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STATE WAGE CASE 2001
DECISION
OF THE
FULL BENCH
OF THE
INDUSTRIAL RELATIONS COMMISSION
OF
NEW SOUTH WALES
Thursday 31 May 2001
table
of contents
Introduction 1
The Australian Industrial
Relations Commission's Decision 4
Pre-Hearing Conference
14
The Position of the Parties
at the Hearing 14
The Evidence 16
The Submissions 19
Labor
Council of New South Wales 19
The Australian Workers' Union, New South Wales 24
Employers
First and The Australian Retailers'
Association,
New South Wales Division 26
Australian
Business Industrial 30
AiGroup,
CCER, SCC, MTA, LGA, SA and RTA 32
The Minister for Industrial Relations and PEO 32
Submissions In Reply 35
The Labor
Council of New South Wales 35
The Commission's Decision 37
The Wage
Increase 37
Award Review Classification Rate 44
Anti-Discrimination Clause 44
The Principles 47
Agreed Matters 47
Access to
State Wage Case Decisions
and Lagging Awards 49
Consent
Awards 58
Terms of the Principles 61
Orders 61
Annexure
A - Appearances at the Hearing 64
Annexure
B - Wage Fixing Principles 65
1 Preamble
65
2 When an Award may be Varied or Another
Award Made Without the Claim Requiring
Consideration as a Special Case 66
3 Previous State Wage Case Increases 67
4 Test Case Standards 67
5 Adjustment of Allowances and Service Increments 67
6 Work Value Changes 68
7 Standard Hours 70
8 State Wage Case Adjustments 70
9 Award Review Classification Rate 72
10 Special Case 74
11 Enterprise Arrangements 74
12 Superannuation 77
13 First Award and Extension to an Existing Award 81
14 Equal Remuneration and Other Conditions 82
15 Economic Incapacity 84
16 Duration 85
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28 -
INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES
FULL BENCH
CORAM: Wright J, President
Walton J, Vice-President
Hungerford J
Sams DP
Boland J
McKenna C
Thursday
31 May 2001
Matter No. IRC 3025 of 2001
STATE WAGE CASE 2001
Summons to Show Cause - Commission on its own initiative pursuant to Part
3 of Chapter 2 of the Industrial Relations Act 1996.
DECISION OF THE COMMISSION
[2001] NSWIRComm 119
Introduction
1 On 2 May 2001, the Commission issued a
summons to show cause to industrial parties to appear before it to show cause
why, after considering the decision of the Australian Industrial Relations
Commission ("the AIRC") in the Safety Net Review - Wages, May
2001 Case, 2 May 2001 (Print PR002001), the Commission should not take
such action pursuant to Pt3 of Ch2 of the Industrial Relations Act 1996
("the Act") as it may deem proper.
2 By leave, on 16 May 2001, the Labor
Council of New South Wales ("Labor Council") filed an application
pursuant to s52 of the Act. In that application the Labor Council applied:
1. To vary
the standard Anti-Discrimination clause as determined in the State Wage
Case June 1999, and;
2. To amend Principle 1.5 in Re Review of the Principles of the Approval
of Enterprise Agreements 2000 with respect to "responsibilities as a
carer."
3 The grounds and reasons for the
application were stated as follows:
1. To achieve
object 3(f) of the Industrial Relations Act 1996
2. To take account of the Anti-Discrimination Amendment (Carers'
Responsibilities) Act 2000
3. To meet the requirements of Section 169 of the Industrial Relations Act
1996
4. To reflect the views of the parties
5. To reflect the views of the Commission in Re Review of the Principles
for Approval of Enterprise Agreements 2000.
4 Part 3 of Ch 2 of the Act includes ss50 and 52 which provide:
50 Adoption
of National decisions
(1) As soon
as practicable after the making of a National decision, a Full Bench of the
Commission must give consideration to the decision and, unless satisfied that
it is not consistent with the objects of this Act or that there are other
good reasons for not doing so, must adopt the principles or provisions of the
National decision for the purposes of awards and other matters under this
Act.
(2) A Full Bench of the Commission is to give consideration to the National
decision either on application or on its own initiative.
(3) The principles or provisions of a National decision may be adopted:
(a) wholly or
partly and with or without modification, and
(b) generally
for all awards or other matters under this Act or only for particular awards
or other matters under this Act.
(4) The principles or provisions of a National decision so adopted may be
varied by a Full Bench of the Commission, whether or not another National
decision is made.
52 Variation of awards and other orders on adoption of National decisions or
making of State decisions
A Full Bench
of the Commission may, when adopting the principles or provisions of a National
decision or making a State decision, make or vary awards, or make other
orders, to the extent necessary to give effect to its decision.
5 A "National decision" is
defined in s48 of the Act as:
48 What is a
National decision?
A National
decision is a decision of a Full Bench of the Australian Industrial
Relations Commission that generally affects, or is likely to generally
affect, the conditions of employment of employees in New South Wales who are
subject to its jurisdiction.
The Australian Industrial Relations Commission's decision
6 In its Safety Net Review - Wages, May 2001 decision ("the
National decision"), the AIRC considered a claim brought by the
Australian Council of Trade Unions ("the ACTU"). The claim was
entitled the "2001 Living Wage Claim". The ACTU's claim sought the
following:
· a $28 per week increase in award rates
of pay up to and including the equivalent of skill level classification C10
in the Metal, Engineering and Associated Industries Award 1998 - Part 1
(the Metal Industry Award) [[Print Q2527 [AW789529]], and a 5.7% increase in
award rates of pay above that level; and
· an appropriate adjustment in allowances
consistent with past safety net decisions and the Furnishing and Glass
Industries Allowances decision [Print M9675, 21 March 1996].
7 In considering Australia's current
economic outlook, the AIRC commented that the positives must be weighed
against the negatives. In this respect, the AIRC stated:
Positive
features of the current economic context are found in the continuing strength
of economic fundamentals, with the absence of imbalances in profit shares and
unit labour costs, a benign outlook for wages and prices inflation,
supportive monetary and fiscal policy settings, a low Australian dollar
supporting the traded goods sector, low interest rates supporting investment
and the expected passing of the transitional effects of the GST on both
prices and output. Against these factors must be considered the decline in
activity in the December quarter, the consequent weakening in the labour
market, the poor productivity outcomes in the final part of 2000, weakness in
the key building and manufacturing sectors, weakness in the international
economy, particularly in the US economy, and
continuing uncertainty and effects on business confidence resulting from the
December quarter decline in growth and the GST.
8 Overall, the AIRC stated that a degree
of caution must be exercised:
Economic
conditions remained strong through to the middle of 2000, when growth
moderated, and GDP contracted in the December quarter, with a consequent
weakening in the labour market conditions. The December fall in GDP
substantially, but not entirely, reflected transitional factors and was
concentrated in particular sectors of the economy. Treasury and the RBA
anticipate the prompt passing of the transitional effects on the December
quarter outcomes. They expect a resumption of reasonable non-inflationary
growth, reflecting a view that Australia's economic fundamentals remain sound
and that fiscal and monetary policy settings are supportive of growth.
Nonetheless, the weak overall growth and employment outcomes in the last half
of 2000, together with other considerations such as recent weak productivity
performance and the weaker labour market performance in late 2000 and into
2001, warrant a degree of caution in assessing the immediate economic
outlook.
In our view, a degree of caution is required in light of the uncertainty
arising from the most recent National Accounts data. Although Treasury and
the RBA expect a timely recovery from the December quarter stalling in
growth, and although transitional influences were significant contributors to
the slowdown, there is some evidence of an underlying slowdown in growth.
Further, there are risks to future activity from negative sentiment and
slowing world growth. The recent weakening in labour market performance
reinforces the need for caution, particularly in light of the requirement to
have regard to the desirability of attaining a high level of employment.
Notwithstanding the need for some caution we think that some further
adjustment of the minimum wages safety net is appropriate and sustainable.
9 In relation to the economic effects of a safety net adjustment the AIRC
considered two likely effects of the ACTU claim, being:
· The effects in aggregate terms on wages growth, inflation, employment and
productivity; and
· The effects at the sectoral or
enterprise level, recognising that the application of safety net adjustments
will vary, as a result of the different incidence of enterprise bargaining
and over award payments, between and within sectors of the economy and the
impact on the employment prospects of those employees benefiting from safety
net adjustments.
10 The AIRC noted that the aggregate effects of any safety net adjustment
will vary depending on the amount awarded, any conditions attaching to the
adjustment and the general economic context. It was noted that although
economic activity declined in the December quarter of 2000, and with it came
a weakness in employment, aggregate wages growth has remained moderate and
inflation has remained low.
11 Cost estimates were provided to the
AIRC by the Joint Coalition governments of the impact on aggregate wages
growth of a range of safety net increases for all sectors, with a separate
set of estimates for the private sector. The AIRC noted that although such
estimates are of assistance in making a decision, they are not without
controversy. The AIRC said:
They do not, however,
provide a direct and uncontroversial measure. The position remains that there
exists no completely reliable and accepted cost estimate, with each of the
different methodologies being subject to criticism.
12 The AIRC considered that nothing had been
put which would warrant a departure from the conclusion reached on the issue
of economic effects in the Safety Net Review - Wages, May 2000 (2000)
95 IR 64. Of the current application the AIRC stated:
We consider
that the safety net adjustment we have decided upon will have a very limited
impact on aggregate wages growth. The impact of the increases we have decided
will not materially affect the aggregate net rate of wages growth over the
next 12 months, given the 'pipeline' effect of the May 2000 increases. Unlike
the May 2000 decision, safety net increases arising out of our present
decision will not coincide with an increase in the minimum employer
superannuation contribution required by the Superannuation Guarantee
Charge Act 1992 and the Superannuation Guarantee (Administration) Act
1992.
The economic effect of any safety net increase on inflation will depend upon
a number of factors including any monetary and fiscal policy response and the
effect of any productivity improvements made by employers in an attempt to
offset the cost of the increase. Given a limited impact on aggregate wages
growth, any effect on inflation would be minimal because wages form only part
of total costs. Further, measures taken to offset the impact of the increases
through productivity improvement would also limit the impact.
