T5214
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Tasmanian Trades and Labor Council ALL PUBLIC AND PRIVATE SECTOR AWARDS
State Wage Case December 1994 - Review of Wage Fixing Principles REASONS FOR DECISION This application was lodged by the Tasmanian Trades and Labor Council (TTLC) on 30 Sept 1994. In its original form the application was couched in the following terms:
When the matter came on for hearing on 7 November the TTLC sought and was granted leave to amend its application to read as follows:
The parties then requested an adjournment to allow all affected and interested organisations the opportunity to discuss and contribute to a proposed new set of wage fixing principles which, it was submitted, would be tailored to meet and conform with Tasmanian conditions and Tasmanian legislation. The parties were then directed into private conference under the guidance of the President and the formal proceedings were adjourned until 17 November 1994. When the hearing resumed on 17th November the parties and the intervener asked the Commission to continue with the current state wage fixing principles, appropriately revised, rather than adopt the precise verbiage of the new principles of the Australian Industrial Relations Commission (AIRC). It was emphasised that the Commission was not being asked to disregard the recent AIRC decisions; rather the point was made that the Tasmanian principles should be modified by integrating within them the central features of those federal decisions. The TTLC submitted in support of this position that the federal industrial relations legislation, because of recent amendments, now provided a comprehensive framework specifically designed to underpin enterprise bargaining. A comparable legislative arrangement was not available in the Tasmanian context. As a result the new AIRC principles contained many references to the obligations of the AIRC with regard to particular provisions of the federal Act. Since the Tasmanian Act did not reflect similar provisions, notably: (i) the declaration and ending of official bargaining periods; (ii) the notion of an obligation to bargain in good faith; and, (iii) the notion of a limited right to strike; it was argued that the adoption of the federal principles, in their exact form, would be difficult and particularly cumbersome. The Tasmanian Chamber of Commerce and Industry Limited (TCCI) observed that the Australian Industrial Relations Reform Act of 1993 had turned the direction of industrial relations in the country dramatically and irresistibly towards an enterprise focus. Parties at a national level were now forced to pursue enterprise bargaining; however the federal decisions already referred to were largely aimed at satisfying the legislative requirements of that jurisdiction and were not "user-friendly" in the Tasmanian environment. A substantial measure of agreement had been achieved between unions, employer organisations and the Government in the proposed new Tasmanian Principles, although there were a few areas of significant disagreement which required the Commission to exercise its arbitral powers. The agreed features of the proposed new principles are summarised as follows, together with the competing views of the parties on certain issues: Introduction The parties suggested a preamble which would alert those under the jurisdiction of the Commission to the fact that the primary focus of the Commission's principles would be to encourage the direct parties to develop enterprise level arrangements through bargaining with a view to ensuring significant and demonstrable improvements in productivity and efficiency. Structural Efficiency The parties considered that it was desirable to retain this principle which is contained in the 1993 State Wage Fixing Principles, and add to it, after the discourse on the efficiency of industry, the words "and enterprises". This, it was said, would emphasise the shift in the focus of industrial relations that was occurring throughout Australia. Enterprise Bargaining This heading was preferred to the existing one of "Enterprise Awards or Section 55 Agreements" as it was considered to be more reflective of the nature and contents of the principle. An introductory paragraph was proposed which was intended to direct the parties to make use of Section 55 Agreements wherever possible, whilst at the same time it recognised the statutory entitlement of an organisation to seek to have an enterprise award made. The parties were of the view that the central thrust of enterprise bargaining was to do with the parties reaching agreements and the new paragraph was "reasonably balanced" in the circumstances. It was submitted that consistent with the requirements of Section 170 MA of the federal Act, such an agreement could not be varied other than by the consent of both parties. This protection was not available in respect of enterprise awards which had the capacity to be varied on application by one party only. As a means of further emphasising the requirement to bargain, the principle imposed a stringent testing process on parties seeking to avoid the use of Section 55. The TCCI elaborated further on the subject and referred the Bench to the tests discussed by the Australian Commission at page 59 of its decision (Print L5300) where it said:
