IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984

See end of Decision for Awards Varied

CONTENTS

The Applications

When the National Wage Bench of the Australian Conciliation and Arbitration Commission (the Australian Commission) handed down its decision in the June 1986 National Wage Case (Print G3600), it awarded a 2.3 percent increase in line with its then existing Principle 1 and determined a revised set of Wage Fixing Principles to extend to July 1988.

Applications to flow on the decision of the Australian Commission were lodged with this Commission by the Tasmanian Trades and Labor Council (TTLC), the Tasmanian Public Service Association (TPSA) and the Association of Professional Engineers, Australia, Tasmanian Branch (APEA).

The application by the TTLC was in respect of all private and public sector awards and all agreements. Specifically the TTLC claimed -

The application by the TPSA sought to increase public sector award salary rates and allowances by 2.3 percent. The proposal for variation to the Wage Fixing Principles as outlined in (c) above, was adopted by that organisation in the course of proceedings.

An application was also made by the APEA to increase by 2.3 percent all salary rates and allowances specified in the Professional Engineers Award (S113) and the North West Regional Water Authority Award (S101).

The foregoing applications are founded on the existing Principle 1, National Wage Adjustments, of the Wage Fixing Principles adopted by this Commission in our April 1985 National Wage Case decision (T96 and T99 of 1985 (24 April 1985)).

Principle 1(a) which is as follows, is particularly relevant -

"Subject to Principle 3, the Commission will adjust its award wages and salaries every six months in relation to the last two quarterly movements of the eight-capitals CPI unless it is persuaded to the contrary by those seeking to oppose the adjustment."

Mr Lennon appearing for the TTLC submitted that Principle 1(a) makes it clear that it is not the task of the unions to show why award wages and salaries should not be adjusted by 2.3 percent, but that the onus is on those who might seek to oppose the flow on adjustment.

As it eventuated, with the exception of the Tasmanian Farmers and Graziers Employers Association (TFGA), the flow on of the decision of the Australian Commission was not opposed by any of the employer parties, including the Minister for Industrial Relations who exercised his right to intervene in the proceedings in accordance with Section 27 of the Industrial Relations Act, 1984 (the Act).

Mr Lennon indicated that the claim by the TTLC sought a flow on of the Australian Commission's decision both in terms of the 2.3 percent increase awarded and the adoption of its new Wage Fixing Principles by this Commission.

Exhibit U1 tendered by Mr Lennon set out the twelve Wage Fixing Principles determined by the Australian Commission, appropriately amended to reflect the fact that this Commission is a State tribunal.

Applicants' Submissions

In support of the TTLC claim, Mr Lennon referred to the question of public interest, properly noting that we have a statutory obligation to satisfy ourselves that any proposed award is consistent with the public interest criteria specified in Section 36 of the Act.

Mr Lennon submitted that the foremost public interest considerations relate to the maintenance of the centralised system of wage fixation. He voiced his concern that failure to grant the increase sought will almost certainly lead to a piecemeal spate of claims by unions outside the structured framework of the centralised system. He said if that eventuated there would be a high probability that many wage increases obtained may be in excess of 2.3 percent.

We will address the question of public interest later in this decision.

To further support the TTLC claim Mr Lennon submitted that the Tasmanian economy cannot be dealt with in isolation from the rest of Australia. He indicated that this commission should have regard for the positive improvements in the nation's economy.

As examples, Mr Lennon cited that Australia's economic growth is the fastest of the OECD countries over the last two years. He submitted that Australia was the only OECD country to have a further fall in unemployment; and that more than two-thirds of job growth has been in full time jobs, almost 90 percent of which are now derived in the private sector.

Mr Lennon said that profitability as a proportion of GDP has risen from 11 percent to 15.5 percent and that industrial disputation is at its lowest level for 18 years.

Mr Lennon also urged us to grant the 2.3 percent increase on the ground that Tasmanian employees subject to federal awards have already been granted this increase and that it would be inequitable not to grant the increase to employees paid in accordance with awards of this Commission. This argument must be considered by us in the context of Section 35(7) of the Act.

With regard to price increases Mr Lennon submitted that increases have been substantial over the last 12 months and that Tasmanians currently pay some of the highest prices for consumer goods in Australia. He said that within the last 12 months costs have risen by just over 9 percent whilst employees have only been compensated by a 3.8 percent wage increase.

It was recognised by Mr Lennon that unemployment in Tasmania remains unacceptably high. He argued however that employees cannot be expected to bear an additional burden affecting their standard of living on top of the restraint which has already resulted in a 2 percent discounting of the Consumer Price Index in the last National Wage Case proceedings.

The view of the TTLC is that employers must now take a proportionate share of responsibility for restraint. Mr Lennon argued that the onus now rests with employers to restrain price levels for everyday necessities of life.

Mr Lennon concluded his submission by stating that if the Commission did not grant the 2.3 percent increase this would signal the end of the centralised system of wage fixation in this State, and put Tasmania out of step with the other States and the Commonwealth.

Mr Evans for the TPSA supported and adopted the submissions advanced on behalf of the TTLC.

In doing so Mr Evans noted that it was eight months since this Commission last adjusted award rates in accordance with Principle 1, at which time union commitments to the Wage Fixing Principles were required and obtained.

The TPSA advocated that we should flow on the 2.3 percent wage increase and adopt the proposed principles in Exhibit U1.

Mr Evans said that if the Commission granted the increase sought, the TPSA will be in a position to give a commitment to adhere to those principles which will ensure that an orderly system of wage fixation can be maintained within the jurisdiction of this Commission.

Mr Henderson representing the APEA endorsed in totality the submission of the TTLC and the TPSA. He urged us to adopt the principles decided upon by the Australian Commission, as amended by the TTLC.

Other Union Submissions

The Federated Miscellaneous Workers' Union of Australia, Tasmanian Branch, supported the TTLC submission.

Mr O'Brien submitted that it would be in the public interest for a centralised system of wage fixation to continue in this State, and that we should take into account the following statement made at page 13 of the decision of the Australian Commission -

"While the recovery in profits as revealed by global figures does not mean that all sectors of the economy are enjoying high profits, it does suggest that there is room for labour cost restraint to be matched by profit restraint. Such an outcome would not only hasten the fall in inflation and interest rates, it would also help to sustain the commitment of wage and salary earners to the stringent requirements of the centralised system."

