Before the Industrial Relations Commission of New South Wales

Matter No. IRC 3025 of 2001

STATE WAGE CASE 2001

Material Filed by the

Labor Council of New South Wales

16 May 2001

Contents

1) Appearance

2) Proposed Orders and Principles

· Action sought to be taken by the Industrial Relations Commission of NSW

· Alterations to the State Wage Case Principles of 2000

· Proposed Orders and new Principles for State Wage Case 2001

3) Contentions

(1) Introduction

(2) The Australian Industrial Relations Commission's Decision - Safety Net Review Wages May 2001 - Major Findings

(3) General Contentions

(4) The Arbitrated Safety Net Adjustments and Economic Considerations

(5) The Arbitrated Safety Net Adjustments and the Low Paid

(6) Application of State Wage Case Decisions

(7) Award Review Classification Rate

(8) Allowances

(9) Other Matters

4) References

1) APPEARANCE

These submissions are made on behalf of the Labor Council of New South Wales.

2) PROPOSED ORDERS & PRINCIPLES

Industrial Relations Commission of New South Wales

STATE WAGE CASE - MAY 2001

Action Sought to be Taken

(1) The Labor Council of New South Wales proposes that the Commission make those orders which are necessary to flow on the wages component of the decision of the Australian Industrial Relations Commission in the Safety Net Review Wages May 2001 [PR002001], consistent with the terms of Part 3 of Chapter 2 of the Industrial Relations Act 1996.

(2) The State Wage Case Principles, as determined in the State Wage Case May 2000, should be retained with some minor changes being those necessary to apply the wage increases awarded in the National Decision and to introduce a modified set of words in Principle 8 to allow for the earlier application of the State Wages Case adjustments either by consent of the parties or by application of the Special Case Principle when dealing with awards which are lagging behind.
Industrial Relations Commission of New South Wales

STATE WAGE CASE - MAY 2001

Amendments the State Wage Case Principles

The Labor Council of New South Wales proposes that the Commission make the following specific amendments to the Principles set down as a part of the State Wage Case May 2000.

(a) in relation to the heading, refer to 'State Wage Case 2001' (and not 'State Wage Case 2000');

(b) in relation to Principle 2, amend paragraph (f) to refer to 'State Wage Case 2001' (and not 'State Wage Case 2000');

(i) insert 3%, in lieu of 3.1%

(ii) refer to 'State Wage Case 2001' (and not 'State Wage Case 2000');

(d) in relation to Principle 8

(i) amend the preamble to refer to 'State Wage Case 2001' (and not 'State Wage Case 2000');

(ii) amend the preamble to delete the words '$15 per week' and replace them with the words '$13.00 per week for wages up to $490.00 per week, $15.00 per week for wages over $490.00 per week and below $590.00 per week and $17.00 per week for wages above $590.00 per week';

(iii) delete paragraph (b) and replace with the words 'That at least 12 months have elapsed since the rates in the award were increased in accordance with previous State Wage Case decisions, except:

(i) where the increases have been phased-in pursuant to paragraph (g); or

(ii) in respect of awards where the application to vary the wage rates to reflect earlier State Wage Case increases is by consent and does not result in an increase in the wage rates actually paid to employees or increase the wage costs for any employer; or

(iii) where an application has been dealt with by way of a special case under Principle 10;

in which case any applicable 12 months delay between variations may be waived.';

(iv) amend paragraph (d) to delete the words 'State Wage Cases of June 1998 and 1999' and replace with the words 'State Wage Cases of June 1999 and May 2000'

(v) amend paragraph (g) to delete the words 'State Wage Case 2000' and replace with the words 'State Wage Case 2001';

(d) in relation to Principle 9, insert '$413.40' in lieu of '$400.40';

Industrial Relations Commission of New South Wales

STATE WAGE CASE - MAY 2001

IRC 3025 of 2001 - Summons to show cause - Commission on its own initiative pursuant to Part 3 of Chapter 2 of the Industrial Relations Act, 1996.

Coram: Wright, J. President and Others

Orders

1. Pursuant to Section 50 of the Industrial Relations Act 1996, the Full Bench of the Industrial Relations Commission of New South Wales orders, for the purposes of awards and other matters under the Act, the adoption, partly and with modification as contained in this judgment, of the principles and provisions of the National decision of 2 May 2001.

2. Pursuant to order 1, the Commission orders that the Commission's Wage Fixing principles shall be as set out in Annexure A.

3. Pursuant to Section 52 of the Industrial Relations Act 1996, the Commission orders that awards which do not contain wage increases awarded since 30 May 2000, other than safety net, State Wage Case, and minimum rates adjustments, may be varied in accordance with the Commission's Wage Fixing Principles upon application to include a State Wage Case adjustment of the following amounts:

(i) a $13.00 per week wage increase for those earning award rates up to and including $490.00 per week;

(ii) a $15.00 per week wage increase for those earning award rates above $490.00 per week; and

(iii) a $17.00 per week wage increase for those earning award rates above $590.00 per week.

At the hearing of any such application, the Commission may, in its discretion, award the whole or part of the amount referred to in the Principles, or determine that no amount should be awarded.

