Workplace Relations and Other Legislation Amendment Act 1996

Minister for Workplace Relations and Small Business

NURSES (SOUTH AUSTRALIAN PUBLIC SECTOR) AWARD 1991

NURSES (ANF - SOUTH AUSTRALIAN PRIVATE SECTOR) AWARD 1989

Workplace Relations Act 1996

s.113 application for variation

s.108 Reference to Full Bench

Minister for Workplace Relations and Small Business

* two applications by the Australian Nursing Federation (ANF) pursuant to item 49, Part 2 of Schedule 5 of the Workplace Relations and Other Legislation Amendment Act 1996 (the WROLA Act) to vary the Nurses (South Australian Public Sector) Award 1991 (the SA Public Sector Award) and the Nurses (ANF - South Australian Private Sector) Award 1989 (the SA Private Sector Award) (collectively: the SA nursing awards);

* an application by the Minister for Workplace Relations and Small Business (the Commonwealth) pursuant to item 49, Part 2 of Schedule 5 of the WROLA Act to vary the Australian Public Service, General Employment Conditions Award 1995 (the GECA Award) by expressing the rates of pay as minimum rates of pay; and

* an application by the Commonwealth pursuant to s.113 of the Workplace Relations Act 1996 (the Act) to vary the GECA Award by expressing the rates of pay as minimum rates of pay.

On 27 May 1998, the President made a decision under s.107 of the Act to refer both the ANF applications to a Full Bench. The President, on 29 May 1998, pursuant to s.108 of the Act referred both the Commonwealth applications to the same Full Bench, so far as they are related to the provision of rates of pay that are expressed as minimum rates of pay.

The applications that were made under item 49 of the WROLA Act, as a consequence of the expiration of the interim period, are being dealt with under item 51(4).

The applications now before us are being dealt with as part of a general review of the approach the Commission should adopt in exercising a discretion under item 51(4) in respect of those awards which provide rates of pay that have not been operating as minimum rates of pay or were made on the basis that they were not intended to operate as minimum rates.

The Australian Council of Trade Unions (ACTU), the Australian Chamber of Commerce and Industry (ACCI), the States of New South Wales (NSW), Victoria, Queensland, Western

Australia (WA), South Australia (SA), Tasmania and the Northern Territory were granted leave to intervene. For the purpose of this decision the States of Victoria, WA, SA, Tasmania and the Northern Territory will be referred to collectively as the Joint Governments.

3. THE DECEMBER 1997 AWARD SIMPLIFICATION DECISION THE april 1998 safety net review decision

The Full Benches in the Award Simplification decision [Print P7500] and the April 1998 Safety Net Review decision [Print Q1998] considered submissions by the Commonwealth and a number of the States which sought the introduction of a principle requiring, as part of the award simplification process, that all awards that were not operating as minimum rates awards

be converted to minimum rates awards. The Full Bench in the Award Simplification decision rejected this proposal for the reasons set out below [pp 30-31]:

"We are not prepared to require, as part of an award simplification exercise, that all awards which are not operating as minimum rates awards be converted to minimum rates awards in the manner proposed by the Joint Governments. Whilst this will be an appropriate course where the award is not a paid rates award, we believe there has been insufficient attention given in this case to the treatment of paid rates awards. Items 49(5) and 51(4), which deal with the conversion of awards which are not operating as minimum rates awards, is each discretionary. The legislation contemplates the continuation of paid rates awards in some circumstances. Neither the WROLA Act nor the WR Act in terms requires paid rates awards to be converted. To the contrary, the WR Act permits the variation of such awards and, in specified circumstances, the creation of new ones (ss.170MX and 170MY)."

The Commonwealth and some of the States advocated the same approach in their submissions to the Full Bench in the April 1998 Safety Net Review case. The Full Bench, for the reasons set out below, declined to adopt the proposal of the Commonwealth and States [page 52]:

"We also consider it would not be appropriate in the circumstances of this case to adopt the proposal of the Joint Governments that requires the conversion of paid rates awards into minimum rates awards. In the present proceedings, there are no paid rates awards before the Commission and there has been no evidence or material relating to the particular circumstances of paid rates awards placed before us.

We consider that the most appropriate way of dealing with the issues relevant to paid rates awards is to conduct a general review regarding the operation of paid rates awards in the context of the legislative framework. Issues for consideration in such a review would include:

* the relationship between paid rates awards and certified agreements, in particular:

- whether the paid rates status of an award can be maintained in circumstances where the parties bound by that award are party to a certified agreement, and

- whether paid rates awards should be varied to reflect the terms of an expired certified agreement which binds the award parties;

* whether arbitrated safety net adjustments should be applicable to paid rates awards and, if so, on what basis; and

* whether the market is an appropriate consideration in the variation of paid rates awards.

In the interim, consistent with our decision to limit safety net adjustments to employees who rely solely or substantially on the award system for wage increases, we have decided that paid rates awards will only be varied to provide

for the arbitrated safety net adjustment we have awarded where the award rates of pay have only been varied for the safety net adjustments which have been available since 1 November 1991. This is dealt with in new Principle 8(f).

In the event that doubt arises as to whether or not the employees covered by a particular award have received award increases in excess of the relevant safety net adjustments, the matter will be referred to a Full Bench for determination.

We have also decided, pending the general review, that paid rates awards ordinarily should not be varied to include the terms and conditions of certified agreements. We have included an appropriate principle reflecting our decision on this issue."

The references by the President under ss.107 and 108 were for the purpose of facilitating a general review of paid rates awards in the context of the legislative changes found in the Act and the WROLA Act as contemplated by the April 1998 Safety Net Review decision.

4. THE SUBMISSIONS OF THE COMMONWEALTH AND THE JOINT GOVERNMENTS

The Joint Governments in their submission [Exhibit JG1] sought the following outcomes from the review [pp 6 and 7]:

_"(a) That the Commission's April 1998 decision, on an interim basis, to modify principle 10 `Making and Varying an Award Above or Below the Safety Net' by adding the sentence `Applications involving claims to incorporate agreements (expired or not) into awards (paid or minimum rates) ordinarily

will not be considered to constitute a special case' should become a permanent feature of principle 10._

(b) That the Commission adopt the joint Governments' proposed amendments to principle 6 of the Award Simplification Principles as outlined in response to issue 10 (below). The principle would require the conversion of paid rates awards to minimum rates awards as part of the award simplification process or prior to varying such awards for future safety net adjustments, whichever was the earlier.

(c) That the Commission adopt the joint Governments' proposed process for the conversion of paid rates awards to minimum rates awards as outlined in response to issue 11 (below). This involves the identification of an appropriate minimum rate on comparative work value grounds with existing minimum rates awards and the absorption of future award safety net adjustments against any residual `overaward' component."

