STATE WAGE CASE 2007
INDUSTRIAL RELATIONS
COMMISSION OF NEW SOUTH WALES
FULL BENCH
Application by Unions New South Wales for a State Decision -
State Wage Case 2007 under s 51 of the Industrial Relations Act 1996
(No. IRC 3613 of 2006)
Before The Honourable
Justice Wright, President
|
8 June 2007
|
The Honourable Justice
Walton, Vice-President
The Honourable Mr
Deputy President Harrison
The Honourable Justice
Boland
Commissioner Tabbaa
Commissioner Bishop
|
|
ORDERS
We make the following orders:
1. Pursuant to s
51(1) of the Industrial Relations Act 1996 the Full Bench of the
Industrial Relations Commission of New South Wales orders that the Commission's
Wage Fixing Principles shall be as set out in Appendix A to this decision.
2. Pursuant to s
52 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 $20.00 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.
3. Pursuant to s
52 of the Act, the Commission orders that the following rates may be increased
by 4 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.
4. Pursuant to s
52 of the Act, the Award Review Classification Rate is increased by $27.00 from
$504.40 to $531.40.
5. A party to
the proceedings in the State Wage Case 2007 shall have liberty to apply on
reasonable notice in the event that any decision made by the Australian Fair
Pay Commission in 2007 has adverse implications for more than one New South
Wales award. Adverse implications shall not include the mere fact that the AFPC
has granted an increase in the Federal Minimum Wage that is different to the
increases awarded in this decision.
6. Orders (1),
(2), (3), (4) and (5) shall operate on and from 8 June 2007 until further order
of the Commission.
7. The
application by the LHMU in Matter No IRC 3608 of 2006 is remitted to a Member
of the Commission to be dealt with in accordance with this decision.
ANNEXURE A
INDUSTRIAL
RELATIONS COMMISSION OF NEW SOUTH WALES
STATE WAGE CASE
2007
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 adjustment
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 it will be dealt with in terms of the
Act;
(f) to adjust
wages for the State Wage Case 2007 in accordance with Principle 8;
(g) to approve of
an enterprise arrangement reached in accordance with Principle 11; and
(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 4.0 per cent for the State Wage Case 2007 adjustment.
(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 classification to which that structure is related. There must
be no likelihood of wage leapfrogging arising out of changes in relative
position.
These are the only circumstances in which rates may be
altered on the ground of work value and the altered rates may be applied only
to employees whose work has changed in accordance with this principle.
(b) In applying
the Work Value Changes principle, the Commission will have regard to the need
for any alterations to wage relativities between awards to be based on skill,
responsibility and the conditions under which work is performed.
(c) Where new or
changed work justifying a higher rate is performed only from time to time by
persons covered by a particular classification, or where it is performed only
by some of the persons covered by the classification, such new or changed work
should be compensated by a special allowance which is payable only when the new
or changed work is performed by a particular employee and not by increasing the
rate for the classification as a whole.
(d) The time from
which work value changes in an award should be measured is the date of
operation of the second structural efficiency adjustment allowable under the
State Wage Case August 1989 (1989) 30 IR 107.
(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.
(j) In
arbitrating an application made under this Principle, the Commission is
required to determine whether or not future State Wage Case general increases
will apply to the award.
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 2007 decision
awards may, on application, be varied to include a State Wage Case adjustment
of $20.00, subject to the following:
(a) The operative
date will be no earlier than the date of the variation to the award.
(b) That at least
twelve months have elapsed since the rates in the award were increased in
accordance with the State Wage Case 2006 decision except in accordance with
Principle 8(h).
(c) In awards
where the variation for a safety net adjustment arising from the 2001, 2002,
2003, 2004, 2005, 2006 or 2007 State Wage Case 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.
(d) At the time
when the award is to be varied to insert the State Wage Case adjustment (or a
proportionate amount in the cases of part-time and casual employees, juniors,
trainees, apprentices, employees on a probationary rate, employees on a
supported wage or with permits under s 125 of the Act), each union party to the
award will be required to give a specific commitment as to the absorption of
the increase. In particular, the union commitments will involve the acceptance
of absorption of the adjustment to the extent of:
(i) any
equivalent overaward payments, and/or
(ii) award wage
increases since 29 May 1991 other than safety net, State Wage Case, and minimum
rates adjustments.
(e) 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 2007. 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 2006
decision.
(f) 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.
(g) 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.
(h) The State Wage
Case adjustment may apply where the rates in an award have increased under the
Work Value and/or Equal Remuneration Principles in accordance with the
Commission’s decision as set out in Principles 6(j) and 14(p) respectively.
9. Award
Review Classification Rate
The Award Review Classification Rate of $531.40 shall
be the rate below which no full-time adult employee (excluding trainees,
apprentices and employees on a supported wage or on a probationary rate) should
be paid under the relevant award.
Where a classification in an award is below the Award
Review Classification Rate the following process will apply on application:
(a) The award will
be listed for a mention at which the parties will report as to:
(i) how the Award
Review Classification Rate will be achieved, or
(ii) whether the
award is obsolete.
The Commission may direct the parties to confer in
order to set a program for an updating of the award to reflect the Award Review
Classification Rate.
(b) If the parties
to the award do not appear at this mention, the Commission shall request the
parties to the award to show cause why the award should not be considered
obsolete, and rescinded under s 17(3) of the Act.
(c) Where no
agreement is reached with respect to (a) above, the Commission shall re-list
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 (e.g. 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) 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 (e.g. ‘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 State Wage Case
1989;
(b) skill,
responsibility and the conditions under which the work is performed;
(c) or 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
under-valuations 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 alteration 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.
(p) In arbitrating
an application made under this Principle, the Commission is required to
determine whether or not future State Wage Case general increases will apply to
the award.
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.
F. L. WRIGHT J,
President.
M. J. WALTON J,
Vice-President.
R. W. HARRISON D.P.
R. P. BOLAND J.
I. TABBAA, Commissioner.
E. A. R. BISHOP,
Commissioner.
____________________
Printed by
the authority of the Industrial Registrar.