IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984

See end of Decision for Awards varied 

Before commencing to deal with each of the applications, several formal matters which arose need to be recorded.

Leave was sought and granted to the controlling authority to amend application T.1413 of 1988 (Nurses [Mental Health Services] Award), by deleting the figure of $10.00 and inserting $1.00 in respect of the proviso in Clause 13(a)4(i) in relation to minimum meal charges.

Similarly the Tasmanian Public Service Association (TPSA) sought and was granted leave to amend application T.1337 by claiming an increase of 6.86% in nominated expense-related allowances, in lieu of 5.3%. The TPSA also indicated that it was no longer pursuing CPI adjustment for meal or travel allowances contained in the General Conditions of Service Award (GCOS Award) and the Advanced Education Service Award, but would pursue a full evaluation of such amounts on other criteria as a preferred option. However, it indicated at the same time that CPI adjustments represented its fall-back position, (and later in the hearing restored its claim for CPI adjustments as an interim measure, with the right to mount a case on other criteria reserved and recognised).

We will now deal with each of the claims seriatim.

1. Applications by TPSA and Royal Australian Nursing Federation (RANF) to vary various public sector awards by increasing nominated expense-related allowances by application of the June, September, December 1987 and March 1988 CPI movements.

Mr Vines produced Exhibit V1 which demonstrated that ABS statistics supported his Association's contention that the CPI (weighted average of 8 capital cities) for March 1987 was 164.7. At March 1988 the figure had moved to 176.0, thus an increase of 11.3 points for the four quarters, which converts to a percentage increase of 6.86.

He said the present claim is consistent with the approach taken by a Full Bench of this Commission on 28 October 19871.

The claim is also consistent with Principle 6(a)(i) Allowances, which provides as follows:

(a) Existing Allowances

(i) Existing allowances which constitute a reimbursement of expenses incurred may be adjusted from time to time where appropriate to reflect the relevant change in the level of such expenses."

It was accepted that in applying the percentage sought, appropriate rounding off should occur.

The TPSA case was supported by Mr Imlach on behalf of the Hospital Employees Federation of Australia, Tasmania No. 1 Branch (HEF 1) who sought and was granted leave to amend application T.1350 by substituting the figure of 5.3% with the figure of 6.86% as the amount by which nominated expense-related allowances should be increased.

General support for the TPSA case was also expressed by Mr Grant on behalf of the RANF as it related to his organisation's own claims in T.1414. However, the RANF stance differed to the extent that it believed it would be more appropriate to include meal and travel allowances in any CPI based adjustments in the first instance, without prejudice to any later more comprehensive examination. At the same time Mr Grant indicated no opposition to similar increases for charges by hospitals in relation to meals provided and board and lodging.

The representatives of the Minister for Public Administration basically did not oppose the relevant applications in this matter, given the attitude expressed by other parties in relation to similar applications relating to increased charges for meals and board and lodging. At the same time however a number of complexities were adverted to in relation to the terms of the hastily entered into second tier, 4% agreement, dealing with the same subject matters. More particularly Mr Willingham referred to the revised method of applying the travelling allowance (i.e. meals and accommodation) contained in the GCOS Award.

However, the agreements entered into do not affect all employees concerned equally.

Of relevance also is the fact that the Minister for Public Administration, the TPSA and others had reached certain understandings as to how those second tier agreements already referred to might inhibit a review of these allowances by way of award application.

Whilst on the face of it that aspect of the second tier agreement going to the same subject matter as applications to vary the GCOS Award may technically negate the effect of any decision we make, we are encouraged by the assurances given to us that this will not be the case. As we have already mentioned however, there are also significant groups of employees who rely not upon the aforementioned agreements, but continue to rely upon provisions relating to travelling contained in the GCOS Award.

Because some of the parties appeared to be in some difficulty concerning the best way to proceed in the face of conflicting applications of the RANF on the one hand, and the TPSA on the other, we indicated our preparedness to allow an interim increase in travelling allowances overall, without prejudice to the TPSA's application to carry out a more comprehensive review of such allowances at another time.

The parties responded favourably to our suggestion and we have accordingly decided to increase all nominated cost-related allowances in all nominated awards by 6.86%, withrounding off to occur in the resultant money amounts, i.e. either to the nearest 1 cent or 5 cents, as is appropriate. Whereas the TPSA had originally precluded the Advanced Education Service Award and the GCOS Award, we point out that both awards were later restored to the list and will therefore be affected according to this decision.