Mr O'Brien said that employers must realise that pressures would be put on the wage fixing system of inordinate price increases were passed on to consumers as a consequence of a 2.3 percent wage adjustment.

We were requested by Mr O'Brien to respond to this submission in our decision on these claims.

In doing so we lend our weight to the foregoing comments by the Full Bench which we consider need no further elaboration.

Ms Crotty appearing for the Tasmanian Teachers' Federation (TTF) urged us to award the 2.3 percent increase to "ensure that workers in both the State public sector and private sector receive the same equitable treatment as other workers in the Commonwealth."

Ms Crotty supported the public interest comments of the TTLC.

Government Submission

Under the terms of the Act the Minister for Industrial Relations is a statutory intervener in proceedings before the Commission, and was represented in these proceedings by Mr Willingham.

The Minister for Public Administration, who is now the nominal employer of most "State employees", was represented at the hearing by Mr Jarman. Mr Willingham, however, assisted by Mr Jarman, assumed responsibility for putting the Government's position on these applications.

While it was made clear that the Government on the one hand supported continuation of a system of centralised wage fixation, its expressed attitude to wage restraint occasioned by perceived budgetary problems appeared, on the other hand, to run somewhat counter to its stated view in this regard and was therefore contradictory. This apparent ambivalence is a matter of concern to this Commission. We cannot understand how the Government can lend its support to an across-the-board National Wage adjustment and in the same breath announce it is in financial difficulties; and because of that difficulty it proposes to reduce the public sector wages and salaries bill by some $20 million over the next twelve months. This, we understand, is to be achieved by actual salary reductions being imposed by statute. Alternatively the reduction will be met by retrenchment of approximately 800 persons now employed in the State Service.

This apparent paradox in attitude is difficult to reconcile.

If we award a 2.3 percent adjustment to employees generally, including those in the employee of the Crown, the additional financial burden to the State will be of the order of $15 million for a full year. The Government says it will support this adjustment. But its approval is not given on the basis that it is seen as an affordable expense, but because it believes -

" ... that it is more within the public interest than without it, for Tasmanian wage and salary earners [not] to be deprived of the 2.3 National Wage Case flow on.

"The Government is also concerned that any deferment or non flowing of the 2.3 percent National Wage increase could have quite serious effects on the conduct of industrial relations throughout Tasmania."

At the same time, it was announced that cost savings of $20 million would be effected by reduction in capital workers; an extra $11 million in other public sector savings; and a $20 million reduction in the public sector salaries and wages bill. In addition, some $40 million will be raised from increased taxes and statutory charges - in all $91 million in 1986/87.

Mr Willingham admitted that the views he had advanced on behalf of the Crown could be viewed as "contradictory". But the Government was concerned to give public expression to its continuing support for centralised wage fixation, and its attendant operating mechanisms around which the whole system pivots.

However, faced with huge budgetary shortfalls, and notwithstanding its non opposition to the claims before us, the Government, it seems, is unwilling to allow the full cost of the 2.3 percent to flow to all of its employees.

It has instead foreshadowed, in these proceedings, a reduction in its wages and salaries bill of $20 million for a full year. This represents approximately 33 percent more than the cost of the 2.3 percent claim if granted to Crown employees.

If that is to be the case, we fail to understand how it can be argued that awarding a $15 million per annum increase, there by putting 600 jobs (ie 15/20 x 800 = 600) at risk is consistent with the statutory definition of public interest set out in Section 36 (1)(b) of the Act.

If 600 persons derive approximately $15 million gross income, the goods and services they purchase after tax must have some impact on the business sector of the economy of this State. Of course to take $20 million worth of disposable income (before tax) out of the economy would be even worse and may well involve job losses in the retail industry. We have been told during this case that retail sales have already plummeted since last year. In June 1985 Tasmanian retail sales were 2.85 percent above the national average. In March 1986 they had fallen to 5.48 percent below the national average.

It follows that if job losses do occur in the public or private arenas the impact is likely to be worse if those who lose their jobs are unable to find alternative employment.

We therefore find the Minister's perception of public interest somewhat difficult to understand and in any case it differs from our own. Moreover, it is unhelpful to argue that an increase should now be awarded across-the-board and new principles established for two years if, because of lack of Commonwealth funding, there is no intention of abiding by a decision taken by this Commission to grant that increase and apply those principles.

By way of illustration we draw attention to the revised Principle 1, which envisages that future National Wage adjustments will operate from January and July each year. That leaves unanswered the question whether the January 1987 adjustment, if any, will be agreed to, opposed, estopped by legislation or paid by the Government.

If the Tasmanian Government cannot afford to pay a section of its own employees minimum award wages, at this time, it also begs the question as to whether it will be better placed to restore the position in 12 months time, together with any January and July 1987 National Wage increase.

And what of the cost of proposed new Principle 3 relating to occupational superannuation? The capacity or otherwise to call in aid Principle 6 (Anomalies and Inequities) could also have particular significance if actual salaries are to be reduced other than by decision of this Commission. In this regard we believe we have a duty to emphasise that artificial disturbance of established relativities between different classifications of employees, unless based upon properly established criteria, can have serious industrial relations consequences. We point out that Principle 1(c) says "The form of indexation will be uniform percentage adjustment unless the Commission decides otherwise ..."

We would hope, in the interest of equity, that sight has not been lost of the fact that rightly or wrongly a sizeable proportion of employees of the Crown are paid in accordance with State private sector awards. These will be varied by the 2.3 percent National Wage increase, yet presumably will not be affected by foreshadowed legislation to reduce wages. It is possible that in the result some supervisors could be paid less than those whom they supervise.

