REVIEW OF CLAUSE 7 AND SCHEDULES B AND F OF THE ABORIGINAL COMMUNITIES AND ORGANISATIONS WESTERN AUSTRALIAN INTERIM AWARD 2011 PURSUANT TO S 40B OF THE INDUSTRIAL RELATIONS ACT 1979 (WA)

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2024 WAIRC 00038

DELIVERED : THURSDay, 25 January 2024

FILE NO. : APPL 24 OF 2023

Applicant

AND

(Not Applicable)

Respondent

CatchWords : Industrial Law (WA) – Aboriginal Communities and Organisations Western Australian Interim Award 2011 – Commission's Own Motion – s 40B – Annual salary rates below the minimum – Whether award provisions are obsolete or in need of updating – Enterprise Flexibility – Minimum rates adjustment – Statement of Principles – Updates to named parties – Discriminatory definitions removed – Award varied

Legislation : Industrial Relations Act 1979 (WA)

Fair Work Act 2009 (Cth)

Equal Opportunity Act 1984 (WA)

Aboriginal Councils and Associations Act 1976 (Cth)

Associations Incorporations Act 2015 (WA)

Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth)

Result : Award varied

Representation:

Hon. Minister for Industrial Relations

Western Australian Municipal, Administrative, Clerical and Services Union of Employees

Case(s) referred to in reasons:

City of Cockburn v Western Australia Municipal, Administrative, Clerical and Services Union of Employees (WASU) & Ors [2023] WAIRC 00787

Commission’s Own Motion v (Not Applicable) [2023] WAIRC 00337

Commission’s Own Motion v (Not Applicable) [2023] WAIRC 00836

Commission’s Own Motion v (Not Applicable) [2024] WAIRC 00013

Commission’s Own Motion v Dardanup Butchering Co & Ors [2004] WAIRC 12690; (2004) 84 WAIG 2739

Commission’s Own Motion v (Not Applicable) [2004] WAIRC 11661; (2004) 84 WAIG 1531

Trades and Labor Council of Western Australia v The Confederation of Western Australian Industry (Inc) & Ors (1989) 69 WAIG 2913

Western Australian Municipal, Administrative, Clerical and Services Union of Employees v Aboriginal Alcohol and Drug Services (AADS) Inc & Ors [2011] WAIRC 00228; (2011) 91 WAIG 476

Reasons for Decision

1         The Commission, of its own motion, initiated this matter for variation of the Aboriginal Communities and Organisations Western Australian Interim Award 2011 under s 40B of the Industrial Relations Act 1979 (WA). Section 40B allows the Commission to vary an award for any of the following relevant purposes:

(a) to ensure that the award does not contain wages that are less than the minimum award wage as ordered by the Commission under s 50A;

(b) to ensure that the award does not contain provisions that discriminate against an employee on any ground on which discrimination in work is unlawful under the Equal Opportunity Act 1984 (WA);

(c) to ensure that the award does not contain provisions that are obsolete or need updating; and

(d) to ensure that the award is consistent with the facilitation of the efficient organisation and performance of work according to the needs of an industry and enterprises within it, balanced with fairness to the employees in the industry and enterprises.

2         The Commission provided notice of its intention to vary the Award, to UnionsWA, the Chamber of Commerce and Industry, the Australian Resources and Energy Employer Association, the Minister for Industrial Relations and each of the parties to the Award for the purpose of giving those parties an opportunity to be heard in relation to the proposed variations.

3         The notice identified three clauses affected by the Commission’s proposed variations:

(a) Clause 7: Enterprise Flexibility Provisions;

(b) Schedule B: Annual Salaries; and

(c) Schedule F: Named parties to this award.

4         I made an order on 26 June 2023 amending the application to include additional proposed variations to clauses 19 and 32, which referred to an employee’s spouse. The Minister brought to the Commission’s attention the fact that the current provisions define ‘spouse’ to include a ‘de facto spouse’ but only where the ‘spouse’ is a person of the opposite sex of the employee.

5         None of the employer parties to the Award sought to be heard or participate in the proceedings. The matter was programmed to be determined on the papers. The Commission received written submissions on behalf of the Western Australian Municipal, Administrative, Clerical and Services Union of Employees (WASU), being the union party to the Award, and the Minister.

