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Tasmanian Industrial Commission
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Industrial Relations Act 1984



RE:   38-hour week

HOBART, 15 March 1985


For the Tasmanian Public Service Association  - Mr A Beckerath, with
  Mr P Mazengarb, and
  later Mr M Huxtable
For the Hobart Regional Water Board - Mr G Lister
Intervening on behalf of the Minister - Mr F D Westwood
21 January 1985 Hobart
28 February 1985 Hobart
8 March 1985 Hobart

This application by the Tasmanian Public Service Association was first lodged with the Public Service Board pursuant to now repealed Part V of the Public Service Act 1973.

The claim, which is for a 38-hour week for "operational staff", was filed with the Board on 21 December 1984.

However, on 1 January 1985 the Industrial Relations Act 1984 was proclaimed. Among other things, proclamation resulted in simultaneous repeal of the Public Service Board's wage fixing jurisdiction which had endured since September 1973.

The application, which was identified by the Public Service Board as matter A994 of 1984, was later renumbered T3 of 1985 when it passed into the new Industrial Commission's list pursuant to the transitional provisions of the Industrial Relations Act. It then fell for determination by the Commission in accordance with the provisions of the present Act.

As the application dealt with the matter of standard hours, a Full Bench was convened in accordance with Section 35(1)(a) of the Act, to consider the matter.

The application first came before the Commission on 21 January 1985. An adjournment was sought and granted in order to facilitate the controlling authority obtaining Cabinet "approval" for what had already been agreed (presumably subject to Cabinet approval) between the applicant TPSA and the Hobart Regional Water Board.

The claim was relisted on 28 February 1985 at the urgent request of the parties. In order to accommodate the wishes of the applicant that the matter be considered with minimum delay, the President took the unusual course of inviting Mr Deputy President Robinson to join the bench in place of Mr Commissioner Gozzi, who had prior industrial commitments to mid March.

During the 28 February proceedings the Commission expressed its concern at not having had placed before it details relating to the cost of the claim if granted. Nor was there any information presented at that time setting out the money value of offsets relating to changed work practices. This is an obvious requirement when dealing with shorter working week claims and is fundamental to the success or failure of such applications.

Principle 5 of the wage fixing principles currently applicable to all applications coming before the Commission states:-


(a) In dealing with agreements and unopposed claims for a reduction in standard hours to 38 per week, the cost impact of the shorter week should be minimized. Accordingly, the Commission should satisfy itself that as much as possible of the required cost offsets is achieved by changes in work practices."

(National Wage Case 1983, Print F2900)

In its published Reasons for Decision, the Composite Bench of the Australian Conciliation and Arbitration Commission observed, in dealing with the matter of standard hours:-

"There is consensus that any claims for a reduction to 38 hours per week should be the subject of close examination using tests currently applied by the Commission. These tests are drawn from the technique of productivity bargaining under which productivity or cost offsets derived from change in work practices provide the basis for the reduction in hours. ...

"The Commission should continue to apply the tests to ensure that all possible cost offsets can be drawn out of changes in work practices. In rare cases, where the Commission is satisfied that work practices in a firm or industry are so efficient as to exclude any reasonable cost offsets, the 38-hour week may be awarded with little or no cost offsets."

(Ibid p 30-31)

This Commission has thus far been called upon to decide three such applications affecting awards or agreements having application in the private sector. In each case the relevant Full Bench convened to consider those applications has rigorously applied the tests laid down by the Australian Commission.

The matter now before us was not seen by the Commission to warrant greater or lesser scrutiny than earlier matters already decided - notwithstanding this was the first non-private 38-hour week application to come before the Commission. Unfortunately the immediate parties did not appear to concur in that regard.

There were two main reasons for this. First, it was submitted that as the parties had reached agreement and Cabinet approval had been obtained on the understanding that the cost of a 38-hour week for the twenty-five operational staff involved (including 4 to 5 shift workers) would be negligible, that should have been the end of the matter so far as the Commission was concerned.

Details of the agreement reached with the Board were then recited by Mr Beckerath on behalf of the Association. In all fairness to the applicant, information on agreed areas of cost offsets was detailed. But no actual money figures regarding gross and net cost were made available, despite prompting from the Bench.

The second area of difference arose out of further questioning about the form of award variation that would be necessary to give effect to a favourable decision of the Commission.

Whereas the Commission voiced its concern that in order to have the full force of the law all agreed matters, if approved, should be included in any consequential award variation, neither the Association, the Board, nor the intervener agreed. The consensus view seemed to be that the only requirement necessary in the circumstances would be an order authorising reduction in ordinary hours from the present award prescription of 40 per week to 38 per week.

It was argued that as many employment conditions applicable to most State employees (as defined) are at present set out in other Awards, Regulations, or Standing Instructions, to now include in this award details of all relevant conditions, together with suitable modifications to permit a 38-hour week to be worked over a fortnight, would be unnecessary, premature and unreasonably time consuming in the circumstances.

The TPSA, supported by the intervener, requested that for the time being at any rate, the Board and the Association should themselves agree upon the necessary consequential modifications to existing conditions of employment.

