T4692
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Tasmanian Trades and Labor Council ALL PUBLIC AND PRIVATE SECTOR AWARDS AND AGREEMENTS
State Wage Case REASONS FOR DECISION This application by the Tasmanian Trades and Labor Council (TTLC), lodged in the Commission on 1 November 1993, was couched in the following terms: "The applicant seeks a Full Bench hearing to flow on the outcomes of the A.I.R.C. Review of Wage Fixing Principles (Print K9700) with appropriate modifications to suit Tasmanian circumstances. A claim for a detailed schedule of Wage Fixing Principles will be forwarded to the Commission after the deliberations of affiliates of the Tasmanian Trades and Labor Council on 4 November 1993." The matter came on for hearing on 22 November 1993 at which time the TTLC tendered a copy of the Wage Fixing Principles determined by the Australian Industrial Relations Commission (AIRC) and attached to its decision of 25 October 19931. The copy had been revised only to reflect the particular requirements of the State Industrial Relations Act 1984. The most significant changes proposed by the TTLC were: 1) to ensure that the expression "consent award" as used in the Federal Principles would mean an agreement made under Section 55 of the State Act, or an enterprise award made pursuant to Section 33 of the State Act, dealing with an enterprise bargaining agreement; 2) to clearly distinguish the Enterprise Awards Principle as dealing with enterprise bargaining; 3) to ensure that an existing agreement or enterprise award could not only be made but be adjusted to reflect an enterprise bargaining agreement; and 4) to permit the Commission to deal with termination, change and redundancy matters in accordance with its Test Case Decision No. T125 of 19851A. Mr Bacon, for the TTLC, described the central outcomes of the federal decision as being: "... firstly, a new arbitrated safety net adjustment principle, which enables the payment of $8.00 per week to low paid workers on an award-by-award basis. Secondly, a new enterprise agreements principle which replaces the existing enterprise bargaining principle. Thirdly, the introduction of the concept of a safety net of awards and , fourthly, the establishment of a capacity for the Australian Commission to arbitrate outstanding matters in an enterprise bargaining arrangement, in circumstances where the parties cannot reach final agreement." Transcript, p.13 Dealing with the last matter first, Mr Bacon submitted that the enterprise award making powers of the state legislation could be used to achieve the outcomes of the federal Commission's decision. He submitted that an enterprise award should not replace totally an existing award but should have effect only in respect to the specific matters raised in the enterprise award. Where an enterprise bargain was to be reflected in an enterprise award the award should address only those matters which were agreed or arbitrated as part of the bargaining process. The original industry or occupational award would, in the TTLC's view, remain as the safety net award. Further, that enterprise awards made to reflect enterprise bargaining arrangements should contain an expiry date in accordance with the proposed Enterprise Awards Principle. The TTLC also submitted that the Principle should permit an enterprise award or Section 55 agreement to reflect an enterprise bargaining arrangement entered into by a group of employees. On the issue of the safety net of awards, Mr Bacon sought from the Commission a clear statement that "in fact all existing awards of this Commission at the date of your decision, should constitute the safety net of awards"2. He submitted further that any new awards made to cover award-free work should become part of the safety net of awards. Mr Bacon contended in respect of the Arbitrated Safety Net Principle, that paid rates awards should not be precluded from consideration given the comments of the Australian Commission at page 24 of its decision, which were as follows: "To the extent that existing paid rates awards do not contain a reference to the relevant minimum rates award classification/s then this should be addressed to ensure that the benefit, if any, of the safety net adjustment is not lost." Mr Bacon concluded by seeking the same operative date as provided in the federal decision. Ms Harvey, for the Health Services Union of Australia, Tasmania No. 1 Branch (HSUA) expressed concern that the debate about paid rates and minimum rates awards might result in a lower paid employees covered by paid rates being neglected and she submitted that that would be inconsistent with the Australian Commission's comment at page 23 of its decision that: "Simply put, priorities must be determined and we make clear that our immediate priority is lower paid employees." The Commission was asked by Ms Harvey to make specific reference to the Australian Commission's view that enterprise bargaining was an extension of the Structural Efficiency Principle, and that that principle was "not intended to apply in a negative and cost-cutting manner, or to formalise illusory short term benefits"3. Ms Harvey said the objectives of the decision in respect of lower paid employees would be undermined if employers sought to use the enterprise bargaining principle other than in ways of finding benefits that assisted both employers and employees. This was said to be of particular importance to the HSUA which covered employees in areas where it was difficult to define productivity. Her organisation felt that consideration should be given to issues such as "quality of care, skill levels, service-user satisfaction, occupational health and safety, absenteeism rather than negative cost-cutting issues"4. Ms Harvey added that agreements under Section 55 expired at the conclusion of their terms, whereas a number of options was available in respect of agreements under Section 134 of the Australian Industrial Relations Act 1988. Further, Enterprise Awards made under the State Act should