4. Pursuant to Section 52 of the Act, the Commission orders the following may be increased by 3% upon application in accordance with the Commission's Wage Fixing Principles:

i) existing allowances which relate to work or conditions which have not changed, including shift allowances expressed as monetary amounts and service increments; and

ii) junior rates expressed as monetary amounts.

Counterpart State awards should be adjusted by the same amount as their Federal counterpart.

5. This order shall operate on and from today until further order of the Commission.

Industrial Relations Commission of New South Wales

STATE WAGE CASE - MAY 2001

Proposed Wage Fixing Principles

1 Preamble

These principles have been developed with the aim of providing for their period of operation, a framework under which all concerned - employers, workers and their unions, governments and tribunals - can co-operate to ensure that measures to meet the competitive requirements of enterprises and industry are positively examined and implemented in the interests of management, workers and, ultimately, Australian and New South Wales society.

In exercising its powers and obligations under the Industrial Relations Act 1996 ('the Act'), the Commission will continue to apply structural efficiency considerations, including minimum rates adjustments provisions.

Movements in wages and conditions must fall within the following principles.

2 When an Award may be Varied or Another Award Made Without the Claim Requiring Consideration as a Special Case

In the following circumstances an award may, on application, be varied or another award made without the application requiring consideration as a special case:

(a) to include previous State Wage Case increases in accordance with Principle 3;

(b) to incorporate test case standards in accordance with Principle 4;

(d) to adjust wages pursuant to work value changes in accordance with Principle 6;

(e) where the application is consented to by the parties;

(f) to adjust wages for the State Wage Case 2001 in accordance with Principle 8; and

(g) to approve of an enterprise arrangement reached in accordance with Principle 11.

(h) to adjust wages pursuant to an application claiming that work has been undervalued on a gender basis in accordance with Principal 15.

3 Previous State Wage Case Increases

Applications for increases available under previous State Wage Case decisions will be determined in accordance with the relevant principles contained in those decisions.

4 Test Case Standards

Test case standards established and/or revised by a Full Bench of the Commission may be incorporated into an award in accordance with the Act. Where disagreement exists as to whether a claim involves a test case standard, those asserting that it does must make an application for a special case.

5 Adjustment of Allowances and Service Increments

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

(b) Existing allowances which relate to work or conditions which have not changed, including shift allowances expressed as monetary amounts and service increments, may be increased by 3% per cent for the State Wage Case 2001 adjustment.

Counterpart State awards should be adjusted by the same amount as their federal counterpart.

(c) 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 of these Principles.

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

(e) Where changes in the work have occurred or new work and conditions have arisen, the question of a new allowance, if any, will be determined in accordance with the relevant principles of these principles. The relevant principles in this context may be Work Value Changes or First Award and Extension to an Existing Award.

(f) New service increments may only be awarded to compensate for changes in the work and/or conditions and will be determined in accordance with the relevant provisions of the Work Value Changes principle of these Principles.

6 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 the work should constitute such a significant net addition to work requirements as to warrant the creation of a new classification or upgrading to a higher classification.

In addition to meeting this test a party making a work value application will need to justify any change to wage relativities that might result not only within the relevant internal award structure but also against external classifications to which that structure is related. There must be no likelihood of wage leapfrogging arising out of changes in relative position.

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

(b) In applying the Work Value Changes principle, the Commission will have regard to the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which work is performed.

(c) 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.

(d) The time from which work value changes in an award should be measured is the date of operation of the second structural efficiency adjustment allowable under the State Wage Case - August 1989.

(e) Care should be exercised to ensure that changes which were or should have been taken into account in any previous work value adjustments or in a structural efficiency exercise are not included in any work evaluation under this Principle.

(f) Where the tests specified in (a) are met, an assessment will have to be made as to how that alteration should be measured in money terms. Such assessment will 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.

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

(h) The Commission will guard against contrived classifications and over-classification of jobs.

(i) 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 any other principle of these Principles, will not be taken into account under this Principle.

7 Standard Hours

In approving any application to reduce the standard hours to 38 per week, the Commission will satisfy itself that the cost impact is minimised. Claims for reduction in standard weekly hours below 38 will not be allowed.

8 State Wage Case Adjustments

In accordance with the State Wage Case 2001 decision all awards may, on application, be varied to include a State Wage Case adjustment of $13.00 per week for wages up to $490.00 per week, $15.00 per week for wages over $490.00 per week and below $590.00 per week and $17.00 per week for wages above $590.00 per week subject to the following:

(a) The operative date will be no earlier than the date of the variation to the award.

(b) That at least 12 months have elapsed since the rates in the award were increased in accordance with previous State Wage Case decisions, except:

(di) where the increases have been phased-in pursuant to paragraph (g); or

(dii) in respect of awards where the application to vary the wage rates to reflect earlier State Wage Case increases is by consent and does not result in an increase in the wage rates actually paid to employees or increase the wage costs for any employer; or

(diii) where an application has been dealt with by way of a special case under Principle 10;

in which case any applicable 12 months delay between variations may be waived.