13 The AIRC came to the following conclusions as to the economic effects of a
safety net adjustment:
As we have concluded earlier, the
economic outlook as a whole suggests that the economy can accommodate further
reasonable improvements in the safety net of minimum wages. The contribution
to aggregate wages growth from the safety net adjustment we have decided upon
will have a limited effect on economic activity, inflation, employment levels
and productivity. In determining both the level and structure of safety net
increases, we have had regard to the level of uncertainty about immediate
economic prospects and the recent weaker labour market performance. We have
also had regard to the differential impact of safety net increases and sought
to protect employment by giving weight to the potentially greater employment
impact of increases at the level of the lowest skilled classifications.
14 On the needs of low paid workers, the
AIRC expressed the following conclusions:
As noted in
previous decisions 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. In the April 1999
decision the Commission said:
"Considering
the needs of the low paid requires the exercise of judgment as to varying
income levels and the resultant living standards attained in the Australian
community. There is clearly a gap between income levels derived from
bargaining and those provided by the award system. The evidence and
submissions inform the Commission in its task of adjusting the safety net.
Central to the adjustment of the safety net consistent with ss.88B(2) is a
consideration of the economic factors, the desirability of attaining a high
level of employment and the needs of the low paid. In this context we reject
the proposition that the low paid include people who are unemployed. The
relevant statutory provisions deal separately with the low paid and the
unemployed and the expression 'the low paid' in ss.88B(2)(c) is intended to
refer to persons who are in employment. However, we are required by
ss.88B(2)(b) and 90(b) to take the level of employment into account and we
have done so. Many low paid employees are unable to afford what are regarded
as necessities by the broader Australian community."
The
Commission reiterated that conclusion in the May 2000 decision. We again see
no reason to depart from it. The evidence presented in this case again
revealed that employees on low wages do experience difficulties making ends
meet and in affording what are generally considered by the broader community
as basic necessities. In this context we note the disagreement between the
parties about the size of the group of employees in this position. It is not
necessary, even if it were possible, to identify the size of the group in order
to reach a decision in this case. We acknowledge that the material does
indicate that people on low incomes face particular difficulties and that is
one of the factors which we have taken into account.
We were presented with arguments by the Joint Coalition governments about the
distribution effects of a minimum rate adjustment. In the May 2000 decision
the Commission considered similar arguments and concluded:
"The
Joint Coalition governments submitted that limiting safety net increases to
at or below the C10 classification rate would better target those in need. We
are not convinced on the material before us that providing a cut-off at C10
would prevent spillage of some of the benefit of safety net adjustments to
those not in need. Indeed we are not sure where any such cut-off could be set
in order to better target the benefit of safety net adjustments.
As a result
of societal change it is often the case that there are two wage earners
(sometimes more) within a family unit. It is not surprising that it is no
longer as simple as it once may have been to view the income of an employee
as an indicator of household income. It may be that safety net wage increases
intended to assist the low paid will supplement the income of some households
of relatively high means. We accept that safety net adjustments are not
perfectly targeted to meeting the needs of the low paid. They do, however,
assist in meeting those needs."
Nothing in
the material presented on this occasion by the Joint Coalition governments
leads us to alter the view there expressed.
15 A significant issue in the proceedings before the AIRC was that of wage
relativities. The AIRC noted that on a number of previous occasions it had
drawn attention to the erosion of relativities between award classifications
where a uniform dollar adjustment occurs. The AIRC referred to its May 2000
decision where it had indicated that on the next occasion it expected to be
addressed on this issue and whether a percentage adjustment is appropriate
"to ensure that the award system provides fair wages for employees paid
at the middle and upper award classification levels." Consequently, all
major parties made submissions on this issue. The ACTU sought a flat
adjustment up to the level of C10 classification in the Metal Industry Award
and a percentage increase above C10 to ensure fairness for middle and upper
classification levels. State Labor governments supported the ACTU, submitting
that the adoption of the ACTU's proposal would provide a fair safety net for
middle and upper classifications while still emphasising the needs of the
lower paid through a flat money increase.
16 The Joint Coalition governments
supported a flat increase capped at the C10 level. They argued, inter alia,
that safety net adjustments should continue to target the low paid, with the
role of relativities being confined to those between awards. It was submitted
that the labour market no longer requires the structural efficiency principle
because workplace relations are now focussed at the enterprise level, thereby
the continuance of historical relativities is no longer relevant.
17 The ACCI argued that relativities are
a matter for the market and will be set by the market. The AiGroup argued
that there is a fundamental tension between protection of the low paid and
protection of skills based classifications. However, it did not consider that
flat increases had reached the point where they threatened the integrity of
the relativity structure. The AiGroup agreed with the State Labor governments
that this point had not been reached.
18 In dealing with the submission of the
Joint Coalition governments that the legislative scheme no longer supports
higher award classification increases under safety net adjustments, the AIRC
reaffirmed its previous rejection of that submission:
It is true
that s88B(2)(c) of the Act provides that when adjusting the safety net the
Commission must pay regard to the needs of the low paid. However we do not
think that this object can be elevated in such a way as to displace the
obligation on the Commission to maintain a safety net of fair minimum wages
for all employees. In this respect we do not see how the use of the plural
term "wages" can be ignored. We are fortified in this
conclusion by two additional factors. First, s89A of the Act provides that
classifications of employees and skill based career paths are allowable award
matters. We think it follows that where classification structures and skill
based career paths are included in awards they are a relevant feature of the
safety net of fair minimum wages and conditions which the Commission is
obliged to maintain. Second, awards play an important role in the operation
of the no disadvantage test. Agreements for which certification is sought under
other divisions of the Act must be tested against appropriate safety net
awards. In this context it would be incongruous if the Commission was not
obliged to maintain fair minimum wages for employees at higher levels of the
award structure. While there may be circumstances in which a safety net
adjustment may be appropriate only at lower classification levels, we do not
accept that such a position is an inevitable consequence of the present
legislative scheme.
19 In granting an increase, the AIRC
concluded that:
... On this
occasion we think that it is appropriate to recognise the different impact of
flat dollar increases at the different award classification levels by
awarding higher amounts at the middle and upper levels. At the same time
while the increase at the lower level is substantial it is not so great as to
put undue pressure on employment. The amount and form of the increases are an
appropriate outcome to the ACTU's claim. The form of adjustment is
appropriate for reasons of fairness and as a measure towards avoiding the
further compression of relativities between job classifications. Furthermore
the result is consistent with the obligations upon us to have regard to
economic factors, including the desirability of attaining a high level of employment,
and to have regard to the needs of the low paid. The adjustment will be the
following:
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 up to and
including $590.00 per week; and
3. a $17.00 per week increase in award rates above $590.00 per week.
We are
confident that the economic impact of the adjustment will be manageable.
Whilst the adjustment is greater in dollar terms at the higher levels than
the adjustment last year, the majority of employees to benefit are at the
middle or lower levels of the award classification structures. At those
levels the amount of the adjustment is the same as or less than last year. It
is also relevant that the cost impact of the increase is less than a
comparison with last year might suggest because this year the increase will
apply to a higher base.
In recent years there has been strong growth in real earnings across the
economy. In the generally favourable economic conditions which have prevailed
the Commission has been able to make significant adjustments in the wages
safety net. We mentioned earlier our concern about some adverse developments
in the labour market. The December quarter 2000 National Accounts also give
cause for concern, particularly the growth statistics. Nevertheless we have
given weight to the predominant view among the parties that because of the
underlying strength of the economy growth will recover during the course of
2001.
As we indicate later in dealing with amendments to the Statement of
Principles we have decided to modify the requirement that safety net
adjustments increases not be available within 12 months of the previous
safety net adjustment. That modification will only apply to cases in which
the parties consent and there is no cost impact arising from the adjustment.
Apart from that modification implementation of the adjustment provided for in
this decision will be subject to the usual conditions. The conditions are:
(a) the increases
will be fully absorbable against all above award payments;
(b) except where specifically permitted by the Statement of Principles, the
increases will be available from a date no earlier than twelve months after
the increases provided for in the May 2000 decision in the award in question;
(c) the commencement of award variations to give effect to this decision will
be no earlier than the date on which the award is varied, with phasing-in of
increases permissible where circumstances justify it. Any application for
phasing-in will be referred to the President for consideration as a special
case;
(d) by consent of all parties, and 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; and
(e) allowances which relate to work or conditions which have not changed and
service increments are to be varied; the method of adjustment is to be
consistent with the Furnishing and Glass Industries Allowances Decision.
Consistent
with our decision the federal minimum wage will be increased by $13.00 per
week to $413.40 per week.
Pre-Hearing Conference
20 There were a number of issues in relation to modification to the State
wage fixing principles. At the parties' joint request, Wright J,
President, convened a conference on 14 May 2001 to canvass those issues. The
issues between the parties were considerably narrowed as a result of this
conference.
The Position of the Parties at the Hearing
21 The position of the Labor Council was that the wage increases awarded in
the National decision should be adopted in New South Wales. However, the
Labor Council registered its disappointment at the level of wage increases
awarded. The Labor Council foreshadowed its 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." The Australian Workers' Union, New South Wales
("AWU") appeared in the proceedings to make submissions on problems
it had experienced with the operation of Principles 8(b), (g) and (h) of the
present State wage fixing principles but otherwise supported the position of
the Labor Council. The position of the Minister for Industrial Relations and
the Public Employment Office ("the Minister") was that this
Commission should adopt in full the increases emanating from the AIRC
decision and apply them to New South Wales awards. Employers First, its
affiliated organisations and The Australian Retailers' Association, New South
Wales Division ("Retailers' Association") submitted that in their
view the increases awarded by the National decision were too high having
regard to the state of the New South Wales economy and its expected
performance. Those employers also noted there were no efficiency gains or
offsets in return for the wage increases awarded. Nevertheless, recognising
the imperatives of s50 of the Act, those employers did not oppose the
adjustment arising out of the National decision. Australian Business
Industrial ("ABI") and The Registered Clubs Association of New
South Wales ("RCA") took the position that, having regard to s50 of
the Act, they did not oppose the increases awarded in the National decision
flowing to New South Wales awards. The Australian Industry Group, New South
Wales Branch ("AiGroup"), Catholic Commission for Employment
Relations ("CCER"), State Chamber of Commerce and Industry
(Industrial Relations) Association ("SCC"), Motor Traders'
Association of New South Wales ("MTA"), Local Government
Association of New South Wales ("LGA"), Shires Association of New
South Wales ("SA") and the New South Wales Road Transport
Association Inc. ("RTA") (referred to collectively as "the
combined employers") expressed support for the position of Employers
First and ABI.