6         In broad terms, WASU and the Minister agree that the relevant clauses ought to be varied under s 40B:

(a) That that Clause 7 ‑ Enterprise Flexibility should be removed as being contrary to the principles summarised in City of Cockburn v Western Australia Municipal, Administrative, Clerical and Services Union of Employees (WASU) & Ors [2023] WAIRC 00787 and applied in Commission’s Own Motion v (Not Applicable) [2023] WAIRC 00836;

(b) That Schedule B should be varied to remove salary rates which are below the minimum rates set under s 50A;

(c) That Schedule F should be updated to remove parties that no longer exist and to correct party names;

(d) That discriminatory definitions of ‘spouse’ or ‘de facto’ should be removed.

7         The only substantive issue for me to decide is what variations should be made to the rates of pay in Schedule B to achieve the purposes of s 40B. WASU argued that the Commission should not only increase the Level 1 salaries below the statutory minimum, but also increase all rates in the Award to establish increases in pay for the steps within each classification level.

Wages that are less than the minimum award wage

8         A copy of the Award’s current wages schedule is annexed as Schedule 1 to these reasons.

9         The rates of pay it specifies for Level 1 (First Year to Fourth Year) are below the statutory minimum award rate, which is $863.40 per week or $45,020 per annum: Commission’s Own Motion v (Not Applicable) [2023] WAIRC 00337.

10      Having identified this, the Commission must vary the Award to ensure that rates of pay are not below the statutory minimum: Commission’s Own Motion v Dardanup Butchering Co & Ors [2004] WAIRC 12690; (2004) 84 WAIG 2739 at [171].

11      WASU argues that the Level 1, First Year rate should be $47,00 per annum, which is above the statutory minimum rate. It draws on the nature of the work that falls within the Level 1 classification, saying that such work can be physically demanding and require the employee to exercise a degree of skill and expertise, such that the rate of pay should be higher than the State Minimum Wage.

12      WASU relies on the following statement of the Commission in Court Session (CICS) in Dardanup Butchering Co & Ors in support of its claim for rates of pay to be set above the statutory minimum rate:

[172] It is clear from the opening words of s.40B(1) that the Commission has had conferred upon it wide powers to amend. These powers can be exercised at any time and more than once in relation to any award. Section 40B(1)(a) does not simply provide that the Commission at any time may vary an award to ensure that the award does not contain wages that are less than the minimum award wage as ordered by the Commission under section 51. The power to amend under each subparagraph of s.40B(1) is wide as the opening words provide that the Commission may vary an award “for any one or more of the following purposes…” Consequently, providing the Commission by order, varies an award for one or more of the purposes set out in (a) to (e) of s.40B(1) the Commission acts within power.

13      The point the CICS made in this extract is that the power under s 40B is wide. It says nothing about how the Commission should approach the exercise of its power for a purpose, or the purposes, in s 40B(1)(a) to (e).

14      Specifically in relation to the minimum award rate purpose in s 40B(1)(a), the CICS observed that the role of the Commission is ‘relatively straightforward’: [175]. It endorsed the parties’ consensus approach that where rates of pay in an award are less than the award minimum wage; the Commission should direct parties to confer, arbitrate where necessary on an expeditious process of Minimum Rates Adjustments, the use of the work value principle, and other processes, to attain the level of the award minimum wage: [180]. The process is directed at ‘fixing the wages that are still below the s 51 minimum’: [6].

