T712 T665 T691 T675
IN THE TASMANIAN INDUSTRIAL COMMISSION
Industrial Relations act 1984
REASONS FOR DECISION
APPEARANCES: - T665 AND T691 of 1987
APPEARANCES: - T665, T691, T675 AND T712 OF 1987
DATE AND PLACE OF HEARING:
The Commission has before it a total of 5 applications. Those lodged by the Tasmanian Public Service Association (TPSA) and the Tasmanian Teachers' Federation (TTF) seek a 10 percent across-the-board adjustment to salaries and allowances payable to the great majority of State employees, and continuation of the wage fixing principles that were put in place by the Commission on 1 July 1986. [1.7.86 date operation of awards - 22.7.86 date of decision].
The application by the Association of Professional Engineers of Australia (APEA), although case in somewhat similar terms to those of the TPSA and TTF claims, in the final analysis became aligned with that of the TTLC. This latter application was drawn in terms not dissimilar to the application made by the ACTU to the Australian Commission. However, its terms sought a flow on of the Australian Commission's decision of 10 March 1987 subject only to consequential amendments to enable this Commission to bring down a decision expressed in terms applicable to persons subject to Tasmanian and not Federal awards.
Before turning to a consideration of the TTLC and APEA claims it is first necessary to deal with those filed by the TPSA and the TTF.
TPSA Claim for 10 percent
This claim purported to affect only members of the Tasmanian Public Service Association.
In fairness to Mr Evans and Mr Vines who argued the Association's case, it must be acknowledged that at no stage during the earlier proceedings was it suggested by the TPSA that what was being sought was an "early" State Wage Case. On the contrary, it was submitted that because the principles then in place had not been superseded, modified or cancelled they remained extant and were therefore to be available to any party who had given a commitment to make claims only in accordance with those principles for their two-year life.
The fact that it was common knowledge that the ACTU supported by CIA and others had already argued a case before the Australian Commission for a new two-tiered system of wage fixation did not, we were told, affect the TPSA's right to invoke Principle 1 (National Wage adjustments), and in this regard the fact that the claim sought an economic adjustment based upon CPI movements for Tasmania did not vitiate the Association's application. The claim purported to affect most employees in Crown employment. There were only minimal exceptions in this sector. However, the TPSA claim did not of course touch upon non-Crown employees subject to what are largely "industry" awards of this Commission having application to employees and employers in the private sector.
In the event, because a decision by the Australian Commission was imminent and this was expected to generate a flow-on application - at least in relation to private sector awards - the Commission exercised its discretion and refused to hear further the TPSA (and TTF) applications on the understanding that these would be considered later in conjunction with the anticipated State Wage Case. It should be pointed out here that consequent on a technical objection taken by the statutory intervener, the TPSA claim eventually was made applicable to the Hospital Scientists Award as a test case.
This came about as a result of the Commission ruling that the only awards which could be processed were those to with the TPSA was the sole employee organisation.
This was argued in a fashion similar to the TPSA case and was likewise adjourned for consideration in conjunction with the State Wage case. It should be made clear that neither the TPSA nor the TTF could see any equity in the much publicised two-tier system. It was the belief of both organisations that while the proposed first tier adjustment of $10 per week would provide only marginal relief to State employees including teachers, statements allegedly made by the Government gave no reason at all to either organisation to believe that a second tier adjustment was negotiable. It was the view of the TTF therefore, like the TPSA, that the Commission's two-year package, being only 8 months' old, was there to be utilised and the Federation had done just that.
TPSA and TTF applications considered in conjunction with TTLC application for flow on of Australian Decision of 10.3.87
While maintaining its view that it was open to it to call the 1986 Principles in aid in seeking an economic adjustment of either 10 percent based upon CPI movements for Tasmania during the four quarters of 1986, or alternatively a 9.7 percent adjustment based upon CPI movements for the six capitals, the TPSA likewise continued its claim for a "members only increase".
However, Mr Vines later put the claim more in perspective when he submitted to the Commission that it clearly now had the option of maintaining a system that had worked or abandoning that arrangement in favour of a two-tiered arrangement that would be likely to be obsolete before the end of the year.
The TTF however doggedly pursued its application. The only concession made by Ms Crotty, if it was a concession, was that the TTF attitude may be coloured by the outcome of the Special Unions' Conference scheduled to take place in early April, following the handing down of the National Wage decision.
We have decided that to entertain either the TPSA or the TTF claims and grant salary adjustments to any group based exclusively upon CPI movements, whether those movements relate to the six capital cities or Tasmania only, would be, in effect, to marshal in the obsequies of a centralised system of wage fixation. The system has not been perfect but it has been generally understood and for the most part rigidly observed. Moreover, we believe it has worked. There have been leaks and some wages drift, but the tribunals cannot be blamed for what has happened. Certain employer and employee groups have been the culprits. Regrettably this has been the situation since 1975 to a greater or lesser degree. Even more unfortunately neither employer nor employee groups appear to profit by these experiences.
