Further, it is fundamental to success that the unions make and keep the following commitments:

. commitment to new award structures including the reform of awards into base rates and supplementary payments;

. commitment to acceptance of the broad award framework and the relationships established;

. acceptance of classification change and new job specifications;

. preparedness to undertake training associated with a wider range of duties; and

. absorption of increases arising out of the minimum rates adjustment.

A no extra claims commitment from each union will also be required before the benefits of this decision are available.

We note that the ACTU stated that the unions were prepared to absorb increases other than the structural efficiency adjustment. We are satisfied that the ACTU accepts that if these commitments are not met, the wages package cannot be sustained and the drive to reform the system will founder.

Further, if any union, or a group or class of its members, refuses to give the necessary commitments or indicates by its conduct that it is not prepared to work within the framework of the principles, then that union or a group or class of its members should not receive any benefits from this package.

There is also a need for consistency in approach on the part of all

tribunals, Commonwealth and State. As noted in the February 1989 Review decision:

"In many instances, employees in the same industry or enterprise may be bound by a mixture of federal and State awards and experience has shown that care must be taken to ensure that appropriate relativities are maintained in decisions of the relevant tribunals."

"In order to guard against industrial disputation and inappropriate wage outcomes, this Commission will utilise the co-operative powers available to it under Part VII of the Act and will continue to pursue the objective of achieving a consistent approach."

18 NATIONAL WAGE CASE AUGUST 1989

In the 1989 Review a number of parties "raised the issue of treatment of profit sharing, performance based systems of pay and payment by results schemes in awards". In that decision the Commission said:

"Our initial reaction is that such schemes can only operate in minimum

rates awards without supplementary payments. However, the issue was not extensively debated in these proceedings and we therefore are not prepared to make a final determination without giving the parties the opportunity of addressing it in more detail."(16)

Debate in these proceedings again fell short of the detail which is necessary to make a final determination. Nevertheless, we are of the opinion that current payment by results schemes should continue to be part of the award structure and:

. it is essential that workers covered by such a scheme be subject to the protection of prescribed minimum rates plus supplementary payments for the work involved;

. additional payments derived from payment by results schemes should be absorbed into supplementary payments; and

. supplementary payments should not be used for the calculation of payment by results (although the re-expression of an existing base rate in an award as a minimum classification rate and a supplementary payment should not have the effect of prejudicing employees subject to existing incentive schemes).

During the proceedings, the relationship between the structural efficiency principle and the other wage fixing principles was debated. In light of that debate, we have decided that:

(i) structural efficiency exercises should incorporate all past work value considerations;

(ii) any extensions of existing awards to include new classifications should form part of the structural efficiency exercises;

(iii) claims based on anomalies and/or inequities will continue to be treated as special cases;

(iv) there is no separate role for the operation of a supplementary payments principle; and

(v) claims for new allowances will be dealt with in accordance with the relevant portion of the allowances principle but, consistent with this decision, existing work-related allowances may be increased by up to 3% at the time of each instalment of the structural efficiency adjustment.

As a consequence of this decision, the existing principles require amendment. Those amended principles are set out in Appendix A to this decision.

_
_

NATIONAL WAGE CASE AUGUST 1989 19

As noted earlier, each union will be required to give a no extra claims commitment before the benefits of this decision are available. That commitment shall be inserted into the award concerned in the following terms:

"It is a term of this award (arising from the decision of the Australian Industrial Relations Commission in the National Wage Case of 7 August 1989 the terms of which are set out in Print H9100) that the union(s)

undertake(s), for the duration of the principles determined by that decision, not to pursue any extra claims, award or overaward, except when consistent with those principles."

The commitment will continue to operate until the principles as amended in this decision are reviewed. Upon application, that Review will commence in September 1990.