In support of the outcomes sought above, the Joint Governments submitted that the principle objects of the Act in s.3 and the objects of Part VI in s.88A reflect an intention that the role of the award system be modified. The role of all awards under the Act are now focussed on establishing a fair and effective minimum safety net, one that does not act as a disincentive to agreement making.

They further submitted that the use of the term "minimum wages" in ss.3 and 88A excluded paid rates awards. Further, the removal from s.88A of the requirement to maintain awards at a relevant level indicates there is no intention in the Act for awards to reflect market outcomes.

A further indication of the focus of the Act moving towards an award system containing minimum rates of pay was the removal of Part VIC dealing with paid rates awards. It was the submission of the Joint Governments that s.88B(3)(a) was intended to preserve the structure of stable and equitable relativities between awards established by the Minimum Rates Adjustment (MRA) process which commenced as a result of the August 1989 National Wage Case decision [Print H9100]. This section, along with items 49(5) and 51(5) were, in the Joint Government's submission, designed to encompass paid rates awards exempted from the MRA process as part of a stable system of relativities of minimum rates of pay between awards.

The key characteristics of awards which contain minimum rates of pay in accordance with ss.88A and 88B and 89A(3) of the Act were [Exhibit JG1, pp 19 and 20]:

"(a) such awards do not attempt to specify actual rates of pay (that is, awards should not operate with the intention of reflecting market outcomes); and

(b) rates of pay in such awards should bear an appropriate work value relationship to work already covered by existing minimum rates awards which have completed the MRA process."

The Joint Governments submitted that the absence in both the Act and the WROLA Act of a requirement that all paid rates awards be converted to minimum rates does not prevent the Commission deciding, based on the merits, that it will determine a principle which, other than in exceptional circumstances, requires that paid rates awards be converted to minimum rates awards.

In the Joint Government's submission "there was no justifiable rationale, on the merits of the argument, for retaining the `paid rates status of awards'". Accordingly, all paid rates awards should be converted to a minimum rates award as part of the award simplification process or where a party applies for a future safety net adjustment (SNA) whichever occurs first.

The Joint Governments proposed that the Commission adopt the following principles for conversion of awards which do not contain minimum rates [Exhibit JG1, pp 30-32]:

"(a) Conversion of paid rates awards and other awards which do not set minimum rates into minimum rates awards will be required when:

(i) application is made to vary such an award for future arbitrated safety net adjustments; or

(ii) the award is dealt with under items 51(3) and (4) of WROLA, Schedule 5, Part 2 or is otherwise subject to applications dealing with award simplification matters.

(b) The conversion of a paid rates award or other award which does not set minimum rates to a minimum rates award will involve the following process.

(i) The parties, assisted by the Commission if necessary, will decompose the classification rates in the award into an appropriate minimum rate and residual component (the notional `market' or overaward component). The Commission must be satisfied that appropriate minimum rates have been identified on the basis of comparative work evaluation with similar classifications in minimum rate awards which have completed the MRA process.

(ii) Any residual component above the identified minimum rates is to be preserved only as a separate component, and not be subject to future increases awarded by the Commission; and

(iii) Any increases to rates in the award will only be applied to the minimum rates component and will be absorbed against any residual component; that is, the residual component will be reduced by the amount of the increase in the minimum rates component.

(c) Where parties to paid rates awards, in award simplification proceedings, are not in a position to identify minimum rates which would satisfy the Commission that they were appropriate on comparative work value criteria, such awards will be converted to minimum rates awards simply by removing any formal status that they are paid rates awards. The current rates of pay in such awards would become the minimum rates. The following paragraph will be included in the rates of pay in such awards:

`Although these are minimum rates of pay, these rates of pay cannot be used to make work value comparisons for first awards or for converting other paid rates awards into minimum rates awards. The rates are not to be adjusted for future safety net adjustments, except as a special case, until such time as the parties propose appropriate minimum rates of pay which satisfy the Commission on comparative work value grounds.'

(d) Any provisions in the award which have the effect of specifying or determining actual rates, such as statements regarding the award's paid rates status, should be removed from the award or amended so that they no longer have the effect of specifying or determining actual rates. Where appropriate, the Commission will facilitate the parties' incorporation of such provisions into an agreement."

The Joint Governments submitted that "the conversion of paid rates awards to minimum rates awards has no direct implications for conditions of employment". Accordingly, in the Joint Government's submission, conditions of employment would remain at their current level of entitlement. It was also submitted that the conversion of paid rates awards will result in some cases of conditions of employment in these awards after conversion being in excess of those in other minimum rates awards. This should not be a ground for increasing such entitlements.

The Commonwealth submitted that paid rates awards have been operating in the APS by consent and the Commonwealth no longer consents to these arrangements. The rates of pay

have taken into account market factors and the current classification structures have been

subject to the structural efficiency process. Since 1992 the APS has been covered by certified agreements which have set actual rates of pay.

The Commonwealth submitted that the APS rates of pay be converted to minimum rates for each classification [Attachment A to Exhibit JG2]. The Commonwealth's proposal for setting the minimum rates for APS classifications is as follows [Exhibit JG2, page 2]:

"7. The proposed clause 16 (at Attachment A) sets out the proposed minimum rates for each classification. The rates were based on APS internal relativities applying after the 1991 NWC increase, with the base trades classification (GSO 5) being set at 100%. The percentages were then applied to a `properly fixed minimum rate' for the GSO5 which was matched to the minimum rate applying to the base trades classification in the Metal Industry award at that time. The APS minimum rates were then increased for the 4 subsequent Safety Net Adjustments (SNA) increases. A more detailed explanation is at Attachment B_."_

In respect of the residual component, it was proposed that this component be absorbed over time as SNA increases are processed for the minimum award rate, the absorption to apply to the residual component in the APS awards. Increments, in the Commonwealth's submission, would be regarded as excess amounts above the minimum rate and be absorbed over time. The residual component would continue to reflect the full salary range currently provided for via increments. This would ensure that pay rates are protected on conversion, as required by the Act.

A separate submission was received from the SA Department of the Premier and Cabinet (the SA Dept) [Attachment B to the Joint Governments' submission in reply dated 3 August 1998] in response to a request from the Bench on how the principles proposed by the Joint Governments might apply to the SA Public Sector Award.

The SA Dept submitted the rates for both registered and enrolled nurses under the award, including increments, may safely be adopted as properly fixed minimum rates. In support of this submission, the SA Dept relied on the decision of the Full Bench of the Commission [Print J4011] in establishing nationally consistent rates for registered nurses based on levels of skills and experience as part of a career structure for the nursing profession and the Full Bench decision [Print K3662] in fixing enrolled nurses' rates by reference to relativities with

registered nurses. In the submission of the SA Dept incremental scales for nurses form part of a career occupation and are not merely a reward for years of service and should be retained.