While no such allegations can fairly be levelled at Tasmanian unions and employers who, for the most part, have behaved in an impeccable way during the life of the centralised system, the fact remains that the problems bedevilling the country cannot be confined merely to State boundaries. Resolution of these difficulties requires sacrifices by all employees - public and private sector - in all States. There can be no exceptions.
We would be less than frank were we not to acknowledge the concern of State employees in relation to a two-tiered system. And we would be remiss if we were not to state now that, because of the nature of what is intended for the new system to work as we are led to believe it is supposed to work, employer/employee co-operation on a scale hitherto unknown will be required.
Furthermore it will also place demands upon this Commission of such magnitude that its already overtaxed resources will not in all probability be able to meet all requirements for some time.
Notwithstanding that less than satisfactory situation, we have decided that our Tasmanian system cannot survive if we allow it to fragment in a way that would give public sector employees a better deal than those in the private sector. Moreover, in dismissing both claims we would indicate now that we do not believe Principle 1 of 1986 Guidelines was intended to be used in this way.
On any construction of the title of Principle 1 and the language used by its architects, it must be concluded that Principle 1 was intended to be the mechanism whereby salaries and wages generally were to be adjusted.
Nowhere in the Australian Commission's Reasons for Decision of 26 June 1986 (Print G3600) did it state or even imply that it would be open for a single union or a group of unions to obtain wage increases for members under Principle 1, except following a National or State Wage Case during which the economy as a whole had been considered.
The two-tiered system was initiated by the ACTU on behalf of its affiliates, knowing full well that the 1986 arrangement was not going to hold. The TPSA and TTF are affiliate members of the Tasmanian Trades and Labor Council which in turn is generally referred to as the Tasmanian Branch of the ACTU.
The two-tired system is not the child of the Australian Commission; it is the product of a union between the ACTU, the Australian Government, the Confederation of Australian Industry and a number of peak employer and employee organisations. It is obvious that neither the TPSA nor the TTF have given such a proposal their unequivocal support. Their reservations about the new proposals may yet prove to be well founded if those Principles do not produce the results hoped for. But until such time as the revised centralised system has been put in place and given an opportunity to be tested against the expectations of those who conceived it, this commission is not prepared to reject centralisation in favour of localisation without reasons of substance sufficient to justify such a departure. Accordingly, these claims are dismissed.
The application by the Tasmanian Trades and Labor Council sought, in respect of all public and private sector awards, the following:
Mr Lennon placed on record that the Tasmanian Trades and Labor Council brought its application to the State Commission as a consequence of the handing down of the decision of the Full Bench of the Conciliation and Arbitration Commission which granted certain increases operative from 10 March 1987.
He said that the TTLC in conjunction with the ACTU and the trade union movement generally remains firmly of the belief that full wage indexation should be retained.
He said they do not accept the need for discounting of wages and reiterated that they supported the maintenance of living standards. However, it was recognized and noted that the Conciliation and Arbitration Commission in its December 1986 decision said:-
Given that situation the trade union movement moved to develop an approach to wage fixation based on a centralised system with the potential to sustain living standards of all workers, particularly low and middle income earners. He said that it is against that background that the two-tiered system was proposed as an alternative.
In the case before the Conciliation and Arbitration Commission the trade union movement's claim was for $20.00 in the first-tier increase with no objections to that increase being awarded in two steps and a 4 percent second-tier adjustment to be available to all by either arbitration or conciliation. The rationale for these amounts was based upon the need to balance interacting equity, industrial relations and economic pressures. It was argued that these amounts would form the basis of a workable wages system for 1987.
Against that background the Full Bench of the Conciliation and Arbitration Commission awarded its increases operative from the first pay period commencing on or after 10 March 1987.1
Mr Lennon said that the TTLC did not shy away from the fact that they were not happy with the level of increases granted by the Conciliation and Arbitration Commission and that the TTLC would take part in a conference to be convened during April to consider the decision.
He indicated that the TTLC was seeking a direct flow-on of the National Wage decision, together with the revised Principles. And in this regard he submitted an exhibit which, mutatis mutandis, precisely reflected the Federal decision.
Mr Lennon informed the Commission that there had been discussions with the Tasmanian Chamber of Industries and the Office of Industrial Relations and was able to indicate that some agreement had been reached between the parties as to the nature of the money amounts. In particular it had been agreed that the minimum wage should be increased by $10.00 per week.
