TASMANIAN INDUSTRIAL COMMISSION
Industrial Relations Act 1984
s23 application for award or variation of award
See end of decision for Awards varied
Tasmanian Trades and Labor Council
(T11548 of 2004)
Private Sector Awards
Tasmanian Trades and Labor Council
(T11564 of 2004)
Private Sector Awards
Tasmanian Trades and Labor Council
(T11566 of 2004)
Private and Public Sector Awards
PRESIDENT P L LEARY
COMMISSIONER T J ABEY
COMMISSIONER J P McALPINE
HOBART, 23 July 2004
Wage Rates - State Wage Case July 2004 - applications to vary private sector awards in a manner consistent with the Australian Industrial Relations Commission in Print PR002004 - Safety Net Review - Award rates to be increased by $19 per week - Wage related allowances increased by 3.5% - Meal allowances increased to $12.70 - Supported Wage increased to $61 per week - Operative date ffpp 1 August 2004 - State Minimum Wage determined at $467.40 - s.35(1)(b)
REASONS FOR DECISION and [Correction Order]
 These are three applications by the Tasmanian Trades and Labour Council (TTLC) to:
- T No.11548 of 2004 - vary private sector awards to (i) increase all award rates and existing allowances relating to work or conditions from a common operative date of, on or after 1 August 2004, and in accordance with the decision of the Australian Industrial Relations Commission (AIRC) Safety Net Review of May 2004 [Print PR002004]; to (ii) increase the minimum wage for adults to $467.40; and (iii) to the extent necessary to effect these changes, amend the Principles of the Tasmanian Industrial Commission.
- T No.11564 of 2004 - to vary all private sector awards containing a provision for Meal Allowance to increase the allowance from $12.30 to $12.70 from a common operative date of on or from 1 August, 2004.
- T No.11566 of 2004 - to vary all awards containing the provision for a Supported Wage to increase the minimum amount payable from $60 to $61 from a common operative date of, on or after 1 August 2004, and in accord with the decision of the AIRC.
T11548 of 2004
 The application by the TTLC to reflect the decision of the AIRC in the Safety Net Review of May 2004, was not opposed by the Tasmanian Chamber of Commerce and Industry Limited (TCCI) or the Minister for Industrial Relations.
 The decision of the AIRC determined to award an increase of $19 per week in all award rates and increase work related allowances by 3.5%.
 Ms Fitzgerald, on behalf of the TTLC, referred to the decision of the AIRC and said:
"In terms of the matters considered by the Federal Commission the Federal Commission is required to consider both economic factors and the needs of the low paid and the economic factors considered were the indicators of past economic activity, including wage movements; the immediate economic outlook; the cost of the ACTUs claim; award employees and award-reliant industries and economic and employment effects of safety net adjustments and with regard to past economic activity I am referring to the statement which is at the front of your Federal decision at paragraph 4, and the Commission states the GDP overall increased by 3.5 per cent in the year to December 2003.
During the last 12 months private investment continued to grow strongly with the exception of dwelling investment. Imports continued to grow strongly and exports declined slightly. Inflation as measured by CPI was 2.4 per cent in December 2003, down from 3 per cent in December 2002. Unemployment has crept steadily lower standing at 5.6 per cent in December 2003. Employment, particularly full-time employment, showed encouraging growth. Productivity increased at satisfactory levels, GDP per hour worked in the market sector grew by 3.2 per cent during 2003. Profits remain at high levels, despite differences between the parties concerning the proper method of measuring the profit share; no one suggested that the share of total factor incomes attributed to profits is a serious obstacle to a safety net adjustment.
