T9626
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union METAL AND ENGINEERING INDUSTRY AWARD
Award variation - Metal and Engineering Industry Award - Clause 12 (d)(iv) - casual loading increased from 20% to 25% - nexus between Federal and State awards - award updated - application granted - included in 1 of 2002 (Part II - Employment Relationship and Associated Matters, Clause 1 - Contract of Employment (d)(v)) - operative ffpp 1 July 2002 REASONS FOR DECISION [1] This was an application made under section 23(1) of the Industrial Relations Act 1984 (the Act) by the Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (the union) for a variation to be made to the Metal and Engineering Industry Award (the award). [2] The union sought to have Clause 12 - Contract of Employment of the State award varied by increasing the loading prescribed for casual employees in sub-clause (d)(iv) of that clause from 20% to 25%. [3] The basis of the application arose out of a Full Bench decision in the Federal Commission in a matter pertaining to the Metal Engineering and Associated Industries Award 1998, dated 29 December 2000 (Print No T4991). In that decision the Federal award prescription of a 20% loading on the wage rate for casual employees was increased to 25%, hence this application. [4] In its submissions in support of the application the union relied on two factors - one that the State award has historically formed a nexus with the counterpart Federal award and this was a case where that parity should be maintained. The other was the process whereby the Federal Commission arrived at the amount of the increased loading whereby it applied a mathematical formula which, the union claimed, ought to be applied to the State award (producing the same result). [5] In further support of its claim for parity the union advised the Commission that the equivalent loading applying to the metals award in other State jurisdictions was as follows:
[6] The New South Wales prescription is influenced apparently by the fact that under the Annual Holidays Act 1946 (NSW) casual employees were entitled to pro-rata annual leave - see Exhibit T6. [7] Also, in relation to parity, the union pointed out that in Tasmania many metal industry employees covered by the Federal award were already receiving the increased loading whilst their counterparts under the State award were not. [8] The union showed how the casual loading of 20% currently prescribed in the State award was inserted in 1974 about six months after the Federal award was so amended, presumably based upon the increase in annual leave granted around that time. [9] The formula applied by the Federal Commission was adopted from a previous decision of the Employment Relations Commission of Victoria.2 After it applied the formula, the Federal Commission said at paragraph 198 of its decision:
[10] The union made the point that casual employees generally received less pay by comparison with full-time workers, implying that the casual loading should reflect the difference. [11] The Tasmanian Chamber of Commerce and Industry Limited (the Chamber) confirmed its opposition to the application based upon reasons related to the alleged nexus between the State award and its counterpart Federal award, the difference between the "Federal" casual employee and the "State" casual employee, the formula used by the Federal Commission and the economic impact of the claimed increase. [12] The Chamber denied there was a nexus between the State award and its Federal counterpart saying that there were many differences between the two awards, and, if the nexus was an established precedent, there were many areas where both the employer and the employee representatives could seek beneficial amendments. The Chamber pointed out, as an example, that it could apply to have the Federal redundancy standards applied which were generally less beneficial for employees. To accept a nexus, the Chamber said, would be against the independence of the State Commission. [13] The Chamber pointed out that the provisions for a casual worker in the Federal counterpart to the State award was very different to the equivalent provisions in the State award, hence it was not appropriate to apply an increase to the State award casual loading in line with that applied in the Federal award. The Chamber submitted that, for all intents and purposes, the two types of casual employees, State and Federal, were entirely different, hence the criteria applied by the Federal Commission should not be applied to the State award casual employees. [14] Turning to the formula applied by the Federal Commission, the Chamber submitted that the changes relied on by the Federal Commission since 1974 notice of termination of employment, a job search allowance (time off during the notice period), severance pay and increased public holidays, had not been provided or changed in the State award. [15] Further, the Chamber said, the inclusion of long service leave is a factor that should be discounted since the Tasmanian Long Service Leave Act 1976 did not exempt casual employees from entitlement and, in any case, it "would lead to an inequitable situation because casual employees, irrespective of their length of service, would achieve a cash benefit from a contingent entitlement not available to most so-called permanent employees."3 [16] The Chamber pointed out that in the formula, the application of even the smallest variation in the quoted average hours of work per week for casual employees produced "wildly fluctuating corresponding figures for the casual loading."4 The Chamber noted the differences between the State award and the Federal award, particularly the provisions for casual employees, and said consequently it was inappropriate to apply the Federal formula to the State award. [17] The Chamber dismissed the