After giving the matter a great deal of thought we have decided to put to the test the bona fides of Mr Willingham's submission that there is more public interest in granting the claim against the Crown than not granting it. But we caution against the wisdom of any subsequent action that brings about a deferral of increases or a reduction of actual salaries in accordance with a subjective, prima facie inequitable, and obviously untested priority system initiated outside the jurisdiction of this Commission. The wages and salaries that currently apply to Government employees have been established in accordance with approved wage-fixing criteria with due regard for the capacity of the Crown to meet those costs. With the exception of a fairly recent aberration in Western Australia, wage rates have not been reduced in Australia since the Great Depression, and then only after a national enquiry by a Full Court of the then Court of Conciliation and Arbitration (30 CAR 2).

If, notwithstanding what we have said, because of acute fiscal considerations, insufficient funds are available to meet the cost of public sector wages or salaries without staff losses, we would remind the Minister of the terminology used in new Principle 12 (Economic Incapacity) determined by the Australian Commission:

"Any respondent or group of respondents to an award may apply to reduce and/or postpone the application of a national wage increase or any other increase in labour costs determined under the Principles on the ground of very serious or extreme economic adversity ..."

The principle is among the set of twelve that the Government, along with all other parties to these proceedings, would have the Commission endorse for the next two years.

It would be devastating - perhaps fatal - to the well-settled system of award regulation by this Commission if other methods were resorted to in order to achieve a pre-determined result. This could be regarded as an open invitation to employee organisations to themselves abolish the current orderly system to which all are committed, in favour of activity in the field. That situation would bring to an end centralised wage fixation in this State, and, in all probability, across the nation.

Other Employer Submissions

Mr Abey appearing for the Tasmanian Chamber of Industries (TCI) spoke out strongly against the decision of the Australian Commission in awarding the 2.3 percent increase.

He submitted that the Confederation of Australian Industry had mounted possibly the most comprehensive argument against a wage increase that he suspected has ever been pursued in any National Wage Case.

Despite this, the Australian Commission chose to grant a 2.3 percent wage adjustment; a decision which the TCI submitted was economically indefensible.

Notwithstanding his criticism of that decision Mr Abey submitted that in a matter such as an application for a flow on of a National Wage Case decision it would require compelling circumstances for there to be a departure from the federal prescription.

Mr Abey submitted that in this instance compelling circumstances do not exist and accordingly the TCI did not oppose the 2.3 percent increase being sought.

The TCI left us in no doubt, as did other employer representatives, that, to put it bluntly, people will be sacked as a consequence of the Commission granting the increase sought.

The concern we have of course is that which relates to our statutory obligation under Section 36 (public interest). Statements of this nature are easily made but specific evidence was not placed before us and, likewise, the claims for increases were not opposed.

It is our view that if such statements are made they should be supported by evidence so that the Commission is able to come to an informed view and reach a decision having regard to all factors as they apply in this State.

It was very much the case in these proceedings that the parties considered that the public interest would be better served by the granting of the increase sought, despite the foreseeable adverse effects referred to. Mr Abey summed this up concisely when he said -

" ... we are not attempting to quantify it but our submission on the public interest would be that the undoubted industrial mayhem which would occur if the claim was rejected would be more against the public interest than the jobs that will be lost if the claim is granted."

In concluding his submissions Mr Abey stressed that the TCI support for the 2.3 percent increase is totally contingent upon each union giving an unequivocal and unqualified commitment that they will not pursue any additional claims except in accordance with the principles determined by us.

Mr Taylor appearing for the Australian Mines and Metals Association, Incorporated (AMMA) said that the mining industry recognised that there is in operation a centralised wage fixing system. In that sense, he said, his Association accepted the Full Bench decision of the Australian Commission.

Mr Taylor said that the AMMA does not oppose the applications, "so long as it is granted in full" with the no extra claims commitment included in awards.

Mr Taylor also submitted however, that the granting of the claims will mean that job loss is going to be a fact of life. Again this aspect was not extrapolated in any meaningful way.

Mr Blackburn appearing for the Retail Traders Association of Tasmania (RTA) supported the submissions of the TCI and expressed disappointment that the Australian Commission had awarded a 2.3 percent increase.

Mr Blackburn then informed the Commission of the present retail position in Tasmania and the adverse implications on the industry in this State if we decided to flow on the increase, which the RTA did not oppose.

We were advised that retail sales in Tasmanian in the past few months had dropped well below the national average. Mr Blackburn referred us to the June 1985 quarter figures for national and Tasmanian sales which he had relied upon in the November 1985 National Wage Case flow on hearing. He contrasted these sales figures with those of the March 1986 quarter in some detail and submitted that the statistics clearly indicate that the retail industry, particularly in Tasmania, is not in a healthy state.

Mr Blackburn then went further and said that the Tasmanian retail industry will be left with only four options if the 2.3 percent increase is granted. These he said are reduction in employment; increasing prices; closing the doors; or slowly going broke.

The implications of the submissions put to us by employer organisations are readily understood by us. However we regard it as ironical that on the one had we are warned of the likely adverse effects the granting of the 2.3 percent increase will have on the economy and on employment, but on the other hand no hard evidence as to the perceived consequences is placed before us.

This is compounded when we reflect on the fact that no opposition (apart from the TFGA) was voiced to the claims.

We have made the foregoing comments to highlight again that the Tasmanian Industrial Relations Act, 1984, provides a unique opportunity for any award that this Commission may make to be tested against its effect on the economy of Tasmania.

With no alternatives pub before the Commission, the economic merit as it relates to the Tasmanian economy as a whole has been poorly addressed.

We agree with the view of Mr Lennon when he said -

"I always find myself somewhat bemused with national wage increases when we have employer organization after employer organization standing before this Commission saying that wage increases are going to cost jobs and I have yet to see an exhibit from any employer organization put before this Commission to substantiate the claim.

I do say to them quite seriously that if they are going to come here and make those sort of accusations about the level of wage costs, when we are looking at the lowest wage costs in this country for some 2 decades, then they should be prepared to substantiate them to the Commission and provide the exhibits and provide the information. It is not good enough, in my view, to just stand up here and make the statements, case after case, and never be prepared to substantiate them."

Transcript p129

We can only reiterate our concern and desire to discharge our obligations in accordance with the provisions of the Act. But we can only meet those requirements if we are given the opportunity to do so through the presentation of full argument and hard evidence.

