TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.23 application for award or variation of award

Tasmanian Trades and Labor Council
(T13471 of 2009)

Private and Public Sector Awards

Wage Rates - State Wage Case 2009 - application amended - application to vary private and public sector awards - award wage rates to be increased by $12.00 per week - wage related allowances to be increased by 1.9% - meal allowance increased to $15.40 - Supported wage increased to $71.00 - State Minimum Wage rate determined at $558.10 - s.35(1)(b) - operative date ffpp 1 August 2009 - Wage Fixing Principles set aside in part

REASONS FOR DECISION

[1] T13471 of 2009 is an application by the Tasmanian Trades and Labor Council made pursuant to s.23(1) of the Industrial Relations Act 1994 (the Act) in the following terms:

[2] On 2 July the Tasmanian Trades and Labor Council made application for a hearing 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 pay period to commence on or after 1 August 2009, by an amount of 4.5 % as indicated by the Labour Price Index for the year ending March 2009;

(ii) to increase the minimum wage that is payable to adults without regard to work performed to $574.00 per week;

(iii) obtain a special increase of rates and meal allowances in all relevant awards;

(iv) to seek an increase to $69.00 in the minimum rate applying in any Supported Wage System;

(v) to review the Wage Fixing Principles of the Commission.

(vi) It is noted that the application meets the requirements of s.35(1)(A) of the Industrial Relations Act 1984 (the Tasmanian Act) to hold an annual hearing to determine the Tasmanian minimum wage.”

[3] Advertisements advising receipt of the application were placed in the three daily newspapers in Tasmania.  The advertisements said:

“Application No T13471 of 2009

Hearing of an application by Tasmanian Trades and Labor Council to vary all Private Sector Awards of the Tasmanian Industrial Commission to (i) increase all award rates and existing allowances relating to work or conditions, in all 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 2009 by the amount of four point five percent (4.5%) as indicated by the Wage Price Index for the year ending March 2009 (ii) increase the minimum wage that is payable to adults without regard to the work performed to $574.00 per week (iii) obtain a special increase of rates of meal allowances in all relevant awards (iv) to seek an increase to $69 in the minimum rate applying in any Supported Wage System (v) review the Wage Fixing Principles of the Commission will be heard by a Full Bench at 10.00am on Monday 20 July 2009 at the Edward Braddon Commonwealth Law Courts, 39-41 Davey Street, Hobart.

Persons or organisations with an interest in these proceedings are invited to provide a written submission either supporting or opposing the application marked attention Kerrie Parsons, Associate to President Leary (Kerrie.Parsons@justice.tas.gov.au) or faxed (62238012) by close of business 17 July, 2009.

A copy of the Tasmanian Trades and Labor Council’s application is available at the Commission Registry, 4th Floor, Edward Braddon Commonwealth Law Courts, 39-41 Davey Street, Hobart.”

[4] No submissions were received as a result of the advertisements.

[5] The application was heard in Hobart on Monday 20 July 2009, and appearances were recorded for the following:

Tasmanian Trades and Labor Council (TTLC);
Tasmanian Chamber of Commerce and Industry (TCCI);
The Minister for Workplace Relations intervening in the public interest pursuant to s.27 (1) of the Act;
The Pharmacy Guild of Australia (represented by TCCI);
Victorian Automobile Chamber of Commerce (VACC) written submission in response the Notice of Listing; and the
Hairdressing Federation of Tasmania.

[6] Mr Cocker, appearing for the TTLC, sought to amend his application by:

[7] deleting the first part of the claim to “…..increase all award rates and existing allowances relating to work or conditions in private sector awards” and replacing it with “….to increase all award rates in private sector awards, and existing allowances relating to work or conditions in all awards of the Tasmanian Industrial Commission”; and

[8] deleting the reference to the adult minimum wage being sought as $574.00 and replace it with an amount of $570.70.