union's claim that the evidence showed casual employees generally received less by comparison with full-time employees saying that this Commission should only be concerned with minimum award rates, not going rates of pay. [18] Finally, the Chamber submitted that the granting of the increase claimed would be against the economic interest of the State, especially in view of the present precarious employment position. There was also the possible flow on effect the Chamber said and, "in summary we say an increase in the casual loading to 25 per cent will only raise costs and prices, lower productivity and reduce employment levels, four outcomes that are clearly contrary to the net interest of the public."5 [19] In a written response agreed between the parties to be submitted, the union referred to the Chamber's submissions against taking the Federal casuals' decision as a precedent and reminded the Commission that in May 2000 the then Manager, Operations, of the Chamber, Mr Terry Edwards, had asserted in a letter to the Commission that, "the (Tasmanian) award has a strong relationship with the Metal, Engineering and Associated Industries Award 1998." The union also quoted from the case Re Retail Trades Award (unreported), T125 of 1985, in which, even though a Full Bench of the Commission was at pains to stress the independence of the Commission, it said, it "may be convenient and in some cases even desirable to follow decisions of the tribunals." The union said that this case was one which did set a precedent and because of the extensive nature of the Federal proceedings it was a benchmark throughout the Commonwealth. The union quoted at some length from two cases relevant to this issue to point out that it would be wrong for the Commission to require a full case to be prosecuted because the Federal decision was a "compendious" inquiry which ought to be relied on. Since the Federal award already applied in Tasmania the union submitted that, far from being contrary to the Tasmanian system, " ... the Federal standard would work to harmonise the rules under which casual labour is engaged in manufacturing in the State." [20] The union submitted that the Chamber was wrong in relying on the fact that there were different provisions for casual employees in the State award, the State award prescription being more accurate in principle. The union said that, if anything, this made its case stronger in that it applied more closely and narrowly to genuine casuals and the factors of itinerancy and lost time, specifically relied on in the Federal decision, remained apposite. [21] The union said:
[22] The union acknowledged the Chamber's submission as to the possibility of excessive figures emerging from the application of the adopted formula, but, pointed out that the Federal Commission had itself qualified the strict use of the formula and said such reliance was used only as a "a broad approximation" of a quantum for notice and hourly employment. [23] As to the Chamber's dismissal of the union's submission that casual employees generally received less than full-time employees, the union traced a pattern of neglect and disadvantage for casual employees and said that the labour market had failed casuals and therefore the Commission should intervene and remedy the situation. Findings [24] In relation to the fomula adopted by the Federal Commission in its decision in Print No T4991, I generally prefer the submissions in this matter put by the Chamber, however, in so doing I do not reject the submissions of the union: I simply propose not to rely on that part of the Federal decision as I think ultimately it does not furnish sufficient grounds to grant this application. [25] I am satisfied that the increase claimed should be granted on the basis that it would be unfair for employees covered by the State award, who previously have received the same amount of casual loading as that prescribed in the counterpart Federal award, to miss out on the increase. In this context, I accept that there is a nexus between the two awards without prejudice to the presence or absence of such a nexus in other provisions of those awards. I note that the last increase in the allowance, in 1974, followed the annual leave increase and the Federal movements in both cases. [26] I also accept the union's submissions that this Commission should acknowledge the extent and significance of the Federal Full Bench case which resulted in the increase in the allowance in that jurisdiction. [27] The fact that the granting of the increase does not put the State award ahead of some of the other state metals awards is also a determining consideration. [28] It is true that the provisions for a casual employee in the State award are different to the counterpart Federal provisions, but, I accept the submission of the union that such a difference is irrelevant because, if the State award provision is better in principle, and I accept that it is, all the elements of casual employment justifying the loading itself are present and the increase is merited in every case, whereas it is conceivable that it may not be so merited in some instances Federally (eg a "full-time" casual employee). [29] I am not satisfied that the granting of this increase would be a significant detriment to the economy of this State. [30] On the basis of all the reasons I have mentioned, I consider it would not be against the public interest in Tasmania for this application to be granted. [31] The application is approved. [32] The order reflecting this decision will be incorporated in the review and consolidation of the award which is expected to be issued in the very near future and to commence operation from the first full pay period commencing on or after 1 July 2002.
P A Imlach Appearances: Dates and place of hearing: 1 See Federal decision at para 150 |