It was further submitted that the present minimum and maximum award salaries for a base grade registered nurse relative to the rate for a fitter does not exceed the range established by the decision of the Commission in the Metal Industry for professional employees as a percentage of the fitter's rate of pay.

The Joint Governments supported the submission of the SA Dept.

ACCI supported the Commonwealth's proposed principles and submitted that the Commission should, as a matter of discretion, convert paid rates awards to minimum rates awards as part of the review of awards under item 51 of Schedule 5 of the WROLA Act.

In the ACCI's submission, conversion should "take place through a national minimum rate being determined through identification of the tradesperson or other key classification in the paid rates award and assigning to this classification a wage rate set at the relevant minimum rate". Other classification rates would then be established through the application of existing internal relativities.

In respect of conditions in paid rates awards, ACCI submitted that they should also be addressed during the conversion process. The test proposed by ACCI is whether or not an existing condition is appropriate for a minimum rates award. This process would be assisted by making comparisons between the award conditions and those conditions determined as test case standards, Full Bench decisions which are not test case award clauses, and conditions in other minimum rates awards in the relevant industry sector.

6. THE SUBMISSIONS OF THE SOUTH AUSTRALIAN EMPLOYERS CHAMBER OF COMMERCE AND INDUSTRY (SAECCI)

In the written submissions dated 3 August 1998, the SAECCI submitted that the rates of pay for nurses and enrolled nurses should be regarded by the Commission as being "properly fixed" minimum rates. SAECCI relied, for this submission, on the decisions of the Commission in the establishment of national rates for nurses and enrolled nurses and the fact

that the rates of pay for nurses, as a percentage of the fitter's rate, had a range of 117.3% to 148.6% which was within the range established for professional employees in a decision of Keogh DP on 7 May 1990 [Print J2540].

In relation to the incremental steps in the SA Private Sector Award's career structure, it was submitted that the incremental scales recognised experience, knowledge and skills gained on-the-job. The incremental scales were therefore not merely a reward for years of service.

With respect to Appendix A to the SA Private Sector Award, it was submitted that these rates were not properly fixed minimum rates. The award was varied to include Appendix A by an order of a Full Bench on 23 February 1996 [Print M9571] arising out of the ANF's 10% salary claim. For the reasons set out in the decision, the Full Bench decided to adjust rates for the nursing home sector by increasing the nurses' salaries in the award by 10% to reflect the enterprise bargaining outcomes in the private sector.

The ANF submitted that it would be unfair to change the paid rates status of the SA nursing awards before the Commission. Both the SA Public and Private Sector Awards have operated as paid rates awards since their making. When made in 1989 both awards were based on then existing State awards which had been paid rates awards.

The rates of pay in both awards were subsequently altered following a number of decisions of a Full Bench of the Commission which established national professional rates for nurses across the various nursing awards. Mr Staindl, for the ANF, submitted that the Full Bench decisions not only establish national rates but put in place a standardisation of pay related conditions of employment. This resulted in adjustments across the awards and produced a leveling out of conditions. The result was that in some States conditions were reduced. In Mr Staindl's submission, the rates of pay established by the Commission in the national rates cases were in response to work value assessments and, in particular, the Full Bench in a decision on 21 December 1989 [Print J0855] specifically concluded it was inappropriate to align nurses with hospital scientists and that they should have their own benchmark.

With respect to the incremental steps at the various level of nurse classifications provided for under the SA nursing awards, it was submitted that they are part of an integrated classification

structure and, along with salary related conditions and career structure, are all part of a comprehensive and integrated matrix of award matters.

The ANF concluded by submitting that having regard to the fixation of rates of pay based on work value and the establishment of uniform pay related conditions of employment across the nursing awards, it would not be fair to convert the awards into minimum rates awards with the prospect of such rates being frozen.

8. THE SUBMISSIONS OF THE CPSU, THE COMMUNITY AND PUBLIC SECTOR UNION (CPSU)

The CPSU submitted that the Commonwealth had not made out a case that there existed "compelling reasons" for the Commission to exercise its discretion and vary the APS awards.

In the CPSU's submission, APS awards are in effect operating as minimum standards for wage rates and form the basis for the making of agreements, subject to the no-disadvantage test under the Act. The provisions of APS awards do not operate as maximum or actual entitlements preventing additional entitlements being negotiated.

It was further put that APS awards are not inhibiting agreement making having regard to the existence of APS-wide and agency agreements negotiated since 1992.

In respect of the Commonwealth's proposal for converting APS awards to minimum rates, the CPSU submitted that the Commonwealth's approach was based on two assumptions which were not sustainable. These were [Exhibit CPSU1, page 5]:

"(a) all internal relativities to APS fitter [GSO5] were correctly established at the time of Structural Efficiency Principle process in the early 1990s; and

(b) there is an identifiable `overaward' component in all APS pay rates"

In the CPSU's submission, there has been no "comprehensive exercise" performed to set rates of pay for all classifications in the APS having regard to external and internal relativities. The effect of the Commonwealth's proposal, in the CPSU's submission, would be to freeze the total award rate from further adjustments in many cases for considerable periods. This would be unfair to APS workers because it would result in the erosion of award standards for the purpose of the no disadvantage test.

The conversion of APS rates of pay, including the removal of incremental payments, would, in the CPSU's submission, result in a single point pay prescription for each classification and would constitute a substantial reduction in work value presently reflected in the rates of pay. The CPSU submitted it was appropriate that, subject to the relevant wage fixing principles being satisfied, awards could be varied to reflect the terms of expired certified agreements.

The ACTU put the following submission [Exhibit ACTU1, page 1]:

"1. The ACTU submits that the Commission should answer the general questions referred to this review by the Safety Net Review Full Bench by determining that:

a. The existence of a certified agreement binding the parties to a paid rates award is not a circumstance justifying the removal of the paid rates status of the award.

b. In appropriate circumstances, and where a case has been made out, the Commission will vary a paid rates award to reflect the terms of an expired certified agreement which binds the parties, in accordance with the decisions of the Full Bench in the Airlines Case (Print N1977) and the CSIRO Case (Print P0978).

c. In general, employees covered by paid rates awards should receive arbitrated SNAs applied in the same way as to minimum rates awards.

d. In appropriate circumstances, consideration of the market should be permitted in the adjustment of paid rates awards.

2. The ACTU also submits that the Commission should not make principles in relation to the exercise of the discretion in subitem 51(4) of Part 2 of Schedule 5 of the Workplace Relations and Other Legislation Amendment Act 1996 (WROLA) and, in particular should neither determine that any or all paid rates awards should be converted to minimum rates awards nor prescribe the means by which such conversion should be implemented."