[9] The TTLC submitted that there seemed to be five options available for consideration. They are:

(1) to award no increase;
(2) to award a headline CPI increase of 2.2%;
(3) to award an effective CPI increase of 2.6%;
(4) to award the WPI rise of 4.5%
(5) to award the WPI rise in part, say 2.6% from August and to review the situation in December for a second instalment.

[10] The TCCI submitted that there should not be any increase to the Minimum Wage and supported the decision of the Australian Fair Pay Commission (AFPC 2009) which provided no increase to the minimum wage maintaining the current minimum rate for federal awards.  This submission was supported by the Pharmacy Guild of Australia, the Victorian Automobile Chamber of Commerce and the Hairdressing Federation of Tasmania.

[11] The Minister said:

“Having spoken of the AFPC I suppose it is, well not suppose, it is relevant that I should advise the Commission of the position of the Tasmanian Government in respect to its submission to that body and in that submission, and it was a short submission, the key phrase was that the Minister at the time, and we’re talking late February, early March, indicated at that time that an increase in the minimum wage that is economically sustainable in the current national and global economic conditions, and that was the basis of the submission that was made at that time.” 

[Transcript p.18 line 10] 

The Economy, State and National

[12] The state of the National and State economies has assumed a significance in this case of unprecedented proportions. In the 2008 State Wage Case [T13142 of 2008]  the Full Bench noted the State Treasury observation to the following effect:

“The sustained recovery in Tasmania’s economic performance which commenced in 2001-02 is expected to continue throughout 2008-2009 and beyond.  And that is supported by some major public and private public-sector investment projects.  Global conditions remain favourable, although not to the same extent in recent years.  The current tight monetary policy may constrain growth prospects, particularly as national consumption rates decline. However, the above trend economic growth is expected throughout ’08-09 as a result of positive overall conditions, and the unemployment rate as has been previously pointed out to the Commission is expected to remain at the current record low levels.”

[13] The extent and depth of the global financial crisis (GFC) which followed has been both profound and arguably unprecedented since the great depression. Notwithstanding, the economic data strongly suggests that Australia has weathered this economic storm better than most developed countries.

[14] The Tasmanian economy has been through economic adversity before, more often than not with severe adverse outcomes, particularly in terms of employment levels. On this occasion however there is evidence to suggest that Tasmania will fare much better. As Treasury observed: [Exhibit M1 Budget Paper No.1] 

• “Tasmania has entered the current worldwide economic recession with above trend economic growth, strong investment levels and very low unemployment. It therefore faces this period of economic downturn in a stronger position than during previous national recessions.

• To date, Tasmania has been less affected than most other economies in Australia. In particular, household consumption and investment in dwellings have been sustained in recent quarters. Some data suggest that Tasmania’s economy is experiencing the downturn around six months after the national downturn.”

[15] The TTLC, TCCI and the Minister all provided comprehensive submissions addressing the economic issues, for which we are indebted. We have also taken into account the sector specific submissions from VACC, the Pharmacy Guild and The Hairdressing Federation of Tasmania. The following is a summary of the material provided, and in particular we have attempted to analyse the Tasmanian economic performance relative to the national economy.

Overview

[16] Since the onset of the GFC in late 2008, the global economy has weakened considerably and there remains a high degree of uncertainty as to the timing and strength of a recovery. Since the third quarter of 2008, there has been a synchronised deterioration in economic conditions across advanced and developing economies. The outlook for some of Tasmania’s major export markets, such as Japan, Korea and Taiwan, is very weak.

[17] International Monetary Fund forecasts point to a weak outlook for growth in 2009, with negative growth forecast for US and European economies.

[18] Business and consumer confidence has fallen sharply since late 2008 and trend employment has also declined. Business investment is expected to decline sharply over the next 12 months.

[19] Against this negative outlook, there are some positive signs emerging, which have caused some commentators to revise forecasts upwards. The re-emergence of strong growth in China is a key factor in this upturn.