Mr Lennon made the point that in his view the Full Bench of the Australian Commission had given recognition to the fact that increases in excess of 4 percent in the second tier may be available in isolated circumstances. He acknowledged that such occurrences may be rare, but nevertheless they may happen.
The Commission is required to pay proper regard to the public interest in dealing with this aspect, and Mr Lennon said that in the past the trade union movement had been given the responsibility of giving a total commitment to make the wages' system work.
He did not argue with that concept but emphasized that if the system is to survive in the immediate future then it will require a commitment from all parties concerned; that means the Commission, unions, employers, as well as individual employees.
Mr Lennon said that the trade union movement expected prices to be controlled effectively and in this regard was somewhat critical of the effectiveness of the Prices Surveillance Authority. He then said that if this Commission was not disposed to grant the increases sought by flowing-on the National Wage decision then we would have a situation operating within Tasmania where people covered by Federal awards would receive an increase and those covered by State awards would not. And that, in his opinion, would create a situation that would have disastrous industrial relations consequences. If the Commission was not disposed to grant the flow-on then he believed that decision would destroy the system of conciliation and arbitration in Tasmania.
At a recent ACTU Wages Committee meeting the union movement without dissent recommitted itself to the system of conciliation and arbitration as opposed to the law of the jungle.
Mr Lennon said it should be recognized that some of the unions and union members in this country would do far better outside the system of conciliation and arbitration than they would do from within. But as a trade union movement it was still firmly committed to a system of conciliation and arbitration.
He said there had been great pressure upon the trade union movement from members to pursue increases outside of the system given the fact that prices last year went up to 10 to 11 percent, or in some cases more, but wages went up only 2.3 percent.
The clear evidence of the fact was that the burden had been unfairly placed upon employees in the past. But notwithstanding that, the trade union movement accepted that it still has a role to play in trying to get the economy back on the road, and it is for that reason that it recognized that the full indexation system was not sustainable in the present economic circumstances. The trade union movement therefore moved to a two-tiered approach with particular emphasis being given to low-income and middle-income employees.
Mr Vines for the Tasmanian Public Service Association stated that he had said during matter T665 that it is the policy of his organisation to seek wage increases based upon the full movements of the CPI index. He said his organisation also has a policy to continue with centralised wage fixation. He observed that it would appear from the decision that was handed down in the Federal Commission that there is now some conflict between those two policies.
The Tasmanian Public Service Association was of the opinion that this Commission has two positions before it: One being continuation of a centralised wage-fixing system based upon full CPI movement; the second for a centralised wage-fixing system based on the two-tiered proposal.
The concern of the TPSA was that the two-tiered package appears to be aimed at achievement by negotiation between employers and employees; preferably using the industrial tribunals only as a last resort.
From the manner in which the second-tier principle is expressed it would appear that the Commission can only arbitrate 2 percent this year and 2 percent next year. This quite clearly encourages work-place negotiation.
The concern of the TPSA is that the work-place negotiation is not going to be available to its members. He said that principles accompanying the two-tiered system have a large degree of uncertainty - what some people call flexibility.
He submitted that there was some ambiguity in relation to those principles and foreshadowed that if they were to be adopted by this Commission, then some means of determining the Commission's interpretation of several of those principles may be sought.
The TPSA also has some concern with what it perceives to be a restriction within the principles for a maximum of 4 percent to be achieved only through the anomalies procedure.
Because of the alleged ambiguities in the Principles it was suggested that at some stage there should be a conference to sort out such questions.
Ms Crotty for the Tasmanian Teachers' Federation indicated that the TTF's substantive submissions made in the earlier proceedings still stood. She said her organisation and the national body of the Australian Teachers' Federation had grave reservations about the two-tiered system.
Ms Crotty submitted that the Principles adopted by this Commission in July last year were distinctly Tasmanian principles. She said they were given a life of 2 years and they should be allowed to run for that time.
Ms Crotty commented upon the submission of the TTLC and said that their submission indicated that the two-tiered system is modelled on fairness to lower income earners. However she submitted that the Commission would be well aware that members of the Tasmanian Teachers' Federation do not fall into that category and the two-tiered system, in effect, would give them no guarantees of anything other than a $10.00 flat increase.
However, Ms Crotty said the Tasmanian Teachers' Federation's ultimate attitude will depend, to a great extent, upon the outcome of the special unions' conference scheduled for 2 April this year.
The Association of Professional Engineers supported the application of the TTLC but in doing so, Mr Henderson expressed a concern which particularly affects the APEA, and that is the notion of equitable base increases under the anomalies and inequities principle.
Mr Henderson referred to the comments made by the Federal Commission about the acceptability or otherwise of market rate surveys and assessments, where an equitable base might lie.
