MUNICIPAL EMPLOYEES (WESTERN AUSTRALIA) AWARD 2021

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2024 WAIRC 00349

DELIVERED : THURSday, 20 june 2024

FILE NO. : APPL 6 OF 2024

Applicant

AND

Western Australian Municipal, Administrative, Clerical and Services Union, Shire of Bridgetown Greenbushes, Shire of Carnamah, Shire of Dalwallinu, Shire of Dowerin, Shire of Goomalling, Shire of Harvey, Shire of Kondinin, Shire of Laverton, Shire of Leonora, Shire of Murray, Shire of Nannup, Shire of Nareembeen, Shire of Ravensthorpe, Shire of Three Springs, Shire of Victoria Plains, Shire of Wagin, Shire of Wandering, Shire of Woodanilling, Shire of Yalgoo, Shire of Boddington, Shire of Bruce Rock, Shire of Waroona, Shire of Sandstone, Shire of Halls Creek

Respondents

CatchWords : Industrial Relations (WA) – Application to vary award – Increasing allowances – Application of Statement of Principles – Whether proposed variation is fair and equitable – Award varied

Legislation : Industrial Relations Act 1979 (WA)

Fair Work Act 2009 (Cth)

Result : Award varied

Representation:

Applicant : Local Government, Racing and Cemeteries Union (WA)

First Respondent : Western Australian Municipal, Administrative, Clerical and Services Union

Case(s) referred to in reasons:

Commission’s Own Motion v (Not Applicable) [2023] WAIRC 00337; (2023) 103 WAIG 748

(Commission’s own motion) v Chamber of Commerce & Industry of Western Australia [2007] WAIRC 00517; (2007) 87 WAIG 1487

Robe River Iron Associates v The Amalgamated Metal Workers & Shipwrights’ Union of Western Australia (1993) 73 WAIG 1993

The Breweries and Bottleyards Employees’ Industrial Union of Workers of Western Australia v Kirin Australia Pty Ltd [2002] WAIRC 05011; (2002) 82 WAIG 412

Western Australian Municipal, Administrative, Clerical and Services Union of Employees v Aboriginal Alcohol and Drug Service (AADS) (Inc) [2013] WAIRC 00795; (2013) 93 WAIG 1380

Western Australian Prison Officers’ Union of Workers v The Minister for Corrective Services [2009] WAIRC 01361; (2009) WAIG 94

Reasons for Decision

1         The Local Government, Racing and Cemeteries Employees Union (WA) has applied to vary the Municipal Employees (Western Australia) Award 2021 under s 40 of the Industrial Relations Act 1979 (WA).

2         The variation is to update the Industry Allowance contained in cl 19.5.1 of the Award from its current rate of $21.82 a week to $34.82. The Union says the Industry Allowance has not been updated in line with decisions of the Commission for a considerable period and no longer reflects the value of the allowance as originally introduced into the Award.

3         The Union is a party bound by the Award and it has standing to bring the application under s 42 of the Act.

4         All named parties to the Award have been served with the application. Several local government respondents support the proposed variations being made. No one opposes the application.

5         The amendments proposed do not affect any substantive change to the scope of the Award or its area of operation. Nor is the application made within a term specified in the Award. Accordingly, the requirements for varying the Award are met.

6         As to the quantum of the increase the Union seeks, it provides the following reasons in justification.

7         The current amount of $21.82 was set by the Municipal Employees Western Australia Interim Award 2011 when it was made on 24 March 2011.

8         When the 2021 Award was made the Industry Allowance in the Interim Award was rolled over without any adjustment or increase. It remained at $21.82.

9         The Union says that it is:

[S]elf-evident that the Industry Allowance as it now appears in the Award has not been adjusted even over the period covered by the Interim Award and the Award if not prior to that point and consequently has suffered a substantial diminution in its real value.

10      By way of illustration the Union says that at the time the Interim Award was handed down the wage for the key Level 4A was $683.50. That rate is now $954.20 being a change of 40%. The Industry Allowance has therefore fallen behind in relative terms by 40%.