State Final Demand (SFD) and Gross State Product (GSP)

[20] Growth in SFD has been very strong in recent years with average annual growth of 4.9% since 2000-01, including growth of 5.3% to March 2009. This is expected to ease over the final quarter 2008-09. Treasury expects SFD to decline by 0.75% in 2009-10 as the positive impact of greater public investment is likely to be marginally less than the negative impact of reduced private investment and public sector consumption. GSP is expected to decline by a similar amount in 2009-10.

[21] According to the TCCI, Tasmania has dropped from the fastest growing State economy in March 2008 to the fourth fastest in March 2009.

The Labour Market

[22] The level of Tasmanian employment peaked in September 2008 at 240,700 following very strong growth in the previous six months. Since then it has declined to 234,300 in June 2009 (1.9%). There has also been a significant shift towards part-time employment, which has grown by 4% since September 2008. Unemployment has increased from a low of 4.0% in August 2008, to 5.3% in June 2009. However this is still comfortably below the national unemployment rate of 5.8%, a position which would not have been remotely contemplated a decade ago.

[23] The Tasmanian participation rate peaked at 62.4% in September 2008 and has since declined to 61.1% in June 2009. Treasury expects the participation rate to remain relatively stable over 2009-10, sustained in part by delayed retirement decisions as a consequence of a collapse in superannuation balances.

[24] Forward indicators of employment, such as the Skilled Vacancies Index (Department Education, Employment and Workplace Relations) and the ANZ Job Advertisement series have shown a significant decline in recent months.

[25] Treasury forecasts that employment will decline by a further 2% in 2009-10, with unemployment increasing to a year-average of 7%.

[26] In terms of the long-term unemployed (unemployed for at least 52 weeks), the position is more encouraging. In the year to June 2009 there was an average of 2,200 classified as long-term unemployed, a decrease of 14.7% for the year to June 2008. This compares with an increase of 10.4% for the national economy over the same period.

Private Investment

[27] Since 2000 the impact of private investment on economic activity in Tasmania has increased from 12% of GSP in 2000-01 to 20% in 2007-08. Dwelling investment, which accounts for around one third of private investment activity, has been sustained over the year. Finance commitments for new dwellings increased by 11.4% for year to May 2009. The value of housing finance for first home buyers in Tasmania had increased by 122% by March 2009, which compares with 92% nationally.

[28] Over the past six years business investment has increased by an annual average rate of 12%. Treasury considers that forward indicators such as Lending Finance Approvals and Building Work yet to be Done, suggest that business investment will decline sharply over 2009-10. It is expected that private investment will decline by around 15% over 2009-10 and recover modestly in 2010-11.

Household Consumption

[29] Retail turnover in Tasmania in May 2009 was 7.15% higher (nominal terms) than for May 2008. Treasury expects real household consumption to increase marginally by 0.25% in 2009-10.

Exports

[30] Treasury expects zero growth for export volumes in 2008-09 and forecasts a fall of 5% in 2009-10. There is likely to be a period of recovery in 2010-11, with export growth returning to trend levels.

Other Economic Indicators

[31] Room occupancy rates for Tasmanian tourist accommodation were showing rates at or above normal levels of 75% (March 2009) with takings up 1.9% over the same period (ABS report 8635.0).

[32] Tasmania’s population continues to increase at a steady rate (0.9% in 2009-10). Positive interstate migration suggests that this trend will continue.

[33] Inflation increased by 2.2% to March 2009 and is expected to decline to 2% in 2009-10.

Recent Economic Commentary

[34] The following is a summary of recent economic commentary and surveys.

[35] The TCCI Survey of Business Expectations, September Quarter 2009 reported that the Composite Business Barometer index had weakened from 44.7 to 42.8 in the June quarter. The outlook for the next 12 months for both the national and state economies improved slightly in the June quarter but both indices remain below 50 (35.0 and 33.6 respectively).

