TASMANIAN INDUSTRIAL COMMISSION
Industrial Relations Act 1984
s23 application for award or variation of award
Tasmanian Trades and Labor Council
(T12144 of 2005)
Private Sector Awards
Tasmanian Trades and Labor Council
(T12156 of 2005)
Private Sector Awards
Tasmanian Trades and Labor Council
(T12157 of 2005)
Private and Public Sector Awards
The Australian Workers' Union, Tasmania Branch
(T12163 of 2005)
Private Sector Awards
See end of Decision for Awards Varied
PRESIDENT P L LEARY
DEPUTY PRESIDENT P C SHELLEY
COMMISSIONER T J ABEY
HOBART, 22 July 2005
Wage Rates - State Wage Case July 2005 - applications to vary private sector awards in a manner consistent with the Australian Industrial Relations Commission in Print PR002005 - Safety Net Review - Award rates to be increased by $17 per week - Wage related allowances increased by 3% - Meal allowances increased to $13.10 - Operative date ffpp 1 August 2005 - State Minimum Wage determined at $484.40 - s.35(1)(b)
REASONS FOR DECISION
 T12144 of 2005 is an application by the Tasmanian Trades and Labour Council (TTLC) to:
(i) increase all award rates and existing allowances relating to work or conditions, in private sector awards of the Tasmanian Industrial Commission, from a common operative date of, on and from the beginning of the first full pay period to commence on or after 1 August 2005, in accordance with the decision of the Australian Industrial Relations Commission of 7 June 2005, contained in Print PR002005 - Safety Net Review - Wages;
(ii) to increase the minimum wage that is payable to adults without regard to the work performed to $484.40 per week; and
(iii) to the extent necessary to effect these changes, amend the Principles of the Commission.
 T12156 of 2005 is an application by the TTLC to:
(i) vary private sector awards by increasing the meal allowance to $13.10 where appearing in each award as a rate of $12.70 to reflect the consumer price index movements in the category of meals out and take away (Reference ABS 6401.0) for the period March 2004 to March 2005.
 T12157 of 2005 is an application by the TTLC to:
(i) vary the Supported Wage clause where appearing in awards of the Commission by increasing the minimum amount payable to employees engaged under the supported wage system from $61.00 to $62.00 per week.
 T12163 of 2005 is an application by the Australian Workers Union (AWU) to vary the following awards:
Impact Fertilizers Enterprise Award;
Metalliferous Mining and Processing Award;
Zinifex Hobart Smelter Enterprise Award;
Zinifex Rosebery (Mining) Award;
 By increasing the Meal Allowance where appearing in each award to reflect consumer price movements in the category of meals and take away (Reference ABS 6401.0) for the period March 2004 to March 2005 and review the wage fixing principles.
 The AWU proposes the following change to the 2004 Wage Fixing Principles:
"Delete existing wording and replace with the following:
3.1 The Commission will continue to play an active role in encouraging and facilitating workplace bargaining and or settling disputes arising out of workplace bargaining.
3.2 In any exercise of its statutory powers the Commission will act in accordance with section 36 of the Industrial Relations Act 1984.
3.3 The Commission may facilitate bargaining in the following ways:
3.3.1 By conciliation, arising out of a dispute notified under s29 of the Industrial Relations Act 1984;
3.3.2 By generally not arbitrating in a dispute except:
3.3.2(a) Where arbitration is undertaken at the invitation of the parties, in which case the Commission's decision should be incorporated into either an agreement or an award(s); or
3.3.2(b) Where the parties remain in disagreement and the Commission considers that there is no prospect of agreement being reached and where the Commission, in all the circumstances considers it desirable to do so will exercise its powers under Parts II and III of the Industrial Relations Act 1984.
3.4 If the Commission arbitrates, it will do so applying the principle that prima facie the main consideration will be the wages and conditions applying at the workplace.
3.5 The Commission will ensure that any proposed award or agreement does not result in a reduction in ordinary time earnings, or departure from parental leave standards or hours of work or annual leave with pay, and the award or agreement, taken as a whole, will not disadvantage the employees concerned unless the Commission is satisfied that circumstances justify otherwise.