11      The quantum of increase sought is to align the Industry Allowance with the Adverse Conditions Allowance in the Local Government Industry Award 2020 (Modern Award) made under the Fair Work Act 2009 (Cth) (FW Act). The Union says the Adverse Working Conditions Allowance in the Modern Award covers comparable disabilities as the Industry Allowance in the State Award and has its origins in an industry allowance. The Adverse Working Conditions Allowance in the Modern Award is contained in cl 19.2(c) and is set at $0.92 per hour for Level 1.

12      The Union’s claim adopts the Adverse Working Conditions Allowance Level 1 as an ‘equitable rate’ for the Industry Allowance in the State Award.

Consideration

13      The Commission in Court Session publishes a Statement of Principles as part of the State Wage Case each year. I must apply and follow the Statement of Principles in the exercise of my jurisdiction under the Act to set wages, salaries, allowances or other remuneration of employees: Robe River Iron Associates v The Amalgamated Metal Workers & Shipwrights’ Union of Western Australia (1993) 73 WAIG 1993 at 1998-9; s 50A(1)(d). The Statement of Principles ensures that there is consistency and equity in relation to the variation of Awards. It sets out for the Commission, and the parties appearing before it, the approach under s 26(1) to be followed: (Commission’s own motion) v Chamber of Commerce & Industry of Western Australia [2007] WAIRC 00517; (2007) 87 WAIG 1487 (2007 State Wage Order) [124]. A failure to apply the Statement of Principles is jurisdictional error: The Breweries and Bottleyards Employees’ Industrial Union of Workers of Western Australia v Kirin Australia Pty Ltd [2002] WAIRC 05011; (2002) 82 WAIG 412 [132].

14      The current Statement of Principles (Commission’s Own Motion v (Not Applicable) [2023] WAIRC 00337; (2023) 103 WAIG 748) provides:

1. Application of the Statement of Principles

1.1 This Statement of Principles is to be applied and followed when the Commission is making or varying an award or making an order in relation to the exercise of the jurisdiction under the Act to set the wages, salaries, allowances or other remuneration of employees or the prices to be paid in respect of their employment.

1.2 In these Principles, wages, salaries, allowances or other remuneration of employees or the prices to be paid in respect of employment will be referred to as “wages”.

1.3 In making a decision in respect of any application brought under these Principles, the primary consideration in all cases will be the merits of the application in accordance with equity, good conscience and the substantial merits of the case pursuant to section 26(1)(a) of the Act.

1.4 These Principles do not have application to Enterprise Orders made under section 42I of the Act or to applications made under section 40A of the Act to incorporate industrial agreement provisions into an award by consent.

1.5 This Statement of Principles will operate until reviewed under section 50A(1)(d) of the Act.

…

6. Adjustment of Allowances and Service Increments

6.1 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 those expenses.

6.2 (deleted)

6.3 Allowances which relate to work or conditions which have not changed and service increments may be adjusted as a result of the State Wage order, or, if an award contains another method for adjusting such allowances, in accordance with that other method.

6.4 In the absence of any other prescribed method, where the Commission has determined that it is appropriate to adjust existing allowances relating to work or conditions which have not changed or service increments for a monetary safety net increase, the method of adjustment shall be as follows: divide the monetary safety net increase by the rate of pay for the key classification in the award which applied immediately prior to the safety net increase, and multiply the resulting figure by 100.

6.5 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 Principle 7.

6.6 New allowances to compensate for the reimbursement of expenses incurred may be awarded where appropriate having regard to those expenses.

6.7 Where changes in the work have occurred or new work and conditions have arisen, the introduction of a new allowance, if any, is to be determined in accordance with the most appropriate Principles.

6.8 New service increments may only be awarded to compensate for changes in the work and/or conditions and will be determined in accordance with the relevant parts of Principle 7.

…

10. Making or Varying an Award or issuing an Order which has the effect of varying wages or conditions above or below the award minimum conditions

10.1 An application or reference for a variation in wages which is not made by an applicant under any other Principle and which is a matter or concerns a matter to vary wages above or below the award minimum conditions may be made under this Principle.

10.2 Claims may be brought under this Principle irrespective of whether a claim could have been brought under any other Principle.