The Sensis Business Index - SMEs June 2009 survey reported:

“After recording sharp falls for the past year, business confidence among SMEs rebounded strongly during the past quarter, recording the strongest increase in a single quarter since the inception of the Sensis® Business Index in May 1993. This quarter’s strong improvement follows the lowest level of business confidence in the history of the survey, which was recorded last quarter. In addition to improved levels of confidence, current perceptions of the economy rose for the first time since November 2007, with perceptions about the future economic direction up by 30 percentage points."

[36] In relation to Tasmania, the report notes:

“Tasmania recorded a strong improvement in business confidence among SMEs with confidence above the national average.”

[37] The Westpac Melbourne Institute Consumer Sentiment Index increased in July 2009 from 100.1 to 109.4. Commenting on the result, Westpac Chief Economist, Bill Evans said:

“This is unquestionably a stunning result. My personal view had been that given that last month we saw the second largest increase in the Index since we started measuring the Index in 1974 any rise in July would have been a great result. The news on the variables that traditionally impact the index had generally been downbeat. Despite this, sentiment has posted another strong gain with the Index now printing an increase of 23.2% over the last 2 months - the largest 2 month increase in the Index since the survey began in 1975. And it is the largest increase by a substantial margin. The second largest 2 month increase was 18.8% in March 1992 when households were finally convinced that the Australian economy was coming out of recession.

This is now the highest level of the Index since December 2007. It is 38.5% above its level a year ago and at 109.4 optimists decisively out-number pessimists for the first time since December 2007.”

[38] The most recent Reserve Bank of Australia (RBA) Board Minutes note that China’s growth, combined with international stabilisation and stronger than expected retail sales, is likely to drag the economy back to slow growth later this year and next.

[39] The Board noted that, “downside risks had diminished”, which has been interpreted as meaning the chances of further interest rate cuts appear more remote.

[40] The Access Economics Report of 21 July 2009 states that “Australia is through the worst of the economic crisis, suffering a small recession while the rest of the world endures a big one”. Access Economics has revised down its predicted peak unemployment rate for 2010 from 8.5% to 7.5%. The Report observes that Tasmania was “one of the safest places to ride out the global economic crisis”, predicting that GSP would remain constant with a small growth in private consumption and private housing investment. However the report predicts significant falls in private commercial construction and private equipment investment. The report was less optimistic about the longer term future for the Tasmanian economy.

Conclusions

[41] On the basis of the available evidence we have reached the following conclusions.

[42] The Tasmanian economy has been and will continue to be adversely impacted by the global financial crisis.

[43] It is unlikely that the impact on the Tasmanian economy will be worse than for the nation generally. Indeed there is some evidence to suggest that Tasmania is faring better than most other States.

[44] Tentative signs of recovery are now emerging. However the timing and extent of the recovery remains uncertain. It is possible that recovery in Tasmania may lag the national economy.

[45] It seems likely, that even with an economic recovery, the level of unemployment will continue to rise over the next 12 months.

The Wage Claim and Impact on Employment

[46] The TTLC submitted that the claim was both reasonable and moderate and would lead to an outcome necessary to maintain both the real and relative positions of award and minimum wage reliant workers in Tasmania. This group has little or no capacity to bargain and granting the claim would not reduce the capacity for enterprise bargaining elsewhere in the State system.

[47] Mr Cocker submitted that there was already a significant time lag inherent in the claim, and if denied, the next opportunity would be July 2010, meaning that the lowest paid workers will have foregone a wage rise for two years.

[48] Mr Cocker noted that s.47AA of the Act mandated that the Commission must have regard to “fairness” in setting the minimum wage. This, the TTLC contended, should be given its ordinary meaning, “which in this case means equitable and just having regard for the interests of the persons immediately concerned, the interests of the Tasmanian community and ensuring protection of those in a non existent or weak bargaining position”.

[49] This Mr Cocker submitted, should be determined on a “best fit” basis, as setting the minimum wage that will suit every circumstance is unobtainable.