It was submitted that the Commission should apply these tests when considering an application to create an enterprise award or vary an existing award and that the Commission should pay significant regard to the proposition that, primarily, enterprise outcomes should be satisfied by way of Section 55. Section B in the old principle should be deleted , it was submitted, and dealt with more explicitly in a new principle to be entitled "Role of the Commission in Enterprise Bargaining". The proposed new enterprise bargaining principle was as follows:
Role of the Commission in Enterprise Bargaining It was submitted that this proposed new principle was the result of substantial discussion and negotiation between the parties as a consequence of the changes to the federal Act and experience with the operation of the existing principles of the Commission. The proposed new principle was :
The TTLC said the first three paragraphs of the principle reflected the powers and obligations of the Commission and certain options available to the parties. However, the last paragraph requiring the Commission to ensure that an agreement or award, when taken as a whole, did not disadvantage the employees concerned, was not provided for specifically in the Industrial Relations Act 1984. Even so, it was contended the definition of "industrial matter" in the Act was broad enough to cover such an issue and since there was consent between the parties on that paragraph, the Commission was urged to adopt it. The TCCI said:
Transcript, pp.46/47 The TCCI reluctantly agreed to the inclusion of a "no disadvantage test" at paragraph 4.4 of the proposed principle which was said to be largely similar to the test to be found in the federal Act. Whilst it was felt that such a test might lead to frustration of the parties at the enterprise level, agreement had been given because it indicated quite clearly that an enterprise award or a Section 55 agreement had to be taken as a whole when applying the test. The TCCI considered that if the test was applied narrowly it would restrict parties in their bargaining. Minimum Rates Adjustments It was proposed that this principle be retained, at least for the foreseeable future. Arbitrated Safety Net Adjustment It was proposed that the existing principle be deleted and superseded by a new Arbitrated Safety Net Adjustment Principle. The Award Safety Net The federal principle was considered to be inappropriate for direct adoption in the Tasmanian context and it was revised in the following terms:
The TCCI submitted that the normal method of reviewing the relevance of the award safety net should be by way of "test case type proceedings" and that any application to review a single award "should be required to stand the test of the principles dealing with claims above or below the safety net and not as an adjustment to an award to retain its relevance". Notwithstanding that submission, the TCCI wished to reserve a right to pursue by consent or arbitration the results of a recent federal test case relating to public holidays. At an appropriate time, it was suggested, issues such as a training wage and wages for people with disabilities might also be the subject of an employer application. Arbitrated Safety Net Adjustments Whilst the wording of this proposed principle differs from the Federal decision, the TTLC said, the outcomes to be derived from it were identical. The wording which had been negotiated was much more suitable to the Tasmanian jurisdiction and easier to follow. The TCCI regarded this principle as the most difficult area to negotiate, and despite the employer's earlier wish to have "a more delayed implementation process", an agreed position had been reached which was "largely consistent" with the AIRC decision. Some changes had been made to recognise Tasmanian circumstances and both the employers and employees had additional proposals to put which had not been agreed. The principle, as agreed, was set out in the following form:
The TTLC submitted that it was its intention that the objective contained in the comment at page 23 of the federal decision (Print L5300) should be transferred to the State system. That comment was as follows:
In order to achieve this objective the TTLC argued that as from the commencement of the new principles the first $8 arbitrated safety net adjustment should not be absorbable against overaward payments. The federal decision requires the parties to take the original $8 arbitrated safety net adjustment out of the supplementary payments column and insert it as a rate separately identified in an Arbitrated Safety Net Adjustment provision. The TCCI submitted that this Commission had implemented the arbitrated safety net adjustment in a manner which was different from the AIRC and from most other commissions and in such a way that there was no need for awards to be varied by separate application for the first $8 arbitrated safety net adjustment because all minimum rates awards of this jurisdiction already had received that amount separately identified. The second arbitrated safety net adjustment of $8 would be available six months from the date of the Commission's decision in this matter which, the TCCI said, would be earlier than if all awards had to be varied independently. It was submitted that if this arrangement was not adopted then the six months period should run from the date each award was varied. On the question of absorption of the first $8 against any overaward payments, the TCCI offered the view that the absorption provision was superfluous and that employers had the power to absorb any award increases against overaward payments if they so wished. However, the parties acknowledged that the first and subsequent $8 payments could be absorbed against any enterprise bargaining increases negotiated since November 1991. The