GENERAL ORDER TO VARY ALL AWARD RATES AND ALLOWANCES

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES Trades and Labor Council of Western Australia

APPLICANT

 -v-

 MINISTER FOR CONSUMER AND EMPLOYMENT PROTECTION, CHAMBER OF COMMERCE AND INDUSTRY OF WESTERN AUSTRALIA

RESPONDENTS

 MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS (CTH)

INTERVENOR

 AUSTRALIAN COUNCIL OF SOCIAL SERVICES, AUSTRALIAN YOUNG CHRISTIAN WORKERS, COMBINED SMALL BUSINESS ALLIANCE OF WESTERN AUSTRALIA, MR. MH DALE, UNITING CHURCH IN AUSTRALIA, WESTERN AUSTRALIAN SYNOD, WESTERN AUSTRALIAN COUNCIL OF SOCIAL SERVICES

OTHER PERSONS

CORAM Chief Commissioner A R Beech

 Senior Commissioner J F Gregor

 Commissioner S J Kenner

 Commissioner J H Smith

 Commissioner J L Harrison

DATE Monday, 26 June 2006

FILE NO. APPL 957 OF 2005

CITATION NO. 2006 WAIRC 04611

STATEMENT

1          I am pleased to announce that all five members of this Commission in Court Session are agreed.  We are conscious that this is the first occasion for twenty-five years when we are asked to increase the award minimum wage and associated wage rates in the absence of a national wage decision. 

2          We consider we have ample evidence and material before us to enquire into and deal with the claim.  We have taken the step of inviting submissions either in writing, by e-mail or in person from the community.  We commissioned a report from Professor David Plowman regarding the effects of past minimum wage adjustments on the State’s economy.  We have found the material presented to us more than adequately provides us with the information we need to make a reasoned and considered decision. 

3          We do not accept the submission of the Commonwealth and the CCIWA that we should await the decision of the AFPC expected in the spring.  One of the principal objects of the Act in section 6(ca) is to provide a system of fair wages and conditions of employment.  We are to do so for the employees and those employing them that are within the coverage of the Commission’s jurisdiction.  Those employees and employers will not be affected by an eventual determination of the AFPC.  We consider it is inconsistent with the Commission’s statutory duty, including the duty under section 22B of the Act to act with as much speed as the requirements of the Act and a proper consideration of the matter before it permit, to adjourn to an unspecified date in the future to await a determination which will have no direct effect upon the employees and their employers who remain within the Commission’s jurisdiction.

4          We find that approximately 40% of the State’s workforce remains within the Commission’s jurisdiction; some of those are presently bound by a federal award or agreement and may return to the State system.  Ultimately, we find that the State system still covers employees in almost every sector in the State other than the mining, power and water supplies and communications sectors. 

5          The claim before us is for a percentage increase.  We find that a flat rate increase achieves the best outcome in terms of targeting those people who will benefit most from the decision. 

6          We note that some twelve months have passed since the last general wage adjustment in WA.  We have also taken into account that notwithstanding the economic information before us showing unprecedented levels of growth for a sustained period of time, together with positive economic forecasts for the foreseeable future, there will be businesses on the margin of profitability for which any increase in award wage levels may cause financial difficulty. 

7          However, we are satisfied from the evidence before us that there are employees now who are unable to bargain for wage increases based upon either maintaining the purchasing power of their wages or assisting in changes in the workplace to make enterprises more productive. 

8          The economic material before the Commission, which was not disputed by any person appearing, provides a sound basis for the determining whether employees in this State who are award-dependent and who have not been able to negotiate a wage increase should now have their wages increased.  Against the background of the State’s final demand and its forecast for the future, fairness and a consideration of the labour-related economic data supports a positive conclusion.   

9          The task of determining the increase to be granted is not  a mathematical exercise.  Whilst we appreciate the assistance given to us from the submissions and evidence before us, the Commission is not restricted to the specific claim made and is to act according to equity, good conscience and the substantial merits of the case.  This is not simply the result from an adversarial procedure but rather from an inquiry by the five members of this Commission in Court Session into the matter before it under legislation which has as its objects, relevantly:

• the promotion of goodwill in industry and enterprises within it,
• to promote equal remuneration for men and women for work of equal value;
• to encourage employers, employees and organisations to reach agreements appropriate to the needs of enterprises within industry and the employees in those enterprises; and
• to provide a system of fair wages and conditions of employment. 

10       We consider our task includes, ultimately, deciding what is fair without setting a level of minimum wage that acts to prevent those seeking work from finding it.  Account needs to be taken generally of the capacity of employers and industry to pay that increase.  We need to be conscious that not all industries outside the mining sector are necessarily profitable although no single employer, group of employers or employer association has objected to the granting of an increase.

11       The increase to be granted should not discourage enterprise agreement making by the size of the increase to award rates.  The safety net increases in the past have not done so.  We have decided that fairness to those employees and employers directly affected by the outcome of these proceedings warrants an increase which maintains as far as possible the real value of wages and not add to the potential inflationary pressures upon the State’s economy. 

12       In the context of all of the foregoing, and in equity, good conscience and the substantial merits of the case, we have decided to increase the award adult full time minimum wage, award wage rates and associated allowances by $20.00 per week.  In the context of the previous increases which have occurred in recent times and the very strong economy in this State, that increase is modest.  On the evidence, it will be economically insignificant.  There is no evidence that such an increase will impact unfairly on small business.  We consider it will be within the capacity of employers generally and individually to pay.

13       We also consider that the resulting minimum wage of $504.40 is both fair and sustainable.  The full increase will apply only to employees who are paid the award wage; any wage paid over that award rate is able to be used to offset the increase. 

14       The state of the economy is such that the increase we propose is most likely to have a negligible effect on the exceptionally low level of unemployment in the present economic circumstances. 

15       The increase will operate on and from 7 July 2006.

16       The present State Wage Principles will be rescinded and re-made and will continue in their usual form until reviewed in the future to see whether they remain appropriate.

17       We propose to give effect to our Decision by issuing a General Order which will:

(a)   Rescind the General Order 576 of 2005 and its accompanying Statement of Principles.

(b)   Make a General Order and accompanying Statement of Principles.

18      Our written Reasons and a Minute of the proposed order now issue.  We ask that you inform us by 4.00 pm on the 27th June whether you require an opportunity to speak to the minutes. Any speaking to the minutes will be in writing.