In the ACTU's submission, paid rates awards should be regarded as the safety net for workers under paid rates awards. The Commission should only treat paid rates differently where it could establish that the awards were not fair.

The existence of certified agreements binding parties to paid rates awards did not, in the ACTU's submission, alter the status of paid rates awards. The integrity of paid rates awards is

not affected by the existence of certified agreements binding parties to paid rates awards. The distinction between agreements made under a statutory framework and overaward payments has been recognised by the Commission. In the ACTU's submission, there can be no concept of breach of the status of paid rates awards.

The ACTU submitted that there was no jurisdictional barrier in s.89A(3) or elsewhere in the Act which would prevent the Commission from varying an award to include the expired terms of a certified agreement. It was important that paid rates awards be varied from time to time to ensure a relevant, up-to-date safety net existed underpinning enterprise bargaining. In respect of the variation of paid rates awards for SNAs, the ACTU submitted that employees covered by paid rates awards should not be discriminated against in the treatment of such adjustments.

The ACTU further submitted that paid rates awards do not necessarily contain rates higher than those in equivalent minimum rates awards. To determine that SNAs were not to apply to all paid rates awards would have the effect of prescribing lower minimum rates for those employees.

The ACTU also submitted that it would be unfair to adopt the Commonwealth's proposal that SNAs for paid rates awards should be delayed until a review and conversion process had been undertaken. Having regard to the requirements of items 51(4) and (5), the numbers of awards involved, and the difficulties in identifying paid rates awards, there would be a considerable delay before the reviews under item 51 were completed. In such circumstances, it would be inequitable to delay SNAs to employees while the reviews were undertaken.

In the ACTU's submission the application of SNAs to paid rates awards and the question of absorption should be left to the Full Bench in each case to determine.

On the matter of market rates as a factor in adjusting paid rates awards, the ACTU put that the Commission's discretion to vary awards above and below the safety net should not be fettered. Market rates should continue to be considered as a relevant consideration.

It was important, in the ACTU's submission, that the opportunity to argue special cases be retained. This was particularly so in the public sector where Governments are able to adopt

the approach of presenting non-negotiable agreements or where the contents have been determined centrally and agencies are prevented from varying the terms.

On the question of conversion of paid rates, the ACTU submitted that the approach by the Full Bench in the Award Simplification decision should be followed. This allows a case by case approach in dealing with awards. There is nothing to suggest that a different approach should be taken with paid rates awards. In the ACTU's submission, the awards before the Full Bench should not have the rates of pay converted to minimum rates and the Commission should not adopt a general principle requiring the conversion of all paid rates awards.

The ACTU concluded by submitting the following [Exhibit ACTU1, page 18]:

"119. The approach proposed by the Commonwealth should not be adopted unless it can be shown to be appropriate for a particular award. The Commission should not adopt any formula to be applied mechanically to all paid rates awards where a decision has been made to convert them.

120. The classification structures of many paid rates awards are the result of a great deal of work by the parties and are designed to reflect the enterprise or industry's requirements in respect of training and career progression, as well as reflecting efficiencies and work practice changes. Application of a formula approach would merely undo the considerable effort from all parties which would have gone into the making of the award.

121. In the case of nurses, for example, vast efforts from the parties and the Commission went into the inquiries which led to the making of consistent national rates of pay for the profession. Regard was had to a large number of factors, including the work done by nurses, their qualifications and career progression as well as ensuring that the decisions were within the Commission's principles. It is hard to envisage any reasoning which could justify dismantling that structure.

122. The Commonwealth's proposal, which involves essentially replicating the internal relativities of the award, will not necessarily achieve consistency between like classifications in other minimum rates awards, a principle underlying the minimum rates adjustment process. [see August 1989 National Wage Case (Print H9100) p12].

123. In other words, applying a simple formula approach of this nature runs the risk of creating inconsistency and inequity and cannot be justified."

The State of NSW submitted that there should be no "blanket" approach in considering variations to paid rates awards under item 51(4). The current terms and status of awards

should not be altered without an examination of their terms and history. The Commission should only vary the award where it is satisfied that it would be appropriate in the circumstances.

In circumstances where the Commission determines under item 51(4) that an award should remain a paid rates award, it should also provide that such awards are maintained as paid rates awards by allowing for appropriate variations.

In respect of the application of future SNAs, the State of NSW submitted that it is a matter which should be dealt with when the next SNA was determined. There is no reason why the statutory obligation to maintain awards set out in s.88A(a) should not extend to paid rates awards.

The State of NSW submitted that the existence of certified agreements operating in conjunction with paid rates awards should not be a ground for removing the paid rates status from the award. There is a clear legislative intention that paid rates awards would maintain their status in circumstances where the certified agreement set higher wage levels. It is important that paid rates be maintained with relevant wage levels, as a measure in having the "no disadvantage test" applied using relevant wage rates.

In conducting a review of a paid rates award under item 51(4) the Commission should examine whether the award has been maintained as a paid rates award and is appropriate to remain as a paid rates award or there are other reasons to maintain or remove its status.

On the matter of market rates as a factor in setting wage rates in paid rates awards, it was submitted that while market rates may not always be relevant the Commission should not fetter in any significant way, the ability to take market rates into consideration in a particular case.

11. THE SUBMISSIONS OF THE STATE OF QUEENSLAND

The State of Queensland submitted that paid rates awards act as a safety net and nothing in s.3(d)(ii) would be compromised by the existence of paid rates awards.

It was further submitted that while there is no impediment to establishing a principle for the conversion of paid rates awards, any conversion should only occur following a request by the parties. Where the Commission decides to exercise its discretion to convert a paid rates award, it is doubtful, due to the nature of paid rates awards, whether it is possible to establish one method of identifying the appropriate minimum rate. It should be open to the award parties to propose, if circumstances warrant, alternate methods in setting the minimum rates.

In the submission of the State of Queensland the issue of whether or not residual amounts resulting from the conversion of a paid rates award should be absorbed against safety net increases should not be considered as part of this review.

In relation to the establishment of principles arising from the present review, it was submitted that any principles should not be unduly prescriptive but should act as a facilitative mechanism only. The State of Queensland submitted the following matters that could be incorporated in the principles [Exhibit Q1, page 11]:

* "recognition that enterprise bargaining does not affect the integrity of paid rates awards

* rates can be varied to reflect the terms of an expired certified agreement

* SNAs available where the award rates of pay have only been varied for the safety net adjustments

* the market may be considered by the parties in variation of paid rates awards

* conversion of awards is a discretionary and not a mandatory requirement

* process to be conducted by way of an award-by-award approach

* statement to the effect that the award is a `paid rates' award

* schedule of rates to include `total rate of pay'

* absorption of SNAs against residual components not to be examined as part of the conversion process

* different categories of paid rates awards need to be recognised"

12. THE DEFINITION OF "PAID RATES AWARD" IN THE CONTEXT OF ITEMS 51(4) AND (5) OF THE WROLA ACT

A statutory definition of a "paid rates award" was introduced in 1993 as part of amendments to the Industrial Relations Act 1988. The definition was in s.4 in the following terms:

"'paid rates award' means an award specifying actual entitlements, rather than minimum entitlements, in respect of wages and conditions of employment;"

This definition has been deleted and replaced by a new definition in s.170LG of the Act which is in these terms:

"A paid rates award is an award or a State award that:

(a) includes a statement to the effect that it is a paid rates award; or

(b) has been regarded by the Commission, or a State industrial authority, as the case may be, as a paid rates award when applying principles for the purposes of determining wages and conditions of employment."