And with regard to the economic outlook again at the statement at paragraph 6 the Australian economy is expected to continue to perform well throughout the 2003/4 financial year with GDP forecast to increase by 3 3/4 per cent compared with the budget estimate of 3 1/4 per cent. It is expected that employment will continue to grow and unemployment will reduce further. There are some areas of risk including the potential inflationary effects of the rise of the Australian dollar; the pace at which parts of the rural economy recover from the drought, and the exposure of the manufacturing sector, to exchange and interest rate movements and global capacity. Overall there are grounds for optimism that the economy will perform strongly in the immediate future."1
 The AIRC indicated, at paragraph 166 of its decision, that:
"Based on the material before us, we adhere to the conclusion reached in the may 2003 decision that it has not been demonstrated that there is a negative association between safety net adjustments and productivity growth. There is no necessary association between award coverage, safety net adjustment and productivity growth.
And they concluded at paragraph 167:
Having regard to the range of material in respect of the economic performance of the most award-reliant industry sectors, we are unable to discern any negative impact from the safety net adjustments which have been awarded in recent years."2
 And at paragraph 325 concluded:
"Several parties, in particular the Commonwealth, submitted that the ACTU claim ignores the requirement for the Commission to establish a genuine award safety net and encourage workplace bargaining. As the Commonwealth pointed out in a previous decision the Commission has recognised that increases in award wages have the potential to influence the speed at which agreement-making is taken up. This is a factor to be taken into account in assessing the parties' proposals. On the other hand, no one would suggest that all employees are capable of bargaining. Bargaining is not a practical possibility for employees who have no bargaining power.
It is to be inferred from the statutory scheme that the award safety net should be adjusted with the interests of these employees in mind. Furthermore, the safety net adjustments in recent years have been accompanied by a steady growth in the number of employees covered by agreements. As we have noted elsewhere, data from the May 2002 EEH Survey show that 20.5 per cent of employees, or about 1.6 million employees, were award-reliant in May 2002. The corresponding figure from the May 2000 survey was 23.2 per cent. Taking all of the material and submissions into account, including the material relating to costs, we have decided to award an increase of $19 per week in all award rates."3
 Mr Watson on behalf of the TCCI tabled a document which he said was a "comprehensive analysis of the Tasmanian economy". Mr Watson further said:
"In relation to the economic outlook Tasmania is experiencing a period of sustained economic buoyancy with nearly all key economic indicators having improved throughout 2003 and indeed 2004.
In relation to the labour market, Tasmania's labour market has improved dramatically with record levels of employment and a large fall in the unemployment rate. The State's participation rate continues to be one area that we can improve on but in the main the news is positive.
In relation to business confidence the immediate economic outlook remains extremely buoyant.
And finally in relation to the general outlook:
Tasmanian businesses look forward to the future with confidence and we face a trading year that is shaping up to be a bumper one. Businesses are overwhelmingly indicating that they are anticipating engaging additional resources across 2004 to meet this buoyant economic environment."4
 The TCCI supported the application.
 It was submitted on behalf of the Minister for Industrial Relations that:
"The State Government participated in the safety net review wages proceedings of the Federal Commission earlier this year and that participation was per the vehicle of a joint labor States and Territories submission central to which was the support for the $20 increase. That proposed $20 per week was a product of reasoning that deduced that such an amount represented an affordable and sustainable increase. This position was arrived at following consideration of prevailing and foreseeable economic circumstances and their effect on employment, together with consideration of the needs of the lowest paid workers.
The joint States and Territories considered that this position was vindicated by the subsequent decision of the Full Bench in their adjudication of the $19 per week increase in award rates and to the Federal minimum wage. Since that time there have been the delivery of the State budget for 2004/05. In the budget speech delivered on 20 May this year the Treasurer stated in part and by reference to immediate past economic performance that it was:
An economic performance highlighted by record levels of private investment, record levels of employment, record tourist arrivals, two credit upgrades, the lowest unemployment rate for 20 years, business confidence at record or near record levels and record population.
In concluding his budget speech the Treasurer stated:
It is a budget that confirms our economy is stronger than it has ever been.