3.6 For the above purpose, "disadvantage the employees concerned," means by reference to the safety net of wages and conditions of employment as detailed in Principle 4 - The Award Safety Net."
 The application by the TTLC to reflect the decision of the Australian Industrial Relations Commission in the Safety Net Review of June 2005 [Print PR002005] was supported by the AWU; the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU); the Health Services Union of Australia, Tasmania No. 1 Branch (HSUA) and the Shop, Distributive and Allied Employees Association, Tasmanian Branch, (SDA).
 The TTLC application was not opposed by the Tasmanian Chamber of Commerce and Industry (TCCI), the Minister for Industrial Relations (the Minister), the Australian Mines and Metals Association Inc (AMMA), the Australian Retailers Association - Tasmania Division (ARA) or the Printing Industries Association of Australia (PIAA).
 The Tasmanian Farmers and Graziers Employers Association (TFGA) submitted that:
"...Given the current status of the Tasmanian vegetable industry, it would be foolhardy of us to come to this Commission and say today that we offer our full support for the application. We are not seeking to argue to the contrary but we do not support the application... at the present time."1
 The TGFA indicated that it reserved its right to argue incapacity to pay, if considered necessary.
 A Memorandum of Understanding in the following terms has been reached between the TTLC and the TCCI:
"A memorandum of understanding has been reached between the Tasmanian Trades and Labor Council and the Tasmanian Chamber of Commerce and Industry that:
1. Wage rates in all private sector awards may be increased by the safety net adjustment of $17.00 per week including junior, apprentice and trainee rates (on a proportionate basis) as from the first full pay period to commence on or after 1 August 2005.
The safety net adjustment be reduced to the extent of any over award payment or enterprise bargaining increase currently being paid by the employer.
2. Wage rates in private sector awards will only increase by the safety net adjustment as from the first full pay period on or after 1 August 2005 where:
· existing wage rates have been varied to include the arbitrated safety net adjustment arising out of the August 2004 State Wage case, and
· a period of 12 months has elapsed since the wage rates in the award were increased to reflect the safety net adjustment arising out of the August 2004 State Wage Case.
In awards where the variation for a safety net adjustment arising from the August 1999, August 2000, August 2001, August 2002, August 2003 or August 2004 State Wage Case decisions is by consent and does not result in an increase in the wage rates actually paid to employees or increase the wage costs for any employer, any applicable 12 months' delay between variations may be waived.
3. Consequentially the State Minimum Wage may be increased by $17 to $484.40 per week.
4. Existing allowances, except meal allowance relating to work or conditions be increased by 3.0% as from the first full pay period on or after 1 August 2005.
5. Meal allowances in all awards as per list in the application to be increased to $13.10.
6. That the minimum weekly wage payable under the Supported Wage provisions be increased to $62 a week in line with the Centrelink adjustment and subject to any contrary decision by the Australian Industrial Relations Commission."2
 The application by the AWU to vary the Carriers Award; the Zinifex Hobart Smelter Enterprise Award and the Zinifex Rosebery (Mining) Award in respect to meal allowance seeks to increase the meal allowance in those awards to $13.10 which is consistent with the TTLC application and "to bring it into line with the State standard."3
 It was submitted that the current meal allowance rate in the Metalliferous Mining and Processing Award and the Impact Fertilizers Enterprise Award are as a result of an administrative error and the application seeks to amend that error by increasing the rate to $13.10.
 AMMA do not oppose the application by the AWU and agree that an administrative error had occurred in respect to the Metalliferous Mining and Processing Award and the Impact Fertilizers Enterprise Award.
 We address the application by the AWU to amend the Wage Fixing Principles later in this decision.