He pointed out that the Federal decision had foreshadowed the possibility of holding conferences to discuss a number of things, one of which is the method of adjusting paid rates awards, and in particular the role of market surveys. It was suggested that this Commission should hold a similar conference, either as a special conference chaired by the President, or through the auspices of the anomalies conference. Such a mechanism would be designed to address the question of market rate surveys and their effect on Tasmanian Industrial Commission awards, and what awards, be they paid or minimum rates awards, should be affected by such surveys.
Mr Imlach representing the HEF No 1 and No 2 Branches said that both organisations supported the application of the TTLC.
He submitted that the previous wage indexation principles had worked fairly well, but believed that the 4 percent ceiling imposed upon second-tier increases may place impossible stresses upon the system. For that reason it was the wish of the two Branches of the HEF that this Commission continue to look at work value exercises on merit, and where it felt it was appropriate to do so, not limit those cases to a 4 percent maximum.
Concern was expressed by the Secondary Colleges Staff Association about the effect of the two-tiered system on the living standards of state servants. Mr Elliott said that last year with a wage inflation rate of around 10 percent his members only received an approximate 2.3 percent salary increase.
Moreover, in the event that the Minister for Public Administration refused to concede any second-tier increase, his members will receive only $10.00 per week. This would represent less than a 2 percent wage increase for a teacher. A situation would then arise whereby over a three-year period, with inflation running at around 30 percent, teaching staff would receive increases totalling no more than something like 4.1 percent overall.
He said that should that situation be reached, widespread industrial activity was a distinct possibility.
In his opening response, Mr Jarman, representing the Minister for Industrial Relations, dealt with the concern expressed by some unions that there may be disadvantages in seeking to obtain a second-tier increase because of the alleged advance notice having been given by the Government of its intention not to negotiate. Mr Jarman said that to his knowledge there had never been a refusal on the part of the Government to listen to a union wishing to process a claim regarding improvements in pay or conditions for its members.
However, while there is a willingness on the part of the Government to sit down with unions and discuss the merit of any particular claim, Mr Jarman made it clear that there ought to be no expectation that any such discussion would result in a guaranteed 4 percent second-tier increase.
In any case, he argued, the precursor to any discussions had to be that there was a claim before the Commission seeking such an amount, and of course there needed to be a sound basis for any such application.
He informed the Commission that to this point in time the Government had heard nothing from the unions regarding how they might wish to pursue second-tier claims. And if the package adopted by the Federal Commission is similarly adopted by this Commission, then there will need to be a number of principles to be observed in pursuit of such claims.
Mr Jarman pointed out that since 23 September 1983 until now, the Tasmanian Government, regardless of its position at National Wage Case hearings, has accepted decisions taken by the Australian Commission, and has not opposed the adoption of those decisions by this tribunal.
He then explained the position taken by the Tasmanian Government before the National Wage Full bench and made various comments on the National Wage decision; the Wage Fixing Principles'; the state of the Tasmanian economy; and the likely effect of the claims before the Commission. He said that it was evident from submissions put by the ACTU, the Commonwealth Government and other parties present at the National Wage Case, that there was little if any disagreement over the poor economic conditions prevailing in Australia at the present time. He said the Tasmanian Government's submission was then, and still is, that the Australian economy is not healthy. He asserted that all parties to the National Wage case had realized that a wage fixation system which awards automatic wage increases in line with CPI movements, can no longer be accommodated.
He argued that full CPI increases can feed a wage/price spiral that in turn feeds the inflation rate. This destroys our international competitiveness, thereby severely diminishing job opportunities and the level of employment in Tasmania.
The ACTU claim was for 96.7 percent adjustment to wage rates. This was to compensate for full movements in the 8-capitals' consumer price index for the 9 months ended September 1986. However, in order that the centralised wage fixing system did not self-destruct, it put forward a secondary or fall-back proposal. This was outlined in the Conciliation and Arbitration Commission's Decision, Print G6400.
The Commonwealth also put forward a proposal for a package similar to the ACTU's secondary position, differing only in minor detail.
Mr Jarman said the ACTU proposed that wages should be adjusted to take account of living standards and the capacity of the economy.
The Tasmanian Government did not disagree with that general sentiment. However, it submitted that present circumstances demand that the capacity of the economy be determined by reference to an appropriate external benchmark. In this regard Tasmania had suggested that the Federal Commission might usefully have regard for the weighted average inflation rate of Australia's major OECD trading partners in determining the overall ceiling for wage increases.
Notwithstanding a number of changes reflected in the new Wage Fixation Principles, we were urged to adopt these as being appropriate in the circumstances. Bearing in mind our economic predicament, it would be preferable to have a centralised wage-fixing system providing a controlled industrial relations environment.