(c) At the time when the award is to be varied to insert the State Wage Case adjustment (or a proportionate amount in the cases of part-time and casual employees, juniors, trainees, apprentices, employees on a probationary rate, employees on a supported wage or with permits under s.125 of the Act), each union party to the award will be required to give a specific commitment as to the absorption of the increase. In particular, the union commitments will involve the acceptance of absorption of the adjustment to the extent of:

(i) any equivalent overaward payments, and/or

(ii) award wage increases since 29 May 1991 other than safety net, State Wage Case, and minimum rates adjustments.

(d) The following clause must be inserted in the award:

'The rates of pay in this award include the adjustments payable under the State Wage Cases of June 1999 and May 2000. These adjustments may be offset against:

(a) any equivalent overaward payments, and/or

(b) award wage increases since 29 May 1991 other than safety net, State Wage Case, and minimum rates adjustments.'

The above clause will replace the offsetting clause inserted into awards pursuant to the Principles determined in the State Wage Case - June 2000 judgment.

(e) By consent of all parties to an award, where the minimum rates adjustment has been completed, award rates may be expressed as hourly rates as well as weekly rates. In the absence of consent, a claim that award rates be so expressed may be determined by arbitration.

(f) The State Wage Case adjustment will only be available where the rates in the award have not been increased, other than by safety net or State Wage Case adjustments, or as a result of the application of the Minimum Rates Adjustment principle, since 29 May 1991.

(g) Increases arising from the State Wage Case 2001 and from previous State Wage Cases may be phased-in upon application and where circumstances justify it.

(h) In the absence of consent in respect of phasing-in, an application will be determined by the Commission.

9 Award Review Classification Rate

The Award Review Classification Rate of $413.40 shall be the rate below which no full-time adult employee (excluding trainees, apprentices and employees on a supported wage or on a probationary rate) should be paid under the relevant award.

Where a classification in an award is below the Award Review Classification Rate the following process will apply on application:

(a) The award will be listed for a mention at which the parties will report as to:

(i) how the Award Review Classification Rate will be achieved, or

(ii) whether the award is obsolete.

The Commission may direct the parties to confer in order to set a program for an updating of the award to reflect the Award Review Classification Rate.

(b) If the parties to the award do not appear at this mention, the Commission shall request the parties to the award to show cause why the award should not be considered obsolete, and rescinded under s.17(3) of the Act.

(c) Where no agreement is reached with respect to (a) above, the Commission shall relist the matter in order to conciliate the issues in dispute.

(d) If the attempt at conciliation is unsuccessful the Commission shall arbitrate any outstanding issue.

10 Special Case

Except for the flow on of test case provisions, any claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the principles, will be processed as a special case before a Full Bench of the Commission, unless otherwise allocated by the President.

This principle does not apply to applications for awards consented to by the parties, which will be dealt with in the terms of the Act, or to enterprise arrangements, which will be dealt with in accordance with the Enterprise Arrangements principle.

11 Enterprise Arrangements

(a) The Commission may approve of enterprise arrangements reached in accordance with this principle and the provisions of the Act.

(b) Industrial unions of employees and industrial unions of employers, or industrial unions of employees and employers, or employees and employers may negotiate enterprise arrangements which, subject to the following provisions, shall prevail over the provision of any award or order of the Commission that deals with the same matters in so far as they purport to apply to parties bound by the arrangements, provided that where the arrangement is between employees and an employer a majority of employees affected by the arrangement genuinely agree.

(c) An enterprise arrangement shall be an agreed arrangement for an enterprise, or discrete section of an enterprise, being a business, undertaking or project, involving parties set out in paragraph (b).

(d) Enterprise arrangements shall be for a fixed term and there shall be no further adjustments of wages or other conditions of employment during this term other than where contained in the arrangement itself. Subject to the terms of the arrangement, however, such arrangement shall continue in force until varied or rescinded in accordance with the Act.

(e) For the purposes of seeking the approval of the Commission, and in accordance with the provisions of the Act, a party shall file with the Industrial Registrar an application to the Commission to either:

(i) vary an award in accordance with the Act; or

(ii) make a new award in accordance with the Act.

(f) On a hearing for the approval of an enterprise arrangement, the Commission will consider in addition to the industrial merits of the case under the State Wage Case principles:

(i) ensuring the arrangement does not involve a reduction in ordinary time earnings and does not depart from Commission standards of hours of work, annual leave with pay or long service leave with pay; and

(ii) whether the proposed award or variation is consistent with the continuing implementation at enterprise level of structural efficiency considerations.

(g) The operative date for an enterprise arrangement shall be no earlier than the date of approval by the Commission, except that the Commission may approve an earlier operative date to achieve consistency with the operative date of an enterprise arrangement which has earlier been approved by the Australian Industrial Relations Commission.

(h) Where parties to an enterprise arrangement include employees covered by a federal award, an agreement covering those employees may be submitted to the federal tribunal for approval.

(i) The Commission is available to assist the parties to negotiations for an enterprise arrangement by means of conciliation and, in accordance with these principles and the Act, by means of arbitration. If any party to such negotiations seeks arbitration of a matter relating to an enterprise arrangement such arbitration shall be as a last resort.