Items 51(4) and (5) of the WROLA Act are in the following terms:

"(4) If, immediately before the end of the interim period, the award provided for rates of pay that, in the opinion of the Commission:

(b) were made on the basis that they were not intended to operate as minimum rates;

the Commission may vary the award so that it provides for minimum rates of pay consistent with sections 88A and 88B of the Principal Act and the limitation on the Commission's power in subsection 89A(3) of that Act.

(5) If the Commission varies the award under subitem (4), it must include in the award provisions that ensure that overall entitlements to pay provided by the award are not reduced by that variation, unless the Commission considers that it would be in the public interest not to include such provisions."

Item 51(4), like item 49(5), is not confined to paid rates awards but applies to any award providing for rates of pay that are not operating, or not intended to operate, as minimum rates.

It will be necessary to examine the history of fixation of rates in each review of an award under item 51 to ascertain whether the discretion in item 51(4) needs to be exercised.

Awards containing rates which have been through the MRA process arising from the 1989 minimum rates adjustment principle and which have not been increased since that time other than by safety net adjustments or pursuant to the work value change principle, are clearly not within the class of awards described in item 51(4). Other awards will require examination to ascertain whether they come within the class. Awards which have not been through the MRA

process may nevertheless contain properly fixed minimum rates consistent with ss.88A, 88B and 89A(3) of the Act provided the rates bear an appropriate work value relationship to rates for work covered by minimum rates awards which have completed the MRA process.

We have decided that in principle all awards which provide for rates of pay which are not operating, or not intended to operate, as minimum rates and which do not bear a proper work value relationship to award rates which are properly fixed minima, should be subject to a

conversion process so that they do contain properly fixed minimum rates of pay. We consider that the Act compels this conclusion. Item 51(4) refers to ss.88A, 88B and 89A(3). The following parts of those provisions are particularly important:

"88A The objects of this Part are to ensure that:

(a) wages and conditions of employment are protected by a system of enforceable awards established and maintained by the Commission; and

(b) awards act as a safety net of fair minimum wages and conditions of employment; and . . ."

88B (1) The Commission must perform its functions under this Part in a way that furthers the objects of the Act and, in particular, the objects of this Part.

(2) In performing its functions under this Part, the Commission must ensure that a safety net of fair minimum wages and conditions of employment is established and maintained, having regard to the following:

(a) the need to provide fair minimum standards for employees in the context of living standards generally prevailing in the Australian community; . . .

(3) In performing its functions under this Part, the Commission must have regard to the following:

(a) the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which work is performed; . . .

(d) the need to apply the principle of equal pay for work of equal value without discrimination based on sex;

89A (3) The Commission's power to make an award dealing with matters covered by subsection (2) is limited to making a minimum rates award."

These provisions clearly demonstrate that awards made under Part VI of the Act should be minimum rates awards. Paid rates awards are only provided for in Part VIB. Moreover, under the statutory scheme rates and conditions should only be adjusted for market considerations through certified agreements, pursuant to s.170MX or perhaps by exceptional matters orders pursuant to s.89A(7). Although in some circumstances the Commission may intervene in the bargaining process to impose an arbitrated settlement, the overwhelming majority of the Commission's awards are, and will be, minimum rates safety net awards under Part VI. Equity requires that so far as possible the rates contained in those awards should be fixed and adjusted on a common basis. Furthermore, without a common basis for fixation and variation of minimum rates awards it is not possible to maintain stable relativities between such awards.

The MRA principle was designed to establish a consistent pattern of minimum rates in awards covering similar work thereby removing inequities and providing a stable foundation for

enterprise bargaining. That objective is as important now, perhaps even more important, than it was in 1989.

We endorse the following passage from the Joint Governments' submission [paragraph 64 of Exhibit JG1]:

"64. The MRA process provided (and still provides as the process is incomplete in a number of minimum rates awards) an effective mechanism to remove inequities and inconsistencies that gave rise to wages instability in the past and provided a stable and consistent framework within which an increasingly flexible wage system could successfully operate. Subsection 88B(3)(a) preserves the structure of stable and equitable wage relativities between awards established by the MRA process. It is designed, along with the transitional provisions in sub items 49(5) and 51(4), to encompass awards previously operating as paid rates awards (and therefore exempted from the MRA process) in a stable system of relativities across the award system."

We now turn to consider whether incremental payments should have any role in the award system. The legislative scheme requires that the great majority of awards, being made under Part VI, will be of a minimum rates character. This fact, together with a consideration of the history of service increments in awards generally, leads us to the conclusion that increments

which are not based on work value should not appear in minimum rates awards. In our view the abolition of advancement between pay points based primarily on service is also consistent with increased flexibility and the encouragement of agreement making. Performance management, for example, may be made more difficult where the award contains an incremental structure which is unrelated to change in the nature of the work. When the Commission is fixing appropriate minimum rates in awards which contain increments it will be necessary, subject to exceptions, to make arrangements for increments to be phased out.

Additional payments which are geared primarily to length of employment are not consistent with properly fixed minimum rates because they are not based on work value. For example, incremental payments in APS awards accrue after 12 months' service subject only to "the employee demonstrating satisfactory diligence, efficiency and attendance for duty". Those conditions can be contrasted with the requirements for advancement for an enrolled nurse under the Australian Public Service, General Service Officers (Salaries and Specific Conditions) Award 1995 [Print M8995]. Pursuant to the provision of Schedule B to the award progression from one pay point to the next is subject to an enrolled nurse meeting the following criteria:

* 12 months' experience at that level and in-service training;

* demonstrated ability to acquire the skills which are necessary for advancement to the next pay point.

An enrolled nurse's progress may be deferred or refused by the employer where the nurse has not fulfilled the criteria for advancement to the next pay point.

Where the relevant award does not make progression through the incremental scale dependent on changed work value, the incremental payments cannot be treated as part of the minimum rate. Where it can be demonstrated, however, that incremental payments were included in the award pursuant to the relevant work value principle or on grounds of structural efficiency and work value, the retention of such payments is permissible.