[50] The TCCI submitted that the magnitude and pervasiveness of the GFC have created a quantum shift in the considerations the Commission must have regard to in 2009. They have created an imperative for genuine caution and consideration of the micro and macro impact of any wage increase.

[51] Mr Dilger, whilst acknowledging the differing legislative frameworks, said the Commission should be persuaded to adopt the position of the Australian Fair Pay Commission which froze the minimum wage rate in a decision, Mr Dilger submitted, “was primarily intended to protect jobs and, importantly, support a stronger recovery in employment as the economy picks up”.

[52] The TCCI contended that initial response of employers was to “hoard labour” in the preliminary phases of an economic slowdown and is the principal reason that employment growth lags economic conditions. The shift between full-time and part-time employment witnessed over the past six months has been a function of business adapting to a slump in activity. Another key feature has been a slowdown in the growth of aggregate hours worked and an increase in underemployment.

[53] Mr Dilger submitted that rates of underemployment are particularly acute in the retail and hospitality industries, sectors regarded as heavily award reliant.

[54] The TCCI asserted that the Tasmanian economy is least able to absorb increases to the minimum wage because Tasmania was the least productive economy in Australia. GSP per capita in Tasmania is $42,994 compared with $52,523 at the national level. Mr Dilger said Tasmania has the lowest skilled workforce in the nation and hence the impact of minimum wage increases will be felt harder here than elsewhere.

[55] The VACC submission was broadly consistent with that of the TCCI, with particular reference to the motor vehicle repair, service and retail industry.

[56] The PGA urged the Commission to follow the AFPC decision and award no increase in rates. The thrust of the PGA submission went to the inability of community pharmacies to absorb increased wage costs through the PBS imposed revenue cap. This the PGA submitted will most likely lead to a reduction in staff numbers and/or reduced hours of work, should the claim be granted.

[57] Mr Mallett, for The Hairdressing Federation of Tasmania submitted that the wage claim, if granted, would impose difficulties for his members, particularly in rural and remote areas. He also noted skill shortages in the industry meant that over award payments were not uncommon, particularly in metropolitan areas.

[58] Mr Baker, for the Minister, submitted that the decision needs to give effect to three things. They are:

• The current state of the economy
• The need to ensure that unemployed persons are not priced out of the market and that those in the workforce remain so.
• A fair and effective safety net of minimum wages and entitlements

[59] The link, if any, between wage increases and employment has been a vexed issue before industrial tribunals for some time. In the 2007 State Wage decision [T12940 of 2007]  the Full Bench noted the findings of the 2006 publication “Boosting Jobs and Incomes - Policy Lessons from Reassessing the OECD Jobs Strategy", which concluded:

“Recent developments suggest that a moderate legal minimum wage generally does not undermine employment, but also that adequate allowance for wages below that level for youth and possibly other vulnerable groups is essential.”

[60] The TCCI submitted that any further wage increases may threaten the already vulnerable unskilled and low skilled workforce, and that artificial wage increases that price low skilled workers out of the labour market at a time of economic weakness could have significant long term economic and social implications.

[61] Mr Cocker submitted that there is no credible evidence that regular, moderate and predictable rises in the minimum wage created unemployment. On the contrary, such increases are often associated with improvements in the functioning of labour markets, including the positive effects on recruitment-retention.

[62] The AFPC considered this issue in its most recent decision and concluded as follows:

“The Commission has examined the available evidence on the relationship between minimum wages and employment in its previous Minimum Wage Reviews and again for the 2009 review. Its assessment is that, on balance, most experts consider that excessive wage growth can harm employment growth.”

[63] We do not quibble with this conclusion. It is self evident that “excessive” price increases of any commodity, including labour, will ultimately have a negative impact on demand for that product or service.

[64] We are however quite satisfied that the wage adjustment we propose could not, on any objective measure, be considered “excessive”.