The Evidence
22 A statement by Janelle Hindmarsh, a
single mother with one child residing in Fairfield West, was filed by the
Labor Council in the proceedings. Ms Hindmarsh is a qualified childcare
worker working 40 hours per week for a gross wage of $536.60 per week
($434.50 after tax). Her statement went to the difficulties of an employee in
her position meeting weekly living expenses and, at the same time, attempting
to save in order to pay rent on a home. She described in her statement the
additional strain caused by unplanned expenses such as car repairs. In her
statement Ms Hindmarsh said:
I understand
that if the State Wage Case follows awards the same amount as the National
Wage Case I would get $15 per week extra. With that amount of extra money it
will make very little impact on my standard of living or my aspirations to
live in a home of my own.
23 Ms Hindmarsh was not required for cross-examination.
In relation to her evidence, Mr C Christodoulou, appearing for the
Labor Council, said:
Janelle
Hindmarsh's evidence is intended simply to remind this Commission as it
ploughs through the reams of economic data about the state of the economy
that there are hundreds of thousands of workers out there who need a real
boost in their wages ...
24 The submissions of Employers First contained an extensive document
entitled "Economic Conditions in New South Wales", prepared by
Chris Richardson, Director, and Marnie Griffith, economist, of Access
Economics Pty Limited. The document contains an overview of Australian
economic conditions and includes a section entitled "Prospects for the
Australian Economy." This section discussed economic activity, job
growth, prices, wages and disposable incomes. It also contained a section
entitled "Prospects for the NSW Economy," which discussed the
economy in NSW, including falls in the construction sector and NSW as a share
of Australia's output. A comparison of forecasts on the NSW economy to the
national economy was also made. The main points arising out of the document
may be summarised as follows:
· There remains a small risk that Australia will slip into recession in 2001.
However, the fundamentals remain good. This is not a 1991 economy, crushed by
18% interest rates. Nor is it a 1982 economy, crushed by excessive wage
rises. This gives hope that late 2001 will bring renewed good growth.
· Growth in NSW is likely to lag
Australia as a whole in 2001 and 2002. The State's good run has come to an
end, and a post-o1ympics hangover has taken hold. NSW might avoid a recession
in 2001, but it may be a narrow miss. As for Australia as a whole, recovery
is imminent and by 2002-03, both NSW (5.0%) and Australian (4.9%) growth is
forecast to be back on track.
· The fall-off in demand is even sharper
than that in output. As is typically the case in any downswing, the fall in
demand currently underway is sharper still than that in output (GDP, or
'supply').
· The outlook for employment is weak. The
number of jobs in NSW in 2001 is projected to contract by 0.4%, compared with
growth of 0.8% for Australia. Job weakness continues until mid-2002, but is
then forecast to grow strongly for the remainder of the year, so that
calendar 2002 should see 2.2% jobs growth in NSW (1.7% for Australia).
· These developments are not a major
surprise. Access Economics' submission to the State Wage Case 2000 noted that
"Theory suggests sustainable wage rises based on productivity improvements,
and that there is a clear trade off between wage rises and job gains. The
trade-off is sharper when conditions are worsening, so slower demand in NSW
in 2001 would accentuate the job cost of any non-productivity based wage
rises. The implication of the economic slowdown now underway (in Australia in
general, and NSW in particular) is therefore that there is greater reason for
NSW to reconsider the quantum of the wage rise granted by the IRC on 1 May
[2000]."
· There is a disaster scenario, though the
chance of it is slim. 2001 was always going to bring a post-O1ympic hangover,
with the end to a bout of office construction in the CBD adding to the
expected downturn in demand. However, the speed and severity of the global
downturn threatens to push NSW over the edge into something deeper. At the
moment that is just a threat, and the forecasts for are little changed on the
last. Certainly, the State government appears to be aware of the risks,
moving fast to replace the Parramatta to Chatswood rail link with a raft of
other projects - though, as with the rail link, few affect spending in 2001.
25 In the body of the document it was
said in respect of the outlook for New South Wales that:
So NSW looks
set to struggle though 2001 before recovering in a better 2002. Output growth
may nudge the zero line, but the downturn may be short, and not unexpected
given the surge brought by the Olympics. Short term indicators pointing to a
moderate slowdown include retail (where a relatively strong pre-GST spend is
being followed by a pause rather than a decline); jobs (where despite recent
weakness State unemployment has temporarily fallen below 6%, with Sydney
below 5%); and wages (which have risen consistently well in recent years,
fuelling the retail boom). But construction could turn out to be NSW's
Achilles heel.
26 Mr Richardson also gave supplementary
oral evidence and was subject to cross-examination.
The Submissions
The Labor Council of New South Wales
27 Mr Christodoulou with Mr P Howes, for the Labor Council,
submitted that the Labor Council maintained its view that because of the
different legislative schemes in the Commonwealth and New South Wales it was
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 AIRC
(see sub-sections 50(3) and 50(4) of the Act). The Commission has accepted
this view in the past (State Wage Case - August 1997 (1997) 73 IR 200
at 220 - 221).
28 The Labor Council contended that on this occasion the AIRC had in its
decision given more weight to economic considerations than to adequate
compensation for the needs of low paid workers with respect to the cost of
living and the impact of the G.S.T. Nevertheless, the Labor Council submitted
that the Commission should make available the Safety Net Adjustments awarded
by the AIRC.
29 The Labor Council further submitted that:
· 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.
· 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%.
· Pursuant to Section 50(1) of the Act, awarding the Safety Net Adjustments
available from the Safety Net Review Wages May 2001would be
consistent with the objects of the Act, in particular objects (a), (b), (e)
and (h).
· Pursuant to Section 50(1) of the Act, there are no good reasons for not
adopting the general tenor of the principles and provisions of the Safety
Net Review May 2001 Decision subject 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 2000.
· The State Wage Case Principles, as
determined in the State Wage Case 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.
30 Mr Christodoulou traversed the detailed economic material before
the AIRC, which included material relating to the New South Wales economy,
and that Commission's analysis of the material. He submitted that the New
South Wales economy is performing almost on par with the national economy. Mr
Christodoulou contended, therefore, that there was no reason why the
New South Wales economy could not sustain moderate safety net increases
consistent with the AIRC's conclusions.
31 Mr Christodoulou reiterated
that the awarding of the Safety Net Adjustments by the AIRC had 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. He referred to the AIRC's acknowledgment
in its decision that many low paid employees are unable to afford necessities
of the broader community and that there continues to be a gap in income
earnings for those under the award system.
32 Mr Christodoulou referred to the role of this Commission in
addressing the needs of the low paid as follows:
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,
(seeState Wage Case
1986unpublished);
b) the setting of a low paid award rate of $310.00 in 1988, (see State
Wage Case - August 1988 27 IR 373);
c) minimum rates adjustments since 1989,
(see State Wage Case - August 1989 35 IR 183);
d) safety net adjustments since 1993,
(see State Wage Case - December 199352 IR 173);
e) Award Review Classification Rate since 1997,
(see State Wage Case - August 1997).
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.
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.
33 It was further submitted that:
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.
34 Mr Christodoulou referred to
the AIRC's decision to give the discretion to members of the Commission to
waive the requirement for twelve months to have elapsed between wage
adjustments allowable under previous Safety Net decisions provided there was
consent between the parties and there was no cost to any employer party to
the relevant award. He contended that this waiver principle should also be
available in the State principles and, in addition, the principles 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. Mr Christodoulou submitted
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.
35 Reference was made to ACCI's
submission in the national proceedings that the AIRC should inquire, 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 Leave Test Case and Personal Carer's Leave Test
Case (Stage 2). Mr Christodoulou contended that with respect to
State awards there are various mechanisms available to the parties to
consider part-time arrangements as appropriate to each industry. The review
of awards pursuant to s19 of the Act in particular, he said, continued to
allow the parties to consider part-time work arrangements as appropriate. It
was the Labor Council's submission that no action nor determination on the
issue of part-time work was necessary as a consequence of the National
decision.
36 Mr Christodoulou also referred to ACCI's submission that the AIRC
should endorse majority clauses in awards. On this point he submitted 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 1996 dealing
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.
37 Mr Christodoulou also made
submissions relating to the Labor Council's application to vary the standard
Anti-Discrimination clause as determined in the State Wage Case 1999
(1999) 88 IR 363 and to similarly amend Principle 1.5 of the principles
applying to the approval of enterprise agreements. It was said that the need
to vary these provisions arises out of the Anti-Discrimination Amendment
(Carers' Responsibilities) Act 2000, which came into force on 1 March
2001. That Act makes discrimination in employment on the ground of a person's
responsibilities as a carer unlawful. Accordingly, Mr Christodoulou
sought to vary Order 5 of the State Wage Case 1999 to add
"responsibilities as a carer" to cl1 of the standard
Anti-Discrimination clause so that it reads:
It is the
intention of the parties bound by this award to seek to achieve the object in
section 3(f) of the Industrial Relations Act 1996 to prevent and eliminate
discrimination in the workplace. This includes discrimination on the grounds
of race, sex, marital status, disability, homosexuality, transgender
identity, age or responsibilities as a carer.
38 Mr Christodoulou proposed that
all awards that contain the Anti-Discrimination clause be varied by way of
general order.
39 The Labor Council sought the same variation to the anti-discrimination
provision in Principle 5 as set out in Annexure A to the Review of the
Principles for Approval of Enterprise Agreements 2000 (2000) 101 IR 332.
The Australian Workers' Union, New South Wales
40 Mr R Tripodi appeared for the AWU to raise and address problems for
a number of its awards, including the Pastoral Employees (State) Award, the
Coal Superintending Samplers (State) Award and the Nut Food Makers (State)
Award arising from the operation of Principle 8(b), (g) and (h) as currently
expressed in the State Wage Case 2000 (2000) 97 IR 93. The problems
raised by Mr Tripodi may be illustrated by reference to the Pastoral
Employees (State) Award. That award was only recently varied to incorporate
the wage increase arising out of the State Wage Case 2000
decision and, consequently, any increase arising out of the present
proceedings would not, by virtue of the operation of Principle 8(b), be
available before April 2002. Mr Tripodi expressed concern that, given
this effect of the operation of the principles, low paid workers who had
already experienced significant delays in receiving wage increases would be
further disadvantaged.