20
NATIONAL WAGE CASE AUGUST 1989

These principles have been developed with the aim of providing, for their period of operation, a clear framework under which all concerned - employers, workers and their unions, governments and tribunals - can

co-operate to ensure that labour costs are monitored; that measures to meet the competitive requirements of industry and to provide workers with access to more varied, fulfilling and better paid jobs are positively examined; and that lower paid workers are protected.

The principles provide that movements in wages and salaries and improvements in conditions - whether they occur in the public or private sector, whether they be award or overaward and whether they result from consent or arbitration - must fall within the level allowable in accordance with the National Wage Case decision of 7 August 1989.

In considering whether wages and salaries or conditions should be awarded or changed for any reason either by consent or arbitration, the Commission will guard against contrived arrangements which would circumvent these principles and their aims.

Any claims for improvements in pay and conditions must be processed in accordance with these principles. No adjustments will be approved by the Commission unless a union concerned in an award gives a commitment that it will not pursue any extra claims, award or overaward, except in compliance with these principles.

When this no extra claims commitment is given, it shall be inserted in the award concerned in the following terms:

"It is a term of this award (arising from the decision of the Australian Industrial Relations Commission in the National Wage Case of 7 August 1989 the terms of which are set out in Print H9100) that the union(s)

undertake(s), for the duration of the principles determined by that decision, not to pursue any extra claims, award or overaward, except when consistent with those principles."

(i) a first increase of $10.00 per week for workers at the basic

skills/trainee level; $12.50 per week at the semi-skilled worker level; and $15.00 per week or 3%, whichever is the higher, at the tradesman or equivalent level and above;

(ii) a second increase of the same order as in (i) above to be paid not less than 6 months after the first increase;

(iii) the first increase will be accessible from 7 August 1989 but the actual date of operation for an award will be the date on which that award is varied in accordance with the National Wage Case decision of 7 August 1989; and

(iv) the second increase will not be automatic, but subject to application.

NATIONAL WAGE CASE AUGUST 1989
21

Minimum rates adjustments allowable in the National Wage Case decision of 7 August 1989 shall be in accordance with the following:

(i) the appropriate adjustments in any award will be applied in not less than 4 instalments which will become payable at 6 monthly intervals;

(ii) in appropriate cases longer phasing-in arrangements may be approved or awarded and/or parties may agree that part of a

(iii) the first instalment of these adjustments will not be available in any award prior to 1 January 1990 or 3 months after the variation of the particular award to implement the first stage structural efficiency adjustment, whichever is the later;

(iv) the second and subsequent instalments of these adjustments will not be automatic and applications to vary the relevant awards will be necessary; and

(v) acceptance of absorption of these adjustments to the extent of equivalent overaward payments is a prerequisite to their being applied in any award.

Any claim for increases in wages and salaries or improvements in conditions which exceed the maximum increases allowable under the National Wage Case decision of 7 August 1989 will be processed as a special case before a Full Bench of the Commission. Such cases should be considered in accordance

with the structural efficiency and other relevant principles.

Structural efficiency adjustments allowable under the National Wage Case decision of 7 August 1989 will be justified in accordance with this principle if the Commission is satisfied that the parties to an award have co-operated positively in a fundamental review of that award and are implementing measures to improve the efficiency of industry and provide workers with access to more varied, fulfilling and better paid jobs. The measures to be considered should include but not be limited to:

. establishing skill-related career paths which provide an incentive for workers to continue to participate in skill formation;

. eliminating impediments to multi-skilling and broadening the range of tasks which a worker may be required to perform;

. creating appropriate relativities between different categories of workers within the award and at enterprise level;

. ensuring that working patterns and arrangements enhance flexibility and the efficiency of the industry;

. including properly fixed minimum rates for classifications in awards, related appropriately to one another, with any amounts in excess of these properly fixed minimum rates being expressed as supplementary payments;

22 NATIONAL WAGE CASE AUGUST 1989

. updating and/or rationalising the list of respondents to awards; and

. addressing any cases where award provisions discriminate against sections of the workforce.

Structural efficiency exercises should incorporate all past work value considerations.

