T2457 T2887 T2888 T3792 T3869 T2609 T3741 T3791 T3862 T2884 T2991 T2993 (18 May 1993)
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Tasmanian Teachers Federation (T2887 of 1991) Secondary Colleges Staff Association Minister administering the Tasmanian State Service Act 1984 Tasmanian Teachers Federation Tasmanian Teachers Federation
Award - Wage Rates and Conditions of Employment - Teaching Service "special case" applications - State Wage Case October 1989 - Structural Efficiency Principle - Economic Incapacity Principle REASONS FOR DECISION BACKGROUND On 30 November 1992 we handed down our decision varying both salaries and conditions of employment applicable to teachers, directors and superintendents employed by the Department of Education and the Arts. Our decision was in response to applications lodged by the Tasmanian Teachers Federation (hereinafter referred to as TTF) and The Secondary Colleges Staff Association (hereinafter referred to as SCSA) on the one hand, and the Minister Administering the Tasmanian State Service Act (hereinafter referred to as the Government) on the other. All of the applications were joined and heard in conjunction with the teachers' "special case" in accordance with this Commission's Wage Fixing Principles which issued from the State Wage Case Decision1 of 30 October 1989. In our 30 November 1992 decision we: 1. Found in accordance with "work value" and "structural efficiency" requirements of the Principles that submissions, evidence and other material presented supported a case for awarding teachers at Rung 11 on Band 1 a benchmark salary of $38,950 per annum after rationalising Band 1 salaries from thirteen to eleven levels. Proportionate increases, substantially less than those claimed were granted to Bands 2 and 3 and to directors and superintendents. 2. Adopted the Government's proposal to require teachers to be in attendance at the workplace for seventy hours exclusive of lunch breaks per fortnight, or an average of 35 hours per week. 3. Adopted the hours of instructional load claimed by the Government and an amalgam of definitions proposed to ensure that those important timetabled features of a teacher's work, being scheduled electives, tutorials, pastoral care and recreational activities count as instructional load. 4. Accepted the Government's submission that excess hours were unnecessary and refused the claim of the SCSA to insert an "excess hours" provision in the Teaching Service (Teaching Staff) Award. 5. Accepted the thrust of the Government's proposed new clause titled "Teacher Year", which adds additional days to the length of the school year beyond that currently prescribed by Regulation. 6. Accepted the Government's position that the establishment of an arbitrary maximum number of students in a class would give rise to administrative difficulties and anomalies and dismissed the claim of the Tasmanian Teachers Federation in this regard. 7. Refused the claims by both the TTF and the SCSA to insert in the award provisions regulating the number of AST3 and Assistant Principal positions in senior secondary colleges, secondary schools and district high schools. 8. Refused the claims of both the TTF and the SCSA to vary the Teaching Service (Teaching Staff) Award by imposing prescriptive conditions and limitations which would attach to the transfer of teachers. Our decision took into account public interest considerations in accordance with the requirements of Section 36 of the Industrial Relations Act 1984, following extensive submissions by the Economic Adviser to the Premier, the Deputy Secretary of the Department of Treasury and Finance, and the Government's advocate. In our finding as to public interest we said: "We have had the benefit of being provided with detailed submissions outlining the State's prevailing economic circumstances, and being told how they impact upon both the Government's budget and the private sector. We have had regard for these factors and have refused to grant the full extent of the union wage claims above the automatic incremental range (Band 1). In addition, we have decided to further cushion the cost effects of the lesser wage increases granted by us by phasing them in from prospective dates of operation. Other claims, going to conditions of employment matters which would have had the effect of increasing the cost of employing teaching personnel, have been rejected. Conversely, to the extent that we have granted Government claims such as hours of duty, contact hours, elimination of excess hours payments, and the length of the school year, there will be considerable cost savings to be made." On 24 December 1992 the Secretary of the Department of Premier and Cabinet advised the Commission that the Government intended to exercise the opportunity available to it under the Economic Incapacity Principle. The Economic Incapacity Principle provides that: "Any respondent or group of respondents to an award may apply to reduce and/or postpone the application of any increase in labour costs determined under the principles on the ground of very serious or extreme economic adversity. The merit of such application shall be determined in the light of the particular circumstances of each case and any material relating thereto shall be rigorously tested." Proceedings to hear the Government's case commenced on 6 January 1993. However a threshold question arose as to whether the Government as distinct from a private employer was entitled to make use of the Economic Incapacity Principle to seek a reduction and/or postponement of the effect of wage increases granted by us on 30 November 1992. In deciding in favour of the Government's application we said on 3 February 1993 that: "We are required to rule on the threshold question as to whether or not the Minister administering the Tasmanian State Service Act 1984 (hereinafter referred to as the Government) can make use of the Economic Incapacity Principle contained in the Commission's Wage Fixing Principles to seek a reduction and/or postponement of the effect of wage increases contained in our decision on these matters dated 30 November 1992. The teaching unions, supported by the Australian Council of Trade Unions, the Tasmanian Trades and Labor Council, the Australian Teachers Union and other unions, argued that the Government should not be permitted to mount an incapacity to pay case because of the inherent ability