15      Minimum Rates Adjustment was introduced as part of the State Wage Decision of 8 September 1989: Trades and Labor Council of Western Australia v The Confederation of Western Australian Industry (Inc) & Ors (1989) 69 WAIG 2913. The principle was stated at 2927 as follows:

2. Minimum Rates Adjustment

Minimum rates adjustments allowable in the State Wage Decision of 8 September, 1989 shall be in accordance with the following:

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

(ii) in appropriate cases longer phasing‑in arrangements may be approved or awarded and/or parties may agree that part of a supplementary payment should be based on service;

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

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

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

16      By 2004, when the CICS decided Dardanup Butchering Co & Ors, the Statement of Principles contained in the State Wage Case General Order [2004] WAIRC 11661; (2004) 84 WAIG 1531 referred to Minimum Rates Adjustments in Principles 2 and 8:

STATEMENT OF PRINCIPLES – June 2004

…

2. When an Award or relevant Agreement may be varied or another Award made without the claim being regarded as above or below the Safety Net:

In the following circumstances an award or relevant agreement may, on application, be varied or another award made without the application being regarded as a claim for wages and/or conditions above or below the award safety net:

…

(f) to adjust wages for arbitrated safety net adjustments in accordance with Principle 8.

…

8. Arbitrated Safety Net Adjustments

Where the minimum rates adjustment process in an award has been completed, the Commission may consider an application for the base rate, supplementary payment and arbitrated safety net adjustments to be combined so that the award specifies only the total minimum rate for each classification.

By consent of all parties to an award, where the minimum rates adjustment has been completed, award rates may be expressed as hourly rates as well as weekly. In the absence of consent, a claim that award rates be so expressed may be determined by arbitration.

The arbitrated safety net adjustment arising from the decision in Matter No. 570 of 2004 is $19.00 per week…

17      The current Statement of Principles still refers to Minimum Rates Adjustment in Principles 3 and 4.2.

18      The current work value principle is set out in Principle 7 of the Statement of Principles. Changes in work value may arise from changes in the nature of the work, skill and responsibility required or the conditions under which work is performed. Changes in work by themselves may not lead to a change in wage rates. The strict test for an alteration in wage rates is that the change in the nature of the work should constitute such a significant net addition to work requirements as to warrant the creation of a new classification or upgrading to a higher classification: Commission’s Own Motion v (Not Applicable) [2023] WAIRC 00337.

19      The upshot is that the CICS in Dardanup Butchering Co & Ors contemplated any adjustment to wages made under s 40B(1)(a) should be approached by applying the Statement of Principles. There can be no doubt that the Commission is bound to follow the Statement of Principles when varying the wages in the Award.

20      WASU’s submission that the work of Level 1 employees warrants a rate of pay exceeding the statutory minimum does not fall within the Statement of Principles. It does not reflect a case for varying the wages based on work value changes. WASU has not attempted to demonstrate that the nature of the work, its level of skill or, level of responsibility or conditions under which work is performed has changed since the Award was made in 2011.

21      Principle 3 enables the Commission to vary an award to adjust wages for total minimum rates ‘pursuant to Principle 4.2’. Principle 4.2, under the heading Previous State Wage Increases, provides ‘Minimum rates adjustments may also be progressed under this Principle’.

22      I accept that this allows me to vary the rates of pay in the Award to align rates that are under the statutory minimum rate with the statutory minimum rate. However, I can find no support for otherwise increasing the rates of pay in the manner WASU has sought.

The Award’s Pay Structure

23      WASU points out that the wage structure in Schedule B has a level/step format. Under that format, at the end of each year of continuous service in a position at an appointed level, the employee automatically progresses to the next step or year within the level.

24      However, the rates of pay for each step/year within each level are the same, except for:

(a) Level 1 Fifth Year, which is $899 per annum higher than the rate of pay for Level 1 First Year to Fourth Year;

(b) Level 5, Fourth Year, which is $715 per annum higher than Level 5, Third Year; and

(c) Level 10 where rates for each First Year, Second Year and Third Year increase incrementally.

25      WASU says this means that the steps have no practical significance and, as such, are redundant and in need of updating.

26      In order to update the steps, WASU argues for the creation of new pay rates for each of steps 2 to 4 in each level, which are incrementally higher than the pay rate for step 1. And in order to maintain relativities between levels, the rates of pay for step 1 in each level from level 2 must also be increased. WASU’s proposal would significantly increase rates of pay, particularly at the higher levels.

27      The rates of pay WASU seeks are based on the relativities established by the Aboriginal Communities and Organisations (Western Australia) Award 1996, which WASU says is the historical source of the Award’s classification structure. The 1996 instrument is an award made by the Australian Industrial Relations Commission before the federal award system became based on the Constitution’s corporations’ power: A1893, Print N3902.

