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Tasmanian Industrial Commission

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T1165 T1185 T1279 T1223 T1283 T1243

 

IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984

 

T.1165, T.1185, T.1279, T.1223, T.1283 and T.1243 of 1988 IN THE MATTER OF APPLICATIONS BY THE SHOP DISTRIBUTIVE AND ALLIED EMPLOYEES' ASSOCIATION, TASMANIAN BRANCH, THE FEDERATED CLERKS UNION OF AUSTRALIA, TASMANIAN BRANCH, THE TASMANIAN CONFEDERATION OF INDUSTRIES, THE RETAIL TRADERS ASSOCIATION OF TASMANIA AND THE TRANSPORT WORKERS' UNION OF AUSTRALIA (TASMANIAN BRANCH) RESPECTIVELY TO VARY THE RETAIL TRADES AWARD
   
  RE: 4% SECOND TIER INCREASE
   
FULL BENCH:-
DEPUTY PRESIDENT ROBINSON
COMMISSIONER R. J. WATLING
COMMISSIONER J. G. KING
HOBART, 6 July 1988
   
   

REASONS FOR DECISION

   
APPEARANCES:  
   
For the Shop Distributive & Allied Employees' Association,
Tasmanian Branch
   - Mr. P. Targett with
     Mr. P. Fenton
     (2.5.88)
   
For the Federated Clerks
Union of Australia,
Tasmanian Branch
   - Mr. D. Fry
   
For the Transport Workers'
Union of Australia
(Tasmanian Branch)
   - Mr. J. T. Lynch
     (2.5.88, 3.5.88, 
     9.5.88 & 7.6.88)
   
For the Tasmanian Trades
and Labor Council
   - Mr. P. Lennon (2.5.88)
   
For the Tasmanian Confederation
of Industries
   - Mr. T. Abey
   
For the Retail Traders Association
of Tasmania
   - Mr. D. McDougall
     with Mr. I. Massie 
     (2.5.88 & 3.5.88)
     Mr. J. Blackburn 
     (3.5.88, 9.5.88 
     and 7.6.88)
   
DATE AND PLACE OF HEARING:  
   
2 May 1988                  Hobart  
3 May 1988  
9 May 1988  
20 May 1988  
26 May 1988  
7 June 1988  
   
   

All applications before us had one thing in common, that is, they claimed a 4% increase in the rates of pay contained in the Retail Trades Award as part of a package.

However, the applications lodged by the Tasmanian Confederation of Industries and the Retail Traders Association of Tasmania sought award variations as trade-offs for the second tier increase under Principle 4 - Restructuring and Efficiency.

On the other hand, the applications lodged by the Shop Distributive and Allied Employees' Association, Tasmanian Branch, the Federated Clerks Union of Australia, Tasmanian Branch and the Transport Workers' Union of Australia (Tasmanian Branch) sought a 4% increase in accordance with Principle 3 - Supplementary Payments.

In our Preliminary Decision handed down on 2 May 1988, we dealt with a request by the parties to rule on a number of threshold matters, one being "the order in which the claims should be heard".

In part, our response was as follows:-

    "Whilst a number of approaches are possible, the main thrust of the Wage Fixing Principles in relation to second tier increases is that primary attention should be given to restructuring and efficiency because of its potential to provide substantial economic benefits for employers, employees and the community as a whole.

    In our view, existing award conditions may be reviewed, but the experience has been to concentrate attention on other areas to the maximum extent possible as a first priority. Even where some existing award conditions have been modified, they have seldom been in the area of prime conditions.

    We believe this trend should continue."

    (Underlining ours)

We then directed the parties into conference to see if, as a first priority, any agreement could be reached on offsets under the Restructuring and Efficiency Principle.

In the event this was not achieved, we indicated to the parties that we were prepared to rule upon any particular item(s) that may form part of the package.

Mr. Targett, representing the SD&AEA and the Chief Advocate for the Unions in this matter, left the Bench in no doubt that he was not willingly involved in the restructuring and efficiency negotiations, but he was, only because of the directions given by the Bench.

He maintained that the proper course to follow for the purpose of gaining the 4% second tier increase was via supplementary payments.

This view, as stated earlier, was not shared by us.

The parties could not reach agreement on the offsets.

This being the case, we now determine the issues in dispute.

The employers proposed that award variations be made in the following areas:-

1. Introduction of a Training Rate.
2. Remaining at Work Station.
3. Spread of Hours.
4. Time Off in Lieu of Overtime.
5. Lunch Breaks.
6. Sick Leave.
7. Annual Leave.
8. Travelling Time.
9. Minimum Period of Engagement.

Mr. Abey, representing the TCI and the Chief Advocate for the employers, maintained that the cost advantage of the offsets to the employer will vary dramatically from one retail outlet to another, depending on such things as the mix of full time and part time and casuals employed.

However, it was his submission that if all the items were granted, it would represent a saving of 3.5% at best and .75 of 1% at worst.