We turn now to consider the submission of the TFGA

Once again, the Tasmanian Farmers and Graziers Employers Association raised with us the parlous state of the rural industry in Tasmania.

Mr Rice went to some pains to inform us of the falling prices and lower demand being experienced by members of the rural community for certain vegetable crops and dairy products. He also asserted that some 40 to 50 farm units had closed during the past 2 or 3 years due to economic circumstances.

For those reasons he requested that the Agriculturists Award (P003) and the Horticulturists Award (P036) be excluded from any order we may make on these claims. In this way the TFGA would be able to mount a detailed case at a later date regarding the rural sector's incapacity to meet the cost of any National Wage adjustment we may award.

Because cost increases inevitable flow from National Wage Case decisions and impact on the rural community in one form or another, but usually in the nature of higher charges for goods and services, Mr Rice opposed the claims in toto. However, in the event the Commission indicated a willingness to conduct a detailed examination into the alleged plight of the industry, it was put to us that it would be unlikely that individual members of the farming community would be willing to open their books to scrutiny. Their unwillingness to co-operate would not be due to any concern that some latent capacity to pay might be discovered, but because they were, it was said, unwilling to demonstrate the true measure of their desperate financial predicament.

The Australian Workers' Union, Tasmania Branch objected to us setting aside these awards, and submitted that any incapacity argument should be put before this Commission on an industry as distinct from an employer basis. Moreover, as the National Farmers' Federation had argued its case before the Australian Commission, Mr Hanlon submitted that it was not now open for the TFGA to recanvass the same national arguments before us.

It was submitted that in any case little information regarding Tasmania was put to the Commission by Mr Rice. Mr Hanlon argued that in "common-rule" cases it was not open to consider sectional claims.

We indicated during proceedings that because the TFGA had opposed the granting of all the claims before us we would rule on its application as part of our overall decision.

Economic Incapacity

As we have decided that we will be putting our imprimatur on new Principle 12 (Economic Incapacity), there will now be available to those who would wish to defer, reduce, or avoid the burden of National Wage or other labour costs determined in accordance with the Wage Fixing Principles of this Commission, a mechanism for seeking that kind of relief. However it must be emphasized that -

(a) the merit of each application will be determined in the light of the circumstances of each case;

(b) the onus will be heavily upon each applicant who pleads incapacity to prove his case;

(c) an applicant must be prepared in any case to submit all relevant information relating to alleged incapacity to meet a particular labour cost. The applicant must also be prepared for that material to be subjected to rigid testing by the Commission; and

(d) any application lodged with the intention of delaying, reducing or excluding a National Wage adjustment otherwise due which fails to achieve its purpose, in the absence of merit, will result in the increase objected to being made operative from the same date determined by this Commission as applicable to awards generally.

Having so decided, we do not consider it necessary to give detailed reasons why we make no prima facie finding on the TFGA application or why we reject Mr Hanlon's arguments in opposition.

However we agree with Mr Hanlon that the industries covered by the Agriculturists and Horticulturists awards are both numerous and complex.

Without detailed knowledge of all the industries involved, the number of persons employed, the extent to which federal awards apply, the extent to which TFGA members and others are engaged in a number of industries, together with likely economic prognostications for the future, this Commission could not and therefore does not make a prima facie finding of incapacity or otherwise.

Also, with regard to the TFGA opposition to the entire claim for a 2.3 percent increase, we are unable to support that position as the requirements of Section 36 were basically confined to the two awards in question only. It would obviously be unrealistic to extend any findings we might make on the TFGA submissions to all awards of this Commission.

As we have already indicated no detailed submissions and evidence in opposition to the 2.3 percent flow on claims were put before us taking into account the economy of Tasmania as a whole.

Nevertheless, there will now be scope within the Wage Fixing Principles that we are adopting for issues of the kind addressed by Mr Willingham on behalf of the Minister, and Mr Rice on behalf of the TFGA to be considered and determined by this Commission on merit. We believe limited, albeit bona fide, resort to this mechanism is unlikely to put at risk the whole infrastructure upon which our present system of compulsory arbitration in general, and centralised wage fixation in particular, now somewhat tenuously rests.

Any application made seeking to invoke the new Principle 12 will be dealt with by a Full Bench, the composition of which will, where practicable, include at least one Presidential member of this Commission.

Public Interest

Without detailing all submissions put to us on this important question, it could be said that foremost in the minds of all who addressed us in this regard was the need for the centralised wage fixing system, together with its governing principles, to continue to bind employee organisations, and employer organisations, governments and tribunals.

The TTLC of course coupled this aspect with the Federal Government/ACTU Prices and Incomes Accord. Most major employer organisations expressed some reservation about the recent National Wage decision and its likely cost to the community in terms of price increases and lost jobs. But except for TFGA opposition to the claims, no-one asked the Commission to abandon the system that has, except for the period 1981/83, existed in one form or another since 1975.

After the sorry experiences of the early eighties, no-one, it seems, would wish to see the labour market "float" at this stage.

We agree with this philosophy, but more for reasons that might be described as timorous of the alternatives to centralised control than for reasons that we believe the economy of this State is as buoyant now as it was this time last year.

Most employer organisations seemed resigned to counting the cost of regular National Wage decisions in terms of jobs and orders lost, while the TTLC, on the other hand, was apprehensive that breaking the Accord would almost certainly mean resorting to the law of the jungle.

Faced with these options, we have attempted to come down on the side of reason.

We are of the opinion that a reasoned system, rigorously applied to all levels of wage and salary earners across all industrial and occupational awards and binding upon governments, employer and employee organisations at all levels is, on balance, more preferable to a so-called system with no checks and balances and no mechanisms for restraint.

If as a consequence of the decision we now take costs rise disproportionately, or jobs are lost because of some act of retribution with the inevitable impact on demand for goods and services, it will be time to reflect upon the real state of the Tasmanian economy and why this is being allowed to happen.

Industrial tribunals can only do so much. In the end it is largely the conduct of persons subsequently affected by decisions taken that determine the measure of community impact properly attributable to National Wage and similar adjustments.