41 Mr Tripodi put forward a number of proposals as to how the AWU
considered the problem might be addressed. His ultimate proposal, which
involved amendments to Principle 8 of the wage fixing principles, was in the
following terms:
8 State Wage
Case Adjustments
(a) ...
(b) Subject to paragraph (g), that at least twelve months have elapsed since
the rates in the award were increased in accordance with the State Wage Case
2000 judgment. ...
(g) Increases arising from the State Wage Case 2001 and/or from previous
State Wage Cases may be phased-in upon application and where circumstances
justify it. However, applications for increases arising from the State Wage
Case 2001 for delayed awards which are made in the year 2001 should be made
effective and available to employees under those awards in the year 2001.
(h) In the absence of consent in respect of phasing-in, an application will
be determined by the Commission in a manner that is consistent with paragraph
(g) above.
42 In the alternative to the foregoing,
Mr Tripodi proposed the following amendments which, he submitted, were
consistent with what the Labor Council had proposed in respect of this issue:
8 State Wage
Case Adjustments
(a) ...
(b) Subject to paragraph (g), that at least twelve months have elapsed since
the rates in the award were increased in accordance with the State Wage Case
2000 judgment. Where an application for an increase arising from the State
Wage Case 2001 would not be made effective and available to employees under
awards in the year 2001 this twelve month delay may be waived. However, an
application for waiver of the twelve month delay must be dealt with as a Special
case in accordance with Principle 10 - Special Case of these principles. ...
Employers First and The Australian Retailers' Association, New South Wales
Division
43 Mr T McDonald appeared for Employers First and Mr D Ritchie,
for the Retailers Association. Mr McDonald said his organisation took
the view that the increases awarded by the National decision were too high,
having regard to the state of the New South Wales economy and its expected
performance. He also noted there were no efficiency gains or offsets in
return for these increases. Nevertheless, he recognised the
imperatives of s50 of the Act as to following National decisions and,
therefore, did not oppose the adjustments arising from the present decision.
44 Mr McDonald submitted that the proposed departures from the
National decision were consistent with the Act and for good reason,
principally flowing from differences between the State and federal
legislation or from a desire to continue certain existing State Wage Fixing
Principles.
45 He observed that with the exception of the quantum of increases to wages
and allowances the federal principles were not changed other than to include
a Principle 8(c) as follows:
(c) In awards
where the variation for a safety net adjustment arising from the April 1999,
May 2000 or May 2001 decisions 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, any applicable twelve months' delay between
variations may be waived.
46 Mr McDonald indicated that this change was reflected in the
following new Principle 8(g) as proposed by Employers First:
(g) Subject
to Principle 11, Special Cases:
(i) In awards
where the variation for a State Wage Case adjustment arising from the 1999,
2000 or 2001 decisions 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, any applicable twelve months' delay between variations may be
waived.
(ii)
Increases arising from the State Wage Case - June 1998 and from previous
State Wage Cases may be phased-in upon application and where circumstances
justify it. In the absence of consent in respect of phasing-in, an
application will be determined by the Commission.
47 Mr McDonald submitted that its position in relation to Principle
8(g) should be adopted due to the agreement to the proposal of all employers,
all other unions (through the Labor Council) except for the AWU, and that
such an approach was well reasoned. Mr McDonald articulated the
grounds in support of his position, relying particularly on the position
adopted by the AIRC and the need to avoid the cost pressures placed on
employers by more than one State Wage Case adjustment being payable at a
time.
48 A further proposed amendment referred to by Mr McDonald was a
re-formulation of Principle 13, First Awards and Extension to Existing
Awards. Mr McDonald indicated that this change was by agreement and
was designed to reflect, in part, changes made to the federal principle in
earlier National decisions.
49 A further change to the principles sought be Employers First, which did
not arise from the National decision, was to change the enterprise
arrangements principle to a consent awards principle and to include a
provision as to flow-on. Consequent changes were also proposed to be made to
the special case principle. This proposed change was strongly contested by
the Labor Council.
50 The thrust of Mr McDonald's proposal in this respect was to
establish a new consent award principle based on the existing enterprise
arrangement principle and thereby remove any distinction - and Mr McDonald
submitted, confusion - between the rules applying to consent awards and
enterprise arrangements. Mr McDonald put extensive written and oral
submissions in support of his position.
51 The essence of Mr McDonald's position may be gleaned from the
following submission. After quoting the special case principle, Mr McDonald
said:
It will be
noted that the exception for consent awards provides that they will be dealt
with in terms of the Act whereas Enterprise Arrangements have to comply with
the Act and Principle 11. Enterprise Arrangements, however, are consent
awards, which are restricted to apply to one enterprise. It could be
interpreted that consent awards that do not apply to one enterprise, are not
subject to any principles. The difference between whether and what principles
to apply to consent awards turns solely on their coverage, that is, whether
they apply to one enterprise or more than one enterprise.
...
The exceptions to the special case principle discriminate between enterprise
specific and industry arrangements. If a consent award is made for an
enterprise the tests contained in the enterprise arrangement principle have
to be satisfied. If the consent award applies to more than one enterprise, on
one view of it (which we do not share), no tests have to be satisfied. Such
an approach is contrary to the Act. Unlike the federal Act, the State Act has
no tilt in favour of, or against, enterprise arrangements. It is "...
based on "choice" between forms of regulation but without a
tilt" in the system towards one form of regulation over another State
Wage Case - December 1994 (1994) 57 IR 1." (at p32)
Consent awards, whether enterprise or multi enterprise based reflected this
choice between forms of regulation. They had their genesis in a recognition
that a central consideration of the Wage Fixing Principles, structural
efficiency, could be enhanced by Enterprise Arrangements and consent awards,
and in
encouraging parties to take greater responsibility for their industrial
affairs. But for the Enterprise Arrangements principle, they are in concept
and execution the same.
Australian Business Industrial
52 Mr P Ronfeldt appeared for ABI and RCA. In relation to economic
considerations, Mr Ronfeldt said that since the National decision
there have been no new figures released which suggest that the economic
picture available to the Commission had substantially changed. Uncertainty,
especially arising from the potential of the US economy to dampen the world,
and the Australian, economies persisted. He said that data showing the
performance and prospects of the NSW economy also suggested uncertainty about
the future and indicated some current under-performance by the NSW economy
relative to its national contribution.
53 Mr Ronfeldt informed the Commission that the ABI Council met on 9
May to determine its position on the Commission's summons to show cause. It
had regard to the operation of s50 of the Act, the National decision and the
economic context, including available economic data. It determined that there
were not "other good reasons" sufficient for the increases under
the National decision not to be adopted. Accordingly, ABI did not oppose
adoption of the increases arising under the National decision, including the
proposed increase available for allowances, juniors and the Award Review
Classification Rate.
54 ABI presented detailed economic submissions. In its concluding statement
on economic conditions, ABI submitted:
The NSW
economy ended 2000 on a low note and has had an inauspicious beginning to
2001. A post-o1ympics slump would appear to have been a significant factor in
the performance of the NSW economy in late 2000 - and this was not totally
unexpected. However, a significant post-o1ympic effect also seems to have
carried over into 2001.
The adverse
effects of the GST have been significant, particularly on the housing sector,
and NSW has not escaped this effect. These GST effects have been more severe
and longer lasting than expected.
In late 2000
it would have been a reasonable assumption that the NSW economy would improve
as 2001 progressed as the adverse effects of the post-Olympics downturn and
the GST dissipated. However, the speed and extent of the US economic downturn
has cast a pall over the international economy and Australia's economic
prospects for the remainder of this year.
It is not
certain that Australia will record positive GDP growth rates over coming
quarters. It does seem clear, however, that the Australian and NSW
unemployment rates will rise as the labour force continues to grow at a
faster pace than jobs creation.
On balance,
it cannot be said that the Australian economy has so altered since the
National decision to depart from the AIRC's view "In determining both
the level and structure of safety net increases, we have had regard to the
level of uncertainty about immediate economic prospects and the recent weaker
labour market performance" [PR002001 para 99]. Data showing the
performance and prospects of the NSW economy also suggest uncertainty about
the future and indicate some current under-performance by the NSW economy
relative to its national contribution.
55 Mr Ronfeldt supported Employers First as to the form and content of
the proposed wage fixing principles as well as the amendments proposed by the
Labor Council in respect of the standard Anti-Discrimination clause in awards
and enterprise agreements.
AiGroup, CCER, SCC, MTA, LGA, SA and
RTA (referred to collectively as "the combined employers")
56 The combined employers were represented by Mr R Davies. Mr Davies'
position was one of support for the position of Employers First and ABI.
The Minister for Industrial Relations
and PEO
57 Mr J V Murphy of counsel, who appeared for the Minister, referred
to the position of the New South Wales government in the proceedings before
the AIRC and the fact that the State of New South Wales supported the AIRC
granting the maximum wage increase consistent with the evidence, and doing
everything possible to address the needs of the low paid.
58 Mr Murphy submitted that advice received from the Treasury of New
South Wales indicated the New South Wales economy exhibited the same
strengths and weaknesses as the Australian economy and led to the conclusion
that the AIRC's decision should flow on to State awards.
59 In summarising his economic submission, Mr Murphy said:
As with the
Australian economy, New South Wales economic growth is expected to moderate
in 2000-01.
A large fall in dwelling construction is the main contributor to that slow
down in 2000-01, although weaker retail sales and vehicle registrations in
the first half of the financial year will also make a contribution. Business
investment is expected to be neutral.
Employment growth is also likely to be slower in 2000-01, while the
unemployment rate may be a little higher. Wage costs in NSW are expected to
continue rising at a moderate rate, slightly faster than expected nationally.
In 2001-02 a recovery in dwelling construction, and to a lesser extent some
lift in non-dwelling construction, should cause the rate of economic growth
to accelerate. Growth is not expected to reach the levels attained in the
last few years of the previous decade but should be fast enough to generate
an improvement in the labour market.
A risk to that scenario is a continued slowing of the global economy. If that
were to occur the outlook for the Australian and NSW economies would be less
optimistic.