(j) Enterprise arrangements entered into directly between employees and employers shall be processed as follows, subject to the Commission being satisfied in a particular case that departure from these requirements is justified:

(i) All employees will be provided with the current prescriptions (eg award, industrial agreement or enterprise agreement) that apply at the place of work.

(ii) The arrangement shall be committed to writing and signed by the employer, or the employer's duly authorised representative, with whom agreement was reached.

(iii) Before any arrangement is signed and processed in accordance with this principle, details of such arrangement shall be forwarded in writing to the union or unions with members in that enterprise affected by the changes and the employer association, if any, of which the employer is a member.

(iv) A union or employer association may, within 14 days thereof, notify the employer in writing of any objection to the proposed arrangements, including the reasons for such objection and in such circumstances the parties are to confer in an effort to resolve the issue.

(v) Where an arrangement is objected to by a union or employer association and the objection is not resolved, an employer may make application to the Commission to vary an award or create a new award to give effect to the arrangement.

(vi) A union and/or employer association shall not unreasonably withhold consent to the arrangements agreed upon by the parties.

(vii) If no party objects to the arrangement, then a consent application shall be made to the Commission to have the matter approved in accordance with paragraph (e) of this principle.

(viii) Such arrangement once approved shall be displayed on a notice board at each enterprise affected.

12 Superannuation

(a) An application to make or to vary a minimum rates or paid rates award which:

(i) seeks a greater quantum of employer contributions than required by the Superannuation Guarantee (Administration) Act 1992 (Cth) ('the SGA Act'); or

(ii) seeks employer contributions to be paid in respect of a category of employee in respect of which the SGA Act does not require contributions to be paid;

shall be referred to the Full Commission for consideration as a special case, unless otherwise allocated by the President. Exceptions to this process are applications which fall within the Enterprise Arrangements and First Awards and Extensions to Existing Awards principles.

(b) If an application is made that does not fall within paragraph (a), the Commission will, subject to paragraph (c):

(i) make or vary an award by inserting a clause stating:

'Superannuation Legislation - The subject of superannuation is dealt with extensively by federal legislation including the Superannuation Guarantee (Administration) Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth), the Superannuation (Resolution of Complaints) Act 1993 (Cth), and s.124 of the Industrial Relations Act 1996. This legislation, as varied from time to time, governs the superannuation rights and obligations of the parties'.

(ii) if appropriate, ensure that the award contains specification of an employee's earnings (eg 'ordinary time earnings') which, for the purposes of the SGA Act, will operate to provide a 'notional earnings base', and

(iii) if the award is to continue to prescribe a 'flat dollar' amount of employer contribution, ensure that appropriate amounts are inserted so as to give effect to the levels of contribution required from time to time under the SGA Act.

(i) by consent; or

(ii) in the absence of consent, by arbitration, provided the Commission is satisfied that there are particular factors warranting the awarding of different provisions. Such factors may include:

(A) the wishes of the parties;

(B) the nature of the particular industry or enterprise;

(D) relevant decisions of the Commission establishing superannuation principles; and

(E) relevant statutory provisions.

(d) Before any different provisions are awarded under paragraph (c), either by consent or arbitration, the Commission must be satisfied, on expert evidence, that the award to be made will not contain requirements that would result in an employer not meeting the requirements imposed by the SGA Act.

(e) Subject to s.124 of the Act, any specification of a fund will carry with it the obligation for an employer to pay contributions at such intervals as are required by the fund.

(f) In determining applications as to specification of fund, the Commission will, as appropriate:

(i) ensure that any fund specified by it is one into which payment will meet the employer's obligations under the SGA Act;

(ii) have regard to the Superannuation Industry (Supervision) Act 1993 (Cth) ('the Supervision Act') which provides for the prudent management of certain superannuation funds and for their supervision by the Insurance and Superannuation Commissioner. In particular, the requirement with respect to equal representation of employers and members on what are called 'standard employer-sponsored funds' (Pt 9 of the Supervision Act) should be noted;

(iii) have regard to previous decisions of the Commission with respect to the specification of a fund or funds; and

(iv) have regard to relevant statutory provisions.

(g) Due to the variety of existing award superannuation provisions and the impact and complexity of the SGA Act, all applications to the Commission may not be capable of being dealt with in accordance with the approach set out above. In any such case it may be appropriate for the application to be dealt with as a special case.

13 First Award and Extension to an Existing Award

(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) Where a first award (other than a paid rates award) is made it may contain a minimum rate for each classification of employees covered by it. The total minimum rate determined for each classification may be expressed as a minimum classification rate and a supplementary payment which bear a proper relationship to the rates for relevant classifications in other minimum rates awards.

14 Economic incapacity

Any employer or group of employers bound by an award may apply to, temporarily or otherwise, reduce, postpone and/or phase in 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 vigorously tested. Significant unemployment or other serious consequences for the employees and employers concerned are significant factors to be taken into account in assessing the merit of any application.

Such an application shall be processed according to the Special Case principle.

Any decision to temporarily reduce or postpone an increase will be subject to a further review, the date of which will be determined by the Commission at the time it decides any application under this principle.

15 Equal Remuneration and Other Conditions

(a) Claims may be made in accordance with the requirements of this principal for an alteration in wage rates or other conditions of employment on the basis that the work is performed have been undervalued on a gender basis.