We therefore concur with the following statement of the Australian Commission appearing at page 5 of its decision:

" ... the centralised system which has operated since September 1983 with the general support of all industrial tribunals has, overall, produced better economic and industrial results. It is our judgment that these results would not have been achieved under a decentralised system."

DECISION

It follows from what we have said thus far that it is our decision to adopt as our own, with the exception of Superannuation, the Wage Fixing Principles determined by the Australian Commission.

However, so as to appropriately incorporate the necessary alterations to the principles to reflect that this is a State tribunal we have decided to issue our own principles which will also take into account what we have to say about superannuation.

We note here that Principle 4 (Work Value) of Exhibit U1 contains a paragraph dealing with "community movements". This is not part of the principles determined by the Australian Commission, nor were we addressed on this variation. Accordingly, it has not been included by us.

Superannuation

The TTLC requested that the Commission include in its Wage Fixing Principles its proposed Principle 3 (Superannuation) which is as follows:

"3.    SUPERANNUATION

Agreements may be certified or consent awards may be made providing for employer contributions to approved superannuation schemes for employees covered by such agreements or consent awards provided those agreements or consent awards:

(i) operate from a date determined or approved by the Commission in accordance with the Commission's phasing in procedure but not before 1 January 1987 except in special and isolated circumstances approved by the Commission;

(ii) do not involve retrospective payments of contributions;

(iii) do not involve the equivalent of a wage increase in excess of 3% of ordinary time earnings of employees;

(iv) are consistent with the Commission's Principles and determinations of the Full Bench of the Conciliation and arbitration Commission decision, Print No G3600.

(v) are in accordance with the Commonwealth's Operational Standards for Occupational Superannuation Funds; and provided that

(vi) the consent of the employers is genuine."

In submitting that we include a superannuation principle, Mr Lennon acknowledged that, as indicated earlier in this decision, superannuation is currently excluded from the jurisdiction of this Commission by Section 3(1)(f) of the Act.

He said that, notwithstanding that statutory prohibition, the inclusion of a superannuation principle is regarded by the TTLC as the most important alteration that we should make to our existing principles.

Mr Lennon then advised the Commission of discussions he had held with the Government on this matter which resulted in a written undertaking over the signature of the Minister for Industrial Relations. The letter from the Minister was submitted as Exhibit U2, the substance of which is as follows:

"I refer to your recent discussions with the Premier and myself and wish to confirm that the Government will introduce an amendment to the Industrial Relations Act which will permit the Industrial Commission to deal with those matters provided for in the superannuation principle of the Conciliation and Arbitration Commission.

I expect that this amendment will be presented to the Parliament in the forthcoming Budget Session."

It was submitted by Mr Lennon that if we decided to include a superannuation principle, the TTLC would accept a prospective date of operation for that principle, on the understanding that the Act will be amended as proposed by the Government.

Mr Lennon suggested that the operative date could be the date when the legislation is proclaimed.

Until the Act is appropriately amended, Mr Lennon suggested that the Commission could still act in a conciliatory capacity in relation to any dispute that might arise on superannuation.

Mr Lennon said that the position of the TTLC was that a no extra claims commitment would only be given if superannuation is able to be dealt with in Tasmania in a like manner as it will be dealt with federally.

He therefore asked the Commission for a clear statement on how it will deal with occupational superannuation.

Mr Willingham confirmed that the Government will move in the Budget Session to remove the legislative barrier which currently precludes the Commission from dealing with superannuation.

He said that whilst the actual mechanics had yet to be determined he was certain that the amendment will permit the commission to deal with this matter consistent with proposed Principle 3.

Mr Jarman then made further submissions to us on superannuation.

Mr Jarman emphasised the Government's view that any amendment to the Act in relation to superannuation should not be seized upon by employee organisations as an invitation to swamp this Commission with claims.

He said that the Government does not accept that occupational superannuation is a way of life and that observations will be made on each claim s it comes to notice. He also submitted that claims should be processed in an orderly manner.

Mr Jarman then quoted extensively from the Statement made by His Honour Mr Justice Maddern on 8 July 1986 which was aimed at avoiding further misunderstanding about the Australian Commission's decision in so far as it relates to superannuation.

The TCI and the AMMA also accepted that there should be a superannuation principle. Mr Abey emphasised however that the existence of a superannuation principle in the Wage Fixing principles does no more than give unions the ability to pursue a claim in the same way as they can pursue a claim in respect of, say, work value.

Both Mr abbey and Mr Taylor agreed that the superannuation principle should have full effect as and when the amendment to the Act is proclaimed and they supported the submission of the TTLC that in the interim period the Commission should adopt a conciliatory role on disputes over this issue.

We accept that the inclusion of the superannuation principle is the most important change required to be made by us to our present Wage Fixing Principles.

The change is supported by all and the Government has agreed to implement the legislation to appropriately amend the act so that this may be dealt with as an industrial matter.

We have no difficulty with the proposition that we include a prospective superannuation principle operative from the date of amendment and will do so.

However we are also cognisant of the need for the Commission to determine the date of operation of agreements that come before us for ratification.

It is our view that this is a vitally important element of the superannuation principle and we, like the Australian Commission, consider it essential that we are able to determine the operative dates of agreements brought before us to ensure that the Tasmanian economy does not become overloaded.

We are also of the view that by this Commission determining the operative dates for agreements, a phased and orderly approach to superannuation will result.

We are concerned to avoid the frantic scramble to pursue superannuation that has been evidenced elsewhere. We do not expect, having regard to the size of the Tasmanian workforce, that industrial disputation by way of strikes will be necessary to bring about the orderly introduction of superannuation in the manner we have explained.

We are aware that what we have proposed in respect of determination of the operative date for agreements presents another legislative hurdle, as the Act does not now provide a mechanism for the Commission to vary an agreement. Therefore, to facilitate what we regard as a fundamental task for the Commission in dealing with agreements relating to superannuation, we are of the view that Part IV of the Act should also be appropriately amended.

In the interim we suggest that agreements brought forward to the Commission not include an operative date. This can be included after the Commission has been apprised of the relevant information and each such agreement has been properly scrutinised.

Until such time as the necessary amendments are made to the Act we cannot include superannuation as a valid principle of this Commission. Nevertheless we have formulated our principles inclusive of this item.