2. Applications by the Minister for Public Administration for various nurses and hospital awards and the GCOS Award to be varied by increasing nominated charges by 6.9%.

Since these items were addressed simultaneously with item 1 and the same degree of consensus applied we have decided to also increase those amounts by CPI increases occurring during the four quarters to March 1988.

However, we do not accept the argument advanced by Mr Stevens that the aggregate figure of 6.86% should be rounded off to 6.9% before being applied. Rather we conclude that 6.86% should be applied to existing money amounts and the result rounded off to either 1 cent or 5 cents, as is appropriate.

3. Applications by the TPSA and HEF 1 & 2 for a new allowance titled 'Non-Cash Payment Expense Allowance'.

Whilst the TPSA applications stipulated a figure of $17.00 per annum to compensate employees for the expenses associated with non-cash payment of wages, Mr Vines sought and was granted leave to amend the claim so that if the claim was accepted by the Commission in principle, then the amount could be an arbitrated amount.

The TPSA argued the claim on a number of grounds:

· The basis of the application arises out of the inclusion of non-cash forms of payment to employees covered by recently negotiated second tier agreements.

· Considerable savings to the Government emanated from this particular aspect of the agreement.

· During second tier negotiations the TPSA made it clear that it was not prepared to cause additional expense to its members and reserved unto itself its right to argue a case for reimbursement of such costs.

· The minimum cost to an employee clearing $600 per fortnight would be $33.00 per annum.

· In an arbitrated decision of this Commission, T.1053 of 1987 re Ferro Alloys Award, a compensatory allowance for non-cash payments was awarded.

· The claim is allowable as a cost-related allowance pursuant to the principles as a whole, and in particular Principle 6(b)(i).

· The Government, as the employer, gains considerable extra tax revenue as a result of non-cash payments to its employees, and this was never accepted by the TPSA as part of general cost offsets in the context of the second tier.

The application of the TPSA was supported by the REF 1, and Mr Imlach added that:

· the charges imposed by State and Commonwealth Governments had been a source of considerable complaint by members;

· the feeling is that wages due and payable should not be reduced in any way;

· the claim is moderate and justified because it is only based upon the notion of the cost of one deposit and one withdrawal being incurred each pay day;

· taxes generally are increasing and eroding the level of wages;

· the present claim is consistent with the principles of Wage Fixation and is a separate matter to 4% cost offsets.

The applications were also supported by the RANF.

In opposing the claim on behalf of the Minister for Public Employment, Mr Willingham raised the following:

· Exhibit V2 (of the TPSA) does not accurately describe State and Federal taxes associated with deposits and withdrawals at banking and similar institutions.

· The RANF, and some other unions, forfeited the rights to be paid by cash in either 1985 or 1986, in return for a 38-hour week in certain awards, including hospital awards.

· The same unions were subsequently able to persuade the management of some hospitals to provide encashment facilities.

· The Temco Case, T.1053 of 1987, has no relevance to this matter because of the vastly different circumstances.

· The lack of reference to any properly arbitrated decision by the various applicants, either State or Federal, going to the merit of such a claim as 'noncash payment expense allowance', supports the case for its rejection at this time.

· Principle 6(b)(i) is not mutually exclusive of 6(b)(ii). By reading both together the claim is not consistent with the principles.

· Prima facie, the only way such a claim might have been entertainable would have been via an anomalies conference, because to grant it would allow the 4% ceiling to be pierced.

· Employees voluntarily relinquished their discretion as to how they were paid in return for the 4% second tier wage increase.

· The cost of granting the present claims, taking into account the undoubted 'flow-on' effect, could be as high as $1,000,000 per annum.

· Whilst it is difficult to assess the number of employees who use the various facilities available, it could be reasonably assumed that at least 75% of employees concerned would use the Savings and Loans Society, and therefore avoid the Federal 'BAD tax'.

· The range of other amounts ordinarily deducted from employees' salaries would, in all likelihood, mean the net wage directly deposited would be much lower than the example of $600 per fortnight used by the TPSA in the costing of its claim. As a result the claim is exaggerated.

· If such a costly claim is granted the 4% may have to be reviewed as a consequence.