It would be time enough later, it was said, when foreshadowed 38-hour applications relating to major public sector awards had been dealt with, for inclusion of additional conditions of employment. An alternative time might be consequent on or prior to proclamation of the State Service Act and Regulations.

The Commission can understand there may be some reluctance by the Association to, in effect, regard this application as a form of test case. But from the Commission's point of view identification of the appropriate drafting mechanisms necessary to give the required authority to vary or modify existing conditions presently ascertainable from areas internal and external to the award is an inescapable obligation. The fact that the Commission can only approve matters that are included in an order, agreement or award puts the position in its correct perspective.

Section 32(5) of the Act makes provision for the Commission to refrain from including in awards matters contained in regulations "if it is satisfied those regulations provide adequately or appropriately" for such conditions.

In this case the Commission was not invited to consider any regulations. Nor was it told how the alterations necessary to implement a 38-hour week involving a 9-day fortnight could be lawfully achieved should the Commission be persuaded to grant the application.

Apart from the obvious legal and industrial implications arising from deliberate breach of awards and regulations, there would appear to be little point in a tribunal reducing its decisions to writing and giving effect to those decisions by way of awards or variations to awards if respondents are prepared to ignore them. This kind of cavalier approach to industrial relations is to be deprecated.

For that reason we make it clear now that if applicants are to have the Commission consider claims for reduced hours, including agreements for the working of those hours over a 9-day fortnight or a 19-day month, the following minimum criteria must be met.

1. The matter must first be agreed to by all parties.

2. There must be produced to the Commission hard evidence, preferably in documentary form, of improved work practices.

3. There must be produced information or a document setting out the approximate gross and net cost of what has been agreed.

4. There should be produced a document identifying consequential alterations necessary to give effect to the agreement reached. That document should include full details of alterations, if any, to regulations, awards, and other regulatory instruments.

5. It should be made clear to the Commission if the agreement reached includes an undertaking that there shall be no loss of pay consequent on introduction of a 38-hour week. And if so, how that is to be achieved in the event allowances and matters of that kind are presently attracted on a daily or hourly basis.

Having raised these issues with the parties the Commission decided to adjourn the 28 February hearing until 8 March to allow the Association and the Board reasonable time in which to identify and document, where possible, information of the kind referred to during proceedings. This was in substance what we have stipulated to be the minimum requirements for the 38-hour week applications.

The required material, or at least a significant part of it, was tendered by way of exhibit on resumption of the hearing.

Apart from a small number of relatively minor omissions from, or imperfections in, the detail submitted, the Commission is generally satisfied that the net cost of granting a 38-hour week for operational staff could be limited to less than one per cent of the annual wage cost of Board employees working a 40-hour week. Expressed as a percentage of overall costs the figure is around 0.04%. It was further submitted by Mr Lister that if indirect cost savings were calculable, the cost of granting the application would be nil.

Subject to what follows we have been persuaded this application meets the criteria for approval in accordance with Principle 5 of the Guidelines.

We are also satisfied that to grant the claim would do no violence to Section 36 of the Act.

Our dilemma, however, lies in deciding how, against spirited opposition to the inclusion of all the relevant employment conditions in the award, we could validly grant the claim for shorter working hours. Our task becomes even more difficult if implementation is to be effected on the basis of a 9-day fortnight for the greater part of the year. Without making the appropriate orders framing mechanisms designed to achieve this result we cannot see how lawful status could be given to what was agreed.

After anxious consideration we have decided to:

1. Grant the application for agreed reduction in hours to 38 per week for 40-hour operational staff.

2. Approve the agreed reduction with effect from the requested commencing date of 1 January 1985.

3. Subject to 5, authorise the implementation of a 38-hour week over a 9-day fortnight during the months of March to December inclusive.

4. Subject to 5, authorise the banking of excess hours worked as ordinary hours during the months of January and February inclusive, on the understanding time off in lieu, to be paid for at ordinary rates, will be allowed later.

5. Determine that in order to give proper effect to items 3. and 4. (and where appropriate 1. and 2.) it will be necessary to:-

(a) Effect the appropriate variations to existing award provisions relating to hours of work; and

(b) Modify existing award provisions which refer to those conditions of employment ascertainable by reference to the General Conditions of Service Award. Such modifications to authorise departure, where necessary, from General Conditions of Service Award provisions; and

(c) Provide for departure from, or modification to, existing regulations or other non-award instruments which bear upon matters necessarily affected as a consequence of working a 39-hour week over a 9-day fortnight.

In addition to (a), (b) and (c) the parties should also note that in due course the Commission will expect to receive a joint application, or an application from any party, seeking inclusion in this award of more detail relating to contractual obligations of employers and employees whose salaries and conditions of employment are established on the authority of this award. It is our view that an award should, where practicable, contain complete provisions relating to standard employment matters, subject only to considerations raised by Section 32(5) of the Act.

The order giving effect to our decision is to be prepared by the parties in draft form for signature by the Commission. In the circumstances we think it proper that in preparing the draft, recourse be given to a nominated member of the Bench. We therefore nominate Mr Commissioner Watling who will be available to assist the parties if required.