 Mr Cocker representing the TTLC submitted:
"...I speak with some trepidation that this may be the last annual event of this type for some time. There are those in our society who want to jettison the civilising legacy of the Harvester judgment and abandon low-paid workers and their families who rely on this annual adjustment to an individual market system. The decisions of this Commission have aided those people in recent years and Unions Tasmania strongly supports the process of annual adjustments determined by industrial commissions and the union movement will continue to fight for that right to be retained. Even if we don't appear in this forum next year we hope that maybe in the future we may be able to.
The applications that we have lodged seek to increase all award rates and existing allowances relating to work or conditions in private sector awards of the Tasmanian Commission from the first full pay period to commence on or after August 2005, in accordance with the decision of the Australian Industrial Relations Commission of 7 June 2005, contained in Print PR002005, the safety net review of wages. We also seek to increase the minimum wage that is payable to adults, without regard to the work performed in Tasmania to $484.40 a week, and to the extent necessary to effect these changes, amend the principles of the Commission.
The requirement on this Commission, as from its Act, is to consider the decision of - or have regard to the decision of the Australian Commission in the proposed award variation and to ensure it is consistent with the public interest, particularly considering the economic position of industry likely to be affected; the economy of Tasmania, and the likely effect of the proposed award with particular reference to the level of employment and any other matter considered relevant by the Commission...
It is submitted that the matters which may be considered relevant to the public interest include the needs of the low paid, equity for Tasmanian award workers, precedent decisions of the Tasmanian Commission, and of course compliance with the Commission's wage fixing principles..."4
 In referring to the decision of the AIRC Mr Cocker noted that:
"The Commission at the end of the day concluded that there is no necessary association between award coverage, safety net adjustments and productivity growth. Indeed, if you look at the low - the bottom level of the Metals Award which was adjusted in this case, the figures presented show that the C14 rate has increased at only about 4/5s of the rate of ordinary weekly earnings for full time adults, and as you go further up that incremental scale, that discrepancy gets bigger and bigger. I don't see that there is any disincentive to bargain and/or to seek career progression when those higher rates are clearly there and the gap between them and the award is increasing on a regular basis.
So in summary, the Commission found that: award wages have not kept up with bargained wages; productivity levels have been "remarkable" since 1996, to quote; inflation has been consistent; employment has grown 19 per cent in that same period; economic growth has been 32 per cent since June 1996; the needs of the low paid are better served through earnings than welfare; that many award reliant workers have low bargaining power; that the evidence suggested that safety net adjustments have not been inconsistent with the continued growth of bargaining; the forecasts are satisfactory; and that to accept the position put by Government employers that $11 a week was a suitable pay rise would result in a loss of spending power for those award-reliant employees; and all those circumstances the Commission considered that an upwards adjustment of $17 a week was appropriate."5
 In support of the claim Mr Cocker submitted:
"Wage growth in Tasmania has seen average weekly earnings over a five-year average of 3.8 per cent increase, and in December 2004 the Tasmanian figure returned to be 90 per cent of the all-Australian figure after the first time in some years, increasing from 89 per cent in the previous year. The figures of these wage increases are well in advance of the safety net adjustments that have occurred in that time. While the participation is still low in Tasmania by Australian standards, there is reason for optimism.
There is also an equity argument, if the Commission pleases, and that argument is that State awards cover approximately 25 per cent of award-covered workers in Tasmania. I am unaware to date that there has been any employer objection to flow on of the increases into Federal awards, and it would seem to me inconsistent to have an argument that said they can't be in State awards when they are flowing into Federal awards. I think the Commission also should be paying particular attention to the public interest in terms of the needs of the low paid.
As was found by the Federal Commission, the experience of low-paid workers is one of struggling to make ends meet, of going without many of the things that ordinary Australians regard as necessities. In this jurisdiction as in the Federal jurisdiction, award-reliant workers are generally paid less than the rest of the community; they are more likely to be women; they are concentrated in three industry sectors, accommodation, cafes and restaurants, retail trade and health and community services; they are overwhelmingly employed in the private sector; and they are overwhelmingly employed in non-managerial occupations and lower-skilled occupations".6
 Mr Watson representing the TCCI said that:
"Tasmania has certainly made up a significant part of the gap that emerged between our and the national economy across the 1990s and we are better positioned for sustained economic growth than in the past two decades. This economic snapshot is in the main positive, but economic growth in Tasmania in the past year has definitely eased from the very impressive growth witnessed across 2002 and 2003.