60 Mr Murphy addressed a number of other issues as follows:
Equal
remuneration - since the wage fixing principles
were set in the State Wage Case 2000, these principles have been
varied by the Commission in Re Equal Remuneration Principle Decision
(2000) 97 IR 177 at 216. This decision inserted a new paragraph (h) in
Principle 2 and adopted a new Principle 15, 'Equal Remuneration and Other
Conditions'. It is appropriate to make explicit the changes by amending the
Wage Fixing Principles to reflect these changes.
Lagging awards and Principle 8(b) - It is desirable that there should
be a mechanism available whereby lagging awards can be brought to the
attention of the Commission and appropriate orders can be made which have
regard to the interests of both the employers and employees concerned. In
this regard there may be merit in adopting the provision which the AIRC in
its National decision introduced into the federal wage fixing principles. It
would appear, however, that the new federal provision is of limited effect,
applying only in those situations where the wage rates set out in a federal
award have fallen behind actual rates. It is submitted that an appropriate
approach to deal with this problem would be to amend Principle 8(b) to make
it explicit that lagging awards can be dealt with as a special case under
Principle 10.
Part-time employment and majority clauses - Employers First has
invited the Commission to 'associate itself' with the comments of the AIRC
concerning part-time employment and majority clauses. There is adequate
flexibility in regard to part-time employment in New South Wales, as provided
by the Industrial Relations Act 1996, the State Part-Time Work Case
(1998) 78 IR 172 and relevant provisions in many New South Wales awards. In
this regard, it is noted that the s19 review process requires the Commission
to take account of part-time work arrangements in awards. The AIRC decision
noted that few majority clauses had in fact been inserted into federal
awards, but expressed support for them as a means of rationalising conditions
of employment in particular enterprises. It is submitted that while there may
be value in such clauses, it is primarily a matter for the parties to
progress in respect of individual awards.
Enterprise Arrangements Principle - Employers First has proposed
changing the current Enterprise Arrangements Principle (Principle 11) to a
'consent awards' principle. This proposal raises some serious issues,
particularly in respect of the capacity of the Commission to have regard to
conditions of employment set by consent awards in other award proceedings.
Accordingly, it is submitted that the questions of reviewing the operation
and effect of Principle 11, and of considering the proposals regarding
consent awards put forward by Employers First, should be reserved for later
consideration by the Commission. Such an approach will enable the parties to
prepare appropriate submissions addressing all relevant issues.
Carers' responsibilities - the Minister wishes to indicate his support
for the variation of the anti-discrimination clause, inserted into awards by
way of a general order as part of the State Wage Case 1999, to reflect
the recent amendment to the Anti-Discrimination Act 1977 to include a
person's responsibilities as a carer as a prohibited ground of
discrimination.
61 Mr Murphy concluded his submission by saying that this Commission
should adopt in full the increases emanating from the AIRC decision and apply
them to New South Wales awards. The economic material before the AIRC, and
now before this Commission, demonstrated that such an approach was
economically responsible. He said that the interests of conformity as between
wage outcomes in this jurisdiction and the federal jurisdiction, and the
needs of low paid workers as identified in the proceedings before the AIRC,
and specifically the needs of low paid female workers which are of special
concern to the State government, required that the outcome of the AIRC
decision now be applied in the New South Wales jurisdiction.
Submissions In Reply
The Labor Council of New South Wales
62 The Labor Council had reserved its position on the Employers First
proposal for a new consent award principle until its reply. In that reply, Mr
Christodoulou submitted there were no compelling reasons for the
Commission to adopt the proposed new principle. It followed, he said, that
the Labor Council did not support any consequential changes to the special
case principle. He also submitted that the current enterprise arrangements
principle should not be amended at this time without a proper examination or
inquiry about its use or its relationship to the making of consent awards or
enterprise agreements.
63 Mr Christodoulou contended that the proposals by Employers First
were first raised with the Labor Council only in the week commencing 7 May
2001 and a formal proposal was not forthcoming until 11 May 2001. He said
that if it was the intention of Employers First to seek what the Labor
Council regarded as substantial changes to the State Wage Case principles and
the operation of consent awards then these should have been foreshadowed much
earlier to allow the Labor Council to properly consult its affiliates and
enter into proper negotiations.
64 Mr Christodoulou made detailed submissions opposing Employers
First's proposal. Significantly, he said:
It is highly
unlikely that simply renaming a Principle which was introduced in 1991 for
enterprise level arrangements could or should be renamed "Consent
Awards" and be extended to apply across whole of industry awards without
a proper examination of the implications.
65 Mr Christodoulou also made the
following points:
· The Labor Council does not believe, given the circumstances surrounding the
introduction of the principle back in 1991, that the application of the
current Enterprise Arrangements principle "turns solely on whether it
applies to one enterprise or more than one enterprise".
· The major difference between the use of Principle 11 to make an Award or
Principle 2, is that Principle 11 contemplates arrangements which may have no
union representation and accordingly certain safeguards are required to
ensure no disadvantage to employees as against the award.
· There is no evidence before the Commission that existing consent awards
have avoided safeguards or scrutiny of the Commission.
· There is no evidence which leads to a conclusion that there is a "flow
on" effect taking place because of the making of consent awards.
· It is well established that the Commission will in most circumstances
discount to some degree the relevance of the use of consent awards as
precedent value.
· The Labor Council believes that there is some merit in examining the
current Enterprise Arrangements Principle in light of some of the issues
raised by Employers First but more particularly the interface between the
current Principle 11 and the Enterprise Arrangement Principles.
· In our view the Commission should not make the changes to the Principles
sought in the absence of sufficient material and facts which would
demonstrate that the operation of the current Principles are not assisting
the Commission in meeting the objects of the Act.
The Commission's Decision
66 We are satisfied that the AIRC's Safety Net Review-Wages May 2001 is
a "National decision" as defined by s48 of the Act which the
Commission is required to consider in accordance with the provisions of s50.
The Wage Increase
67 The AIRC determined to grant adjustments in the weekly rate of pay in all
awards made under the terms of the Workplace Relations Act 1996 on a
tiered basis. The rates of wage were increased by $13.00 per week in the case
of award rates up to and including $490.00 per week; $15.00 per week in the
case of award rates above $490.00 per week and up to and including $590.00
per week; and $17.00 per week in the case of award rates above $590.00 per
week.
68 Section 50(1) of the Act requires us to adopt the National decision unless
we are satisfied that it is inconsistent with the objects of this Act or that
there are other good reasons for not doing so. It is important
to note in this respect, as observed in the State Wage Case 2000, that
differences exist in the legislative frameworks which underlie the federal
and New South Wales systems.
69 A Full Bench of this Commission has recently stated that the differences
that now exist between the two legislative schemes, so far as the respective
award making powers of the AIRC and this Commission are concerned, are stark:
Re Pastoral Industry (State) Award [2000] NSWIRComm 27 at [28]. In that
decision, the Full Bench was required to consider the statutory schemes where
an application had been made to vary an award which had hitherto been treated
as a counterpart award. In relation to safety net adjustments, the Full Bench
stated (at [25]):
Thus, it will
be seen that the WR Act places a particular emphasis on the concept of a
'safety net' in the context of awards made by the AIRC. That term is not
defined in the WR Act, but was considered by a Full Bench of the AIRC in Safety
Net Review - Wages - April 1997 (1997) 71 IR 1 at 16-17. That decision
was considered in the State Wage Case - August 1997 earlier referred
to, the State Wage Bench there noting the consequent divergent paths which
the two systems of industrial relations appeared to be following (at 208). By
way of contrast, the Act does not contemplate any limitation in the making of
awards to a safety net basis.
70 On this occasion, we have decided to adopt the decision of the AIRC as to
the quantum of the wage adjustment. The divergent approaches of the
legislative schemes do not manifest themselves in the decision of the AIRC to
such an extent as would warrant any departure from that decision.
71 Having regard to the quantum of and reasons for the AIRC decision, the
adjustment in wages arising from the National decision is not inconsistent
with the objects of the Act. Further, we are mindful that no party to the
proceedings opposed the adoption of the quantum of the wage adjustment
arising from the National decision, although some parties, as we have earlier
mentioned, expressed reservations as to the quantum awarded.
72 Accordingly, we adopt the decision of the AIRC as to the quantum of the
wage adjustment. In doing so, however, it is appropriate to make some
observations as to the critical factors underpinning that decision.
73 There were two factors which were paramount in the decision reached by the
AIRC. Firstly, the AIRC had regard to economic conditions and, in particular,
the state of the Australian economy and the economic effects of any safety
net adjustment. Secondly, the AIRC considered the position of low paid
workers.
74 The AIRC concluded that there were positive features of the "current
economic context". This positive outlook was found essentially in the
continuing strength of the economic fundamentals of the Australian economy.
The counterbalancing consideration was the slow down in the Australian
economy. The AIRC referred to the moderation of the growth of the Australian
economy from the middle of the year 2000. It was observed that Gross Domestic
Product contracted in the December quarter with a consequent weakening of
labour market conditions. This fall was, it was concluded, substantially, but
not entirely, reflective of transitional factors and was concentrated in
particular sectors of the economy.
75 In the result, the AIRC concluded that a degree of caution was required,
particularly in the light of the uncertainty arising from recent National
Accounts data. This cautionary approach was adopted, notwithstanding the
projected resumption of reasonable non-inflationary growth (reflecting the
sound state of Australia's economic fundamentals and the position of fiscal
and monetary policy settings) estimated by the Australian Treasury and the
Reserve Bank of Australia. The AIRC's conclusion was based on evidence of
some underlying slow down in growth in Australia, the risk to future activity
from negative sentiment and slowing world growth.
76 On balance, the AIRC concluded that notwithstanding the cautious approach
warranted on the economic evidence, a further adjustment of the minimum wages
safety net was "appropriate and sustainable". The AIRC considered
the contribution to aggregate wages growth from the safety net adjustment
would have limited effect on economic activity, inflation, employment levels
and productivity.
77 The evidence before us confirms that the economic fundamentals in
Australia remain sound. Thus, although there has been a decline in the
Australian economy, on the evidence of Mr Richardson, the Australian economy
will recover rapidly towards the end of the year 2001 and continue recovery
into 2002. This projection was supported on the bases of the existence of
relatively low interest rates, a projected increase in public spending, the
competitiveness of the Australian dollar and the artificially weak nature of
housing activity (which is expected to recover substantially).