TCCI, in answer to a question from the Bench, agreed that contrary to the intention of the TTLC, the employers held the view that whether or not an employee received a $24 per week increase over the period November 1991 to July 1996 depended on how much was absorbed against existing overaward payments or enterprise bargaining deals. Insofar as paid rates awards were concerned, the TTLC said that absorption of the arbitrated safety net adjustments should occur only where enterprise bargaining since November 1991 had resulted in an increase. As to the proposition that enterprise level increases for the second and third arbitrated safety net adjustments could be recognised in schedules to common rule awards, the TCCI indicated it had agreed only for the sake of uniformity with the federal decision. Whilst acknowledging that access to the principle during the six months period would be limited, there was some concern that the proposal would be unwieldy, given the potential for, say, each employer in the Retail Trades Award area to reach an enterprise level agreement and to seek to have a schedule describing that attached to the award. The TCCI noted that in dealing with the second or third arbitrated safety net adjustments at the enterprise level, a union must have genuinely sought to reach an agreement and that there was no likelihood that further conciliation would result in an agreement. In order to test whether or not there had been a genuine attempt to reach agreement the TCCI submitted that further conciliation should be encouraged under the auspices of the Commission. The TTLC proposed two additional subclauses to this principle:
and
These, the TTLC said, were designed to allow industry awards which had genuinely wide and disparate scope to be varied for the second or third arbitrated safety net adjustments in respect of named enterprises at a date earlier than would be available for the industry award generally. It was submitted that if a union could show that it had "negotiated with a genuinely representative and relevant employer organisation" and had met the other requirements of 7.2.1, the second and third arbitrated safety net adjustments should be available to employees of those identified and represented enterprises. In support of this contention the TTLC submitted that the lack of legislative support for the Federal system of enterprise bargaining or "mainstream enterprise bargaining" made it difficult to achieve the same results in Tasmania. High levels of unemployment and the "unprecedented number of retrenchments and redundancies in the recent past" were said "not to sit comfortably with the notion of equitable bargaining relationships". In addition, it was claimed that unions did not have sufficient resources to engage in widespread bargaining, for example in the retail trades, restaurant keepers and medical practitioners award areas. Mr Cooper, for the AWU-FIME Amalgamated Union, referred to the difficulties associated with enterprise bargaining in the farming and fruit growing and the fish and aquaculture industries. It was submitted that in these areas in particular many employees would be unable to bargain at the enterprise level and, since there was no compulsion on employers to bargain in good faith and no right to strike, such employees would be disadvantaged compared with what was available under the Federal decision. Mr O'Brien for the Australian Liquor, Hospitality and Miscellaneous Workers Union, Tasmanian Branch also supported the inclusion of the two subparagraphs for the reasons previously advanced. The TCCI opposed the insertion of the two subparagraphs proposed by the TTLC as it considered they "flew in the face of the enterprise approach" which both parties had agreed to in the remainder of the principles. It was submitted that the TTLC proposal would simply provide an award level arbitrated safety net adjustment at a date earlier than would otherwise be available. It was claimed that it would be impossible to ascertain whether every employer had been given an opportunity to participate in negotiations and if they had not been given the opportunity they would be denied "natural justice". In respect of the TCCI's proposed addition to this principle at paragraph 7.2.2.3, which was worded in the following manner:
the TCCI submitted that the proposal conformed with the federal decision at page 39 (Print L5300) where the full bench said that when dealing with the second arbitrated safety net adjustment one of the tests would be to determine:
The last point (3) was not sought as it was considered that it was related to a specific requirement of the federal legislation. The TCCI said that facilitative clauses had not been inserted in Tasmanian awards to the extent that they might have been and there was a continuing need to make awards more relevant to the enterprise. The distinction between facilitative provisions and enterprise flexibility clauses was explained by reference to statements by the federal bench at pages 30 and 31 of the decision (Print L5300). The TCCI sought the majority clause provision in order to overcome perceived problems in relation to multi-award coverage. The TTLC opposed the inclusion of the paragraph 7.2.2.3 saying that the provision emanated from the new statutory responsibility of the Federal Commission arising from Section 88A(c) of the Federal Act for which there was no similar State counterpart. It was argued that the parties involved in the State jurisdiction could not be compelled to implement facilitative provisions and use majority