Having clearly spelled out our attitude in this matter, the principle as we have determined it will be in accordance with Exhibit U1, as appropriately amended.

Commitment

Subject to what we have said about occupational superannuation, we believe we should reproduce and adopt as our own the views of the Australian Commission regarding commitment to the new Wage Fixing Principles as a condition precedent to flowing on the 2.3 percent National Wage adjustment. The Commission said at page 28 of its decision:

"We are of the opinion that any claims that there has been a breach of commitment, whether on the grounds of disputation or otherwise, should be closely examined and tests applied on an individual award basis. In our view any industrial action on matters covered by the guidelines is unnecessary and contrary to their spirit and intention. Further, it was not our intention in the period from September 1983 to date that only industrial action by a union at the time of the hearing of the claim should be taken into account.

We also believe that it is necessary for the unions individually to commit themselves to the package for it to be effective. We have therefore decided that, as in the previous package, all unions concerned with a particular award variation under Principle 1 should give an undertaking that they will not pursue any extra claims, award or overaward, except in compliance with the Principles, before they will be entitled to any benefits from this package.

We require this commitment to be given on this occasion before the 2.3% increase is granted, to cover the period until the next national wage decision is known. Thereafter we would expect a renewal of the commitment after each National Wage Case to cover the period until the next case."

It is clear therefore that the commitment we require to be given by each employee organisation claiming an interest in awards or agreements of this Commission will, of necessity, be conditional upon the Commission being clothed with the necessary jurisdiction to offer to the parties the same twelve principles formulated by the Australian Commission. And we would here ad that it would be our intention to change those principles only where it is necessary to do so in order that the parties to awards and agreements of this Commission may properly regard those principles as principles of this Commission.

Accordingly we intend to reconvene on 29 July 1986 for the purpose of taking individual commitments from individual employee organisations. Those giving the necessary commitment will need to be authorised by the organisation on whose behalf it is to be given. Each organisation of employees will be required, subject to the jurisdictional question, to unequivocally engage itself not to pursue any extra claims, award or overaward, except in compliance with the principles, until the next National Wage Case. Thereafter we will expect to receive a renewal of the commitment to cover the period until the next National Wage Case.

If that commitment is not forthcoming or is not given in a form acceptable to the Commission (with due regard being had for the jurisdictional difficulties regarding superannuation) the award or agreement in respect of which the employee organisation has a registered interest will not be varied to reflect the 2.3 percent adjustment.

OPERATIVE DATES

The Principles:

Bearing in mind what we have said about the date of operation of proposed Principle 3, the package of Principles that we now introduce will have a life of two years with effect from the beginning of the first full pay period commencing in July 1986.

The 2.3 percent decision:

Adjustment to wages and allowances resulting from the 2.3 percent decision will take effect from the beginning of the first full pay period commencing on or after 1 July 1986.

Exemptions:

Exemption is granted in relation to the day shift allowance appearing in subclause (a) of Clause 4, Part I of the Electrolytic Zinc Award (P025).

Applications for deferment, reduction or exclusion from 2.3 percent decision:

We would expect that any unsuccessful application for deferment, reduction or exclusion from the operation of the 2.3 percent adjustment we now award would also operate from the same date as the 2.3 percent will apply generally.

Future National Wage Decisions:

A good deal of discussion took place regarding the intention of principle 1(b) insofar as reference is made to the operative date of future National Wage decisions.

It was suggested by Mr Lennon that the proposed Principle 1(b) be amended to accommodate circumstances which may prevent the Commission from dealing with future applications for flow on the National Wage Case decisions prior to 1 January and 1 July.

We have considered the suggestions put to us on this particular point and have decided that the amendment proposed by Mr Evans is the most appropriate in that in adopting the Australian Commission's Principles we do so in compatible form. Therefore it is proper that we support the operative date for future adjustments as specified in its decision.

If applications are made sufficiently early so as to enable those dates to be met, future National Wage adjustments (if any) will operate from the first full pay period commencing in January and July respectively.

We understand Mr Lennon's concern about adjustments falling due in January. But we believe most pays are calculated in advance in December for employees taking leave in January, or for those resuming work in January. There is nothing this Commission can or should do about that.

However, wherever practicable, this Commission will, on receipt of an application in that regard, list for early hearing any request for a flow on of future National Wage decisions taken during the life of the principles now established.

Form of Variation

(a)  The awards, orders and agreements to be varied as to wages, salaries and allowances are those nominated or requested by the applicants, apart from the exemptions already stipulated. Specifically this means:-

(i) Wages and salaries to be increased by 2.3 percent and rounded off to the nearest 10 cents, with 5 cents going to 10 cents except where expressed as annual figures, in which case rounding off will be to the nearest $1.00, with 50 cents being taken to the next highest dollar.

(ii) The minimum wage where applying to be increased by 2.3 percent to $198.70.

(iii) As a consequence of increasing wages and salaries by 2.3 percent, adjustments to be made to wage rates for juniors, apprentices and piece work rates.

(b)  All appropriate allowances to be varied including:-

(i) Leading hand rates to be increased by 2.3 percent

(ii) Tool allowances to be increased by 2.3 percent

(iii) Shift allowances expressed in money terms to be increased by 2.3 percent

(iv) Meal allowances to be increased by 2.3 percent

(c)  We do not believe it is appropriate to alter annual leave loadings where expressed as money amounts at this time.

The formula to be adopted for rounding off generally is as follows:-

Award rates and allowances expressed in whole dollars - rounded off to the nearest dollar;

Allowances or rates expressed as amounts, already rounded off to the nearest 5 cents or 10 cents, to be rounded off to the nearest 5 cents or 10 cents as the case may be;

Allowances or rates already rounded off to the nearest cent to be again rounded off in that manner, except where the award contains rates expressed as fractional parts of a cent, when rounding to the nearest decimal point will be in order.

The increases shall operate from the beginning of the first pay period to commence on or 1 July 1986.