(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.

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.

However, rather than create a new classification it may be more

appropriate in the circumstances of a particular case to fix a new rate for an existing classification or to provide for an allowance which is payable in addition to the existing rate for the classification. In such cases the same strict test must be applied.

(b) Where new or changed work justifying a higher rate is performed only from time to time by persons covered by a particular classification or where it is performed only by some of the persons covered by the classification, such new or changed work should be compensated by a special allowance which is payable only when the new or changed work is

performed by a particular employee and not by increasing the rate for the classification as a whole.

(c) The time from which work value changes should be measured is the last work value adjustment in the award under consideration but in no case earlier than 1 January 1978. Care should be exercised to ensure that changes which were 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.

(d) Where a significant net alteration to work value has been established in accordance with this principle, an assessment will have to be made as to how that alteration should be measured in money terms. Such assessment

should normally be based on the previous work requirements, the wage previously fixed for the work and the nature and extent of the change in work. However, where appropriate, comparisons may also be made with other wages and work requirements within the award or to wage increases for changed work requirements in the same classification in other awards provided the same changes have occurred.

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

(f) The Commission should guard against contrived classifications and over-classification of jobs.

NATIONAL WAGE CASE AUGUST 1989 23

(g) Any changes in the nature of the work, skill and responsibility required or the conditions under which the work is performed, taken into account

in assessing an increase under any other principle, shall not be taken into account in any claim under this principle.

(i) Existing allowances which constitute a reimbursement of expenses

incurred may be adjusted from time to time where appropriate to reflect the relevant change in the level of such expenses.

(ii) Existing allowances which relate to work or conditions which have not changed may be adjusted from time to time to reflect national wage increases, except where a flat money amount has been awarded,

provided that shift allowances expressed in awards as money amounts may be adjusted for flat money amount national wage increases.

(iii) Existing allowances for which an increase is claimed because of changes in the work or conditions will be determined in accordance with the relevant provisions of the work value changes principle.

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

(ii) No new allowances shall be created unless changes in work have occurred or new work or conditions have arisen: where changes have occurred or new work and conditions have arisen, the question of a new allowance, if any, shall be determined in accordance with the

The relevant principle in this context may be work value changes or first awards and extensions to existing awards principle.

(i) Existing service increments may be adjusted in the manner prescribed in (a)(ii) of this principle.

(ii) New service increments may only be allowed 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.

(a) Agreements may be certified or consent awards made providing for employer contributions to approved superannuation schemes for employees covered by such agreements or consent awards provided those agreements or consent awards:

(i) operate from a date determined or approved by the Commission; and

(ii) do not involve the equivalent of a wage increase in excess of 3% of ordinary time earnings of employees.

24 NATIONAL WAGE CASE AUGUST 1989

(b) Where, following a claim for employer contributions to approved superannuation schemes for employees, the parties are unable to negotiate an agreement consistent with this principle, and conciliation proceedings before the Commission have also failed to achieve such an agreement, the Commission shall, subject to the provisions of the Act, arbitrate on that claim.

(c) The Commission will not grant retrospective operation for any matters determined in accordance with this principle.

(d) For the purposes of this principle, approved superannuation scheme means a scheme approved in accordance with the Commonwealth Operational Standards for Occupational Superannuation Funds.

(a) In dealing with claims for a reduction in standard hours to 38 per week, the cost impact of the shorter week should be minimised. Accordingly, the Commission should satisfy itself that as much as possible of the required cost offset is achieved by changes in work practices.

(b) Claims for reduction in standard weekly hours below 38, even with full cost offsets, will not be allowed.

(c) Changes in work practices designed to minimise the cost of introducing shorter hours will not be a consideration for claims under any other principle.

Except for the flow-on of test case provisions, applications for changes in conditions other than those provided elsewhere in the principles will be considered in the light of their cost implications both directly and through

flow-on and must be processed in national wage case proceedings or before a specially constituted Full Bench.

