granted, would lead to the following outcome:
[5] Award coverage in this industry [or industries] has a long and complex history. [6] On 3 May 1988 Watling C [as he then was] approved the terms of a Scope clause for a new award to cover the building and construction industry.1 [7] In a subsequent decision dated 28 May 1990, Watling C observed:2
[8] The Commissioner went on to determine that:3
[9] In a decision granting the second structural efficiency increase4 Watling C noted that the "making of the Building and Construction Industry Award and specifically the construction side of that Award has not been finalised ..." The Commissioner indicated that he expected this to commence in the first quarter of 1991. For whatever reason, the rationalisation of the building and construction industry awards has not progressed since these early decisions of Commissioner Watling. [10] In 1996 the scope of the former Roadmakers Award was expanded and the award renamed the Civil Construction and Maintenance Award. [11] Mr Bodkin submitted:5
[12] Whilst there was broad agreement to establish a self-contained off-site award, both the AWU and the TCCI initially opposed the creation of a single on-site award. [13] Following a number of informal conferences, the matter was set down for hearing on 17 and 18 September 2001. This included an inspection program involving a number of sites in the Hobart area. [14] Mr Bodkin submitted that a number of conclusions could be drawn from the inspections:
Demarcation [15] During preliminary submissions, Mr Flanagan for the AWU indicated that his organisation did not accept the proposition that there is a similarity between building work and construction work. He submitted that there are two distinct and discrete industries. [16] On the question of demarcation between the respective unions, Mr Flanagan said the issue of who represents the interests of labourers on commercial building sites and civil construction sites is one which has been contentious for many years. [17] Mr Flanagan said that the CFMEU [and the BLF before it] has, for a long period of time, represented certain classes of labourers on commercial building sites just as the AWU has very clearly represented the interests of labourers on civil construction sites. Reference was made to certain demarcation agreements, which underpin this contention.6 [18] The position had been clouded by litigation at a federal level whereby the CFMEU sought to extend its rules to have dual coverage of labouring classifications in the civil construction industry.7 [19] Mr Bodkin described the demarcation issue as a "red herring". He pointed out that both unions are party to all awards and in such circumstances a demarcation dispute could not arise simply as a consequence of the amalgamation of the two on-site awards. Mr Bodkin submitted that the demarcation issues have no merit in the question of whether award rationalisation should be completed in accordance with Commissioner Watling's earlier decision. [20] At the conclusion of the CFMEU submissions the hearing was adjourned on the basis that both the AWU and TCCI would respond in writing. These written submissions were received on 14 March and 4 April 2002 respectively. Mr Bodkin exercised his right of reply by correspondence dated 9 April 2002. [21] Importantly the AWU written submission reads in part:
[22] Given the significance of this agreed position, the correspondence dated 20 September 2001 from Mr Bodkin to the AWU national office is set out in full.
[23] The Commission notes that despite the litigious battle at a federal level, the two organisations have a demonstrated history of amicably settling demarcation issues at a local level. The understandings recorded above, coupled with the proposed Demarcation Disputes Procedure, augers well for a stable industrial environment into the future. TCCI Submissions [24] Despite initial opposition to the application, the TCCI in its final written submission did not oppose the application for one award to cover "on-site work", albeit it was not considered to be "an optimised outcome". The submission said:
[25] The TCCI submission also included the following points and observations:
Wage Fixing Principles [26] Mr Bodkin submitted that, in relation to the building and construction industry, the first stage of the structural efficiency process was completed with the decision of Watling C on 26 October 1990. He said that the present application is intended to give full effect to the objective underpinning that decision. [27] Mr Bodkin submitted that the structural efficiency principle continues to be relevant to the building and construction industry awards because the process started before Commissioner Watling has not yet been completed. Mr Bodkin noted that the structural efficiency principle provides "inter alia for an examination of award matters to include specific consideration of the scope and incidence of the award and/or rationalising the list of parties to the award". [28] I agree with Mr Bodkin's submission. In appropriate circumstances the structural efficiency principle remains extant. The current award arrangements in the building and construction industry clearly create such a circumstance. [29] I conclude that the Structural Efficiency Principle, combined with Award Review Process, provides the appropriate vehicle for the processing of these applications. The Creation of an On-Site Award [30] In light of the submissions of the parties and the evidence produced in this matter, I have no hesitation in concluding that the creation of one award to cover the on-site components of the building and construction industry is consistent with both the Wage Fixing Principles and the public interest requirements of the Act. [31] This award, to be known as the Building and Construction Industry Award, will have a Scope clause expressed in the following terms:
[32] Mr Bodkin submitted a draft award. He explained that of the 53 clauses in the new award, complete rationalisation had been achieved in 45 clauses, and substantial rationalisation had been achieved in four of the remaining eight clauses. [33] In large measure I accept the draft as submitted by Mr Bodkin. In a rationalisation process such as this it is inevitable that some adjustments to wage rates, allowances and award provisions will be necessary. Examples include a $3.40 difference in industry allowance and a $1.80 differential in fares and travel allowance. These differentials are not significant and in most cases appear to be a consequence of a failure to flow certain changes in the parent federal award to the State counterpart. I am satisfied that this levelling up process will not result in a cost impact of any consequence in the field. [34] The matter of meal allowance needs to be determined. Under the civil award, an allowance of $11.90 is payable where employees are required to work in excess of 1½ hours overtime. Under the national building award, the allowance is $9.30, payable when 1½ hours overtime is worked. [35] Under the draft put forward by Mr Bodkin, this differential is preserved through separate subclauses. In the alternative Mr Bodkin submitted that there be a common clause for all employees, and that should be in line with the national building award. [36] The AWU opposed this latter position stating that there was no justification for departing from the State standard in favour of a provision based solely on a federal nexus. [37] I do not favour having different meal allowance provisions for employees who may well be performing both civil construction and building work on the same day. That would not only be unworkable but would be contrary to one of the drivers behind these applications. That is, a degree of uniformity for employees and employers alternating between different branches of the construction industry. [38] I propose to adopt Mr Bodkin's alternative position. That is, an allowance of $9.30 payable after 1½ hours overtime. This is a reduction on what hitherto has applied for some employees. I would observe however, that most of the benefits of the "levelling up process" referred to above will favour this same category. I would not rule out a reversion to the State standard at some stage in the future. The success or otherwise of any such application would depend largely on the parties' attitude to the matter of "parent award nexus", an issue which the CFMEU at least is yet to address. [39] The matter of a nexus with respective federal awards has hitherto been persuasive in terms of State award variations. Both the AWU and the TCCI have expressed the view that the creation of one award for the on-site sector will bring this nexus to an end. The CFMEU has not expressed a view on this question. It is an important issue and one that the parties should have a clear understanding about. I propose that this issue be discussed at the settling of the orders hearing to be set down prior to this award coming into operation. The Creation of an Off-Site Award [40] There is universal support for the creation of a self-contained award to deal solely with off-site work. Whilst there may be a debate as to the delineation between civil construction and building work, the same debate does not extend to the off-site sector. The reality is that the on-site and off-site sectors are "chalk and cheese" and it makes sense that this clear distinction be reflected in the award coverage. Indeed the off-site influence of the award extends to the mixed industry sector by virtue of Regulations made pursuant to s.40, Extension of awards by regulation, of the Act. [41] It logically follows that I have no hesitation in granting the application to create an award limited to the off-site sector of the industry. It also makes sense to use the existing Building Trades Award, appropriately modified, as the vehicle for this application. [42] The only significant area of contention relates to the Scope clause. The CFMEU proposes the existing Building Trades Award scope, appropriately modified to exclude all on-site elements. [43] The TCCI contends that this style of drafting is more akin to the craft of the employee, rather than the industry of the employer, as is required under s.33 of the Act. The TCCI proposal8 seeks to define the "off site building industry" as:
[44] Both proposals would adequately cover the situation although, if anything, the TCCI proposal is potentially wider than that of the CFMEU. Mr Bodkin submitted that this might give rise to "unintended consequences". [45] I intend to adopt the scope clause as proposed by the applicant, if for no other reason than we are dealing with a known quantity, and hence less likely to encounter outcomes that were not anticipated. [46] The new Scope clause will read as follows:
[47] The CFMEU has also lodged applications to delete the following organisations from the Award Interest Clause:
[48] These applications were not addressed in any depth during the proceedings. I therefore propose to defer consideration until the hearing as proposed below. Operative Date [49] Attached to this decision are draft orders in relation to both awards. The new awards will commence operation from the beginning of the first pay period to commence on or after 1 October 2002. A prospective date will allow sufficient time to finalise all aspects of the new awards. Civil Construction and Maintenance Award [50] To facilitate the implementation of the new on-site award, it will be necessary to set aside the Civil Construction and Maintenance Award. I invite the parties to lodge an appropriate application. Further Hearing [51] In order to finalise the orders prior to operative date, I propose to convene a hearing/conference on 4 September to deal with outstanding issues. This hearing/conference will address the following matters:
[52] In addition it would be useful to hear the parties' position in relation to the matter of nexus with relevant federal awards.
Tim Abey Appearances: Date and Place of Hearing: 1 T1175 and others of 1988, 3 May 1988 |