In these proceedings, the Commission has acted on its own initiative. On 14 June 2024, an initial Summons to Show Cause was issued. Following the reconstitution of the Commission on 1 July 2024, a revised Summons to Show Cause was issued on 5 July 2024. The revised Summons addresses two matters:
1. firstly, the appropriate action pursuant to Pt 3 of Ch 2 of the Industrial Relations Act 1996 (NSW) ("Act") and cl 4 of the Commission's Wage Fixing Principles, namely, the adjustment of State award wages following the Fair Work Commission's Annual Wage Review 2023-24 [2024] FWCFB 3500; and
2. secondly, a broad review of the form and content of the Commission's Wage Fixing Principles.
Given the significance of the Commission's review of the Wage Fixing Principles, a five-member bench will hear and determine the matter, constituted by the three Presidential members, Senior Commissioner Constant and Commissioner McDonald.
We propose to deal with the two matters separately and in two stages.
[2]
Stage 1 - Adjustment of State award wages
On 3 June 2024, an Expert Panel of the Fair Work Commission delivered its decision in Annual Wage Review 2023-24 [2024] FWCFB 3500. By this decision, the Expert Panel increased the National Minimum Wage and all modern award minimum wages by 3.75%, effective from 1 July 2024.
State Wage Case 2024 [2024] NSWIRComm 1 | Case summary | Zoe
As a National Decision under s 50 of the Act, this Full Bench of the reconstituted Commission must now give consideration to the Expert Panel's decision and determine whether and to what extent its principles or provisions will be adopted for the purposes of awards and other matters under the Act.
Unless the Commission determines otherwise, the awards relevant to the Commission's consideration in this regard, pursuant to s 52 of the Act, are listed at sub-principle 4.2 of the Wage Fixing Principles set out in Annexure A to the State Wage Case 2022 [2022] NSWIRComm 1081. The relevant awards, divided into three categories, are:
Category 1
1. Security Industry (State) Award;
2. Miscellaneous Workers - Kindergartens and Child Care Centres, &c. (State) Award;
3. Health, Fitness and Indoor Sports Centres (State) Award;
4. Transport Industry (State) Award;
5. Clerical and Administrative Employees (State) Award;
Category 2
1. Local Government (Electricians) (State) Award;
2. Entertainment and Broadcasting Industry - Live Theatre and Concert (State) Award;
Category 3
1. Local Government Aged Disability and Home Care (State) Award; and
2. Nurses' (Local Government) Residential Aged Care Consolidated (State) Award 2021.
The Commission calls for submissions from interested parties as to whether and to what extent the decision of the Expert Panel in Annual Wage Review 2023-24 [2024] FWCFB 3500 is to be adopted in respect of the Relevant Awards.
As part of this first stage, the Commission will also consider whether and to what extent the "Stage 3" wage increases awarded by the Fair Work Commission in Aged Care Award 2010 [2024] FWCFB 150 and Aged Care Award 2010 [2024] FWCFB 298 are to be adopted or applied in respect of the Category 3 awards, whether by operation of s 52 of the Act or by other means.
[3]
Directions in respect of Stage 1
Having heard from the parties today, the Commission makes the following directions in respect of the first stage:
In relation to the Category 1 Awards:
1. any interested party is to file and serve written submissions on or before 2 August 2024 addressing the quantum and timing of any increase to the Category 1 Awards as a consequence of the Annual Wage Review 2023-2024;
2. any interested party wishing to respond to any submissions filed and served in accordance with para 10(a) must do so by filing and serving on each relevant party written submissions in reply on or before 16 August 2024;
3. the matter is listed for further directions before Justice Chin on 9 August 2024 at 10:00am at which time any variation to para 10(b) and the need for a hearing date will be addressed;
In relation to the Category 2 Awards, the matter is listed for further mention before Justice Chin on 9 August 2024 at 10:00am, in the expectation that a consent application to vary those awards may be filed before then;
In relation to the Category 3 Awards, the matter is listed for further directions before Justice Chin on 9 August 2024 at 10:00am.
[4]
Stage 2 - Wage Fixing Principles
In our view there is a proper basis to consider whether the Wage Fixing Principles are still fit for purpose.
In various iterations, the Commission's Wage Fixing Principles have been in use for over 40 years. In the State Wage Case 1983 (1983) 5 IR 1, the Industrial Commission of New South Wales in Court Session adopted in whole the Australian Conciliation and Arbitration Commission's principles as determined in National Wage Case - September 1983 (1983) 4 IR 429. After a substantial history of comity in approach to wage fixing between the New South Wales and federal jurisdictions, this Commission's Wage Fixing Principles survived a general review in 2010 that was conducted after the federal system had ceased to use principles of this kind (see State Wage Case 2010 [2010] NSWIRComm 183 at [28]). Since then, the Principles have been subject to review from time to time, albeit in a legislative context which had substantially reduced the Commission's role in wage fixation (see State Wage Case 2020 (No 2) [2021] NSWIRComm 1079; and State Wage Case 2021 [2022] NSWIRComm 1014).