clauses in the manner sought by the TCCI. Any party could make application to deal with a matter that might fall within the parameters of what might be called a facilitative provision. So far as majority clauses were concerned, the TTLC reminded the Commission that federal awards were limited in application by virtue of the requirement of respondency whereas the Tasmanian jurisdiction was essentially a common rule jurisdiction involving industries. It was argued that if an employer was aggrieved by the application of a common rule award, application could be made to vary the award or a Section 55 Agreement could be negotiated. In any event, the TTLC said the TCCI proposal was more stringently constructed than the proposition advanced in the federal decision. Form of Orders The parties proposed a new principle, setting out the manner in which wage rates should be expressed in awards of the Commission. It was said to be similar in many respects to the wording of the Federal Commission's Principle at page 69 of Print L5300, but it required the arbitrated safety net adjustments to continue to be expressed as separate amounts in order to protect the integrity of the wage relativities which had been established as a result of the structural efficiency process. The TCCI suggested that the process of combining the base rate and supplementary payment (A) could occur either in conjunction with the last minimum rate adjustment or when either the first, second or third arbitrated safety net adjustment at award level was inserted, or indeed at any other time the parties were before the Commission with an application to "do something to the award". The proposed new principle was as follows:
Special Cases It was submitted that there was no longer a need for this principle as it had been superseded by a proposed new principle headed "Making and Varying and Award Above or Below the Safety Net". Allowances It was proposed that the existing principle should be retained with some alterations to reflect the manner in which the three arbitrated safety net adjustments should be applied. The alterations conform with the AIRC decision as contained in Print L5300 at pages 42 and 43. The proposed new principle was tendered in the following form:
Superannuation This principle to a large extent was unaltered save for the important deletion of the cap of 3% on employer contributions which did not sit comfortably with the requirements of the various pieces of federal superannuation law. It was submitted that the new principle adopted the provision of the September 1994 decision of the Federal Commission (Print L5100) insofar as this Commission has jurisdiction. Work Value Changes It was proposed that the existing principle should be retained with the clarification that the datum point from which change in work value could be assessed would be the date of operation of the second structural efficiency adjustment allowable under the 30 October 1989 State Wage Case Decision, or the operative date of any increase awarded in accordance with this principle since that date. Paid Rates Awards It was proposed that this principle should be deleted as the question of paid rates awards was dealt with in the proposed new principle headed "Making and Varying an Award Above or Below the Safety Net". Making and Varying an Award Above or Below the Safety Net It was submitted that apart from adjustments to the references to particular sections of the Federal Act, this new principle had the same impact as the new principle adopted by the AIRC which is found at pages 70 and 71 of the decision (Print L5300).
It was submitted that the majority of public sector awards and a number of private sector awards were regarded as falling into the category of paid rates awards. First Awards and Extensions to Existing Awards The parties submitted that the existing principle should be deleted and a new principle, in the following form, inserted in its place:
Standard Hours The parties proposed that the Standard Hours Principle should be revised and include a condition that a reduction in standard hours below 38 per week or an increase up to 38 per week should be approved only in circumstances where the parties demonstrated their consent. The new proposal was worded in the following manner:
Economic Incapacity It was proposed that this principle should remain unchanged. General submissions: It was submitted by all parties that the Tasmanian economy could sustain the three $8 per week award increases spread over a period from November 1991 until eighteen months after the date a decision in this matter was made (that is, until June 1996). Reference was made to the statistical information presented by the Australian Chamber of Commerce and Industry during its submissions to the Federal Commission which dealt with the Average Weekly Ordinary Time Earnings for full-time adults and real award wages trends, company profits, the labour market, productivity and inflation. These are reproduced in the federal decision (Print L5300) at pages 11 to 15. The AWU-FIME Amalgamated Union also presented statistical information dealing with employment levels, inflation and average earnings of Tasmanians compared with Australia generally. An extract from the 1994/95 Budget Papers for Tasmania was tendered which predicted a steady growth of 3.5% in average weekly earnings against a growth in the Consumer Price Index of 3.0% to 3.5% after the period 1995/96 - 1997/98. The TCCI informed the Commission that although its federal organisation, the Australian Chamber of Commerce and Industry, had