Where the Commission determines that increments are in excess of a properly fixed minimum rate, they will, in accordance with the principles, be separately identified as a residual amount above the minimum rate and subject to absorption against increases to rates in the award.

We now turn to the method of establishing properly fixed minimum rates. Having considered all of the submissions we have decided to adopt an approach which gives primacy to the maintenance of internal relativities. The approach involves identifying the key classification in the award under review, striking the appropriate work value relativity between that classification and the fitter in the Metal, Engineering and Associated Industries Award, 1998 - Part 1 [Print Q2527], adjusting the rate for the key classification accordingly (if necessary) and then adjusting all of the rates in the award under review to maintain the pre-existing relativities with the key classification. We understand that this may lead to differences in minimum rates at particular skill levels across the award system. Nevertheless we think this approach is preferable to any other because it maintains the established relativities at the enterprise level. For the most part the awards requiring adjustment have previously been paid rates awards and have a history of adjustment on an enterprise or similar basis. In the public sector, for example, the establishment and maintenance of internal relativities has been regarded as more important than adjusting for variation in market rates for particular skill groups or particular locations. We emphasize that this approach is directed to enterprise based awards including those in the public service. Should there be awards which are not enterprise based, but which apply to a number of employers, consideration might have to be given to setting aside such an award and creating enterprise specific awards in order to implement the MRA principle without disrupting the relativities in the establishments concerned. If necessary an application may be made to the President for a special case.

No party, with the exception of ACCI, submitted that the conversion of an award to a minimum rates award constituted a ground for reducing award conditions of employment. ACCI did not put any detailed submissions on the issue. The Joint Governments, while advocating the conversion of all awards which did not constitute properly fixed minimum rates to minimum rates awards, submitted that conversion of such awards had no direct implications for conditions of employment and "conditions of employment would remain at

their current level of entitlement". We accept this submission and have included a principle reflecting our decision on this matter.

14. PRINCIPLES FOR THE CONVERSION OF AWARDS WHICH DO NOT CONTAIN PROPERLY FIXED MINIMUM RATES

The principles we have formulated pursuant to item 53 and s.106 are as follows:

1. Awards requiring review under item 51(4) will be:

(a) awards containing rates which have not been adjusted in accordance with the minimum rates adjustment principle in the August 1989 National Wage Case decision; and

(b) awards containing rates which have been adjusted in accordance with the minimum rates adjustment principle in the August 1989 National Wage Case decision but which have been varied since the adjustment other than for safety net increases or pursuant to the work value change principle.

2. The rates in the award under review should be examined to ascertain whether they equate to rates in other awards which have been adjusted in accordance with the August 1989 approach with particular reference to the current rates for the relevant classifications in the Metal, Engineering and Associated Industries Award, 1998 - Part 1 [Print Q2527]; where the rates do not equate they will require conversion in accordance with these principles.

3. Fixation of appropriate minimum rates should be achieved by making a comparison between the rate for the key classification within the award with rates for appropriate key classifications in awards which have been adjusted in accordance with the 1989 approach.

4. In the fixation of rates the relationship between the key classification in the award and the metal industry fitter should be the starting point; internal award relativities established, agreed or determined should be maintained: see, for example, the approach adopted in Kenworth Trucks Vehicle Industry Award 1981 [Print K0003] and Commonwealth Serum Laboratories Commission Sales Representative Award 1987 [Print K4939].

5. Any residual component above the identified minimum rate, including where relevant incremental payments, should be separately identified and not subject to future increases.

6. If the rates are too low it is consistent with the purpose and intent of item 51(4) that the rates be increased so that they are properly fixed minima.

7. Any future increases in rates in the award will only be applied to the minimum rates component and will be absorbed against any residual component; that is, the residual component will be reduced by the amount of the increase in the minimum rates component.

8. Increments will only be retained where they have been included in the award pursuant to the relevant work value principle or where it can be established that the increments were inserted by the Commission on grounds of structural efficiency and work value.

9. Where parties cannot agree on rates, or they agree on rates which the Commission is not satisfied are properly fixed minima, the Commission will determine the matter, subject to the right of any party to seek a reference pursuant to s.107.

10. Any party seeking to depart from these principles should make application to the President for the matter to be dealt with as a special case. The President may call a

conference of the parties to the award and the parties to these proceedings prior to deciding any such application.

11. Award rates which have been dealt with pursuant to these principles cannot be used to found claims in other awards based on the restoration of relativities.

12. The conversion of awards, in accordance with these principles, to minimum rates awards is not a ground for reducing the conditions of employment in the converted awards or for increasing conditions of employment in other awards.

15. CAN AWARDS BE VARIED TO REFLECT THE TERMS OF AN EXPIRED AGREEMENT?

No cogent reasons have been advanced to change the decision the Commission made on an interim basis in the April 1998 Safety Net Review decision [at 52]. Variation of awards to reflect the terms of an expired agreement is inconsistent with the safety net character of the award system.

16. SHOULD SAFETY NET ADJUSTMENTS BE APPLICABLE TO AWARDS WHICH DO NOT CONTAIN PROPERLY FIXED MINIMUM RATES?

We have decided that safety net adjustments should not be applicable to awards which do not contain properly fixed minimum rates subject to the qualification contained in the April 1998 Safety Net Review decision [principle 8(f)]. Whether the application of SNAs to classification rates which have been reviewed in accordance with the MRA principle or the principle set out in this decision results in an actual increase will depend upon whether classification rates include amounts identified as being in excess of properly fixed minimum rates.

17. WHETHER THE MARKET IS AN APPROPRIATE CONSIDERATION IN THE ADJUSTMENT OF AWARDS WHICH DO NOT CONTAIN PROPERLY FIXED MINIMUM RATES?

Wage rates in minimum rates awards, including those which have been through a conversion process as a result of this decision, ordinarily will only be adjusted for safety net adjustments or changes in work value. Because of the terms of s.170MW(7) access to arbitration under that provision is not dependent on the maintenance of the paid rates status of an award and therefore the conversion of a paid rates award as a result of the principles established in this decision will not affect its paid rates character for the purpose of s.170MW(7).

We accept the submissions that although the rates contained in the awards (excluding Appendix A) have been treated as paid rates awards in the past, they are nevertheless properly fixed minimum rates with rates for the relevant classifications being within the acceptable range of relativities in relevant minimum rates awards. We are also satisfied that the incremental salary levels for nurses and enrolled nurses within the classification structures of the two nursing awards form part of the work value assessment of nurses' rates of pay

conducted by Full Benches of the Commission in the development of professional rates for the nursing profession in federal awards. Accordingly, they are not affected by our decision. (See Full Bench decisions in Re Determination No. 195 of 1970 [Nursing Staff - RANF] [Print J4011] and Re Hospital Employees Etc. (Nursing Staff A.C.T.) Award 1980 [Print K3662]).