(b) The assessment of the work, skill and responsibility required under this principal is to be approached on a gender neutral basis and in the absence of assumption based on gender.

(c) Where the undervaluation is sought to be demonstrated by reference to any comparator awards or classifications, the assessment is not to have regard to factors incorporated in the rates of such other awards which do not reflect the value of work, such as labour market attraction or retention rates or productivity factors.

(d) The application of any formula, which is inconsistent with proper consideration of the value of the work performed, is inappropriate to the implementation of this principal.

(e) The assessment of wage rates and other conditions of employment under this principal is to have regard to the history of the award concerned.

(f) Any change in wage relativities which may result from any adjustments under this principals, not only within the award in question but also against external classifications to which the award structure is related, must occur in such a way as to ensure there is no likelihood of wage leapfrogging arising out of changes in relative positions.

(g) In applying this principal, the Commission will ensure that any alternation to wage relativities is based upon the work, skill and responsibility required, including the conditions under which the work is performed.

(h) Where the requirements of this principal have been satisfied, an assessment shall be made as to how the undervaluation should be addressed in money terms or by other changes in conditions of employment, such as reclassification of the work, establishment of new career paths or changes in incremental scales. Such assessments will reflect the wages and conditions of employment previously fixed for the work and the nature and extend of the undervaluation established.

(i) Any changes made to the award as the result of this assessment may be phased in and any increase in wages may be absorbed in individual employees' overaward payments.

(j) Care should be taken to ensure that work, skill and responsibility which have been taken into account in any previous work value adjustments or structural efficiency exercises are not again considered under this principal, except to the extend of any undervaluation established.

(k) Where undervaluation is established only in respect of some persons covered by a particular classification, the undervaluation may be addressed by the creation of a new classification and not by increasing the rates for the classification as a whole.

(l) The expression 'the conditions under which the work is performed' has the same meaning as in Principal 6, Work Value Change.

(m) The Commission will guard against contrived classification and over classification of jobs. It will also consider:

(i) the state of the economy of New South Wales and the likely effect of its decision on the economy;

(ii) the likely effect of its decision on the industry and/or the employers affected by the decision; and

(iii) the likely effect of its decision on employment.

(n) Claims under this principal will be processed before a Full Bench of the Commission, unless otherwise allocated by the President

(o) Equal renumeration shall not be achieved by reducising the current wage rates or other conditions of employment.

16 Duration

These principles will operate until further order of the Commission.

3. CONTENTIONS

1.0 Introduction

1.1 These proceedings are brought under Part 3, Chapter 2 of the Industrial Relations Act, 1996, with the Commission acting on its initiative pursuant to Section 50(2).

1.2 Section 50 requires a Full Bench of the Commission "as soon as practicable after the making of a National Decision" to give consideration to such a decision and "unless satisfied that it is not consistent with the objects of the Act or that there are other good reasons for not doing so, must adopt the principles or provisions of the National Decision".

1.3 The Safety Net Review Wages May 2001 [PR002001] of the Australian Industrial Relations Commission is a National Decision comprehended by Section 48 and actionable by the Commission under Section 50.

1.4 These proceedings should be considered in the light of previous State Wage Case decisions particularly those of August 1997, June 1998, June 1999 and May 2000.

1.5 We note that State Wage Case principles established in May 2000 have subsequently been amended to incorporate a new Equal Remuneration Principal.

1.6 The Labor Council submits that the wage increases awarded in the National Decision should be adopted in New South Wales, however we assert our disappointment at the level of the wage increases awarded.

In doing so the Labor Council foreshadows it's intention to pursue a Secure Employment Test Case which is designed to assist low paid workers move out of casual and contract work to more regular and secure employment.

2.0 The Australian Commission's Decision - Safety Net Review Wage May 2001 - Major Findings

2.1 A Full Bench of the Australian Industrial Relations Commission (Australian Commission) handed down its decision in the Safety Net Review Wages May 2001 on 2 May 2001 in [PR002001].

2.2 In accordance with the Workplace Relations Act 1996, the Australian Commission's task was to balance two potentially conflicting imperatives:

(i) ensuring Safety Net Adjustments do not unfavorably impact on employment, inflation and productivity; and

(ii) to have regard to the needs of low paid workers and the need to provide fair minimum standards.

2.3 The Australian Commission endorsed very moderate safety net adjustments indicating that such adjustments were justified as it would have a limited adverse impact on wage costs and the economy generally, but would also avoid the compression of relativities between classifications.

2.4 Flat increases were awarded as follows:

(i) a $13.00 per week increase in award rates up to and including $490.00 per week;

(ii) a $15.00 per week increase in award rates above $ 490.00 per week and up to and including $590.00 per week;

(iii) a $17.00 per week increase in award rates above $590.00 per week.

2.5 Safety Net Adjustments should only be available to those dependent on the award system and increases should be absorbed into over-award payments and payments under agreements and residual component of converted paid rates awards.