continue, notwithstanding Mr Bacon's submission, but for the period of the enterprise bargaining component of the award there should be a "no extra claims" commitment. Mr Cooper for the Australian Workers' Union (AWU) added his support to the submissions of the parties, particularly that part of the proposed principles which provided for the involvement of the Commission to assist parties to develop a mutually-acceptable enterprise bargaining agreement. The Australian Education Union (AEU), through Ms Moran, also supported the proposed new principles and raised the union's concern to ensure that the safety net should be available to all organisations which have been unable to negotiate an enterprise agreement. In particular Ms Moran referred to the fact that unions "which recently had had special case claims granted (were) unable to access in full, and perhaps at all, the state wages agreement because of their special cases"5 Further, "This means that teachers may in fact not get the first 1.5% of that 5% or may in fact not get any of it."6 Ms Moran asked the Commission to frame the Principles in a manner which allowed her organisation access to wage increases set out in the federal decision. Representatives of the Tasmanian Public Service Association (TPSA), the Shop, Distributive and Allied Employees Association (SDAEA) and the Salaried Medical Practitioners' Association (SMPA) also supported the TTLC's application. For the Tasmanian Chamber of Commerce and Industry Limited (TCCI), Mr Abey indicated that the flow-on of the federal decision was not opposed although his organisation was critical of it for a number of reasons. More particularly, because the $8 safety net increase was unrelated to negotiations at the enterprise level and, in his opinion, there was no link with productivity and efficiency measures. Mr Abey tendered exhibits showing that the award rates of pay in Tasmania were similar to those in other States but that actual earnings in Tasmania were much lower than any other State. The Commission was told that the inference to be drawn from those figures was that the level of over-award payments was less in Tasmania than in other States and therefore there was less in terms of over-award payment against which the $8 could be absorbed, and therefore the decision would impact more on Tasmanian employers than on employers in other States. Having said that, Mr Abey submitted that the $8 safety net increase must be applied on an award-by-award basis and that there must be no retrospectivity. He refuted the claim that the increase would be available to any organisation which had not had an enterprise bargaining increase and he asserted that the safety net was only available "on an award-by-award basis in minimum rates awards, absorbable against over-award payments"7. Mr Abey submitted that paid rates awards should be excluded from the application of the $8 increase and if there was any doubt as to what constituted a paid rates award then this issue should be addressed at the subsequent individual award hearings.8 It was drawn to the Commission's attention that approximately half of the Commission's awards did not make provision for supplementary payments and that a separate column needed to be established in awards to reflect the additional nature of the payment which was to be absorbed against over-award payments. In the absence of a specific award requirement linking the percentage for junior (including apprentices) rates of pay to a total rate (i.e. base rate plus supplementary payment), Mr Abey argued that the $8 or proportionate increases should not extend to juniors. Mr Abey strongly disagreed with the proposition put forward by the TTLC that enterprise awards and enterprise agreements should deal only with matters relating to enterprise bargaining and then fall back on the award. He claimed there was nothing in the federal decision to support such a contention and that the Commission should reject it. So far as existing enterprise awards were concerned, Mr Abey said that where enterprise bargaining negotiations were proceeding they should be allowed to conclude before the Commission dealt with an application for the $8 safety net anjustment. Appearing for the Minister for Employment, Industrial Relations and Training, Mr Pearce supported the Australian Commission's decision which was regarded as giving "stimulus to ... enterprise considerations whilst ensuring that such is undertaken in a relatively controlled, stable and regulated environment."9 The Minister supported "this devolutionary process", in particular the enterprise awards principle. Whilst being disappointed with the $8 arbitrated safety net adjustment feature of the decision, the Minister acknowledged the Australian Commission's reasons for giving priorities to the low wage and salary earners who do not benefit from substantial over-award payments and who have not benefitted from enterprise-based arrangements. It was submitted that there was no impediment to the adoption of the decision. Mr Pearce suggested that the Enterprise Awards Principle might well incorporate reference to Section 55 enterprise agreements in its title. As to the question of what was a paid rates award, Mr Pearce replied that each matter would have to be separately argued. Mr Rice, appearing for the Retail Traders Association and the TFGA Industrial Association, adopted the primary position of opposition to the claim. He summarised the continuing erosion of profit margins for farmers since 1990 and provided the Commission with an outline of the Tasmanian agricultural scene as being under "extreme financial pressure"10 However, Mr Rice, in a secondary position, supported the position of the TCCI, but submitted that the $8 adjustment should be regarded as being at the tradesman's rate of $417.20 per week, and that it be applied proportionately below and above $417.20 to maintain the relativities in an award. The Printing and Allied Trades Employers' Federation of Australia, Tasmanian Region (PATEFA), represented by Mr Hargrave, supported the TCCI position and the submission of Mr Rice about maintaining relativities within awards. Ms Byrnes, for the Australian Mines and Metals Association (Incorporated) (AM&MA), was not opposed to the $8 arbitrated safety net adjustment, but expressed concern regarding the concept of arbitration in the context of an environment of devolution of wage determination to the enterprise. However the retention of a set of wage fixing principles was supported. The Association was concerned to establish that the arbitrated safety net adjustment should not apply to all awards and, in particular submitted that, mining industry awards, because they do not separately specify minimum rates and supplementary payments, should not qualify for the adjustment. DECISION This Commission has substantially followed decisions of the Australian Industrial Relations Commission in relation to periodic reviews of Wage Fixing Principles since their inception. In its Reasons for Decision in the State Wage Case issued on 27 April 1987, a Full Bench of this Commission said: "Given the measure of consensus by Governments, both State and Federal, peak trade unions and major employer organisations during the National Wage Case, we have formed an opinion that only in extraordinary circumstances would it be desirable to settle upon objectives manifestly inconsistent with those of the Commonwealth in a National Wage case."11 On the basis of the opinions generally expressed during proceedings before us, it is clear that most parties genuinely feel that there is a need to continue with a set of wage fixing principles which, however, give further impetus to enterprise bargaining. Accordingly, we have decided to adopt the reasons for decision of the Australian Industrial Relations Commission in its Review of Wage Fixing Principles October 199312, together with its supplementary decision13 and to revise the Wage Fixing Principles of this Commission in a similar manner, save only for those modifications which are necessary to conform with the Tasmanian Act. In particular we have decided that there will be available an additional $8.00 per week in supplementary payments to be determined on an award-by-award basis in a manner which is consistent with the Australian Industrial Commission's decisions of 25 October and 15 November 1993. This arbitrated safety net adjustment is to be shown separately in the provision dealing with supplementary payments. It also is our decision that where an application is successfully made to vary an appropriate award to grant such $8.00 per week increase to adult employees, juniors and apprentices should be able to qualify for a proportionate amount. We expect that in most instances existing awards will make such provision already by virtue of clauses containing percentages related to adult wage rates, but in the event that less prescriptive clauses are found to be either vague or silent in this regard Commission members will be at liberty to determine what should be the appropriate relative proportion of $8.00 to be applied in individual cases. A number of trade union parties, not unnaturally, emphasised the need to extend the safety net wage adjustment to all low paid workers. We share the views expressed by the Australian Industrial Relations Commission in this regard, and this is the reason why, together with equity and economic considerations, we support an increase in supplementary payments. However, the increase does not apply across the board but is to apply where justified on merit. It is to be subject to absorption. Several parties requested that emphasis be given to a number of aspects of the decisions we have now made and the manner in which the revised principles are to be applied. We were asked to make it clear that industrial agreements and enterprise awards may be made and varied to reflect enterprise bargaining agreements and also that the Commission can deal with termination, change and redundancy matters in accordance with the Full Bench decision in Matter T No. 125 of 198514. In this regard we say that those matters are clearly self-evident and may be made the subject of applications, and we add that enterprise awards and agreements under Section 55 are not limited to dealing only with enterprise bargains as comprehended in the principle which we have entitled the Enterprise Awards and Section 55 Agreements Principle. On this point we make it clear that as a general rule we would not become involved in enterprise bargaining negotiations unless the parties were in dispute or otherwise requested the Commission's assistance. A distinctive feature of the revised principles is that whilst primacy is to continue to be given to encouraging parties to negotiate and reach agreed outcomes for ratification in accordance with the Act, the Commission will assist in the resolution of disputed matters, and where it is able, arbitrate provided structural efficiency measures are continuing to be applied. We reject the request from the TTLC that we should determine now that all awards of the Commission should constitute the "safety net of awards" and we indicate to the parties that the safety net will become clear as awards of the Commission are dealt with under this new principle. As to the primary position of the TFGA Industrial Association, which was of opposition to any wage increase, we acknowledge the generally depressed level of profit margins applying in certain areas of the rural sector. However, we consider that allowing a case-by-case approach for relief in appropriate circumstances in accordance with the revised Economic Incapacity Principle will accommodate the concerns of the Association and we so decide. Date of Operation: Our decision and the revised Wage Fixing Principles which are attached, shall come into operation as from the date of decision and continue in force until revised or abandoned.
Appearances: Date and Place of Hearing: 1 Print K9700
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