Mr Jarman said it was considered that it would be totally inappropriate to return to a `law of the jungle' situation that would be likely to set back the recovery of our economy and at the same time create lasting damage.
He said at page 77 of transcript:-
Turning to the question of public interest, Mr Jarman submitted that it would be consistent with the public interest if we were to follow the Federal decision.
Despite its expressed reservations the Tasmanian Government was cognizant of the fact that centralised wage fixation had been designed with the dual concepts of commonality and uniformity in mind.
To distance ourselves from the national wage decision now may prove disastrous for the State's industrial system.
Furthermore, it was necessary to keep in mind that there are people working within this State who are covered by Federal awards.
Those persons will, if unions give the appropriate commitment, receive any benefits flowing from the two-tiered system introduced by the Federal Commission.
Mr Jarman said that to initiate something different in this State could, in the long run, prove inequitable for persons covered by awards of either jurisdiction.
He submitted we should not lose sight of the fact that the centralised system has been designed to overcome inequitable situations. In the Government's view therefore it would be appropriate for the decision of the national wage Bench to be adopted by this tribunal subject to any necessary minor variations of a jurisdictional nature.
Mr Westwood, on behalf of the Minister for Public Administration and public controlling authorities, supported the general submissions of Mr Jarman. He agreed that the national wage package should be adopted by this Commission.
He said its adoption would provide the most practical basis for uniform wage movements between employees covered by Federal awards and awards of this Commission.
However the Minister considered that the claims by the TPSA and the TTF, supported by the Secondary Colleges Staff Society, put at risk any centralised system.
Mr Westwood argued that the notion of full, automatic indexation has been rejected at a national level and submitted that it should also be rejected by this Commission.
Mr Westwood then pointed out that in the draft principles presented by the TTLC, reference was made to the convening of a conference in October this year. He said he did not believe that it would necessarily be appropriate so far as this Commission was concerned. However it might be appropriate if we were to follow a National Wage decision taken following such a conference.
We were informed that a $10.00 per week increase in wage rates for State employees would cost approximately $13 million for a full year.
He said that each 1 percent increase awarded would result in a $6.3 million addition to the wages bill over 12 months.
On this basis the 10 percent claim by the TTF and TPSA would amount to $63 million for a full year. In addition to the obvious impact upon the State purse, there would also be a likely flow-on consequence.
The Council of Advanced Education indicated that it supported continuation of a centralised wage-fixing system. Moreover such a system was essential to the continuation of the industrial harmony we have been able to achieve in Australia in recent years.
Mr Garnham explained that over 60 percent of employees of the council are presently subject to Federal award coverage. He therefore emphasized the importance of the guidelines to be adopted by this Commission not being substantially at variance with those promulgated by the Australian Commission.
In his opening address, Mr Abey submitted that the decision of the Full Bench has the capacity to achieve one of two results. At worst it has the potential to raise labour costs by upwards of 10 percent between now and January next year. Should that occur it will take the Australian economy out backwards.
At best, the new system will provide the necessary flexibility to enable Australia to develop a wage system more in sympathy with economic market forces.
Despite some reservations concerning the generosity of the Federal decision, the TCI did not oppose the claim because it prefers a positive rather than a negative approach to wage fixation.
However, it did not agree with an operative date of 10 March as claimed.
Mr Abey submitted that the advantages of a successful new system will be twofold. Firstly, it will require an absolute and unqualified `no extra claims' commitment from the trade union movement. However he questioned whether that commitment was present, citing as examples a number of factors, including certain demands already being made by particular unions.
He pointed to industrial action that is either taking place or is foreshadowed in the building industry. And he instanced demands that are being made by trade unions seeking guarantees of increases which, if agreed to, would exceed the limits to be established by the National Wage decision.
Mr Abey submitted that the other crucial factor will be the manner in which the second-tier options are dealt with.
He stressed that the 4 percent wage increase across the board is not there simply for the asking. Rather the 4 percent is a ceiling. It is not an entitlement. Furthermore the second tier must be justified in terms of improved efficiency.
The TCI was of the opinion that the community generally must begin to address new concepts which lead to greater efficiency.
Moreover, the manner in which the second tier is developed, whether by agreement or by arbitration, will either make or break the proposed new system.
Mr Abey asserted that it was unlikely that employers would take a `head in the sand' attitude in relation to second-tier increases. He argued that the Principles would enable objective negotiations to take place. These could reduce costs and improve efficiency. The result of exercises of that kind could be recognized in the pay packet in appropriate circumstances.
Mr Abey submitted that the Tasmanian Chamber of Industries opposed any retrospective operation of the $10.00 first-tier increase.
It was the view of the Chamber that the $10.00 increase should apply from the date on which the unions give their commitment to the new system.