The recent success of the Tasmanian economy, there is no guarantee for future performance. Tasmania has returned from the brink, yet its recovery has been largely cyclical. There has been an unmistakable fall in confidence and the challenge before us is to prevent a further downturn associated with the normal economic cycle. Tasmania continues to be a long way behind the rest of Australia, but nonetheless appears to be better positioned for sustained economic growth than in the past two decades. We are less likely to continue lagging behind the mainland on a range of economic indicators in the near future, and we have commenced narrowing at least some of the gaps that emerged during the 1990s. With that statement on the record, President and Members of the Bench, we indicate that we are not opposed to this year's application. In fact, there is agreement as per the MOU that Mr Cocker has referred to."7
 Mr Evans on behalf of the Minister submitted:
"...The Government respectfully urges the Bench to adopt in full the form and quantum of wage increases expressed in the memorandum which are essentially increases determined by the recently concluded AIRC 2005 safety net review case. All available evidence indicates that such an increase is economically sustainable, both in prevailing and foreseeable economic circumstances.
It is also the Government's strong view that such an increase would not have a deleterious effect on the current level of employment in the State, but would provide some protection for the lowest paid workers in the State. I would make some comments regarding the state of the economy. On 19 May, the Premier and Treasurer delivered his budget speech, and if I may quote some passages from that speech. Members of the Bench, he said:
The Tasmanian standard of living is the best it has ever been.
Tasmania's general Government net debt will be totally eliminated by 30 June 2006.
He indicated that Tasmania has a bright future. He said:
Today's budget is framed in the context of a strong economic outlook. Tasmanians have every reason to be optimistic and business has every reason to maintain its confidence.
The Treasury has forecasted economic growth at 3.25 per cent in the coming year and employment growth of 6000 more jobs. Regarding employment, he said:
Employment is a remarkable story. At the end of March, there were more than 218,000 Tasmanians in work. We have had 36 months of consecutive jobs growth. Since 1999 24,600 new jobs have been created. There are more Tasmanians than ever before in work and our unemployment rate has fallen to its lowest level in 20 years. Our population is growing.
As a final quote from the Premier and Treasurer's speech, he said:
Private investment has grown by nearly 14 per cent a year since we came to office. In the 12 months at the end of last December it grew by nearly 25 per cent. This is a real vote of confidence in the future of Tasmania.
I think everything that has been said here today in relation to the state of the economy at present and in the foreseeable future and indeed those comments from the Premier and Treasurer's speech supports that the economy is in a fairly robust state. Clearly, as I said, those comments and forecasts go a long way to satisfying the provisions of section 36 of the Industrial Relations Act that require the Commission to be satisfied that any increase is consistent with the public interest.
Specifically, the Government says: the economic position of industry in general or any specific industry will not be adversely affected by such an increase and; the Tasmanian economy or level of employment will not be adversely affected by such an increase and; there is no other relevant public interest consideration that should prevent the Commission from awarding the increase sought."8
T12157 of 2005:
 This is the application by the TTLC which seeks to increase the Supported Wage in awards where it is so prescribed. The application was not opposed. We have since been advised that to date no similar application is before the AIRC. Accordingly the TTLC withdraws this application and when, and if, an application is made to the AIRC, a new application will be filed.
 In the State Wage Case decision of 2002 [T10230 of 2002] we said:
"...we are of the view that within a period of no longer than three years all awards of the TIC will reflect a minimum wage amount being the same as the federal minimum wage."
 Since that time there have been conferences between the parties to particular awards which have considered the effect of the introduction of the federal minimum wage to awards of this Commission. All awards will now be varied to reflect a minimum wage of $484.40 and will include the standard minimum wage clause. Awards which provide an annual leave loading should now prescribe a loading of 17½% in lieu of any current provision which relied on the quantum of the minimum wage.