of Governments to raise revenue and prioritise their expenditure. Additionally, the unions strongly submitted that we should refrain from hearing the application because of what they regarded as "intense and hostile" duress imposed on the Commission in the form of reported statements that the Government might legislate to overturn a decision of the Commission which "it did not like" and that the matter was now before us "to get it right". The Secondary Colleges Staff Association, supported by the Tasmanian Teachers Federation, submitted that that duress alone was sufficient for us to refrain from further hearing this application. The SCSA contended that the parties should be equal before the Commission and that we should, at least, seek a commitment from the Government that it will abide by any decision we make. Further, the unions submitted that the Government, during the earlier proceedings as the sole employer, had already exercised the right to put substantial economic argument in the public interest context, and we were referred to various excerpts from transcript including one where the Government representative had said, at page 2535 of transcript: 'the total focus of our submissions will go to the economic capacity of the Government to absorb or withstand or reconcile and manage the impost of the claims by the teacher unions.' It was submitted that in these circumstances it would be a "misuse of process" to allow the Government to proceed. The Government responded by arguing that the current Wage Fixing Principles included an Economic Incapacity Principle and that it was open to any party to utilise that Principle. Reference was made to the Full Bench decision of the Commission in the July 1986 State Wage Case to support the contention that such Principle was available to the Government as well as to a private employer. Further that the Principle was available only after a decision had been handed down and therefore was not available during the course of the proceedings. It was submitted that the words of the Principle were clear and unambiguous and permitted any employer to seek relief in accordance with it. Whilst the Government acknowledged that it had provided the Commission with extensive financial and economic material, it was contended the fact remained that the option to seek relief under the Economic Incapacity Principle was still available. It was also submitted that it would be in the wider public interest for the Commission to hear the Government on this matter. Notwithstanding the concerns expressed by the teaching unions, we have no doubt that the Principle is worded in such a manner as to not discriminate between public and private employers. This is also clear from the decision of the State Wage Case Full Bench referred to earlier." FINDING In considering the present matter it is relevant to point out that in the past decade this Commission has consistently followed National Wage Case decisions and in the main adopted the same Wage Fixing Principles. Certainly the Economic Incapacity Principle of this Commission is identical in all respects to that of the Australian Industrial Relations Commission. In these circumstances we consider it is appropriate to have regard for the views expressed by the Australian Commission in relation to how the Principle is to be applied. In this context it is useful to note that in the 26 June 1986 National Wage Case decision the Full Bench2 said at page 49: "j. We have considered providing the tests on which incapacity should be determined but we have come to the conclusion that such tests could be inappropriate and possibly misleading in particular cases. The variety of factors and combination of factors which could arise in incapacity claims make it unwise for any guidelines to be set down. We agree with CAI and BCA that an incapacity application should be decided on all the material presented in such a case. k. In the structured centralised system we have adopted, the onus should rightly be on those who seek to rely on incapacity and we so decide." Nothing was put to us in this case which we believe would require a different approach from that outlined above. It follows therefore that the onus was on the Government in this case to prove its incapacity to meet the cost of the teachers' decision. The Government's submissions were substantial and directed principally to the need to reduce the net financing requirement to $40 million by the financial year 1994/95 and that any departure from that figure and timeframe could have a deleterious effect on the State's credit rating. The unions' comprehensive submissions sought to question the Government's strategy. It is our decision that the Government's application for an indefinite postponement of any salary increase for teachers, directors and superintendents on the grounds of very serious or extreme economic adversity fails for the following reasons. 1. Our decision of 30 November 1992 applied to the Government as a single employer, which had presented extensive submissions in relation to the State's financial position and its strategy to reduce the net financing requirement. That material had been taken into account by us and impacted upon our decision in the public interest. In our view nothing new was provided during this case which would justify a departure from our original decision. 2. In this case the teacher unions provided a list of possible additional revenue sources and potential areas in which cost savings could be achieved. We make no comment as to whether any of these options are appropriate. The Government however rejected them but when questioned would not rule out the possibility of availing itself of them at some time in the future. 3. Having regard to all the material provided we have concluded that the Government has available to it a range of options and the capacity to rearrange its priorities to enable it to meet its industrial obligations. 4. In the 30 November decision we refused to grant the full extent of the union wage claims, cushioned the impact of the wage increase by phasing it in from prospective dates, and granted Government claims which contained cost savings. 5. In respect of the estimated cost of our decision, public statements were made which alleged that the cost could be up to $30 million in a full year. In this hearing the Government estimated that the net full year cost would be of the order of $23.5 million. However, as a consequence of our examination of this claim, we are satisfied that the full year cost should be substantially less than that figure. 