The rates of pay in Appendix A of the SA Private Sector Award, however, are in excess of properly fixed minimum rates for nursing classifications. The rates were inserted by a Full Bench of the Commission on 16 February 1996 as a special case and increased wages by 10% for nurses employed in the aged care sector in SA. The 10% increase reflected a bargaining outcome achieved by the ANF in the SA public and private health sectors. In the light of our decision there are no grounds to retain those components of the rates in Appendix A which reflect the 1996 special case increase. The amount by which the rates in Appendix A exceed the rates in the Award proper should be identified separately and dealt with in accordance with the principles in this decision. Whether any consequential changes are required in Appendix A, is a matter to be dealt with at the settlement of the order giving effect to our decision. An appropriate order in accordance with the principles containing a residual component above the minimum rate is to be drawn up by the ANF (in consultation with SAECCI). The order will be settled by Commissioner Smith.

We accept the Commonwealth's approach to the conversion of the rates for the relevant classifications to properly fixed minimum rates and the outcome it proposes. Given the history of wage fixation in the area, in particular, the service-wide structural efficiency exercise in 1992, the maintenance of internal relativities is important. Striking a relationship with the metal industry fitter is, we think, the most appropriate way in which to establish a properly fixed minimum rate. It would be impossible to maintain the existing internal relativities if a linkage were made with other minimum rates awards in relation to a range of other classifications. The resulting external relativities for a range of classifications will alter, for example, nurses, clerks and so on. In the circumstances, however, the maintenance of existing internal relativities is the only rational way in which to implement the conversion from paid rates to properly fixed minimum rates. It is important for the stability of the wages system as a whole that differences in rates for classifications contained in other minimum rates awards resulting from the new fixation cannot provide justification for increases in rates in other awards.

One matter which concerns us is whether all of the incremental payments in the APS awards fail to comply with the principles we have decided upon. Provision for incremental advancement in the APS is set out at clause 17 - Increments in the GECA Award and is in the following terms:

An employee will be entitled to progress one pay point within the pay scale for the employee's classification after 12 months of service at a particular pay point. This incremental progression is subject to:

17.1.1 the employee demonstrating satisfactory diligence, efficiency and attendance for duty;

17.1.2 any prescription on qualification or advancement barriers or accelerated advancement provisions contained in an award or determined by the Public Service Commissioner; and

17.1.3 the employee not being eligible for incremental progression for 12 months and a corresponding number of calendar days, where a total of more than 30 calendar days of leave is taken and that leave does not count as service."

Employees in the APS who advance in the incremental scale based on clause 17.1.1 do so, as the Commonwealth submitted, "on an assessment of whether employees have been diligent and efficient in applying their skills to a satisfactory standard". We do not consider the award criteria for an increase in the wage rate meet the test under the principles we have now decided upon for the retention of increments as part of a properly fixed minimum rate. The requirement under clause 17.1.1 for the payment of increments must be regarded as a payment for a satisfactory period of service and not work value. Therefore, to the extent that employees under the APS awards advance in the incremental scale based solely on the criterion set out in clause 17.1.1 of the GECA Award, such salaries would be in excess of the properly fixed minimum classification rate in the Commonwealth's proposal which we have decided is in accordance with the principles set out in 14 above. Accordingly, such increments will form part of the residual component requiring absorption.

However, an examination of other classifications, for example enrolled nurses employed by the Aboriginal Hostels Limited (AHL), discloses that advancement is based on additional

training and acquisition of skills. These provisions are set out in Schedule B - Pay Point Definitions for Enrolled Nurses in the Australian Public Service, General Service Officers (Salaries and Specific Conditions) Award 1995 [Print M8995]. Registered nurses are appointed in accordance with clause 12.1.5 of Part 5 of the Australian Public Service, Specific Professional Classifications (Salaries and Specific Conditions) Award 1995 [Print M8998] which states:

A registered nurse shall be credited with approved experience since graduation as a registered nurse for the purposes of determining salary on appointment and eligibility for incremental advancement.

`Approved experience' means such experience in the nursing industry as is recognised by the employer for the purposes of this clause."

We note the Commonwealth's submissions that incremental progression for nurses in the APS is the same as for other APS employees under clause 17.1.2 of the GECA Award and no longer mirrors the arrangements applying to public and private hospital-based nurses. The Commonwealth also pointed out that most of the registered nurses in the APS are not engaged in a practitioner capacity and, as a consequence, there is no necessity for "the APS outcomes from these proceedings to be the same as for other areas". In the case of enrolled nurses, the Commonwealth advised that AHL is the only agency to employ such nurses and is currently

negotiating a new agreement containing a move away from the current increment test to a performance interview process for movement within salary ranges.

In considering the position of nurses in the APS we have in mind our decision in respect of registered and enrolled nurses in the SA nursing awards where we have concluded that the incremental scales in the two awards (inserted as a result of a Full Bench decision of the Commission) were included on grounds of structural efficiency and work value. It may be that with further examination of the circumstances in which registered and enrolled nurses are employed in the APS and agencies that there may be grounds for adopting a different approach from the one we have applied in the SA nursing awards. However, we consider that in both cases a further examination is required of all the circumstances before a decision is made.

We note also that there are other classifications where salary advancement to a specific pay level in the incremental scale is based on the possession of certain academic qualifications. These arrangements may also require careful examination.

One issue raised by the CPSU and ACTU concerned the effect of the deletion of incremental scales on certified agreements which rely on the award provision to determine incremental movements under such agreements. The Commonwealth proposed the making of a Determination under s.82D of the Public Service Act 1922 to mirror the relevant award provisions (eg. clauses 14, 15, 16 and 17 of the GECA Award) to enable the present provisions in the agreements to continue to operate pending "alternative arrangements via agency agreements being put in place in line with Government Policy Parameters [Exhibit JG7]". We consider that some provision should be made to allow those agreements which operate in conjunction with the incremental provisions contained in the APS awards to continue to have force following the conversion of the incremental scales.

Having regard to these and other matters we have referred to and those identified by the Commonwealth, we have decided to refer the following matters to Commissioner Smith for the purpose of preparing a report for this Full Bench:

1. whether the incremental payments applying to registered nurses and enrolled nurses in the APS should be retained;

2. whether there are incremental payments for other classifications in the APS to which clause 17.1.1 of the GECA Award does not apply, and, if so, how they are to be dealt with consistent with the principles;

3. how the matters identified by the Commonwealth as requiring arbitration should be resolved (see Exhibit JG2, Attachment C);

4. the means by which rates in agreements which operate in conjunction with various APS awards may be maintained following the conversion of the incremental scales in the awards.