We are of the opinion that the cost savings estimate of the offsets submitted by Mr. Abey tended to err on the conservative side.

However, we recognise the difficulty of costing the offsets with any degree of accuracy in an industry as diverse as the retail industry.

We now turn to the offsets that should be contained in any package to award up to a 4% increase in the wage rates contained in this award.

In doing so, we make the point that in arbitrating these matters, it should not be taken as a ruling in the form of a test case on the issue raised, but only a determination between two competing arguments. This is in an effort to resolve the dispute surrounding the second tier adjustment and the contents to be contained in this particular package of offsets.

In the above circumstances, it is not our intention to detail the submissions of the parties for and against the various claims.

Training Rate

It was Mr. Abey's submission that the award should contain a training rate based on the following criteria:-

1. Employees entering the industry for the first time, shall be paid 80% of the relevant award rate for the first three months of employment.

2. The training rate to apply to junior employees only.

3. The rate to apply to full or part time employees working in excess of 20 hours per week.

4. If an employee was terminated at the end of the three month period, it would, prima facie, constitute an unfair dismissal.

We are of the opinion that this should not form part of the package for the following reasons:-

(a) there are a number of schemes in operation which attract State and Federal Government subsidies. Those schemes have a recognised training component.

    The schemes to which we refer are, for example, "Job Start" which, if certain criteria is met, would mean a subsidy of $75.00 a week for 15-17 year olds for the first six months of their employment;

    The Tasmanian Employment Program which gives a subsidy of $5,000 to the employer to put on additional employees and this is payable over 18 months.

(b) if any training scheme was to be available to employees in the retail industry then it should be on an organised basis and conducted by specialist trainers, thus giving increased skills to the employees and not on an ad hoc basis;

(c) there is already in existence a prevocational training program being conducted by the Tasmanian Retail Industry Training Committee, where unemployed juniors attend a 5-day intensive course of training;

(d) if the employer's proposal was adopted, it would have the following affect on the rates for juniors in their first three months, which, in our opinion, is not reasonable

            AGE

      CURRENT RATE

      80% REDUCTION
            Under 17 $145.50 $116.40 $29.10

          17

      158.90 127.12 31.78

          18

      196.70 157.36 39.34

          19

      231.70 185.36 46.34

          20

      242.70 194.16 48.54

(e) the FCU and the TCI are already parties to an agreement registered before the Commission which provides for clerical trainees under the Australian Traineeship System to be employed in the retail industry.

Remaining at the Work Station

The proposal dealing with this matter relates to employees remaining at the work station for up to 10 minutes after the store's normal closing time, where necessary, to provide service to late customers etc. The applicant desired this to be recognised in the award.

We have decided to endorse the proposal in a qualified form and determine that a new subclause be included in the award detailing that for the purpose of determining overtime entitlements of an employee, any employee who works 10 minutes or more past the time fixed for ceasing work, shall be paid overtime at the appropriate overtime rate for all time worked after the time fixed for ceasing work. We emphasise that this is meant to apply as a contingency provision only and is not to be used as a vehicle to increase ordinary hours of work.

Spread of Hours

The applicant sought to include the following spread of ordinary hours in the award:-

"Monday to Friday - 6am to 9pm

Saturday - 7am to 5pm

Provided that penalty rates shall continue to apply to work performed after 6pm Monday to Friday and on Saturdays."

At the start of this case, the employers foreshadowed they would be lodging an application in the near future, seeking a reduction in penalty rates.

That being the case, we had to consider carefully the question of span of hours.

We arrived at the conclusion that it would be inappropriate for us to vary the span of hours given the employer's intention to have the whole question of penalty rates considered on merit at some future date.

We agree with the submission of Mr. Target that the span of hours is inextricably linked with the penalty rates issue, and we believe it should be heard on merit at that time.

For that reason we do not propose to vary the award in the manner sought.

Time Off in Lieu of Overtime

It was the employer's proposition that there be a provision in the award for employees to take time off in lieu of overtime at the employer's discretion and that such time off be at the penalty equivalent.

On the face of it, we have some sympathy with the thrust of this provision, but we are concerned about the implementation of this clause being solely at the employer's discretion.

There is no doubt some employees work regular overtime.

If we were to include the wording "by mutual consent" without qualification as an alternative, then the bargaining power between the store manager and say for example, the junior sales assistant may not be equal when arriving at the agreement.

For that reason, we determine the award should enable an employee to take time off in lieu of overtime at the penalty equivalent, only where the request has been initiated by the employee and agreed to by the employer.

We will leave it to the parties to draft an order giving effect to this decision, but care should be taken to ensure that when an employee takes time off in lieu of overtime at the penalty equivalent, then it is done with pay.

Lunch Break

The employers proposed that the award be amended to enable lunch breaks to be taken between the hours of 11am and 3pm.

We endorse this proposal to commence the lunch breaks 30 minutes earlier and extend them by 30 minutes at the other end.