78 Upon the basis of estimates by Access Economics, the Australian economy is
expected to return to 4.9% growth by 2002-2003. Similarly, whilst employment
growth was expected to be weak until mid 2002, it was forecast that
employment would grow strongly for the remainder of that year.
79 The evidence before us demonstrated that the downturn in the New South
Wales economy is presently greater that that of the Australian economy. This
was largely associated with the decline in investment in New South Wales
which had risen sharply through the year 2000 due to a variety of investment
factors (not the least of which was the Olympics). Employment growth
contracted in New South Wales in 2001, compared with the slight growth in
Australia.
80 This decline in the New South Wales economy would seem, however, to derive
largely from transitional factors. On the evidence of Mr Richardson, it is
expected that the present weakness in the New South Wales economy will be
corrected by mid-2002 so that the New South Wales economy should improve
proportionally better than the Australian economy after that time. For
example, it is expected that for the financial year 2002-2003, growth in New
South Wales will be 5% as compared to the Australian economy at 4.9%.
Employment growth is expected to be 2.2% in New South Wales for the calendar
year 2000 compared to 1.7% in Australia. Indeed, Mr Richardson expressed a
concern in his evidence that the Australian and New South Wales economies
might bounce back too dramatically and result in other difficulties arsing
from the consequent adjustment in monetary policy.
81 We see no reason in this case to depart from the conclusion reached by the
Full Bench in the State Wage Case 2000 (at [79]) that the New South
Wales economy in the long term is expected to continue to function at about
the average of the Australian economy and that the New South Wales economy
should continue to demonstrate a relatively consistent position by comparison
to the Australian economy. We do not consider that the present circumstances
affecting the New South Wales economy warrant a different safety net
adjustment outcome to that awarded by the AIRC in the National decision.
82 As to the second factor, namely the needs of the low paid, we have earlier
set out (in para 14 of this decision) the conclusions reached by the AIRC.
83 We reiterate the view expressed in the
State Wage Case 1999 and State Wage Case 2000 that, having
regard to the objects of the Act, there is a need to make adjustments in
wages in order to protect lower paid employees under State awards. In this
respect, the evidence given by Janelle Hindmarsh, earlier referred to in this
decision, gives a compelling basis for the award of a safety net adjustment
to such employees.
84 In his submissions, Mr Murphy referred to contentions made by the
New South Wales government to the AIRC. Those submissions were as follows:
The State
Labor governments submitted that research suggests that earnings mobility at
the bottom of the labour market is quite limited and that with the growth of
part time, casual and contract work, low paid workers are more likely to be
entrenched into a future of low paid work. They submitted that research by
Mitchell reveals that a larger proportion of the workforce now face lower
real wages due, in part, to deregulation of the labour market.
85 Further, Mr Christodoulou foreshadowed that the Labor Council would
bring an application under s51 of the Act with respect to "secure
employment".
86 As to these matters, we observe that the situation of employees in low
paid work remains an important consideration in State Wage Case proceedings,
particularly in circumstances where the awards of this Commission may
prescribe actual rates of pay.
87 The Act does not confine the Commission to the establishment of minimum
wages and conditions of employment or the establishment of a safety net
(whether for the needs of the low paid or otherwise). The objects of the Act
reflect the broad discretion conferred upon the Commission for the making of
awards. Section 3(a) provides that an object of the Act is:
to provide a
framework for the conduct of industrial relations that is fair and just;
88 Putting aside reference to the particular conditions of employment
referred to in Div 2 of Pt1 of Ch2 of the Act, s10 leaves relatively
unfettered the discretion of the Commission in the making of awards -
requiring only that the Commission set "fair and reasonable conditions
of employment for employees". There is no express provision in or
objective of the Act which confines the exercise of discretion of the Commission
to the making of awards for minimum entitlements for employees as in the
federal system. Section 406 of the Act does refer to minimum entitlements
but, in doing so, merely continues provisions found in successive industrial
statutes in New South Wales which
proscribe contracting out of awards. The section does not limit the
jurisdiction of the Commission to fix wages or conditions of employment.
Award Review Classification Rate
89 It was agreed between the parties to the proceedings that the Award Review
Classification Rate should be adjusted by the same amount by which the AIRC
increased the federal minimum wage.
90 Employers First submitted that, due to the operation of s19 of the Act and
the historical operation of the Award Review Classification Rate, the Award
Review Classification Rate might not need to be continued in future wage
fixing principles. However, it did not argue against the retention of the
rate in these proceedings.
91 We are satisfied that it is appropriate in New South Wales to continue to
depart from the National decision in specifying an Award Review
Classification Rate, in line with the practice adopted in the State Wage
Case - August 1997. We determine that that rate shall be $413.40 per
week.
Anti-Discrimination Clause
92 In the State Wage Case 1999 decision, it was decided that a new
Anti-Discrimination clause should be inserted in awards by general order.
Order 5 prescribed the terms of the Anti-Discrimination clause. Order 5(1)
was in the following terms:
It is the
intention of the parties bound by this award to seek to achieve the object in
section 3(f) of the Industrial Relations Act 1996 to prevent and
eliminate discrimination in the workplace. This includes discrimination on
the grounds of race, sex, marital status, disability, homosexuality,
transgender identity and age.
93 In Review of the Principles for Approval of Enterprise Agreements 2000,
a Full Bench of the Commission determined that the Principles for the
Approval of Enterprise Agreements should be varied so as to include a new
provision 3.1 in the following terms:
The
Commission, in accordance with section 169(1) of the Act, must take into
account the principles of the Anti-Discrimination Act 1977 when exercising
its functions under these Principles.
94 An Anti-Discrimination clause was adopted in that decision which was in
relevantly similar terms to that inserted in awards pursuant to the State
Wage Case 1999.
95 Furthermore, clause 1.5 of the principle established in Review of
Principles for Enterprise Agreements (at [77]) provided:
In
particular, the terms and conditions of employment in a proposed agreement
must not unlawfully discriminate, either directly or indirectly, on the
grounds of sex, race, marital status, homosexuality, age, disability or
transgender identity.
96 In that respect the Full Bench noted (at [15]):
The parties
also agreed that, upon any amendment to the Anti-Discrimination Act 1977
making reference to carers' responsibilities, it would be appropriate to
amend proposed principle 1.5 to include a reference to carers'
responsibilities, upon application by any party.
97 The Anti-Discrimination Amendment (Carers' Responsibilities) Act 2000
amended the Anti-Discrimination Act 1977 by incorporating, as a ground
of discrimination under that Act, discrimination against a person on the
basis of that person's responsibilities as a carer.
98 In consequence of that legislative amendment it was proposed by the
parties to these proceedings that the general order made by the Full Bench of
the Commission in the State Wage Case 1999 be amended by adding to the
provision a reference to "responsibilities as a carer". It is
proposed that the general order so made would thereby vary all awards of the
Commission so as to incorporate that additional provision.
99 Furthermore, it was proposed by the parties that this Full Bench vary the
Principles for Approval of Enterprise Agreements as established in Review
of Principles for the Approval of Enterprise Agreements 2000 by making a
similar adjustment to clause 1.5 of the preamble of those principles.
100 We propose to vary the general order and principles as proposed by the
parties. In coming to this decision we have taken into account the consent of
the parties and the appropriateness of reflecting in awards and agreements
made under this Act the provisions of the Anti-Discrimination Act
1977, as recently amended. This approach is entirely consistent with the
decisions of Full Benches of the Commission in the State Wage Case 1999
and Review of Principles for the Approval of Enterprise Agreements 2000.
101 Accordingly, we shall order that order 5(1) of the orders made in the State
Wage Case 1999 be deleted and in lieu thereof the following words be
inserted:
It is the
intention of the parties bound by this award to seek to achieve the object in
section 3(f) of the Industrial Relations Act 1996 to prevent and
eliminate discrimination in the workplace. This includes discrimination on
the grounds of race, sex, marital status, disability, homosexuality, transgender
identity, age and responsibilities as a carer.
102 We shall further vary clause 1.5 of the Principles for Approval of
Enterprise Agreements by deleting that clause and inserting in lieu thereof:
In
particular, the terms and conditions of employment in a proposed agreement
must not unlawfully discriminate, either directly or indirectly, on the
grounds of sex, race, marital status, homosexuality, age, disability,
transgender identity or responsibilities as a carer.
The Principles
103 The parties reached agreement as to the terms of the principles excepting
for two matters. Those matters were as follows:
1. The provisions governing the timing of access to State Wage Case increases
(both as to increases arising under the State Wage Case 2001 and previous
State Wage Case adjustments);
2. The principles governing consent
awards and enterprise arrangements.
Agreed Matters
104 It was observed in the State Wage Case 2000 that the principles
there adopted differed in a number of respects from those determined by the
AIRC. The Full Bench considered that those modifications of the principles
adopted by the AIRC were warranted having regard to differences between the
two jurisdictions and the appropriateness of giving conformity to principles
adopted in earlier State Wage Case decisions.
105 Putting aside the two contested matters, the parties proposed a
continuance of the principles adopted in the State Wage Case 2000,
save for the principle concerning first awards and extensions to existing
awards. It should be noted, however, that the parties proposed the
incorporation of the principle arising from Re Equal Remuneration
Principle (2000) 97 IR 177 at [158].
106 As to first awards and extensions to existing awards (Principle 13) the
parties proposed a substantial alteration to the existing principle. It was
contended that the existing principle should be modified so as to give
greater conformity with Principle 11 of the National decision. However, it
should be noted that the parties considered it inappropriate to fully adopt
the principle deriving from the National decision, given differences in the
federal and New South Wales jurisdictions.
107 We consider that the principles proposed by consent of the parties are
appropriate and that the departures from the National decision are
appropriate having regard to the differences presently existing in the wage
fixing principles of the two jurisdictions as the result of earlier State
Wage Case decisions and the continuing differences between the legislative frameworks.
108 We note that submissions were put by the parties in relation to
principles concerning part-time employment and majority clauses. Reference
was made to paragraphs [158] to [162] of the AIRC decision. We do not
consider that this matter has been fully debated before us and, therefore, it
is not a matter with which we intend to deal in any detail in this decision.