2.6 Allowances and service increments may be adjusted by the Safety Net Adjustment.

2.7 The Federal minimum wage would be adjusted by $13.00 to $413.40.

2.8 A slightly modified "Statement of Principles" was approved which incorporated the new wage increases and which allows for the May 2001 Safety Net increases to apply within 12 months of the last Safety Net increase if there is consent to do so by the parties, and where such increases will not result in an increase in wage rates actually paid to employees or increase the wage costs to employers.

3.0 Labor Council's General Contentions in the relation to the Australian Industrial Relations Commission Safety Net Review Wages May 2001

3.1 The Labor Council maintains its view that because of the different legislative schemes in the Commonwealth and New South Wales it is open for the Commission, as a matter of jurisdiction and discretion to award different Safety Net Adjustments in this case and in future cases, and to establish a different set of Wage Fixing Principles than that of the Federal Commission (see sub-sections 50(3) and 50(4) of the Industrial Relations Act 1996).

The Commission has supported this view in the past. (State Wage Case decision- August 1997 see 73 IR 200, 220).

3.2 The Labor Council contends that on this occasion the Australian Commission has in it's decision given more weight to economic considerations than to adequately compensate the needs of low paid workers with respect to the cost of living and the impact of the G.S.T.

3.3 The Labor Council submits, that the Commission should make available the Safety Net Adjustments awarded by the Australian Commission in the Safety Net Review Wages May 2001 [PR002001].

3.3 The State Wage Case Principles should continue an Award Review Classification Rate below which no full time adult employee should be paid; such rate to be adjusted to $413.40.

3.4 In accordance with past practice in New South Wales, allowances which relate to work or conditions, including shift allowances and service increments, should be increased to reflect the safety net adjustment; such increase to be 3%.

3.5 Pursuant to Section 50(1) of the Industrial Relations Act 1996, the Labor Council contends that, awarding the Safety Net Adjustments available from the Safety Net Review Wages May 2001 [PR002001] would be consistent with the objects of the Act, in particular objects (a), (b), (e) and (h).

3.6 Pursuant to Section 50(1) of the Act, the Labor Council further contends that there are no good reasons for not adopting the general tenor of the principles and provisions of the Safety Net Review May 2001 Decisionsubject to any modifications necessary to reflect:

a) the NSW legislative framework;

b) the views of the Labor Council;

c) the orders, principles and reasoning in the Judgments of the State Wage Case August 1997, June 1998, June 1999 and the State Wage Case May 2000.

3.7 Accordingly, the State Wage Case Principles, as determined in the State Wage Case May 2000, should be retained with some minor changes being those necessary to apply the wage increases awarded in the National Decision and to introduce a modified set of words in principle 8 to allow for the earlier application of the State Wages Case adjustments either by consent of the parties or by application via the Special Case Principle dealing with awards which are lagging behind.

4.0 The Arbitrated Safety Net Adjustments and Economic Considerations

4.1 The Labor Council submits that the Commission should make available generally under New South Wales awards the Safety Net Adjustments of:

1. a $13.00 per week increase in award rates up to and including $490.00 per week;

2. a $15.00 per week increase in award rates above $490.00 per week and including $590.00 per week; and

3. a $17.00 per week increase in award rates above $590.00 per week.

and that the increases are economically sustainable.

4.2 The Australian Commission considered economic conditions at paragraph 16 through to paragraph 58 of the National Decision.

In particular they noted lower G.D.P. for the December 2000 quarter and considered submissions by all the parties as to the factors which caused the slow down.

4.3 The Australian Council of Trade Unions argued that the slow down in the December Quarter was affected amongst other factors by the G.S.T. and interest rates. It urged the Commission to look through the transitional effects of the G.S.T. and to regard the Australian Council of Trade Unions' claim as having a stimulatory effect on the demand. (see paragraphs 18 to 21 of the Safety Net Review Wages May 2001 [PR002001]).

4.4 The State Labor Governments submitted that the national economy was expected to grow during 2001 (see paragraph 23 of the Safety Net Review Wages May 2001 [PR002001]).

4.5 The Joint Coalition Governments submitted that the Australian economy could expect a more positive outlook than that which had resulted in a December Quarter decline in the G.D.P. However the Joint Coalition Governments did ask the Commission to consider a number of potential risks of the economy. (see paragraphs 33 to 36 of the Safety Net Review Wages May 2001 [PR002001]).

4.6 Not unexpectedly a bleaker outlook of the economy and it's ability to sustain the Australian Council of Trade Union's claim was given by employer groups who predicted a further decline in economic activity (see paragraphs 24 to 32 of the Safety Net Review Wages May 2001 [PR002001]).

4.7 The Australian Commission concluded that the Australian economy could accommodate a moderate improvement in the Safety Net (see paragraph 99 of the Safety Net Review Wages May 2001 [PR002001]).

In particular they noted the effects the last Safety Net awarded in May 2000 did not cause the slow down in growth in the last half of 2000. (see paragraph 69 of the Safety Net Review Wages May 2001 [PR002001]).

4.8 The New South Wales economy is performing almost on par with the National economy. There is, therefore, no reason why the New South Wales economy could not sustain moderate safety net increases consistent with the Australian Commission's conclusions.