· Since Government taxes and charges are included in CPI figures, then wage movements based (at least in part) upon such movements have already compensated employees for such a cost.

· The vast majority of State Service employees were paid by direct deposit of wages, or by cheque, prior to the introduction of second tier cost offsets. Therefore those people suffered no additional cost at all.

· Even the very small minority of employees who were paid in cash, probably still used banking facilities of one kind or another, and therefore still incurred associated costs.

· If the claim is granted by the Commission the cost will be extremely high and create budgetary difficulties which will have to be addressed.

This matter has presented a difficulty for us in that the case put by the TPSA, as applicant representing the vast majority of employees concerned, relied heavily upon the fact that whilst it is party to registered second tier agreements which specifically contained 'Non-Cash Payment of Wages' as a cost offset, it maintains that its agreement was a qualified one. It says it had made it plain at the relevant time that it would argue for a compensatory allowance at a later date. And while the representative of the Minister for Public Administration acknowledged the fact that the TPSA flagged its intention of making a claim, equally it was argued that the notion of an allowance such as is now being sought, was always strenuously opposed.

We also are aware of the fact that the TPSA gave notice of its intentions to pursue a separate claim, as is its right. Nevertheless, we feel bound to have proper regard for both the terms of the written agreement and the relevant principle.

The registered agreement known as the TPSA State Service Proper, Restructuring and Efficiency Agreement (T.1233 of 1988), as an example, provides as follows:

"4. NON CASH PAYMENT OF WAGES

Employees shall not continue to be paid by cash but will accept payment of wages by cheque, direct deposit or electronic funds transfer, subject to appropriate notice being given by the employer. Except in circumstances beyond the employer's control, the Government will guarantee the transfer of appropriate funds to the employee's account on pay days and where necessary, alternative arrangements for payment by cash will be made for those employees located in isolated areas which do not have facilities for obtaining cash on a pay day."

And the second tier principle states, inter alia:

"Second Tier

(a) No improvements in pay or conditions under the second tier principle will result in an increase in costs exceeding 4% of wages and salaries.

(b) Subject to agreement between the parties concerned, and processing of such agreement in accordance with appropriate principle, increases not exceeding 4% ceiling may be approved from a date to be fixed by the Commission.

(c) Failing agreement between the parties concerned, the Commission will arbitrate in accordance with the relevant principle or principles, and in, such cases, the Commission will award no more than 2% to operate from a date no earlier than 1 September, 1987 and no more than a further 2% to operate from a date no earlier than 1 July, 1988."

Taking into account the terms of that agreement and the second tier principle together with the fact that in our view the total cost offsets in the earlier matter fell short of the cost of granting a 4% pay rise, then on this account alone we do not feel disposed towards granting the present claims.

This view is enhanced by the fact that, on the evidence produced, significant numbers of State servants suffered no 'loss' as a result of this particular part of the second tier agreement because they had not been receiving payment by cash beforehand. This was because they had either voluntarily foregone cash payments or had already forfeited such right in return for the granting of reduced ordinary hours of work. However, if the claim was granted all employees would be affected by these applications and would receive the new allowance.

We also do not feel comfortable with the notion of a special allowance being introduced to insulate a discrete group of employees against taxes and charges incurred by the rest of the community as part of the law of the land.

Furthermore, whilst the TPSA was able to rely in part upon an arbitrated decision of this Commission2 which accepted a similar type of allowance, it is clear that such decision did not address the integrity of the allowance. Instead that case represented an agreed allowance which formed part of a properly costed second tier package, and only the amount had to be arbitrated.

No other cases could be produced by any applicant.

It would also be irresponsible for us to ignore the undoubted potential for flow-on and the associated cost implications. Not only do the principles require us to consider flow-on, but the requirements of Section 36 of the Act compel us to consider public interest criteria.

Taking all of these factors into consideration, we decide against the claim.

Those matters which have been granted, including the details of awards to be varied and the substitute figures, are appended hereto in 'Attachment A'.

OPERATIVE DATE

All variations shall have effect from the first pay period to commence on or after 1 September 1988.

Orders will issue in due course.

Remaining matters are listed for hearing at 10.30am on 15 September 1988.

* KEY:

Awards Varied: 

1 T.833
2 T.1053 of 1987 - Ferro Alloys Award - 1.12.1987