Sick Leave

This aspect of the employer's application is in two parts.

The first seeks to have new employees, during their first three months of employment, accrue sick leave on the basis of 6.33 hours for each completed month of service.

The second calls for employees to notify the employer of any absence due to illness as soon as possible and where practicable within one hour of commencement of the employee's normal working day.

In dealing with the first part of the claim, we are of the view that the award should be varied -

(a) to include a clause stipulating new employees will not be eligible for the full entitlement to sick leave until the expiration of three calendar months after the date the employee commenced employment with the employer;

(b) to enable a provision for new employees to receive or accrue, during the first three months of employment, 6.33 hours sick leave for each completed calendar month of service with the employer.

We have arrived at this conclusion because it is not unreasonable that an employee should be required to have a small equity, in terms of service, with the employer before he/she is eligible to take the full quantum of sick leave.

On the second part of the claim, we have been persuaded that employees, if absent due to illness or accident, should notify the employer as soon as possible and where practicable within one hour of the commencement of the employee's normal working day.

Currently, the award requires notification within 48 hours. However, early notification enables the employer to make provision for relief staff much sooner thus maintaining the productivity and efficiency of the enterprise.

Annual Leave

The issues we have been required to consider under this heading are:-

(1) Whether an employee can take annual leave in two periods at the employer's discretion, the shorter of which shall not be less than seven days.

(2) By agreement, annual leave to be taken in any combination.

(3) The deletion of the annual leave loading for part time employees working less than 20 hours per week i.e. those employees in receipt of the 20% loading.

The award currently prescribed that annual leave be given and taken in one consecutive period unless the employer and the employee agree to split the leave into two separate periods and then only with the lesser being not less than seven consecutive days.

We have not been persuaded to the view that the employer should have the sole discretion to require employees to take their leave in two separate periods, as it strikes at the very heart of the reasons for taking annual leave.

It can also lead to uncertainty amongst employees, especially when a holiday package is planned in advance or inadequate notice is given by the employer of the requirement to split the leave.

We can see a number of difficulties associated with such a proposal. However, we are prepared to accept the following -

    Leave allowed under the provisions of subclause (a) shall be given and taken in one consecutive period, or if the employer and the employee agree, in one of the following methods:

    (i) in two separate periods, the lesser of which shall be not less than seven consecutive days i.e. five working days;

    (ii) in any combination, provided one period shall be not less than 7 consecutive days i.e. 5 working days.

and we decide accordingly.

We now wish to turn to the third part of the claim.

It is our view that part time employees who work less than 20 hours per week and receive a 20% loading in lieu of sick leave, annual leave and public holidays should not receive the annual leave loading.

The loading should only be available to those employees who proceed on annual leave and not those who receive a loading in lieu. There is also a question of double-counting if an employee is paid both loadings.

We therefore decide that the award should be varied by modifying this provision.

Travelling Time

We have noted the submissions presented by the parties in relation to this matter and, at their suggestion, Clause 33 - Travelling Time will be deleted from the award.

Minimum Period of Engagement

The award currently provides for a minimum period of engagement of 4 hours for part time employees and casuals.

The claim is for the minimum period to be reduced to three hours with a savings provision for existing employees, i.e. they are to retain a minimum hiring period of 4 hours.

We, like Mr. Targett, are apprehensive about the employer's proposal as it will create two standards for part time and casual employees and could become unworkable and cause dissention.

In any case, we are not convinced that a savings provision inserted in the award to protect existing employees will have the desired effect as it could be argued that each "start" for a casual employee is a new contract.

Therefore, we would ask -

(a) what does the savings provision mean for them; and

(b) how could they be classed as existing employees once the contract has been completed?

There is a very high proportion of casuals in this industry and they stand to lose a significant amount of their income by reducing their earning power if they were employed for the proposed minimum period of engagement.

A 4% increase in wage rates for the three year experienced sales assistant will increase the rate for the equivalent experienced casual employee by 38c per hour.

To receive this increase, this trade-off, if granted, could reduce their earning capacity by $8.17 per start if employed for the minimum period.

This, we believe, is unreasonable and therefore we reject it.

Conclusion

We do not hesitate in saying that the award variations contained in this package are very hard, if not impossible, to cost due to the diverse nature and size of the retail outlets falling within the scope of this award.

We are satisfied that the package is the best that can be achieved in a difficult area and decide to grant a 4% increase to all classifications contained in the award with proportionate amounts going to juniors. All amounts will be rounded off to the nearest 10 cents.

We believe this decision has the effect of satisfying all second tier claims for this award.

This being the case, all applications before us have been satisfied and no further action will be taken on them.

Operative Date

As a further concession to employers, we have decided to award a prospective operative date for this decision.

It will be from the first full pay period to commence on or after 1 August 1988.

Order

The draft order giving effect to this decision will be drawn by the parties and finalised under the direction of the Deputy President.