[65] It is widely recognised that State Wage decisions have greatest impact on the industry sectors of Retail and Accommodation & Food Services. These decisions have granted wage increases of $17 (2005), $20 (2006), $22.70 (2007) and $19 (2008).

[66] The pattern of employment is revealed in the following table:

Source ABS 6291.0.55.003

[67] From this table it is clear that both full-time and part-time employment in the retail industry has grown steadily over the past four years, including the 12 months to May 2009, which embraces the impact of the GFC. It is likely that this pattern is directly related to the relatively robust retail activity over this period, including recent months. Certainly it is not possible to conclude that successive State Wage decisions have impacted negatively on employment in this sector.

[68] A similar pattern is evident in the Accommodation & Food Services sector although there is a discernable decline in the past 12 months. We suspect that this is a function of a decline in discretionary spending in times of economic adversity, rather than the impact of the 2008 State Wage decision.

[69] The underemployment and labour hoarding impact referred to in the TCCI submission is not readily apparent from this data set.

[70] It is undeniable that total employment in Tasmania has fallen over the past 12 months. However the overwhelming evidence is that this is a consequence of factors other than the 2008 State Wage case. Indeed we are confident that this would have occurred even if the Commission had declined to award a wage increase in 2008.

[71] Regrettably, it appears inevitable that unemployment will continue to rise in the foreseeable future, irrespective of the strength of economic recovery, if for no other reason than an increase in the size of the available workforce. We are not convinced that a modest wage adjustment of the order we propose will have any material bearing on this likely outcome.

Economic Stimulus Package and Tax Transfer Payments

[72] The TCCI contended that changes to tax and transfer payments, coupled with the Commonwealth economic stimulus package, have provided substantial real increases in income for low income earners, which in most cases have outpaced growth in living costs. This is a further reason why the Commission should decline a wage increase at this time.

[73] We are of the view that the Commonwealth Government has, in the face of a rapidly deteriorating economy, engaged in a series of policy measures aimed at halting and perhaps reversing, this decline. At no stage has the Commonwealth suggested that these actions are intended to be in substitution for other measures, including the fixation of minimum wages, which would otherwise occur as a matter of course.

[74] In the most recent WA State Wage decision, the Full Bench concluded: [20090 WAIRC 00375] 

“We consider it to be inconsistent with the Commonwealth’s fiscal stimulus payments stimulating consumer spending to reduce the value of the minimum wage by awarding no increase at all. The minimum wage is an important part of the social safety net and we consider that the requirements upon us in s 50A(3)(a)(ii) and (iii) in particular, to ensure that Western Australians have a fair system of wages which meets the needs of the low paid and provides fair wage standards in the context of living standards generally prevailing in the community, argue against no increase being ordered at all.”

[75] In the Tasmanian context, we agree with this conclusion.

Supported Wage

[76] Increases to the Supported Wage in Tasmania have traditionally followed increases awarded in the federal jurisdiction.  For some reason Tasmanian State Awards provide a lesser Supported Wage than awards in the federal jurisdiction and have done for some years. 

[77] The Australian Fair Pay Commission in its decision of July, 2009 [3/2009] determined:

“The Commission is aware that the weekly income test free threshold for a single person receiving DSP will increase from $69 to $71 from 1 July 2009. Accordingly, in Wage-Setting Decision 3/2009 the Commission adjusts to $71 per week the minimum weekly amount payable to employees with disability covered by the following instruments:

• Special Supported Wage System (Employees with a disability) transitional Australian Pay and Classification Scale, [2007] APCS 1;

• transitional special Federal Minimum Wage No. 2 - Employees with a disability who are unable to perform the range of duties to the competence level required because of the effects of a disability on their productive capacity - and are not currently covered by a Pay Scale; and

• transitional Pay Scales which provide for the SWS and which also provide a minimum amount payable under the SWS.”