It is sufficient to note that s19 of the Act specifically deals with the
issue of part-time employment. Furthermore, there is ample scope within the
jurisdiction of the Commission and within wage fixing principles to deal with
those matters which might be otherwise contemplated by majority clauses.
109 We now return to the contested matters.
Access to State Wage Case Decisions and Lagging Awards
110 The Wage Fixing Principles were varied in the National decision by the
insertion of a new Principle 8(c) in the following terms:
In awards
where the variation for a safety net adjustment arising from the April 1999,
May 2000 or May 2001 decisions 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, any applicable 12 months' delay between variations
may be waived.
111 Additionally, Principle 8(b) was amended so as to remove reference to the
Safety Net Review - Wages - April 1999 decision (1999) 87 IR 190 and
inserting a reference to the Safety Net Review - Wages - May 2000 decision
(2000) 95 IR 64.
112 The genesis of Principle 8(b) of the federal principles was the decision
of the Full Bench of the AIRC in Safety Net Review - Wages - April 1999.
The AIRC decided in that decision to provide for a twelve months' gap between
increases provided for in its April 1998 decision (Safety Net Review -
April 1998 (1998) 97 IR 37) and any increases provided for in that
matter. The Commission considered that the provision of a twelve months' gap
would ameliorate any adverse economic consequences of its decision. The
principle was continued in Re Safety Net Review - Wages - May 2000
(2000) 95 IR 64 at [122] on essentially the same basis, namely, in order to
avoid cost pressures which might arise from the safety net adjustment.
113 In the National decision, the AIRC decided to relax the provisions of
Principle 8(b) so as to permit more than one safety net adjustment to be
awarded at the same time. The basis for that decision was as follows
[151-152]:
We have considered whether the Statement of Principles should be amended to
allow for more than one safety net adjustment to be awarded at the same time.
This issue has arisen in particular in relation to the award simplification
process. No party was opposed to such an amendment to the principles however
it was submitted that certain conditions should be complied with before any
award could be varied.
The justification for the twelve month delay between safety net adjustments
has been referred to already. We have decided that a member of the Commission
should be able to waive the requirement for 12 months to have elapsed between
wage adjustments allowable under previous safety net decisions provided that
each party to the award consents to the variation and there is no cost to any
employer party to the award. In any other case where a party seeks to vary an
award for more than one safety net adjustment that party will need to apply
for and justify the variation as a special case.
114 It should also be noted that a Full Bench of the AIRC has reduced the
time periods between safety net adjustments (as specified in Principle
8) in special case proceedings: Re Hospitality Industry - Accommodation,
Hotels, Resorts and Gaming Award 1998 (unreported, 21 May 1999, Print
R4975).
115 Prior to the decision of the AIRC in Safety Net Review - Wages - April
1999 this Commission, in State Wage Case - August 1997, considered
a situation where a relatively large number of awards had not received safety
net adjustments. The evidence before the Commission in that matter was that
in 218 awards sampled, over half had not received the benefit of three $8.00
safety net adjustments (see at 223). In the result, the Commission determined
that it would permit applications to have any outstanding $8.00 safety net
adjustments dealt with at the same time as the safety net adjustment awarded
in the State Wage Case - August 1997. However, the Commission
introduced a requirement for phasing-in. Principle 1(d)(vi) provided that:
(vi)
Increases arising from paragraph (v) above may be phased in upon application
and where circumstances is justified. (at 229)
116 In the State Wage Case - June 1998 (1998) 79 IR 416, the
Commission determined to adopt agreed departures proposed by the parties from
the then federal principles established in Safety Net Review - April 1998
(1998) 79 IR 37. The federal principles had been reconstructed in the Safety
Net Review - April 1998. As part of those changes a new Principle 8 was
added to the federal principles. In giving effect to the agreement of the
parties, the Commission introduced an additional component to Principle 8
which differed from the federal principles. It was in the following terms:
(f) increases
arising from the State Wage Case June 1998 and from previous State Wage Cases
may be phased in upon application and where circumstances justify it. (at
446)
This provision
was, no doubt, reflective of the phasing-in arrangements introduced in the State
Wage Case - August 1997.
117 Thus, when the Full Bench of the Commission in the State Wage Case
1999 came to consider the introduction of Principle 8(b) arising from the
Safety Net Review - Wages - April 1999 decision it did so in this
historical context which incorporated management of outstanding safety net
adjustments and the existence of a different principle providing for the
phasing-in of outstanding safety net adjustments.
118 Those factors resulted in the Full Bench in the State Wage Case 1999
modifying Principle 8(b) of the then federal principles. The Commission
introduced a proviso to Principle 8(b) which was reflective of the earlier
phasing-in arrangements. The proviso was expressed within Principle 8(g) as
follows:
Increases
arising from the State Wage Case 1999 and from previous State Wage Cases may
be phased in upon application and where circumstances justify it.
119 The reason for this decision was contained in the section of the State
Wage Case 1999 decision dealing with lagging awards. After outlining the
aforementioned history of principles dealing with phasing-in arrangements,
the Commission identified that, on the evidence before it, there remained
awards which were still lagging behind, that is, not in receipt of a number
of State Wage Case adjustments. The Commission expressed great concern over
that matter, given past experience had indicated that the awards which had
been overlooked particularly affected low paid workers. The Full Bench stated
the approach it intended to adopt in relation to lagging awards as follows
(at 396):
As to such
awards the Commission has determined to take two steps. The first is that at
all future State Wage Case hearings the parties will be required to identify
any awards which have not been varied to give effect to increases available
under the previous State Wage Case so that the situation as to such awards
can be considered and addressed.
The second is that we have decided that, as was the approach adopted in the State
Wage Case August 1997, outstanding increases available under the State
Wage Case June 1998 should be phased-in by agreement or, in the absence
of agreement, by decision of a single member of the Commission. The
requirement that increases available from this decision not be inserted into
an award until 12 months after the 1998 increase has been inserted will not
strictly apply to these awards, but will be a matter to be dealt with either
by agreement of the parties or by decision of the Commission. The aim is to
introduce at the appropriate time wage increases to which employees are
entitled, but without affecting employment or business viability.
120 That departure, in Principle 8, from the federal principles was continued
in the State Wage Case 2000. The question of lagging awards was
addressed at that time as follows (at [90] - [93]):
As we have
noted, the parties were agreed that any wage adjustment arising from this
decision should be inserted in awards only upon application. This approach
was urged by the parties on a variety of bases, including that it reflected
the agreement of the parties and comity with the approach of the AIRC.
Further, we have noted the submission put by Mr Robertson on behalf of
the Labor Council which we have earlier extracted in this decision and
consider that it is appropriate to act on it in these proceedings.
The Full
Bench, in the State Wage Case 1999, stated that:
... at all
future State Wage Case hearings the parties will be required to identify any
awards which have not been varied to give effect to increases available under
the previous State Wage Case so that the situation as to such awards can be
considered and addressed.
We understand
Mr Robertson to be addressing this question in his submission. This
issue will be revisited in the next State Wage Case, at which time the
outcome of the s19 review process should be clearer.
For present
purposes, we shall provide that access to the State Wage Case 2000 wage
adjustments shall be obtained only by application.
121 It will be observed from the foregoing consideration of Principle 8(g)
that the provision has a discrete history and context quite separate from
Principle 8 which emerged in the federal arena.
122 In this matter, the Labor Council proposed the continuation of the
existing proviso to Principle 8(b) together with the new federal principle
(Principle 8(c)). However, the Labor Council also proposed that outstanding
safety net adjustments may be obtained without the twelve months' delay
occasioned by Principle 8(b) by way of a special case. It was submitted that
it was neither fair nor just that an award or awards could indefinitely lag
behind in wages because of previous oversights in making applications.
123 The employer parties proposed essentially a similar approach to the Labor
Council and relied upon the common position with the Labor Council in support
of its approach.
124 The Minister submitted that Principle 8(c) of the federal principles was
of limited effect and did not address the problem where there occurred a lag
in safety net adjustments for awards containing actual wage rates. The
Minister considered that it was appropriate to make explicit that lagging
awards can be dealt with as a special case. The Minister proposed that
Principle 8(g) be amended by deleting the existing words "the State Wage
Case 2000 and from".
125 The AWU contended that Principle 8(g) should be amended so that award
increases arising from the State Wage Case 2001 would not be delayed
beyond the year 2001 as the result of the operation of Principle 8(b) (in the
case of awards which had historically been the subject of late applications
by the AWU for State Wage Case adjustments).
126 No party to these proceedings squarely addressed the requirements for
information as to lagging awards required by the Commission in the State
Wage Case 1999 and State Wage Case 2000. The Labor Council did
undertake some limited research which revealed, in its submission, the
continued existence of lagging awards. However, it conceded that the research
was not exhaustive. Further, the material supplied did not provide relevant
information as to why the awards in question had so lagged.
127 The awards identified by the Labor Council were in miscellaneous
industries with the greatest concentration lying in the transport industry
and in relation to musicians. It would appear that some of the awards are
subject to s19 proceedings which are extant. In other cases, s19 proceedings
have been completed with respect to the subject awards.
128 It should also be noted that the AWU contended that Principle 8(g) did
not effectively remedy the position of lagging awards or the problem of
delayed access to safety net adjustments as the provisions of Principle 8(g)
had been construed as applying only in circumstances where there was more
than one outstanding safety net adjustment in relation to a particular award:
Re Pastoral Employees (State) Award (unreported, Grayson DP, 14
December 2000).
129 It is apparent that the principles and procedures put in place by this
Commission in successive State Wage Case decisions since 1997 to remedy the
non-application of State Wage Case adjustments in awards under this Act have
not been fully effective. Whether this situation arises from the failure of
parties to make relevant applications or the principle not being given full
effect is, to some extent, beside the point. What is important is that the
principle was created to ameliorate the difficulties occasioned to low paid
workers as a result of the non-adjustment of awards in accordance with State
Wage Case decisions. These awards typically provide actual rates of pay.
130 In these circumstances, it is appropriate for the Commission to continue
to fashion the provisions of Principle 8 so as to rectify lagging awards in
the New South Wales system which by their nature (in not being merely minimum
rates awards) require special attention for the low paid.