In this regard Mr Abey referred us to an approach which had been made by the Confederation of Australian Industry to the President of the Australian Conciliation and Arbitration Commission, seeking a reopening of the National Wage case regarding the question of the operative date.
The evidence before us overwhelmingly supports continuation of a centralised approach to wage fixation including conditions of employment.
Notwithstanding certain fundamental conceptual differences, no organisation - employer, Government, or trade union either in the public or private sectors - wished us to do otherwise than continue with a set of principles of one kind or another.
All organisations represented, other than the TPSA, the TTF and the SCSA, urged the Commission to follow the most recent National Wage case decision of the Australian Commission2, despite the fact that they found certain aspects of that decision somewhat unpalatable.
The Commission has a statutory duty to determine each matter coming before it according to equity, good conscience and the merits of the case, without regard for technicalities or legal form. In addition it is required to have regard for the public interest.
In deciding whether a matter would be consistent with the public interest the Commission shall -
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.
Furthermore, the sheer weight of opinion expressed during proceedings made it clear that most parties to awards genuinely felt that centralisation was a good thing and should continue pro tem.
However, the TPSA and TTF in particular are large organisations whose views on this occasion run somewhat contrary to the rest. Nevertheless we believe the two fundamental reasons for this are that:
The prima facie shift toward protection of the living standards of lower-paid workers, and limiting employees better situated to wage increases phased in over time, is a conscious effort that has been considered to be necessary because of Australia's current economic plight. While it is to be hoped that better times are ahead and that wage increases might become more affordable, the harsh reality is that in the national interest restraint is widely recognised as essential to the overall good.
The measure and incidence of wage increases is undoubtedly a significant factor impacting on the economy and has an effect on the capacity of industry to employ labour. It is therefore incumbent upon us to satisfy ourselves that decisions of this kind are consistent with the public interest.
We note the expressed concern of the TPSA, TTF and SCSA that they may not be given an opportunity to sit down with the Minister for Public Administration to discuss with him in a meaningful way a possible second-tier increase.
We would hope that both public and private employers would at least discuss with an applicant any claim that falls squarely within the revised Principles that we now put in place.
However that may be, the Commission will arbitrate any claim not settled by consent.
Our interpretation of the responses to questions asked during proceedings leads us to conclude that the spirit and intention of the package will be observed by all parties.
In order to ensure that the new Principles are not frustrated without fair trial, we make it clear that we will closely monitor the progress of individual negotiations where the matter is the subject of an application.
We stress however that nothing which we have said should be construed as implying that second-tier increases are there for the asking, or that there can be any automatic expectation of an increase of any kind arising from agreement by an employer to discuss a claim.
Moreover, it is important to stress that the 4 percent referred to in the second-tier adjustment is a ceiling and not in any sense a guaranteed adjustment. Unless the parties clearly understand this they cannot presume to be genuinely committed to the new Principles which they themselves have asked the Commission to introduce in substitution for those Principles that have been observed to date.
In the event that genuine anomalies or inequities arise they will be dealt with through the procedure already established and restated in the new Principles.
While we have been asked to give some guidance to the parties, we have decided that it could be pre-emptive were we to do so at this time. However, it would be consistent with our decision if the various interest groups were to adopt a responsible and objective approach to day-to-day claims that are consistent with the thrust of the Principles. This may be trite comment, but none the less what we believe should happen is fundamental to that essential economic restraint and good industrial relations practice.
There should also be a demonstrable and genuine desire to improve productivity and efficiency in all spheres of work. This of course includes both the public and private sectors.
Genuine improvements freely negotiated and identified may be rewarded within the parameters of the second-tier limitation. But we caution employer or employee organisations against contrived arrangements.
We cannot over-emphasize that the Commission expects all parties to apply themselves resolutely to resolving amicably problems that arise before referring those issues to the Commission for ratification or arbitration.
Realistically it must be accepted that the workload of all concerned will undoubtedly increase in the foreseeable future.
This will necessitate considerable patience and application by all if disaffection and disputation is to be avoided or minimised.
For its part the Commission will endeavour to respond quickly to applications requiring conciliation or direction in order to assist those who, having embarked upon genuine negotiations, in accordance with the Principles, are at a point where the assistance of a third party is desirable.
But we repeat that the Commission will closely monitor all matters brought to its attention and will guard against contrived or pseudo arrangements that do not meet the stringent tests which each member of the Commission will apply to all applications with which he is required to deal.
In deciding to accede to the TTLC application we will increase all adult wage rates contained in all awards of this Commission by $10.00 per week, or $520 per annum where expressed as yearly salaries, with proportionate increases for juniors.
We also recommend that all agreements containing wage rates be similarly adjusted as a first-tier increase.