[78] Accordingly, and with the consent of the parties, the application in this matter will be amended to increase the Supported Wage to $71 per week to make it consistent with the decision of the AFPC.

Decision

[79] For the reasons previously outlined we do not accept that a case has been made out for no wage adjustment at all.

[80] In previous State Wage decisions the Commission has adopted the Wage Price Index (WPI) as the preferred index for wage adjustment purposes. The adoption of the WPI has the advantage of ensuring that minimum wages are adjusted broadly in line with wage and salary levels in the wider industrial community.

[81] In the absence of other compelling factors, we believe that this position holds true.

[82] On this occasion however there are other compelling factors to be considered, notably the impact of the GFC.

[83] We are of the view that to grant an increase of 4.5% in the current environment would be inappropriate.

[84] We note that inflationary pressures are presently in decline and are likely to remain subdued over the next 12 months.

[85] On balance we believe that an adjustment of 2.2% at the minimum wage level is appropriate. Such an increase is in line with the CPI to the March quarter 2009. Consistent with previous decisions we propose to grant a flat rate increase of $12pw. This adjustment will, we believe, satisfy the objectives of maintaining real wages at least at the minimum wage level, without imposing unsustainable cost pressures on employers with attendant adverse employment outcomes.

[86] This increase will also notionally apply to public sector awards. However in every case this is to be absorbed against earlier bargaining outcomes, resulting in no adjustment to rates currently contained in public sector awards.

[87] In terms of meal allowance, we propose to follow the formula adopted in previous decisions. This will increase the meal allowance by 5.7% to $15.40.

[88] In summary:

• Classification rates in all private sector awards will be increased by $12pw, with consequential adjustments to junior and other formula related rates.

• Pursuant to s.35(1)(b) and s.47AB of the Act, we declare that the minimum wage for Tasmania will be $558.10pw.

• Work related allowances in public and private sector awards will be increased by 1.9%.

• The meal allowance in private sector awards is to increase to $15.40.

• The minimum amount payable under the Supported Wage System shall increase to $71 per week

[89] The increases provided by this decision will take effect from the first pay period on or after 1 August 2009.

[90] Variations to rates and allowances should, in respect to annual salaries be rounded to the nearest dollar; weekly rates be rounded to the nearest 10 cents; daily rates be rounded to the nearest 5 cents; and hourly rates be rounded to the nearest cent.

[91] Orders will issue in due course to give effect to this decision.

Wage Fixing Principles

[92] The TTLC submitted that the Wage Fixing Principles no longer have a relevant purpose and should be retired.

[93] The TCCI and the Minister agreed with this proposal.

[94] The Commission in large measure agrees with the position of the parties. Accordingly the Wage Fixing Principles, as such, will be set aside.

[95] We are of the view however that there is merit in retaining, for the foreseeable future, the principles pertaining to Pay Equity and Economic Incapacity. These principles will form part of this decision as recorded below, rather than a discrete document.

Pay Equity

[96] In this Principle 'pay equity' means equal remuneration for men and women doing work of equal value.

[97] Applications may be made for making or varying an award in order to implement pay equity.  Such applications will be dealt with according to this principle.

[98] Pay equity applications will require an assessment of the value of work performed in the industry or occupation the subject of the application, irrespective of the gender of the relevant worker. The requirement is to ascertain the value of the work rather than whether there have been changes in the value of the work.  The Commission may take into account the nature of the work, the skill, responsibility and qualifications required by the work and the conditions under which the work is performed.

[99] A prior assessment by the Commission (or its predecessors) of the value of the work the subject of the application, and/or the prior setting of rates for such work, does not mean that it shall be presumed that the rates of pay applying to the work are unaffected by the gender of the relevant employees.  The history of the establishment of rates in the award the subject of the application will be a consideration.  The Commission shall broadly assess whether the past valuation of the work has been affected by the gender of the workers.

[100] In approaching its task, the Commission will have regard to the public interest requirements of Section 36 of the Act.