On receiving the report we will conduct a short hearing in order to allow the parties the opportunity of making any submission on the report before finalising our order.

The principles established by this decision are intended to operate as part of the review of awards required by item 51(1). In some cases reviews have been conducted under item 49 or item 51 with the question of rates of pay left unresolved pending the decision in this case. In those cases the review can now be completed in accordance with our decision. Other awards will be reviewed in due course under item 51 either by a member of the award simplification panel or by a member of the relevant industry panel.

We have given consideration to the Joint Governments' submission that where awards are required to be reviewed in accordance with the principles set out in this decision, the review should be conducted at the latest in conjunction with any application for the implementation of a safety net adjustment. We do not think that course is appropriate. So far as practicable item 51 award reviews should deal with all aspects of item 51 including those required pursuant to item 51(4) and these principles. It would be inappropriate for the implementation of a safety net adjustment to be delayed pending completion of a review pursuant to item 51 generally or item 51(4) in particular. We add, however, that although item 51 reviews are conducted by the Commission, a party to an award may request that the award be reviewed, either in conjunction with another application or otherwise. Whether that request is granted however will be a matter for the Commission's discretion.

PRINCIPLES FOR THE CONVERSION OF AWARDS WHICH DO NOT CONTAIN PROPERLY FIXED MINIMUM RATES

The principles we have formulated pursuant to item 53 and s.106 are as follows:

1. Awards requiring review under item 51(4) will be:

(a) awards containing rates which have not been adjusted in accordance with the minimum rates adjustment principle in the August 1989 National Wage Case decision; and

(b) awards containing rates which have been adjusted in accordance with the minimum rates adjustment principle in the August 1989 National Wage Case decision but which have been varied since the adjustment other than for safety net increases or pursuant to the work value change principle.

2. The rates in the award under review should be examined to ascertain whether they equate to rates in other awards which have been adjusted in accordance with the August 1989 approach with particular reference to the current rates for the relevant classifications in the Metal, Engineering and Associated Industries Award, 1998 - Part 1 [Print Q2527]; where the rates do not equate they will require conversion in accordance with these principles.

3. Fixation of appropriate minimum rates should be achieved by making a comparison between the rate for the key classification within the award with rates for appropriate key classifications in awards which have been adjusted in accordance with the 1989 approach.

4. In the fixation of rates the relationship between the key classification in the award and the metal industry fitter should be the starting point; internal award relativities established, agreed or determined should be maintained: see, for example, the approach adopted in Kenworth Trucks Vehicle Industry Award 1981 [Print K0003] and Commonwealth Serum Laboratories Commission Sales Representative Award 1987 [Print K4939].

5. Any residual component above the identified minimum rate, including where relevant incremental payments, should be separately identified and not subject to future increases.

6. If the rates are too low it is consistent with the purpose and intent of item 51(4) that the rates be increased so that they are properly fixed minima.

7. Any future increases in rates in the award will only be applied to the minimum rates component and will be absorbed against any residual component; that is, the residual component will be reduced by the amount of the increase in the minimum rates component.

8. Increments will only be retained where they have been included in the award pursuant to the relevant work value principle or where it can be established that the increments were inserted by the Commission on grounds of structural efficiency and work value.

9. Where parties cannot agree on rates, or they agree on rates which the Commission is not satisfied are properly fixed minima, the Commission will determine the matter, subject to the right of any party to seek a reference pursuant to s.107.

10. Any party seeking to depart from these principles should make application to the President for the matter to be dealt with as a special case. The President may call a conference of the parties to the award and the parties to these proceedings prior to deciding any such application.

11. Award rates which have been dealt with pursuant to these principles cannot be used to found claims in other awards based on the restoration of relativities.

12. The conversion of awards, in accordance with these principles, to minimum rates awards is not a ground for reducing the conditions of employment in the converted awards or for increasing conditions of employment in other awards.

E. Cole with S. Matheson and R Tarlinton for the Minister for Workplace Relations and Small Business on behalf of the Commonwealth and on behalf of the governments of the States of Victoria, South Australia, Western Australia and Tasmania and the government of the Northern Territory.

D Staindl of Counsel for the Australian Nurses Federation.

J Stapleton for CPSU, the Community and Public Sector Union and the Media, Entertainment and Arts Alliance.

T Pallas for the Australian Council of Trade Unions

S Bridgeford with I Taylor for the State of New South Wales.

R Hamilton with M Ballard for the South Australian Employers Chamber of Commerce and Industry and the Australian Chamber of Commerce and Industry.

Award - review of award - Item 51(4) Workplace Relations and Other Legislation Amendment Act 1996 - paid rates - minimum rates - s113 Workplace Relations Act 1996 - application by Commonwealth to vary GECA Award by expressing rates of pay as minimum rates - Item 49(2) Workplace Relations and other Legislation Amendment Act 1996 - applications by ANF to vary Nurses (South Australian Public Sector) Award 1991 and Nurses (ANF-South Australian Private Sector) Award 1989 - ss107, 108 Workplace Relations Act 1996 - reference to Full Bench - various employees, various industries - statement of principles - all awards providing rates of pay not operating as minimum rates and not bearing proper work value relationship to rates fixed through minimum rates adjustment (MRA) principle in August 1989 National Wage Case to be converted to minimum rates - award rates requiring review to be assessed against rates adjusted under MRA principle - where rates do not equate conversion required - fixation of minimum rate to be achieved by comparing key classification in subject award with appropriate key classification in award adjusted under MRA principle - in fixing rate, starting point should be relationship between key classification in subject award and current rate for metal industry fitter in Metal, Engineering and Associated Industries Award 1998 - Part 1 [Print Q2527] - agreed internal relativities in subject award to be maintained - any residual component above minimum rate to be separately identified - future increases in award rates, whether for safety net adjustment or changes in work value, to be applied only to minimum rate and absorbed against any residual component - conversion to minimum rate not a ground for reducing conditions of employment - incremental payments - increments to be retained only where they were included in award pursuant to relevant work value principle or inserted on work value or structural efficiency grounds - increments in GECA Award do not meet test for retention as part of properly fixed minimum rate as payment is for satisfactory period of service, not work value - such increments to form part of residual component requiring absorption - conversion of rates in APS awards to be achieved by striking relationship with metal industry fitter rate - importance of maintaining existing internal relativities in APS awards requires this approach - certain matters regarding conversion of APS awards referred to Smith C for report to Full Bench - although treated as paid rates awards, SA Nursing Awards contain properly fixed minimum rates including incremental salary levels which form part of work value assessments - where awards to be reviewed, inappropriate that safety net adjustment should be delayed pending completion of review.

s108 Reference to Full Bench of application by Minister for Workplace Relations and Small Business to vary Australian Public Service, General Employment Conditions Award 1995 and another- Paid Rates Review

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