6. It is clear to us that not only has the net cost of our decision not been accurately calculated by the Government but, in addition the capacity which is now available by virtue of our decision to revise administrative arrangements in schools and colleges in a manner which will effect considerable savings has not been recognised or taken into account. 7. The Government's cost estimates have failed to acknowledge the existence of any Commonwealth Supplementation towards the cost of teacher salaries. Whilst this was a point of contention between the parties we are not convinced that national benchmark rates for teachers have not been taken into account in calculating the Recurrent Grant made to the State by the Commonwealth. In addition to the foregoing we consider that the following observations are relevant to this matter. We fully recognise, as we believe the community at large does, that the Tasmanian Government's financial circumstances are difficult. Against that we have had to reach a conclusion on whether or not that difficulty justifies the indefinite postponement of a properly determined salary increase for teachers who represent one section only of the Government's workforce. Particularly when the Commission is aware that other groups of employees, during the conduct of the teachers' special case, have received substantial pay increases and no attempt has been made by the Government to exercise the Economic Incapacity Principle. Throughout the proceedings we expressed the concern that successive Governments had chosen to ignore the possibility of a favourable outcome for teachers in this case. The benchmark salary first gained momentum in 1989 and since then tribunals throughout the country have awarded at least that level of salary. Tasmania is the last State to award an increase and indeed the full benchmark rate of pay will not be available to public sector teachers until the financial year 1994/95. That phasing-in arrangement was determined by us in recognition of the State's difficult financial position. Indeed in the ACT teachers' salaries are already in the process of moving by a further 4.9 percent. It should also be noted that in other States where the salaries of teachers were increased, conditions of employment were not altered and no cost savings were afforded to the employer. In Tasmania teachers will have their conditions of employment changed in a significant way on implementation of our decision and this will have the effect of ameliorating the cost of the increases. In that regard we are concerned by the fact that no recognition was given by the Government during this case to the increase in hours of attendance for teachers from 30 to 35 hours per week exclusive of lunch breaks. The Government claimed that this increase would produce no actual cost savings. Whether this claim is true or not there is a productivity dividend of the order of 16-17% available to the Government as a result of this change and we would be surprised if some of this could not be converted to cash savings. Whilst it was not formally before us it was publicly reported during the time of proceedings that the Government was concerned that if teachers were to obtain wage parity with their mainland counterparts there would be a flow-on of similarly based wage increases to other State employees. There is no basis for the belief that what happens to teacher salaries will set any kind of precedent or alone justify wage rises for any other group of State employees. In fact all of the evidence was very clearly against any flow-on effects. Even the ACTU and TTLC made it clear to us that they did not support the notion of any flow-on, and we endorse and support that view without equivocation. Any other special cases must be decided on individual merit and public interest considerations. Operative Dates In our 30 November 1992 decision we determined that the increases in the salaries of teachers should be phased in spanning the 1992/93, 1993/94 and 1994/95 financial years. Against that we provided the Government with the opportunity to implement conditions of employment changes producing cost savings from 1 January 1993. However, as the Government, quite properly, undertook at the commencement of these proceedings not to change conditions of employment pending the outcome of its application to have salary increases deferred indefinitely, some cost savings otherwise available to it have been foregone. We have therefore considered whether in a practical sense there remain grounds for maintaining the same operative date of 1 January 1993 for both salary and conditions matters. In deciding not to alter the operative date for the salary increases we are mindful of the Government's submissions which recognised that if its application failed, teachers would not be disadvantaged as the operative date for the increases was not sought to be altered in the event of that particular outcome. The Structural Efficiency Principles requires the consideration of a broad agenda, and it is usual to consider that agenda as part of a package, however there is no requirement for wages and conditions changes to operate from the same date. Were this not to be the case then indeed there would be capacity to use the Economic Incapacity Principle capriciously. Our view is supported by the comments made by the 1986 National Wage Case Full Bench which stated at page 49: "As for incapacity applications designed to delay adjustments, such delaying tactics would be discouraged by the fact that the prescribed date for national adjustments would prima facie be the date of operation applying to unsuccessful applications." We acknowledge that this quote refers to the application of national wage increases but consider it is equally useful now that the Economic Incapacity Principle has been widened to include any award cost increase. Accordingly as we have stated previously we have decided against revising the effective date of our decision of 30 November 1992 and orders will apply as from the commencement of the first full pay period to commence on or after 1 January 1993. We therefore renew our request to the parties to finalise the draft orders at an early date.
Appearances: Dates and Place of Hearing: |