Economic Incapacity

[101] Any registered organisation with an interest in an award may apply on behalf of an employer or group of employers to temporarily reduce or postpone or phase in the application of any increase in labour costs under the Principles on the grounds of very serious or extreme economic adversity.  The merit of such application will be determined in the light of the particular circumstances of each case and any material relating thereto shall be rigorously tested.  The impact on employment at the enterprise level of the increase in labour costs is a significant factor to be taken into account in assessing the merit of any application.

P L Leary
PRESIDENT

Appearances:
Mr S Cocker for the Tasmanian Trades and Labor Council
Mr D Dilger for the Tasmanian Chamber of Commerce and Industry Limited and the Pharmacy Guild of Australia
Mr P Baker intervening on behalf of the Minister for Workplace Relations
Mr R Mallett for the Hairdressing Federation of Tasmania

Date and Place of Hearing:
2009
July 20
Hobart

Awards Amended:
Aerated Waters
Architects (Private Industry)
Automotive Industries
AWU (Tasmanian State Sector)
Baking Industry
Barristers and Solicitors
Bootmakers
Broadcasting and Television
Building and Construction Industry
Building Trades
Business Services
Butter and Cheesemakers
Carriers
Catholic Education
Child Care and Childrens Services
Clay and Mud Products
Cleaning and Property Services
Clerical and Administrative Employees (Private Sector)
Clothing Industry
Community Services
Concrete Products
Custodial Officers
Dairy Processing
Dental Employees
Dentists
Disability Service Providers
Draughting and Technical Officers (Private Industry)
Electrical Engineers
Entertainment
Estate Agents
Farming and Fruit Growing
Fibreglass and Plastics
Fish, Aquaculture and Marine Products
Fuel Merchants
Furnishing Trades
Governor of Tasmania Staff
Hairdressing, Health and Beauty
Health and Fitness Centres
Health and Human Services (Tasmanian State Service)
Horticulturists
Hospitals
Hotels, Resorts, Hospitality and Motels
Ice Cream Makers
Impact Fertilisers Enterprise
Independent Schools (Non-Teaching Staff)
Independent Schools (Teachers) Tasmania
Insurance
Laundry and Dry Cleaning
Leather, Canvas and Sheet Plastic Fabrication
Licensed Clubs
Meat Processing Industry
Meat Retailing
Medical Diagnostic Services (Private Sector)
Medical Practitioners (Private Sector)
Metal and Engineering Industry
Metalliferous Mining and Processing
Miscellaneous Workers
Miscellaneous Workers (Public Sector)
Mobile Crane Hire
Monumental Masons
Musicians
National Training Wage (Tasmanian Private Sector)
North West Water Authority Enterprise
Nurses (Tasmanian Public Sector) 2005
Nursing Homes
Optical Industries
Parliamentary Staff
Photographic Industry
Plant Nurseries
Plumbers
Port Arthur Authority
Post Year 10 Teaching Staff
Printers
Printing Authority of Tasmania
Produce
Professional Engineers and Scientists (Private Industry)
Public Accountants
Public Vehicles
Quarrying and Lime Processing
Restaurant Keepers
Retail Pharmacy
Retail Trades
Rubber Trades
Security Industry
Shearing Industry
Shellfish Industry
Shipbuilders
Shipping
Silviculture and Afforestation
Southern Regional Cemetery Trust Staff
Surveyors (Private Industry)
Tasmanian Ambulance Service
Tasmanian Information Technology Industry
Tasmanian State Service and Correction Order
Tasmanian State Service National Training Wage
Teaching Service (Tasmanian Public Sector)
Textile
Timber Merchants
Totalizator Agency
TOTE Tasmania Racecourse 2005
Transport Workers General
Veterinary Services
Wholesale Pharmaceutical
Wholesale Plant Bakeries
Wholesale Trades
Wireworking
Zinifex Hobart Smelter Enterprise
Zinifex Rosebery (Mining)