10.3 (deleted)

15      The Union has not sought to justify the Industry Allowance increases by applying Principle 6. It relies on Principle 10. Arguably, Principle 6 does not apply because the adjustment sought is not for a monetary safety net increase.

16      The application is supported by the Western Australian Municipal, Administrative, Clerical and Services Union of Employees (WASU) who is also party to the Award. WASU submits that:

a. The variation of the Industry Allowance is an increase to wages as provided by Principle 1.2.

b. Under Principle 1.3, the primary consideration in this application will be the merits of it, in accordance with equity, good conscience and the substantial merits: s 26(1)(a).

c. The application can be made under Principle 10.

17      Principle 10 has been described as ‘the procedural gateway for award increases that fall outside the scope of other principles’: 2007 State Wage Order [91], [93].

18      The Full Bench has also described Principle 10 in Western Australian Municipal, Administrative, Clerical and Services Union of Employees v Aboriginal Alcohol and Drug Service (AADS) (Inc) [2013] WAIRC 00795; (2013) 93 WAIG 1380 at [13] as a principle ‘of deliberately broad application’:

It is not easy to anticipate in advance the many different kinds of circumstances which may warrant consideration of a wage increase to an award beyond that prescribed in State Wage Case proceedings. The Commission in Court Session has deliberately chosen not to be prescriptive, in case so a circumstance which deserves consideration on merit is unable to be considered because it does not meet criteria set out in Principle 10.

19      In Western Australian Prison Officers’ Union of Workers v The Minister for Corrective Services [2009] WAIRC 01361; (2009) WAIG 94, Chief Commissioner Beech observed at [32]:

Principle 10 is to be read in the context of the Principles as a whole; although Principle 10 permits a matter to be considered irrespective of whether it could have been brought under any other Principle, it does not mean that those other Principles are irrelevant. The strict test in Principle 7.2 for an alteration in wage rates cannot be avoided by invoking Principle 10.

20      As WASU points out, prior to the transition of local government to the State industrial relations system on 1 January 2023, the majority of local governments were operating as national system employers under the FW Act. Indeed, any local government which was previously a national system employer not covered by a registered enterprise agreement as at 1 January 2023, or an industrial agreement made under the Act subsequently, remains bound by the Modern Award as a ‘new state instrument’ under s 80BB.

21      Under cl 19.2(c) of the Modern Award, a Level 1 employee is entitled to an Adverse Working Conditions Allowance of $0.92 per hour or $34.96 per week of ordinary hours. The Adverse Working Conditions Allowance is higher for Level 2 and Level 3 employees.

22      In these circumstances, granting the claim will not cause any additional financial burden on local government employers who were previously national system employers.

23      On the other hand, to not grant the claim would mean that employees paid under the Award will continue to receive a significantly lower allowance, for the same work performed under the same conditions by employees for other local governments that apply the new state instrument.

24      The Industry Allowance has not been varied or updated since the Award was made on 29 April 2021.

25      The Industry Allowance contained in the Award when it was made was the same rate of allowance as contained in the Interim Award when it was made some 10 years earlier.

26      No explanation has been provided as to why the Industry Allowance was not updated during the life of the Interim Award or at the time the Award was made. The disparity that currently exists could have been avoided had the parties to the Award made timely applications to vary the Interim Award under Principle 6 or updated the Industry Allowance when the Award was made.

27      Nevertheless, I do consider that fairness and equity, and the substantial merits of the case, support an increase in the Industry Allowance to align it broadly with the Adverse Working Conditions Allowance in the Modern Award. When the Award was made, it was intended to provide consistency in working conditions for State system employers and employees compared with those in the national system. With the transition of local government to the State industrial relations system, the disparity between the Industry Allowance under the Award and the Adverse Working Conditions Allowance under the Modern Award is now not only a disparity across systems, but is a disparity within the State system. To allow this situation to continue is inimical to equity and the substantial merits of the case.

28      I will therefore order that the Award be varied by substituting the amount of $21.82 in cl 19.5.1 with the new amount $34.82 with such variation having effect from the beginning of the first pay period commencing on or after the date of this Order.