APPENDIX

INTRODUCTION TO THE PRINCIPLES

References to Principle 3 (Superannuation) contained anywhere in the Principles set out below are subject to the amendment of the Tasmanian Industrial Relations Act, 1984 in the manner foreshadowed in the proceedings, the effect of which will be to permit this Commission to determine matters of superannuation in the way contemplated by Principle 3.

THE PRINCIPLES

In considering whether wages and salaries or conditions should be awarded or changed for any reason either by consent or arbitration, the Commission will guard against any contrived arrangement which would circumvent these Principles.

The Principles have been formulated on the basis that the great bulk of wage and salary movements and improvements in conditions will emanate from national wage adjustments and consent arrangements in relation to superannuation. Increases outside national wage and superannuation arrangements whether in the form of wages, allowances or conditions, whether they occur in the public sector or private sector, whether they be award or overaward - must constitute a very small addition to overall labour costs.

The Commission will guard against any Principle other than Principles 1 and 3 being applied in such a way as to become a vehicle for general improvement in wages and conditions.

1.  NATIONAL WAGE ADJUSTMENTS

(a) Subject to Principle 2, the Commission will adjust its award wages and salaries every six months in relation to the relevant quarterly movements of the eight-capitals CPI unless it is persuaded to the contrary by those seeking to oppose the adjustment on grounds related to the state of the Tasmanian economy and the likely effects of any adjustment on the economy, with special reference to the level of employment and inflation.

(b) The Commission expects that decisions on national wage adjustments will be made to enable adjustments to operate from 1 January and 1 July.

(c) The form of indexation will be uniform percentage adjustment unless the Commission decides otherwise in the light of exceptional circumstances. It is to be understood that any compression of relativities which may have occurred in recent times does not provide grounds for special wage increases to correct the compression.

(d) It would be appropriate for the Commission, after hearing the parties to an award and being satisfied that a proper case has been made out, to recommend the indexation of overaward payments when award payments are indexed.

2.  OTHER CLAIMS

Any claims for improvements in pay and conditions other than those provided by Principle 1 must be processed in accordance with Principles 3 to 12 below. No application for a national wage adjustment to an award will be approved by the Commission unless all employee organisations registered in respect of the award give an undertaking that until the next National Wage Case decision they will not pursue any extra claims, award or overaward, except in compliance with the Principles.

3.  SUPERANNUATION

Agreements may be approved by the Commission, pursuant to Section 55 of the Industrial Relations Act 1984, which provide for employer contributions to approved superannuation schemes for employees covered by such agreements, provided those agreements:

(i) operate from a date determined by the Commission in accordance with the Commission's phasing in procedure but not before 1 January 1987 except in special and isolated circumstances approved by the Commission;

(ii) do not involve retrospective payments of contributions;

(iii) do not involve the equivalent of a wage increase in excess of 3 percent of ordinary time earnings of employees;

(iv) are consistent with this Commission's Wage Fixing Principles specified in T432, T435 and T440 of 1986 (22 July 1986).

(v) are in accordance with the Commonwealth's Operational Standards for Occupational Superannuation Funds; and provided that

(vi) the consent of the employers is genuine.

4.  WORK VALUE CHANGES

(a) Changes in work value may arise from changes in the nature of the work, skill and responsibility required or the conditions under which work is performed. Changes in work by themselves may not lead to a change in wage rates. The strict test for an alteration in wage rates is that the change in the nature of work should constitute such a significant net addition to work requirements as to warrant the creation of a new classification.

These are the only circumstances in which rates may be altered on the grounds of work value and the altered rates may be applied only to employees whose work has changed in accordance with this Principle.

However rather than to create a new classification it may be more convenient in the circumstances of a particular case to fix a new rate for an existing classification or to provide for an allowance which is payable in addition to the existing rate for the classification. In such cases the same strict test must be applied.

(b) Where new or changed work justifying a higher rate is performed only from time to time by persons covered by a particular classification or where it is performed only by some of the persons covered by the classification, such new or changed work should be compensated by a special allowance which is payable only when the new or changed work is performed by a particular employee and not by increasing the rate for the classification as a whole.

(c) The time from which work value changes should be measured is the last work value adjustment in the award under consideration but in no case earlier than 1 January 1978. Care should be exercised to ensure that changes which were taken into account in any previous work value adjustments are not included in any work evaluation under this Principle.

(d) Where a significant net alteration to work value has been established in accordance with this Principle, an assessment will have to be made as to how that alteration should be measured in money terms. Such assessment should normally be based on the previous work requirements, the wage previously fixed for the work and the nature and extent of the change in work. However, where appropriate, comparisons may also be made with other wages and work requirements within the award or to wage increases for changed work requirements in the same classification in other awards provided the same changes have occurred.

(e) The expression "the conditions under which the work is performed" relates to the environment in which the work is done.

(f) The Commission should guard against contrived classifications and over-classification of jobs.

(g) Where through technological or other change the impact of work value change on the work force is widespread or general, the matter should be dealt with in National Wage Cases.

5.  STANDARD HOURS

(a) In dealing with 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 offset is achieved by changes in work practices.

(b) Claims for reduction in standard weekly hours below 38, even with full cost offsets, should not be allowed.

(c) The Commission should not approve or award improvements in pay or other conditions on the basis of productivity bargaining. These improvements should only be allowed on the basis of the appropriate Principles.

6.  ANOMALIES AND INEQUITIES

(a)  Anomalies

(b)  Inequities

(i) The resolution of inequities existing where employees performing similar work are paid dissimilar rates of pay without good reason. Such inequities shall be processed through the Anomalies Conference and not otherwise, and shall be subject to all the following conditions:

(1) The work in issue is similar to the other class or classes of work by reference to the nature of the work, the level of skill and responsibility involved and the conditions under which the work is performed.

(2) The classes of work being compared are truly like with like as to all relevant matters and there is no good reason for dissimilar rates of pay.

(3) In addition to similarity of work, there exists some other significant factor which makes the situation inequitable. An historical or geographical nexus between the similar classes of work may not of itself be such a factor.

(4) The rate of pay fixed for the class or classes of work being compared with the work in issue is a reasonable and proper rate of pay for the work and is not vitiated by any reason such as an increase obtained for reasons inconsistent with the Principles of the Commission applicable at the relevant time.