131 In these circumstances, Principle 8(c) of the federal principles is not
appropriate and provides far too restrictive an approach to remedy the
problem we have identified, and particularly so when regard is had to the
history of the provisions in this jurisdiction. Whilst we can understand that
the parties may not have looked to the special case principle as a means of
dealing with these difficulties, we consider that, given the history of
lagging awards, any requirement being imposed on the parties of this nature
might serve only to aggravate rather than remedy the situation.
132 We propose, therefore, to amend Principle 8(g) so as to provide adequate
scope to deal with the special class of awards which have lagged with respect
to State Wage Case adjustments. We refer in this respect to awards which have
more than one outstanding safety net adjustment or awards which, by dint of a
delinquent approach to earlier applications, have been unable to access in a
reasonable and timely way safety net adjustments, due to the operation of
Principle 8(b). We emphasise that the grant of any such application is not
automatic and may attract, in the ordinary course, phasing-in principles.
Furthermore, we emphasise that the amendment to Principle 8(g) we propose to
make is designed to deal with the special circumstances we have identified in
this decision and not to provide for any abridgment of the twelve month
provision arising in Principle 8(b) in the ordinary course.
133 In order to ensure the effective operation of Principle 8(g) we also
intend to adopt a procedure by which applications arising under Principle
8(g) may be dealt with by the Commission. Accordingly, we direct that any
application for a safety net adjustment which relies upon Principle 8(g)
should be made no later than 1 August 2001. Further, such applications should
specify:
1. that the application as pressed in whole or in part upon the basis of the
operation of Principle 8(g); and
2. whether the award is or has been the subject of s19 proceedings.
134 Furthermore, the application should be accompanied by correspondence to
the Industrial Registrar identifying that the application is made upon this
basis.
135 Such applications will be listed before a member of this Full Bench, Walton
J, Vice-President, after 1 August 2001. It will be expected that the
Commission would then consider the applications in the light of any s19
proceedings (although we envisage that any s19 proceedings which are extant
will take into account revised Principle 8(g)). We would expect that the
parties before us will appear in the proceedings before his Honour with a
view to indicating at that time the outcome of their researches as to whether
there remain lagging awards other than those which have been the subject of
an application in accordance with the abovementioned procedure. By this
means, we expect the parties will provide the information as to lagging
awards earlier sought by Full Benches in the State Wage Case 1999 and State
Wage Case 2000 at that time.
136 Accordingly, we propose to amend Principle 8(g) as follows:
(g) Increases
arising from previous State Wage Cases may be phased-in upon application and
where circumstances justify it, whether as part of the application of the
increases arising from the State Wage Case 2001 or otherwise.
Consent Awards
137 In the State Wage Case - December 1993 (1994) 52 IR 157 at 204,
the Full Bench of the Commission established an exception to the special
case principle in relation to awards consented to by the parties and
enterprise arrangements dealt with in accordance with the enterprise
arrangements principle.
138 The enterprise arrangements principle was brought into existence in the State
Wage Case - May 1991 (1991) 36 IR 362. The Commission observed in the State
Wage Case - December 1993 that the changes to the special case principle
had resulted from a recognition of the increased devolution of industrial
affairs to the parties. This devolution had occurred partly as a result of
changes occurring in the federal arena, but also due to the changes in the
statutory scheme that the Commission was then considering.
139 It is against this background that the Full Bench of the Commission in
the State Wage Case - June 1998 came to consider the introduction of
Principle 2 of the federal principles established by the decision of the AIRC
in Safety Net Review - April 1998.
140 In the State Wage Case - June 1998 the Full Bench modified the
operation of the federal principle, by identifying matters arising under the
enterprise arrangements principle as not requiring consideration as a special
case. In this manner the Commission adopted the same approach as it had done
in the State Wage Case - December 1993.
141 The employer parties essentially contended that the enterprise
arrangements principle should be amended so as to incorporate some mutually
agreed changes. They also sought the alteration of the provision so as to
have it apply to all consent awards (whether enterprise based or otherwise).
In this latter respect their approach was opposed by the Labor Council and
the Minister. The essential basis for this proposition was that consent
awards had been considered by the Commission under different principles and,
therefore, there may arise an inconsistency of approach.
142 The difficulty with this proposition, however, is that, whilst examples
were given of matters that have been considered by this Commission variously
under the enterprise arrangements principle and as consent awards, there was
no evidence as to any inconsistency of approach by the Commission in dealing
with such awards. Nor were any examples given of difficulties occasioned by
the existing form of the principles. Indeed, it was not submitted that the
existing principles had created difficulties as a matter of principle or
practice.
143 In our view, no basis has been established to alter the structure of the
principles dealing with consent awards. Those principles have now been in
place effectively since 1993 without difficulty being occasioned, or any
issue arising, at a theoretical or practical level as to the operation of the
principles. In these circumstances, and in the absence of consent of all
parties, a firm basis for the alteration of the principles would need to be
established before their variation. None was forthcoming in this matter.
144 However, we note the willingness of the Labor Council to enter into
discussions as to the form of the principles governing consent awards. We
encourage the parties to take that course.
145 We note that Employers First contended, without opposition from any other
party, paragraphs (g) and (h) of the enterprise arrangements principle were
now otiose. We agree. Those paragraphs shall be removed from the principles
we now make.
Terms of the Principles
146 The principles which we adopt are set out in Annexure B.
Orders
147 The Commission makes the following orders:
1) Pursuant to
s50 of the Industrial Relations Act 1996, the Full Bench of the
Industrial Relations Commission of New South Wales orders, for the purpose of
awards and other matters under the Act, the adoption, partly and with
modifications as contained in this decision, 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 B.
3) Pursuant to s52 of the Act, the Commission orders that awards which do not
contain wage increases awarded since 29 May 1991, 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:
(i) $13.00
per week increase in award rates up to and including $490.00 per week;
(ii) $15.00
per week increase in award rates above $490.00 per week up to and including
$590.00 per week; and
(iii) $17.00 per week increase in 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 amounts referred to in the Principles or determine that
no amount should be awarded.
4) Pursuant to
s52 of the Act, the Commission orders that the following rates may be
increased by 3 per cent 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
awards should be adjusted by the same amount as their federal award
counterparts.
5) Pursuant to
s52 of the Act, the Commission orders the variation of awards generally, to
delete paragraph 1 of the standard Anti-Discrimination clause as determined
in the State Wage Case 1999 and insert in lieu thereof:
"1. It
is the intention of the parties bound by this award to seek to achieve the
object in s3(f) of the Industrial Relations Act,1996 to
prevent and eliminate discrimination in the workplace. This includes
discrimination on the grounds of race, sex, marital status, disability,
homosexuality, transgender identity, age and responsibilities as a
carer".
6) Pursuant to
s33(4) of the Act, the Commission orders the deletion of paragraph 1.5 of
Annexure A to the Review of the Principles for Approval of Enterprise
Agreements 2000 decision and the insertion in lieu thereof:
"1.5. In
particular, the terms and conditions of employment in a proposed agreement
must not unlawfully discriminate, either directly or indirectly, on the
grounds of sex, race, marital status, homosexuality, age, disability,
transgender identity or responsibilities as a carer".
7) These
orders shall operate on and from today until further order of the Commission.
Annexure A - Appearances at the Hearing
· Mr C Christodoulou with Mr P Howes for the Labor Council of
New South Wales.
· Mr J V Murphy of counsel for the Minister for Industrial Relations
and the Public Employment Office.
· Mr R Tripodi for the Australian Workers' Union, New South Wales.
· Mr T McDonald for Employers First and its affiliated organisations.
· Mr P Ronfeldt for Australian Business Industrial and the Registered
Clubs Association of New South Wales.
· Mr D Ritchie for the Australian Retailers Association, New South
Wales Division.
· Mr R Davies for the Australian Industry Group New South Wales
Branch, New South Wales Road Transport Association Inc, Motor Traders'
Association of New South Wales, Local Government Association of New South
Wales, Shires Association of New South Wales, Catholic Commission for
Employment Relations and State Chamber of Commerce and Industry (Industrial
Relations) Association.
Annexure B - Wage Fixing Principles
INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES
STATE WAGE CASE 2001
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;
(c) to adjust allowances and service increments in accordance with Principle
5;
(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 2001in 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 Principle 14.
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 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 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) Subject to paragraph (g), that at least twelve months have elapsed since
the rates in the award were increased in accordance with the State Wage
Case 2000 decision.
(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 s125 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
Case 2001. These adjustments may be offset against:
(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.'
The above clause will replace the offsetting clause inserted into awards
pursuant to the principles determined in the State Wage Case 2000
decision.
(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 previous State Wage Cases may be phased-in upon
application and where circumstances justify it, whether as part of the
application of the increases arising from the State Wage Case 2001 or
otherwise.
(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 $413.40shall 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 s17(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 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.
(h) 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 a Full Bench 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 s124 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.
(c) The Commission may award provisions which differ from those in paragraph
(b):
(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;
(C) the
history of the existing award provisions;
(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 s124 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
Any first
award or an extension to an existing award must be consistent with the
Commission's obligations under Part 1 Chapter 2 of the Act.
In determining
the content of a first award the Commission will have particular regard to:
(a) relevant
wage rates in other awards, provided the rates have been adjusted for
previous State Wage Case decisions and are consistent with the decision of
the Stage Wage Case 1989;
(b) the need for any alterations to wage relativities between awards to be
based on skill, responsibility and the conditions under which the work is
performed;
(c) for conditions of employment, other than wage rates, prima facie the
existing conditions of employment;
(d) that the
award would comply with the requirements of section 19 of the Act.
14 Equal Remuneration and Other
Conditions
(a) Claims may be made in accordance with the requirements of this principle
for an alteration in wage rates or other conditions of employment on the
basis that the work, skill and responsibility required, or the conditions
under which the work is performed, have been undervalued on a gender basis.
(b) The assessment of the work, skill and responsibility required under this
principle is to be approached on a gender neutral basis and in the absence of
assumptions 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 principle.
(e) The assessment of wage rates and other conditions of employment under
this principle 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 principle, 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 principle, the Commission will ensure that any
alternative 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 principle 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 extent 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
principle, except to the extent 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 Principle 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 principle will be processed before a Full Bench of the
Commission, unless otherwise allocated by the President.
(o) Equal remuneration shall not be achieved by reducing any current wage
rates or other conditions of employment.
15 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.
16 Duration
These
principles will operate until further order of the Commission.
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