The minimum wage, where appropriate, will also be increased by $10.00 per week or $520 per annum.
Allowances will not be adjusted except in accordance with the criteria established by the Australian Commission.
This means that mutatis mutandis we will adopt the new Principles laid down by the Australian Commission in Print G6800.
The operative date of our decision shall be the first full pay period commencing on or after 10 march 1987.
It follows from the foregoing that we will abandon the current package of Principles and replace them with those requested by the TTLC, the TCI and the Government. However, in doing so we have decided that:
In this regard, the President, following the giving of commitments, will confer with core members of the Anomalies Conference to determine a number of procedures.
As with restructuring and efficiency exercises affecting employers who, because they are unregistered, are unable to access this Commission in their own right, the President will seek discussions with the peak anomalies conference members with a view to determining procedures to identify genuine incapacity-to-pay applications flowing from variations to common-rule awards. Such applications may flow from inclusion of supplementary payments as well as efficiency exercises negotiated on an industry as distinct from an enterprise basis.
The President will also discuss the form of restructuring to be approved in the appropriate circumstances. However we say now that generally, so far as State employees are concerned, restructuring should be on a group-by-group (eg Prison Officers) or agency-by-agency basis.
We were also asked by the APEA to indicate our intention regarding the use of market surveys to adjust paid rates awards. Insofar as such "surveys" may involve the doctrine of comparative wage justice, we say exercises of that kind will not be approved. There is ample scope within the new Principles for bona fide wage improvements to be effected where justified.
But the overriding consideration must be that these Principles are intended to contain a wage blow out rather than facilitate such an occurrence. If that situation is made clear at the outset, unreal expectations of willy-nilly wage increases will be avoided.
We say now that we would expect all private and public employers at all levels of authority to play their part in making this fragile package viable. Consent arrangements outside of the Principles will not be countenanced in either sector. We would hope that the Commissioner for Review will likewise have regard for the Principles we have introduced when dealing with matters coming before him by way of appeal, although of course we do not pretend to have any jurisdiction over his area of activity.
Without co-operation there can be no point in tribunals attempting to regulate the incidence of wages and conditions in times of serious economic adversity. The system will survive only as long as those participating want it to.
Finally we advise that we will again follow the established procedure of taking individual commitments from individual employee organisations.
For this purpose we will conduct a hearing at 10.30am on Thursday, 7 May, 1987, at Hearing Room 1, Lyndhurst.
Those giving the necessary commitment will need to be authorised by the organisation on whose behalf it is to be given and submit it in writing.
The form of commitment is contained in the revised Principles of this Commission to be found in Attachment "A" hereof.
TASMANIAN INDUSTRIAL COMMISSION
The principles have been developed in the context of general agreement as to the need for restraint and sustained efforts on the part of all concerned - employers, employees and their unions, governments and tribunals - to address the serious economic problems facing Australia. In particular, the package has been introduced to ensure in the current economic circumstances that changes in labour costs are closely monitored; opportunities are provided to increase efficiency and productivity at the industry and enterprise level; and protection is accorded to lower paid workers.
The principles provide that movements in wages and salaries and improvements in conditions - whether they occur in the public sector or private sector, whether they be award or overaward, whether they result from consent or arbitration - must fall within the limits set out in this package.
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 Commission will also guard against any principle, subject to the second tier ceiling, being applied in such a way as to become a vehicle for general improvement in wages and conditions.
1. WAGE ADJUSTMENTS
(a) There will be a national wage increase of $10-00 per week in award wages and salaries to operate from the first pay period to commence on or after March 10th, 1987. Junior rates expressed in flat money amounts in awards will be increased proportionately.
(b) The Commission will convene a conference of the parties to this case in October 1987 to consider whether a further increase in the first tier should be awarded during the period of operation of the package. Such an increase, if any, shall not exceed the equivalent of a 1.5% increase in wages and salaries.
(a) No improvements in pay or conditions under the second tier principle will result in an increase in costs exceeding 4% of wages and salaries.
(b) Subject to agreement between the parties concerned, and processing of such agreement in accordance with appropriate principle, increases not exceeding 4% ceiling may be approved from a date to be fixed by the Commission.
(c) Failing agreement between the parties concerned, the Commission will arbitrate in accordance with the relevant principle or principles, and in, such cases, the Commission will award no more than 2% to operate from a date no earlier than 1 September, 1987 and no more than a further 2% to operate from a date no earlier than 1 July, 1988.
(d) The Commission will not award retrospectivity in relation to any second tier increases.