(i) In the resolution of anomalies, the overriding concept is that the Commission must be satisfied that any claim under this principle will not be a vehicle for general improvements in pay and

conditions and that the circumstances warranting the improvement are of a special and isolated nature.

(ii) Decisions which are inconsistent with the principles of the Commission applicable at the relevant time should not be followed.

(iii) The doctrines of comparative wage justice and maintenance of relativities should not be relied upon to establish an anomaly because there is nothing rare or special in such situations and

because resort to these concepts would destroy the overriding concept of this principle.

(i) The resolution of inequities existing where employees performing similar work are paid dissimilar rates of pay without good reason, shall be processed through the Anomalies Conference and not otherwise, and shall be subject to all the following conditions:

NATIONAL WAGE CASE AUGUST 1989 25

(1) The work in issue is similar to the other class or classes of work by reference to the nature of the work, the level of skill and responsibility involved and the conditions under which the work is performed.

(2) The classes of work being compared are truly like with like as to all relevant matters and there is no good reason for dissimilar rates of pay.

(3) In addition to similarity of work, there exists some other significant factor which makes the situation inequitable. An

historical or geographical nexus between the similar classes of work may not of itself be such a factor.

(4) The rate of pay fixed for the class or classes of work being compared with the work in issue is a reasonable and proper rate of pay for the work and is not vitiated by any reason

such as an increase obtained for reasons inconsistent with the principles of the Commission applicable at the relevant time.

(5) Rates of pay in minimum rates awards are not to be compared

(ii) In dealing with inequities, the following overriding considerations shall apply:

(1) The pay increase sought must be justified on the merits.

Any claim made on the grounds of this principle shall be processed as a special case.

(a) Except in special cases, the Commission will not make new paid rates awards.

(b) In the making of a first paid rates award the conditions as provided in the first awards and extensions to existing awards principle must be complied with.

(c) Rates in paid rates awards should not be fixed at a level which would affect the rates for other workers.

(d) In assessing an adjustment in rates of pay in a paid rates award it is inappropriate to apply the General Motors-Holden's Limited and Ford Australia Ltd Case approach of:

"awarding an increase to restore to the rates under the awards the relationship which they had when established vis-a-vis rates actually paid for similar work in industries located near the establishments of these two companies".(17) _
_

26 NATIONAL WAGE CASE AUGUST 1989

(e) Subject to special cases, no special adjustment will be approved for paid rates awards which cannot be justified on the basis of the creation of a proper career structure through structural efficiency.

(f) In paid rates awards no increase at the base rate which is greater than the structural efficiency adjustment will be approved.

(g) The rates of pay prescribed by a new paid rates award must be expressed in terms of properly fixed minimum classification rates plus supplementary payments.

(h) Paid rates awards should contain clear classification definitions.

(i) Statutory declarations will be required from all parties to paid rates awards to the effect that the integrity of those awards will be preserved.

(j) If a paid rates award fails to maintain itself as a true paid rates award that award should be discontinued and replaced by a minimum rates award.

(a) In the making of a first award, the long established principles shall apply i.e. prima facie the main consideration is the existing rates and conditions.

(b) In the extension of an existing award to new work or to award-free work the rates applicable to such work will be assessed by reference to the value of work already covered by the award.

(c) In awards regulating the employment of workers previously covered by a state award or determination, existing rates and conditions prima facie

(d) Where a first award is made it shall contain a minimum rate for each

classification of employee covered by it. Where the total rate determined for each classification in accordance with (a) and (c) of this principle exceeds the appropriate minimum rate for that classification, the excess amount shall be prescribed as a supplementary payment. For the purposes of this paragraph, the appropriate minimum rate will be assessed by comparison with similar classifications in other minimum rates awards.

Any respondent or group of respondents to an award may apply to reduce and/or postpone the application of any increase in labour costs determined

under the principles on the ground of very serious or extreme economic adversity. The merit of such application shall be determined in the light of the particular circumstances of each case and any material relating thereto shall be rigorously tested.

