SERIAL C7531

 

STATE WAGE CASE 2010

 

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

FULL BENCH

 

 

Summons to Show Cause - Commission on its own Initiative pursuant to Part 3 of Chapter 2 of the Industrial Relations Act 1996

 

(No. IRC 471 of 2010)

 

 

 

ORDERS

 

The Full Bench makes the following orders:

 

(1)      Pursuant to s 51(1) of the IR Act, the Commission 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 IR Act and consistent with Principle 8 of the Commission's Wage Fixing Principles, the Commission orders that all awards are hereby varied by increasing the following monetary sums by a State Wage Case adjustment of 4.25 per cent other than those awards which contain wage increases awarded since 29 May 1991 which were not safety net, State Wage Case or minimum rates adjustments:

 

(i)       Existing adult wage rates;

 

(ii)      Existing monetary allowances, including shift allowances expressed as monetary amounts and service increments; and

 

(iii)      Junior rates expressed as monetary amounts.

 

(3)      The following clause is inserted in each relevant award:

 

'The rates of pay in this award include the adjustments payable under the State Wage Case 2010. 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 replaces the offsetting clause inserted into awards pursuant to the Principles determined in the State Wage Case 2009 decision.

 

(4)      Pursuant to s 52 of the IR Act, the Award Review Classification Rate is increased by $24.10 to $592.30.

 

 

 

 

(5)      Pursuant to s 52 of the IR Act, the Commission orders that:

 

(i)       The minimum weekly rate of pay payable to an adult employee (as defined in s 5 of the IR Act) engaged on a full-time basis whose employment is not subject to the terms of an industrial instrument (as defined in s 8 of the IR Act) shall be an amount of $569.90 as varied from time to time by the Commission;

 

(ii)      The minimum hourly rate of pay payable to an adult employee (as defined in s 5 of the IR Act) engaged on a part-time basis whose employment is not subject to the terms of an industrial instrument (as defined in s 8 of the IR Act) shall be an amount of $569.90, as varied from time to time by the Commission divided by 38;

 

(iii)      The Order in paragraph (4) will not apply to those employees who are trainees, apprentices or employees on a supported wage or those employees employed on annual remuneration which is greater than the amount specified in reg 12.3 of Chapter 2 of the Workplace Relations Regulations 2006 of the Commonwealth from time to time or that amount as indexed from time to time in accordance with reg 12.6 of Chapter 2 of those Regulations;

 

(6)      Orders (1), (2), (3), (4) and (5) shall operate on and from the date of this decision and shall be in force until further order of the Commission.

 

 

 

 

APPENDIX A

 

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

 

STATE WAGE CASE 2010

 

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 is varied (by the General Order made in the State Wage Case 2010) or may be varied as the case may be, 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 2010 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, are increased by 4.25 per cent for the State Wage Case 2010 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 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 2010 decision, all relevant NSW awards are varied to include a State Wage Case adjustment of 4.25 per cent (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), subject to the following:

 

 

 

(a)      The following clause is inserted in each relevant award:

 

The rates of pay in this award include the adjustments payable under the State Wage Case 2010. 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 replaces the offsetting clause inserted into awards pursuant to the Principles determined in the State Wage Case 2009 decision.

 

(b)      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.

 

(c)      The State Wage Case adjustment is only 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 Minimum Rates Adjustment principle, since 29 May 1991.

 

(d)      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 $592.30 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 $592.30 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(s).

 

9A.     Minimum Wage

 

(a)      The Minimum Wage shall apply to those adult employees who are employed in the jurisdiction of the Commission and whose employment is not subject to the terms of an industrial instrument.

 

 

(b)      The minimum weekly rate of pay payable to an adult employee (as defined in s 5 of the Act) engaged on a full time basis whose employment is not subject to the terms of an industrial instrument (as defined in s 8 of the Act) is $569.90, as varied from time to time by the Commission.

 

(c)      The minimum hourly rate of pay payable to an adult employee (as defined in s 5 of the Act) engaged on a part-time basis whose employment is not subject to the terms of an industrial instrument (as defined in s 8 of the Act) is $569.90, as varied from time to time by the Commission divided by 38.

 

(d)      The Minimum Wage will not apply to those employees who are trainees, apprentices and employees on a supported wage or those employees employed on an annual remuneration which is greater than the amount specified in regulation 12.3 of Chapter 2 of the Workplace Relations Regulations 2006 of the Commonwealth from time to time or that amount as indexed from time to time in accordance with regulation 12.6 of Chapter 2 of those Regulations.

 

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 provisions of any award or order of the Commission that deals with the same matters insofar 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)      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 s 124 of the Industrial Relations Act 1996. This legislation, as varied from time to time, governs the superannuation rights and obligations of the parties.'

 

(ii)       if appropriate, ensure that the award contains specification of an employee's earnings (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 s 124 of the Act, any specification of a fund will carry with it the obligation for an employer to pay contributions at such intervals as are required by the fund.

 

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

 

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

 

 

 

 

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

 

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

 

(iv)      have regard to relevant statutory provisions.

 

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

 

13.      First Award and Extension to an Existing Award

 

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)      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 s 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 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 a 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.

 

 

 

 

R. P. BOLAND  J, President.

M. J. WALTON  J, Vice-President.

R. W. HARRISON,  D.P.

J. P. GRAYSON,  D.P.

I. TABBAA, Commissioner.

 

 

 

 

 

____________________

 

 

Printed by the authority of the Industrial Registrar.