Any claim for improvements in pay and conditions must be processed in accordance with these principles. No adjustment will be approved by the Commission unless a union concerned in an award gives an undertaking that for the period of operation of the package it will not pursue any extra claims, award or overaward, except in compliance with the principles. Where this no extra claim commitment is given it shall be inserted into the appropriate award in the following terms:
3. RESTRUCTURING AND EFFICIENCY
(a) Increases in rates of pay or improvements in conditions of employment may be justified as a result of measures implemented to improve efficiency in both the public and private sectors.
(i) Changes to work practices and changes to management practices must be accepted as an integral part of an exercise conducted in accordance with this principle.
(ii) Other initiatives may include action to reduce demarcation barriers, advance multi-skilling, training and re-training and broad-banding.
(iii) Changes to working patterns may be necessary.
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.
(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 January 1st, 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 overclassifications of jobs.
(g) Any changes in the nature of the work, skill and responsibility required or the conditions under which the work is performed taken into account in assessing an increase under this principle shall not be taken into account in any claim under the restructuring and efficiency principle.
5. SUPPLEMENTARY PAYMENTS
For the purposes of this principle, a supplementary payment is a separate amount in a minimum rates award which is in addition to the minimum rate and which together with the minimum rate becomes the award rate below which no employee may be paid.
Whether by consent or arbitration, a supplementary payment may be introduced into a minimum rates award or an existing supplementary payment may be increased only in accordance with the following criteria:
(a) The prime consideration will be the level of actual payments to the employees covered by the award under review. Where relevant the level of supplementary payments made to similar classifications of employees in other minimum rates awards may also be taken into account.
(b) The relevant union or unions must give appropriate commitments regarding the absorption of overaward payments up to the level of the supplementary payment. Supplementary payments do not justify increases to employees already receiving in excess of the minimum rate plus the supplementary payment.
(c) There must be a clear understanding and acceptance by the unions concerned in the award that the introduction or adjustment of supplementary payments may alter relativities of actual rates within the award and with other awards.
(d) Where appropriate, supplementary payments may vary between classifications and geographic areas.
(e) The date of operation of any supplementary payment will be determined by the Commission.
(f) The introduction or adjustment of supplementary payments will be subject to the second tier ceiling. Existing supplementary payments may be adjusted from time to time according to increases in the first tier, except where a flat money amount has been awarded in a National Wage Case.
Allowances may be adjusted or awarded only in accordance with this principle and the anomalies and inequities principle. Service increments may be adjusted or awarded only in accordance with (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 increases under the first tier, except where a flat money amount has been awarded, provided that shift allowances expressed in awards as money amounts may be adjusted.
(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 the work value changes principle or the restructuring and efficiency principle and will be subject to the second tier ceiling.
(a) Agreements may be certified or consent awards 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; and
(ii) do not involve the equivalent of a wage increase in excess of 3% of ordinary time earnings of employees.
8. STANDARD HOURS
9. CONDITIONS OF EMPLOYMENT
Except for the flow-on of test case provisions, applications for changes in conditions other than those provided elsewhere in the principles will be considered in the light of their cost implications both directly and through flow-on and subject to the second tier ceiling.
10. ANOMALIES AND INEQUITIES
(i) In the resolution of anomalies, the overriding concept is that the Commission must be satisfied that any claim under this principle will not be a vehicle for general improvements in pay and conditions and that the circumstances warranting the improvement are of a special and isolated nature.
(ii) Decisions which are inconsistent with the principles of the Commission applicable at the relevant time should not be followed.
(iii) The doctrines of comparative wage justice and maintenance of relativities should not be relied upon to establish an anomaly because there is nothing rare or special in such situations and because resort to these concepts would destroy the overriding concept of this principle.
(iv) The only exceptions to (iii) are that catch-up for the metal industry standard and adjustment of paid rates awards to establish an equitable base may be processed as anomalies provided such claims are lodged before 1st September, 1987.
(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 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 consideration 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.
(i) An anomaly or inequity which is sought to be rectified must be brought to the Anomalies Conference by the Tasmanian Trades and Labor Council.
(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.
11. 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 the first awards and extensions to existing awards principle 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.
12. FIRST AWARDS & EXTENSIONS TO 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.
(c) In awards regulating the employment of workers previously covered by a Federal award or determination, existing rates and conditions prima facie will be the proper award rates and conditions.
(d) Where a first award is made it shall contain a minimum rate for each classification of employee covered by it. Where the total rate determined for each classification in accordance with (a) and (c) exceeds the appropriate minimum rate for that classification, the excess amount shall be prescribed as a supplementary payment. For the purposes of this paragraph, the appropriate minimum rate will be assessed by comparison with similar classifications in other minimum rates awards.
(e) The application of this principle is subject to the second tier ceiling.
13. ECONOMIC INCAPACITY
Any organisation with a registered interest in an award may apply to reduce and/or postpone the application of any 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.