NATIONAL WAGE CASE AUGUST 1989 27

I. Watson for The Clothing and Allied Trades Union of Australia with L. Ayres for the Australian Council of Trade Unions and with P. Tighe for the Electrical Trades Union of Australia.

S. Green with L. Stephens for The Association of Professional Engineers,

Australia and the Australian Council of Professional Associations.

G. Giudice of counsel with F. Parry and E.H. Callander for the Confederation of Australian Industry, the Textile, Clothing and Footwear Council of Australia, the Confederation of A.C.T. Industry, the Clothing Industries Division of the Queensland Confederation of Industry Limited, The Victorian Employers Federation, respondent members of the Tasmanian Confederation of Industries, the Chamber of Manufactures of New South Wales, the Australian

Confederation of Apparel Manufactures - N.S.W. (Division of the Chamber of Manufactures of New South Wales), the Chamber of Commerce and Industry of South Australia Incorporated, the Confederation of Western Australian Industry, the South Australian Employers Federation, the Australian Institute of Dry Cleaning - N.S.W., the Australian Institute of Dry Cleaning - Queensland and with G.R. Sapwell for The Australian Chamber of Manufactures and with R. Whiffin and J. Forbes for the Australian Mines and Metals Association (Inc).

R.P. Boland with M.K. Scott for the Metal Trades Industry Association of Australia and the Engineering Employers Association, South Australia.

B. Yates with L. Tacy for the Minister of State for Industrial Relations on behalf of the Commonwealth (intervening).

E. Porter for Her Majesty the Queen in right of the State of Queensland (intervening).

J. Fernan of counsel with S. Litchfield for Her Majesty the Queen in right of the State of New South Wales (intervening).

I. Silk with J. McCabe for Her Majesty the Queen in right of the State of Victoria (intervening).

G. Bull for Her Majesty the Queen in right of the State of Western Australia

J. Woodrow with D.J. McCallum for the Government of the Australian Capital Territory (intervening).

M. Gallant for Her Majesty the Queen in right of the State of South Australia (intervening).

J. McCabe for Her Majesty the Queen in right of the State of Tasmania (intervening).

N. McHattie with M. Jones for the Government of the Northern Territory (intervening).

C. Murphy with B. Davis for the Australian Chamber of Commerce (intervening).

M. Angwin for the Business Council of Australia (intervening).

28 NATIONAL WAGE CASE AUGUST 1989

B.H.B. Dann for Australia and New Zealand Banking Group Limited, National Australia Bank Limited, Westpac Banking Corporation, Bank of New Zealand, Banque Nationale de Paris, Australian Bank Limited, Bank of Queensland Limited, Rural and Industries Bank of Western Australia, S.B.T. Bank (previously Savings Bank of Tasmania), State Bank of South Australia, State Bank of Victoria, Tasmania Bank, Cardlink Services Limited, Deutsche Bank Australia Limited, Mitsubishi Bank Limited, Primary Industry Bank of Australia and Standard Chartered Australia Bank (intervening).

G. Carmody with P. Trenwith and L. Metzner for the National Farmers' Federation (intervening).

G. Gerard for the Australian Coal Association (intervening).

B.D. Purvis for the Australian Wool Selling Brokers Employers Federation (intervening).

S. Clancy and K. Lovell for the Australian Federation of Construction Contractors (intervening).

G. Harrison for The Amalgamated Metal Workers' Union, the Association of Draughting, Supervisory and Technical Employees, the Australasian Society of Engineers, the Electrical Trades Union of Australia, The Federated Ironworkers' Association of Australia, The Federated Miscellaneous Workers Union of Australia, The Federated Engine Drivers' and Firemen's Association of Australasia and The National Union of Storeworkers, Packers, Rubber and Allied Workers (intervening).

D.G. Coleman and R. Hughes for Qantas Airways Limited (intervening).