argued against any award increase because of the negative impact such increases might have on enterprise bargaining, the proposed arrangements had the consent of the Tasmanian Chamber. The Tasmanian Farmers and Graziers Employers Association, explained to the Commission the circumstances of the pastoral and agricultural employers in this State, but notwithstanding what were said to be very parlous conditions, supported the submission of the TCCI and the three staged arbitrated safety net adjustments. An assurance was sought from the Commission that the economic incapacity principle could be accessed by individual employers and could continue to be dealt with on a case-by-case basis. The Minister, as statutory intervener, welcomed the initiative of the parties in working together to develop a set of wage fixing principles which would reflect the needs of Tasmanian employers and employees. However, it was acknowledged that there was a potential for tension between the rights of registered organisations to pursue award applications, the obligations of this Commission to settle disputes and to make and vary awards, and on the other hand, the devolution of industrial regulation and responsibility to the enterprise. The Minister said industrial disputes would arise at the award or enterprise level and that the Commission could not have its statutory powers fettered to the extent of not being involved. However, it was suggested that there was discretion available to the Commission as to how it might settle a dispute or deal with agreements or award variations. Specifically the Minister supported the TCCI's desired approach to the no disadvantage test at Principle 4.4 dealing with the Role of the Commission in Enterprise Bargaining. In relation to the Arbitrated Safety Net Adjustments Principle, the Minister opposed the additional subparagraphs 7.2.1.6 and 7.3.1.6 put forward by the TTLC in the following manner:
Transcript, p.75 and further:
Transcript p.76 The Minister submitted that each and every employer in an industry award was entitled to the opportunity to participate in the bargaining process, but if not given that opportunity the employer should not be disadvantaged by an industry level adjustment at a period earlier than otherwise would be required. The Minister supported the TCCI's proposed new subparagraph 7.2.2.3 dealing with facilitative provisions and majority clauses as an "important and fundamental necessity to ensuring that awards are suited to the needs of industries and enterprises". The Minister also adopted the submissions of the TCCI in relation to the economy of the State and its capacity to meet the amounts which have been awarded federally. In response to questions from the Bench in relation to public sector awards, the Minister's representative indicated that it would seem to be appropriate that public sector awards could be varied in accordance with the principles whilst at the same time having regard to the State Service Wages Arrangements Agreements which prevailed in that area. FINDING We agree with the submissions of all parties which go to the difficulty of implementing in this jurisdiction the precise detail of the recent decisions of the Federal Commission which are the subject of this hearing. Clearly the statutory provisions applying in the Commonwealth and in this State are different. The parties are to be congratulated for their initiative in not only meeting for the purpose of exploring the possibility of developing a set of guidelines for Tasmania, but in being able to reach such a remarkable degree of consensus. All the parties, whilst acknowledging the delay which was occurring in the rate at which the Tasmanian economy was recovering, considered that the impact on the economy of what is effectively a $24 per week award increase over the period November 1991 to July 1996, some 4-1/2 years, was sustainable. We agree with that view. We accept the general view that a set of wage fixing principles to guide the parties and the Commission over the next eighteen months or so is highly desirable and we accept the deletion of those parts of the old principles which now are considered to have no relevance and to have been superseded by new principles. Dealing with the proposed new principles seriatim, we have decided, at the request of the parties, to include an introduction which alerts all participants in the system that so far as the jurisdiction of the Commission is concerned (which excludes Part IVA of the Act entitled Enterprise Agreements which is in the province of the Enterprise Commissioner) the parties should direct themselves to enterprise bargaining. Preferably the results of such enterprise bargaining should be ratified by way of an agreement under Section 55, failing that, if the tests provided in the principle allow, by way of an enterprise award. The introduction also informs the parties that the Structural Efficiency Principle still has significance for the purpose of continuing to restructure awards to make them relevant to industry. The Structural Efficiency Principle will be retained as a continuing reminder to the parties of the important issues to be addressed in all deliberations on award and indeed agreement changes. The old Enterprise Awards or Section 55 Agreements Principle will be retitled Enterprise Bargaining with the addition of a preamble informing the parties (1) that section 55 agreements are to be the predominant vehicles by which to formalise enterprise bargains, and (2) that an approach using other than Section 55 would require the