5.0 The Arbitrated Safety Net Adjustments and the Low Paid

5.1 The awarding of the Safety Net Adjustments by the Australian Commission has on this occasion not adequately addressed the needs of low paid workers, particularly in the context of increasing decentralised bargaining at the enterprise or workplace level, the increased incidence of precarious employment, cost of living and the impact of the G.S.T.

5.2 At paragraphs 100 to 124 of the Safety Net Review Wages May 2001 [PR002001] the Australian Commission considered the evidence put to it by the Parties on the needs of the low paid relative to its other statutory obligations which are to have regard for economic factors including levels of productivity, inflation and employment.

5.3 The Australian Commission considered the Australian Council of Trade Unions submissions that:

(i) previous Safety Net Decisions had sustained a floor beneath the working poor (see Paragraph 107 of the Safety Net Review Wages May 2001 [PR002001])

(ii) the G.S.T. had impacted more greatly on the low paid (see Paragraph 108 of the Safety Net Review Wages May 2001 [PR002001])

(iii) low paid workers have many unmeet needs which effect their ability to participate fully in Australian society (see Paragraph 102 of the Safety Net Review Wages May 2001 [PR002001]).

5.4 The State Labor Governments submitted during the National Wage Case that earnings mobility at the bottom end of the labour market is quite limited with the growth of part-time, casual and contract work and that low real wages were in part due to the deregulation of the Labour Market (see paragraph 109 of the Safety Net Review Wages May 2001 [PR002001]).

5.5 In it's conclusions the Australian Commission reiterated its statement in its Safety Net Review Wages April 1999decision which acknowledges that many low paid employees are unable to afford necessities of the broader community. It also restated its view that there continues to be a gap in income earnings from those under the award system. (see paragraph 125 and 126 of the Safety Net Review Wages May 2001 [PR002001]).

However it states: "the statutory scheme does not give to the Commission a supervening social welfare responsibility either for incomes generally or their distribution. The scheme regulates wages and conditions of employment and requires the adjustment of the minimum wages safety net contained in awards having regard to particular considerations. The information about income levels and distribution provided by the parties is informative of Australian Living standards. However, it must be taken into account having regard to the limited nature of our task and statutory responsibilities"

5.6 In our view the Australian Commission has given greater weight to economic considerations than to the needs of the low paid.

5.7 The Industrial Commission of New South Wales has identified and focused on the needs of low paid workers in a series of major cases since 1986. Mechanisms to assist low paid workers have included:

a) granting of supplementary payments in 1986,

(see State Wage Case 1986 unpublished);

b) the setting of a low paid award rate of $310.00 in 1988,

(see State Wage Case August 1988 27IR373);

c) minimum rates adjustments since 1989,

(see State Wage Case August 1989 35IR183);

d) safety net adjustments since 1993,

(see State Wage Case December 1993 52IR173);

e) Award Review Classification Rate since 1997,

(see State Wage Case August, 1997).

5.8 The Industrial Relations Commission of NSW in considering the needs of the low paid have different objects that need to be considered than those of the Australian Commission.

5.9 A decision in this case to adopt the increases as awarded in the National Decision would in a small part alleviate some of the difficulties faced by low paid workers who solely rely upon the award system.

5.10 To further assist low paid employees the Labor Council intends to file an application pursuant to Section 51 for the making of a State Decision to deal with Secure Employment.

This application will seek to place conditions on employers with respect to their use of part-time and casual employees, the use of labour hire and contracting companies. We will seek to provide opportunities to low paid employees to access proper career structures in a Labour Market which makes it more difficult to find regular and secure employment.

6.0 Application of State Wage Case Decisions

6.1 At paragraphs 145 to 155 the Commission considered arguments by the A.C.C.I. with respect to the Commission endorsing longer delays between the application of Safety Net Adjustments (see Paragraph 146 of the Safety Net Review Wages May 2001 [PR002001]).

6.2 The Commission reiterated it's rationale for introducing a 12 month delay between one Safety Net Adjustment and another and rejected the A.C.C.I. submission to delay beyond 12 months access the Safety Net Adjustments (see Paragraphs 147 and 148 of the Safety Net Review Wages May 2001 [PR002001]).

6.3 The Commission went further to give the discretion to members of the Commission to waive the requirement for 12 months to have elapsed between wage adjustments allowable under previous Safety Net decisions provided there is consent between the Parties and there is not cost to any employer party to the award (see Paragraphs 152 and 153 of the Safety Net Review Wages May 2001 [PR002001]).

6.4 The Labor Council submits that this waiver principle should also be available in our State Principles and in addition we should explicitly make clear that it would be open to any party to run a "special case" should they wish to bring forward the application of previous or current wage case adjustments.

6.5 The position contended for by the Labor Council would in our view address issues raised by the Australian Workers Union, New South Wales with respect to awards which have lagged behind in terms of the application of previous State Wage Case adjustments.

6.6 The Labor Council submits that it would be neither fair nor just that an award or awards could indefinitely lag behind in wages or delays because of what may have been oversights in the past in making applications to vary them for previous State Wage Case adjustments. It is therefore proper that we place beyond doubt the ability of the Commission to deal with the issue having regard to each case on it's merits.