Since the Principles were last considered, the Industrial Relations Amendment Act 2023 has reformed the Commission and restored its wage fixation functions. In addition to reconstituting the Commission and re-establishing the Industrial Court of New South Wales, the amending Act also:
1. abolished the requirement for the Commission to give effect to government policy on adjusting wages for public sector employees as contained in former s 146C of the Act;
2. introduced the object of encouraging strategies to attract and retain skilled staff where there are skill shortages (section 3(i));
3. requires the Commission to have regard to the fiscal position and outlook of the Government; and
4. established a new stream of "mutual gains bargaining" in Chapter 2A of the Act. This has coincided with the Government publishing a new approach to bargaining within the public sector, titled NSW Government Fair Pay and Bargaining Policy 2023.
The Commission invites interested parties to address it on the question of the continued appropriateness and content of the Commission's existing Wage Fixing Principles. In particular, the Commission invites submissions on whether the Wage Fixing Principles should be abolished or retained and, if they are to be retained, what amendments should be made to them having regard to the contemporary industrial and legislative context.
Without limiting the scope of the parties' submissions on this matter, the Commission would be assisted by the parties addressing the following 11 matters:
1. Whether to retain Wage Fixing Principles in whole or in part.
2. Whether to retain the onus on applicants seeking different conditions or rates of pay to rebut a presumption that existing awards set fair and reasonable terms and conditions of employment.
3. Whether and to what extent there ought to be a principle addressing increases to maintain the real value of award rates of pay having regard to the rate of inflation and changes in the cost of living for employees, and if so, whether it should apply generally or be limited to employees on low wages.
4. Whether and to what extent Principle 7 (Minimum Wage for Award/Agreement Free Employees) ought to be amended, or some other mechanism introduced to set an appropriate minimum rate of pay to be applied to low wage employees at a base grade in an award.
5. Whether there ought to continue to be a separation of general work value considerations from increases to wages based on gender-based undervaluation.
6. Whether to retain a Special Case principle, and if so whether the circumstances that establish a Special Case ought to be better defined.
7. Whether and to what extent Principle 8 (Arbitrated Case) ought to be amended, or some other mechanism introduced to permit the consideration of claims based on the attraction and retention of skilled staff where there are skill shortages and having regard to the effective and efficient delivery of services.
8. Whether and to what extent one or more of the Principles ought to be amended in light of the Commission's obligation to have regard to the fiscal position and outlook of the Government and the likely effect of the exercise of the Commission's function on the fiscal position and outlook.
9. Whether and to what extent sub-principle 8.3 (Productivity and Efficiency Considerations) ought to be amended, or some other mechanism introduced to expand, clarify and/or refine the concept of public sector productivity and efficiency and, in particular, the relevance of and relationship between improvements in the quality of public sector services and employee-related costs.
10. Whether and to what extent Principle 9 (Negotiating Principles) ought to be retained or revised in light of the mutual gains bargaining provisions in the Act. The Commission is particularly interested to receive submissions addressing the appropriateness and operation of "no extra claims" clauses in agreements in light of the mutual gains bargaining scheme and whether there ought to be a model "no extra claims" clause.
11. Whether the following Principles ought to be removed from the Wage Fixing Principles:
1. Principle 10 (Superannuation); and
2. Principle 12 (Economic Incapacity).
[5]
Directions in respect of Stage 2
After hearing from the parties today directions were made, and the matter set down for hearing. The hearing date however has had to be altered to accommodate court room availability. The Commission makes the following directions in respect of Stage 2 of the proceedings:
1. Any interested party wishing to make submissions in respect of the Commission's review of the Wage Fixing Principles must do so by filing and serving on each party to these proceedings written submissions on this matter on or before 16 August 2024.
2. Any interested party wishing to respond to any submissions filed and served in accordance with para 18(a) must do so by filing and serving on each party to these proceedings written submissions in reply on or before 13 September 2024.
3. The matter is listed for hearing before a Full Bench on Wednesday 9 October 2024 at 10am.
[6]
Amendments
11 July 2024 - Deleted Senior Commissioner Constant and Commissioner McDonald. The statement is only from Taylor J President, Chin J Vice-President and Paingakulam J Deputy President.
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Decision last updated: 11 July 2024