 At the hearing on 15 July, 2005, we advised the parties that we would grant the application by the TTLC to vary rates of pay, meal allowances and the minimum wage as well as that part of the application by the AWU to vary meal allowances in a number of specified awards.
 Variations to rates and allowances should, in respect to weekly rates be rounded to the nearest 10 cents, in respect to daily rates to the nearest 5 cents, and in respect to hourly rates to the nearest cent.
 We are of the view that the public interest requirements of s.36 of the Act are satisfied and we note the large degree of agreement between the TTLC and the employer representatives. Accordingly awards will be varied to take effect from the first pay period on or after 1 August, 2005.
 The application by the AWU to amend the wage fixing principles is opposed by the TCCI and AMMA and is not supported by the TTLC or the AMWU. The Minister submitted that the application had only been received on the day of the hearing and as such was in no position to indicate a view about the application.
 The parties were directed to confer and to report back to the Commission in due course.
 In light of the AWU application we have decided that it is an appropriate time to have a review of the wage fixing principles generally. We propose to list the matter for report on Thursday 18 August, 2005 at 2.15pm and at that time ask the parties to address us on the following:
Are the current wage fixing principles still relevant?
If not, should any of the current principles be amended, removed or new principles created?
Do contradictions exist within the current wage fixing principles?
If so how are those contradictions best resolved?
Can a system of enterprise bargaining be subjected to wage fixing principles?
Should there be any wage fixing principles?
 The current wage fixing principles have been amended where necessary to reflect the terms of this decision.
 Orders will be issued in due course to give effect to this decision.
P L Leary
Mr S Cocker for the Tasmanian Trades and Labor Council
Mr R Flanagan for The Australian Workers' Union, Tasmania Branch
Mr T Jacobson for the Health Services Union of Australia, Tasmania No 1 Branch
Mr P Griffin for the Shop, Distributive and Allied Employees Association, Tasmanian Branch
Mr D Hanisch for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
Mr M Watson for the Tasmanian Chamber of Commerce and Industry Ltd
Mr B Fitzgerald for Australian Mines and Metals Association (Incorporated)
Mr D McDougall for the Australian Retailers Association - Tasmania Division
Mr K Rice for the Tasmanian Farmers and Graziers Association
Mr J Hargrave for the Printing Industries Association of Australia
Mr J Evans intervening on behalf of the Minister Administering the State Service Act and the Minister for Industrial Relations (T12144 and 12157)
Date and place of hearing:
1 Transcript PN119 - 120
2 Exhibit TLC1
3 Transcript PN160
4 Transcript PN17, 18, 21 - 22
5 Transcript PN31 - 32
6 Supra 35 - 37
7 Transcript PN78 - 79
8 Transcript PN92 - 104
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)
Disability Service Providers
Draughting and Technical Employees (Private Industry)
Farming and Fruit Growing
Fibreglass and Plastics
Fish, Aquaculture and Marine Products
Hairdressing, Health and Beauty Industry
Health and Fitness Centres
Hotels, Resorts, Hospitality and Motels and Correction Order
Ice Cream Makers
Independent Schools (Non-Teaching Staff)
Independent Schools (Teachers) Tasmania
Laundry and Dry Cleaning
Leather, Canvas and Sheet Plastic Fabrication
Licensed Clubs and Correction Order
Meat Processing Industry
Medical Diagnostic Services (Private Sector)
Medical Practitioners (Private Sector)
Metal and Engineering Industry
Metalliferous Mining and Processing
Mobile Crane Hire and Correction Order
National Training Wage (Tasmanian Private Sector)
Plumbers and Correction Order
Professional Engineers and Scientists (Private Industry)
Quarrying and Lime Processing
Restaurant Keepers and Correction Order
Silviculture and Afforestation and Correction Order
Surveyors (Private Industry)
Transport Workers General
Wholesale Plant Bakeries
Zinifex Hobart Smelter Enterprise and Correction Order
Zinifex Rosebery (Mining)