(5) Rates of pay in minimum rates awards are not to be compared with those in paid rates awards.

(ii) In dealing with inequities, the following overriding considerations shall apply:

(1) The pay increase sought must be justified on the merits.

(2) There must be no likelihood of flow-on.

(3) The economic cost must be negligible.

(4) The increase must be a once-only matter.

(c)  Procedure

(i) An anomaly or inequity which is sought to be rectified must be brought to the Anomalies Conference by the TTLC.

(ii) The matter is first discussed with the employers and other interested parties at the Conference.

(iii) The broad principles for processing the anomaly or inequity raised are:

(1) If there is complete agreement as to the existence of an anomaly or inequity and its resolution, and the President is of the opinion that there is a genuine anomaly or inequity, the President will make the appropriate order to rectify it.

(2) If there is no agreement at all, one of two situations can arise. Either the President will hold that there is no anomaly or inequity falling within the concept of the Conference which would mean an end of the matter as far as the Conference is concerned or on the other hand the President could hold that there was an arguable case which would then go to the Commissioner concerned for consideration, with right of appeal to a Full Bench by the aggrieved party.

(3) This procedure can be departed from by agreement and with the President's approval.

7.  PAID RATES AWARDS

(a) Except in the case of first awards, the Commission will refrain from making any new paid rates awards. In the making of first awards the conditions as provided in Principle 10 below must be complied with.

(b) The Commission may convert into a minimum rates award a paid rates award which fails to maintain itself as a true paid rates award. The conversion of such a lapsed paid rates award into a minimum rates award will involve the valuation of the classifications in it by comparison with similar classifications in other minimum rates awards excluding supplementary payments.

(c) Claims for the adjustment of existing paid rates awards to establish an equitable base should be processed as anomalies through the Anomalies Conference as provided in Principle 6.

8.  SUPPLEMENTARY PAYMENTS

(a) The Commission will refuse claims for new supplementary payments.

(b) Existing supplementary payments should not be increased except for national wage adjustments.

9.  ALLOWANCES

Allowances may be adjusted or awarded only in accordance with this Principle and Principle 6. Service increments may be adjusted or awarded only in accordance with paragraph (c) of this Principle.

(a)    Existing Allowances

(i) Existing allowances which constitute a reimbursement of expenses incurred may be adjusted from time to time where appropriate to reflect the relevant change in the level of such expenses.

(ii) Existing allowances which relate to work or conditions which have not changed may be adjusted from time to time to reflect the movements in wage rates as a result of national wage adjustments.

(iii) Existing allowances for which an increase is claimed because of changes in the work or conditions will be determined in accordance with the relevant provisions of Principle 4.

(b)    New Allowances

(i) New allowances will not be created to compensate for disabilities or aspects of the work which are comprehended in the wage rate of the classification concerned.

(ii) New allowances to compensate for the reimbursement of expenses incurred may be awarded where appropriate having regard to such expenses.

(iii) New allowances to compensate for changes in the work or conditions will be determined in accordance with the relevant provisions of Principle 4.

(iv) New allowances to compensate for new work or conditions will be determined in accordance with the provisions of Principle 10(b).

(v) No other new allowances may be awarded.

(c)    Service Increments

(i) Existing service increments may be adjusted in the manner prescribed in (a)(ii) of this Principle.

(ii) New service increments may only be allowed to compensate for changes in the work and/or conditions and will be determined in accordance with the relevant provisions of Principle 4.

10.  FIRST AWARDS AND EXTENSIONS OF EXISTING AWARDS

(a) In the making of a first award, the long-established principles shall apply, ie prima facie the main consideration is the existing rates and conditions.

(b) In the extension of an existing award to new work or to award-free work the rates applicable to such work will be assessed by reference to the value of work already covered by the award.

11.  CONDITIONS OF EMPLOYMENT

Applications for changes in conditions other than those provided elsewhere in the Principles must be considered in the light of their cost implications both directly and through flow-ons. Where such cost increases are not negligible, we would expect the employer organisation concerned to make application for the claim to be heard by a Full Bench.

12.  ECONOMIC INCAPACITY

Any organisation with a registered interest in an award may apply to reduce and/or postpone the application of a national wage increase or any other 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.

Awards Varied:
Aerated Waters
Agriculturists
Ambulance Services
Automotive Industries
Barristers and Solicitors and Correction Order
Boarding Schools and Student Hostels 
Bootmakers
Broadcasting and Television
Building Trades (Part I) and (Part II)
Butter and Cheesemakers
Carriers
Cement Makers and Correction Order
Chemists and Correction Order
Cleaners and Correction Order
Clerical Employees
Clothing Makers
Concrete Products
Dairymens
Dental Officers
Dentists
Electrical Engineers
Electrolytic Zinc
Entertainment and Correction Order
Estate Agents and Correction Order
Ferro Alloys
Fibreglass & Plastics
Fuel Merchants
Furnishing Trades
General Conditions of Service
General Officers (Public and Mental Health Services)
Governor of Tasmania Staff
Hairdressers
Hobart Regional Water Board Staff
Horticulturists
Hospitals
Hotel and Motel Keepers
Ice Cream Makers
Inland Fisheries Commission Staff
Insurance
Laundrymens
Legal Practitioners
Licensed Clubs
Meat Trades
Medical Practitioners (Private Sector)
Medical Practitioners (Public Sector) 
Miscellaneous Workers
Monumental Masons
North West Regional Water Authority Employees
Officers of the State Fire Commission
Optical Industries
Parliamentary Staff
Plumbers
Police
Police Departmental Employees & Road Safety Officers
Printers
Prison Officers
Produce
Public Accountants
Public Vehicles
Quarrymens
Restaurant Keepers and Correction Order (23.9.86) and Correction Order (14.11.86)
Retail Trades and Correction Order
Rubber Trades
Sea Fisheries
Security and Watching Services
Shipbuilders
Shipping
Southern Regional Cemetery Trust
Technical Employees
Timber Merchants
Textile
Totalizator Agency
Vegetable Preservers
Veterinary Services
Welfare and Voluntary Agencies
Wholesale Trades
Wireworking