Members of the bench, in the context of your deliberations under section 36 of the Act those particular quotations in this submission represent solid affirmation that the application to flow on the terms of the Federal decision satisfies the public interest test. In conclusion and importantly the Government acknowledges and welcomes once again the level of agreement that prevails between the Council and the Chamber. It is an enviable position and one that constitutes evidence of a continuing constructive and responsible approach to the settlement of issues. Finally we submit that the Commission give effect to the terms of the application and in so doing ensure that the continuing relevance of principle 4 of the award safety net."5
 We advised the parties that we would grant the application sought by the TTLC and we are of the view that in doing so the public interest requirements of s.36 of the Act are satisfied. Accordingly awards will be varied to take effect from the first pay period on or after 1 August 2004.
T11564 of 2004
 This application seeks to vary awards which currently provide a meal allowance of $12.30 by increasing the allowance to $12.70 effective from the first pay period on or after 1 August, 2003[correction]. The increase represents the movement in the CPI, March, 2003, to March, 2004 and is not opposed.
T11566 of 2004
 This application seeks to increase the Supported Wage, in awards where it is prescribed, in the same terms as any increase granted by the AIRC. The application was not opposed. At the date of hearing the application to the AIRC had not been heard and determined however, with the agreement of the parties, we granted the increase sought conditional upon the decision AIRC providing the same increase. Accordingly awards of this Commission which include a Supported Wage provision of $60 will be varied to increase the amount to $61 per week effective from the first pay period on or after 1 August, 2004.
 The Commission's Wage Fixing Principles have been amended where necessary to reflect the terms of this decision.
 Members of the Commission will issue orders in their respective areas of responsibility to give effect to this decision.
P L Leary
Ms L Fitzgerald for the Tasmanian Trades and Labor Council
Mr P Tullgren for the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch
Mr T Kleyn for the Health Services Union of Australia, Tasmania No 1 Branch
Mr J Russell for the Shop, Distributive and Allied Employees Association, Tasmanian Branch
Mr M Watson for the Tasmanian Chamber of Commerce and Industry Ltd
Mr K Rice for the Tasmanian Farmers and Graziers Employers Association
Mr T Pearce intervening on behalf of the Minister for Industrial Relations (T11548)
Date and place of hearing:
1 Transcript PN 27-29
2 Transcript PN 32-34
3 Transcript PN 61-62
4 Transcript PN115
5 Transcript PN125 - 130
Architects (Private Industry)
Australian Cement Holdings Enterprise
Barristers and Solicitors
Broadcasting and Television
Building and Construction Industry
Butter and Cheesemakers
Child Care and Childrens Services
Clay and Mud Products
Cleaning and Property Services
Clerical and Administrative Employees (Private Sector)
Community and Health Services (Public Sector)
Disability Service Providers
Draughting and Technical Employees (Private Industry)
Electrical/Electronic Trades (Public Sector)
Farming and Fruitgrowing
Fibreglass and Plastics
Fish, Aquaculture and Marine Products
General Conditions of Employment
Governor of Tasmania Staff
Hairdressing, Health and Beauty Industry
Health and Fitness Centres
Hotels, Resorts, Hospitality and Motels
Ice Cream Makers
Independent Schools (Non-Teaching Staff)
Independent Schools (Teachers) Tasmania
Laundry and Dry Cleaning
Leather, Canvas and Sheet Plastic Fabrication
Meat Processing Industry
Medical Diagnostic Services (Private Sector)
Medical Practitioners (Private Sector)
Metal and Engineering Industry
Metal Trades (State Employees)
Miscellaneous Workers (Public Sector)
Mobile Crane Hire
National Training Wage (Tasmanian Private Sector)
North West Water Authority Enterprise
Pasminco Hobart Smelter Enterprise and Correction Order
Pasminco Rosebery (Mining)
Port Arthur Authority
Printing Authority of Tasmania
Professional Engineers and Scientists (Private Industry)
Quarrying and Lime Processing
Restaurant Keepers and Correction Order
Silviculture and Afforestation
Southern Regional Cemetery Trust Staff
Surveyors (Private Industry)
Tasmanian Ambulance Service
Transport Workers General
Wholesale Plant Bakeries