parties to establish to the satisfaction of the Commission, why Section 55 was inappropriate. The proposed new principle, Role of the Commission in Enterprise Bargaining, is adopted but modified to reflect more accurately the Commission's limitations compared with the Federal Commission in relation to arbitration in respect of agreements. The Commission will continue to assist the parties in the bargaining process by way of conciliation, which could be sought by way of Section 29 dispute notification. If necessary, where the parties engaged in enterprise bargaining agree, the more formal process of private arbitration will be available under Section 61 of the Act. The principle recognises that where the parties are not prepared to take advantage of Section 61, either party can make application for an enterprise award. In this context the Commission will have regard to the tests set out at page 59 of the Federal decision (Print L5300), specifically "the nature of the enterprise, the views of the parties, the history of regulation in the area ..., the range of matters covered by agreements, the likelihood of `flow on' and any other relevant matters". The Minimum Rates Adjustments Principle submitted by the parties will be retained. The proposed Award Safety Net Principle is adopted from the Federal principles as varied to reflect the Tasmanian legislation. All parties regarded the common rule awards of this Commission as the safety net to underpin enterprise bargaining. The direction and wording of the Act, particularly Section 38 (Effect of Awards) ensures that awards of this Commission have already provided a meaningful safety net of entitlements for employees in the industries or occupations covered. We accept the TCCI's proposition that any review of the award safety net should be by way of test case proceedings. There is no doubt that the catalyst for this review of principles has been the decision of the Federal Commission (Print L5300), that wage rates in all awards of that Commission between November 1991 and May 1996 should be varied by at least $24 per week. The parties have endeavoured to translate the detail of the Federal decision, loosely titled Safety Net Adjustments, into the Tasmanian industrial relations environment and, to the extent that they reached agreement, they have been successful. Accordingly their proposed principle, Arbitrated Safety Net Adjustments, is adopted with minor alterations. Applications to vary awards of the Commission may be made at any time after the date of this decision to include the first arbitrated safety net adjustment of $8 per week with effect from the first full pay period to commence on or after the date of this decision. We note the TCCI's submission that most private sector awards already include, separately identified, the eight dollar safety net adjustment determined in the December 1993 State Wage Case and that it would be a pointless exercise to revisit all awards simply to retitle the increase. By virtue of the Commission's 1993 decision, all awards were required to include the qualification that 1993 $8 increase could be offset against any overaward payment applying at that time. Given the submissions of the parties that absorption provision will be progressively removed from awards. So far as increases derived from enterprise bargaining since November 1991 are concerned, it is noted and approved that they may be offset against the first arbitrated safety net adjustment. As to the second arbitrated safety net adjustment, we accept the proposal that increases may be effected at the enterprise level as from the date of this decision provided that:
We also accept the proposal that at the award level the second $8 per week arbitrated safety net adjustment may be inserted in awards of the Commission as from six months after the date of this decision provided that the award has included the first arbitrated safety net adjustment for at least six months; that an employee who has received the second adjustment at the enterprise level is not entitled to the award increase and that the second adjustment is capable of being absorbed against any wage increase resulting from enterprise bargaining after 1 November 1991. We add that these adjustments will be reflected in the relevant awards of the Commission. It should be noted that this aspect of our decision is designed to encourage parties to enter into a Section 55 Agreement. Accordingly the second arbitrated safety net adjustment at enterprise level will only be available where the reaching of an industrial agreement pursuant to Section 55 has not been possible. Under similar conditions, providing no changes occur following the deliberations of the Federal Commission scheduled for August 1995, a third arbitrated safety net adjustment of $8 per week will be available. At the enterprise level the third adjustment will be available no earlier than twelve months after the date of this decision and at the award level no earlier than eighteen months after the date of this decision. The TTLC, supported by the AWU-FIME Amalgamated Union, Tasmania Branch and the Australian Liquor, Hospitality and Miscellaneous Workers Union, Tasmanian Branch (ALHMWU), argued that it should be possible to vary common rule awards for the second and third adjustments from the same date that enterprise level arrangements could be effected, that is, six months earlier than otherwise would be the case. We reject this proposition. The main thrust of these principles is to ensure that enterprise level negotiations will occur which should