7.0 Award Review Classification Rate

7.1 The Labor Council submits that the Award Review Classification Rate concept be retained. This is a rate below which no full-time adult employee (excluding trainees, apprentices and employees on a supported wage or on a probationary rate) should be paid under the relevant Award.

7.2 The Award Review Classification Rate is a significant mechanism for addressing the needs of low paid workers in New South Wales.

7.3 The Award Review Classification Rate was established in the State Wage Case August 1997 as a means of raising classification rates to the Federal minimum wage level of $359.40 set in the Safety Net Review April 1997 [Print P1997].

7.4 All parties appearing in the State Wage Case August 1997 agreed that the adoption of the minimum wage concept in New South Wales was inappropriate and inconsistent with the history of wage fixing in this State and the existing legislative framework.

7.5 Labor Council understands that all parties appearing in these proceedings seek the retention of the Award Review Classification Rate.

7.6 It is consistent with the objects of the Industrial Relations Act 1996 to increase the Award Review Classification Rate by the safety net adjustment available from the Safety Net Review Wages May 2001 [PR002001], ie:. by $13.00 to $413.40.

7.7 It is appropriate to increase the Award Review Classification Rate by the same amount as the Australian Commission increased the Federal Minimum Wage.

8.0 Allowances

8.1 Allowances which relate to work or conditions which have not changed, including shift allowances expressed as monetary amounts and service increments, should be adjusted by 3% to reflect the increases in wages awarded. Such adjustment is agreed between the Parties and reflects a commonly adopted approach in the New South Wales system.

9.0 Other Matters

9.1 The A.C.C.I. Submitted during the National Case that the Commission should enquire when an award is varied to include the Safety Net adjustment, whether that award has appropriate provisions dealing with Part-time employment which are consistent with the Family and Personal Carers Leave Test Case (see Paragraph 158 of the Safety Net Review Wages May 2001 [PR002001]).

9.2 The Commission indicated these was plenty of scope available through applications to vary, and award simplification, to ensure part-time provisions appropriate to each industry were considered (see Paragraph 159 of the Safety Net Review Wages May 2001 [PR002001]).

9.3 Labor Council contends that with respect to state awards there are also various mechanismsavailable to the parties to consider part-time arrangements as appropriate to each industry. Section 19 Award Review in particular continues to allow the parties to consider part-time work arrangements as appropriate.

9.4 It is the Labor Council submission that no action nor determination on the issue of part-time work is necessary as a consequence of the National Decision.

9.5 The A.C.C.I. submitted that the Commission should endorse majority clauses in Awards (see Paragraph 160 of the Safety Net Review Wages May 2001 [PR002001]).

9.6 The Commission revisited the history of majority clauses by referring back to the April 1991, September 1994 and October 1995, National Wage Case decisions. The Commission was not persuaded to revisit the matter as suggested by the A.C.C.I. however restated it's view they supported majority clauses as a means of rationalizing conditions of employment in particular enterprises (see Paragraphs 161 and 162 of the Safety Net Review Wages May 2001 [PR002001]).

9.7 The Labor Council contends that no action or determination is necessary as a consequence of the National Decision with respect to majority clauses. We submit that the Industrial Relations Act 1996 and various principles established by this Commission provide adequate flexibility and safeguards as follows:

(i) Chapter 2, Part 2 of the Industrial Relations Act 1996dealing with Enterprise Agreements,

(ii) Enterprise Agreements Principles which were last reviewed in December 2000 (see Review of the Principles for Approval of Enterprise Agreements 2000),

(iii) the Enterprise Arrangements principle contained in the May 2000 State Wage Case Principles, and;

(iv) consent awards.

4. REFERENCES

References cited by the

Labor Council of New South Wales

1. Safety Net Review Wages, April 1999 - Print Q1999

2. State Wage Case, June 1998 - 79 IR 416

3. State Wage Case, August 1997 - 73 IR 200

4. State Wage Case, April 1996 - 64 IR 439,448

5. Safety Net Review, April, 1997, Print P1997

6. State Wage Case, December 1993 - 52 IR 157

7. State Wage Case, August 1989 - 35 IR 183

8. State Wage Case, August 1988 - 27 IR 360

9. State Wage Case 1986 - Unpublished

10. State Wage Case, June 1999 - 88 IR 363

11. State Wage Case, May 2000 - 97 IR 93

12. Safety Net Review Wages, May 2001 - PROO2001

Submission to NSW IRC on 2001 State Wage Case

Summary

Before the Industrial Relations Commission of New South Wales

Matter No. IRC 3025 of 2001

STATE WAGE CASE 2001

Action Sought to be Taken

Amendments the State Wage Case Principles

Proposed Wage Fixing Principles

1 Preamble

2 When an Award may be Varied or Another Award Made Without the Claim Requiring Consideration as a Special Case

3 Previous State Wage Case Increases

4 Test Case Standards

5 Adjustment of Allowances and Service Increments

6 Work Value Changes

7 Standard Hours

8 State Wage Case Adjustments

9 Award Review Classification Rate

10 Special Case

11 Enterprise Arrangements

12 Superannuation

13 First Award and Extension to an Existing Award

14 Economic incapacity

16 Duration