produce improved efficiency, and therefore competitiveness, and at the same time provide wage increases to employees. It is therefore imperative that direct negotiations should occur to achieve those objectives. We recognise the problems that the unions might have in contacting the many small employers in this State, however the award level safety net adjustments have been designed to ensure that within a relatively short time all award employees will be entitled to the arbitrated safety net adjustments. The TCCI, supported by the Tasmanian Farmers and Graziers Employers Association (TFGEA), and the Minister sought the inclusion in this principle of a prerequisite that in order to receive the second arbitrated safety net adjustment the parties should have developed a program to negotiate the effective implementation of facilitative provisions and the inclusion and effective use of majority clauses. We reject the first proposal on the grounds that the Structural Efficiency Principle already provides that the insertion of facilitative clauses in awards is a measure to be considered in any review of awards which, as we have already said, is to be a continuing process. As to the question of majority clauses, we do not consider that, in the State's common rule award system, it is practical or desirable to require such a broad brush approach. We again note that the Structural Efficiency Principle contains the signal that in reviewing awards regard should be had for the possibility of updating and/or rationalising the list of parties to the awards. That option continues to be available to the parties. The Form of Orders Principle is adopted with reference also to the requirement to identify the amount of arbitrated safety net adjustment against each classification in the award. We have also decided to include advice to the parties that the second and third arbitrated safety net adjustments at enterprise level must be shown in the award. We accept the TCCI approach that it is not essential at this stage to vary awards simply to retitle the arbitrated safety net adjustment component as this amount is already separately identified in other awards. We remind the parties, however, that when the awards are next varied the absorption clause will be adjusted to remove any direction relating to the ability of the employer to absorb the arbitrated safety net adjustment against any overaward payment being made. The old Special Case Principle will be deleted, for the reasons advanced by the parties. The Allowances Principle is adopted in the form proposed by the parties. It is noted that existing allowances relating to work or conditions which have not changed, and service increments, may be adjusted by the Commission when dealing with safety net adjustment applications. However, no action on the first arbitrated safety net adjustment is to be taken in respect of these allowances, service increments, or weekend penalties where they are expressed as flat dollar amounts, until the outcome of the Federal Commission's deliberations in the Retail and Wholesale Shop Employees' (Australian Capital Territory) Award matter has been considered by this Commission. The Work Value Principle is to be retained. The revised Superannuation Principle adequately reflects the requirements of the federal superannuation laws and the statutory obligations imposed on the Commission by virtue of the provisions of the Industrial Relations Act. Accordingly the draft principle is adopted. The proposed new Making and Varying an Award Above or Below the Safety Net Principle incorporates the old Special Case Principle. In future any award application seeking wages and/or conditions greater or less than the award safety net provides must be supported by material justifying such a change. The President will then determine whether or not the claim should be dealt with as a special case and whether or not the matter should be referred to a Full Bench. The exceptions to this process will be enterprise bargaining matters covered by Principle 3, Enterprise Bargaining, or applications under Principle 13, First Award and Extension to an Existing Award. The proposed Principle, derived from the Federal decision (Print L5300), is adopted. The new First Award and Extension to an Existing Award Principle is approved and we note that in considering a first award the main consideration shall be the existing rates and conditions. However, quite properly the needs of the particular industry and employees' interests must be taken into account. Special attention is given to the making of paid rates awards which require consideration of custom and practice in the area concerned, i.e. has the past practice involved the use of a paid rates award, and the parties to be covered by the award. A list of considerations to be tested is set out in the Principle which mirrors those of the Federal decision. The Standard Hours Principle will be revised in the manner requested by the parties. Particular attention is drawn to the requirement that a reduction in standard hours below 38 or an increase above 38 will only be approved where the parties demonstrate their consent. We endorse that approach. The Economic Incapacity Principle remains unchanged and we repeat that the Commission will deal with applications under this Principle made on behalf of an employer or a group of employers on a case by case basis. The foregoing Principles which are attached in consolidated form, will continue to operate until revised or replaced by this Commission.
Appearances: Date and Place of Hearing: |