28      The Award was made on WASU’s application in A 1 of 2011. In WASU’s application, the Award it sought to be made contained the current level/step structure, with no differences in the rates of pay for each step within each level, except for the three exceptions set out above at paragraph [24].

29      This appears to be a deliberate choice. Clause 15.2 of the Award deals with annual increments. It distinguishes between existing employees as at 27 March 2011 and employees who commence employment after 27 March 2011:

15.2 Annual Increments

15.2.1 In this clause:

(1) ‘existing employee’ means an employee who was employed by an employer on or before 27 March 2011.

(2) ‘new employee’ means an employee who commences employment with any employer after 27 March 2011.

15.2.2 Existing employees are entitled to advance by annual increments to the maximum of the appropriate classification level. The following conditions apply:

(1) The employee has given satisfactory service over the last 12 months; and

(2) The employee has acquired any new and / or improved skills that are required for the employee’s position.

(3) New employees are entitled to payment at the first year rate of the appropriate classification level. An employer and individual employees may agree to allow the employee to advance by annual increments to the maximum of the appropriate classification level.

30      In effect, only existing employees as at 27 March 2011 were entitled to receive a rate of pay other than the First Year rate of pay. The intention was to remove the practical significance of the steps/annual increments, for all new employees from 27 March 2011 onwards. Grandfathering of increments also appeared in the Aboriginal Communities and Organisations (Western Australia) Award 2001, being the federal pre-reform Fair Work Australia consolidated award: [AP814193].

31      I cannot, therefore, accept the argument that the absence of pay increases within each level is unintentional or a distortion.

32      In any event, Principle 6.8 of the Statement of Principles says:

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 [Work Value Changes].

33      Again, WASU has not attempted to establish work value changes since the Award was made in 2011. I do not consider it open to me to increase the rates for the increments as WASU has sought.

34      I do consider the steps at levels 2, 3, 4, 6, 7, 8 and 9 and are obsolete as they do not affect any changed terms or conditions. The appropriate variation is to remove the obsolete provisions.

Enterprise Flexibility Clause

35      The Award’s current Clause 7 Enterprise Flexibility is the same type as the clause I considered in APPL 27 of 2023: Commission’s Own Motion v (Not Applicable) [2024] WAIRC 00013. It purports to allow a single employer covered by the Award and its employees, either individually or as a group, to reach an agreement with the effect of varying the Award’s obligations. Although the clause contemplates an application to the Commission in relation to any such variation or agreement, nothing in the Act’s provisions enables such agreements to be approved, registered or otherwise endorsed by the Commission. In other words, those kinds of deals are not within the Act’s scheme.

36      It is uncontentious that the clause is contrary to the scheme of the Act and invalid. It should, therefore, be deleted.

Named Parties

37      WASU proposes that it be added to Schedule F. WASU was party to the proceedings which gave rise to the Award: Western Australian Municipal, Administrative, Clerical and Services Union of Employees v Aboriginal Alcohol and Drug Services (AADS) Inc & Ors [2011] WAIRC 00228; (2011) 91 WAIG 476. It is, therefore, deemed to be a party to the Award under s 38(1a) of the Act. Section 38(1) required that it be listed as a named party to the Award. It is appropriate that it be added to Schedule F.

38      The following party names contain errors:

(a) Kulumburu Aboriginal Association: no organisation with this name is currently registered, nor has it ever been registered. On 1 July 1981, Kalumburu Aboriginal Corporation was registered under the Aboriginal Councils and Associations Act 1976 (Cth). The organisation with this name remains registered with the Office of the Registrar of Indigenous Corporations.

(b) Warburton Community Incorporated: the registered name of this organisation at the time the Award was made was Warburton Community Inc. That remains its current name.

(c) Yamatji Regional Council: no organisation with this name is currently registered, nor has it ever been registered. At the time the Award was made, the following entities were registered:

(i) Yamatji Marlpa Aboriginal Corporation: was a registered Indigenous Corporation being registered under the Aboriginal Councils and Associations Act 1976 (Cth) in 1994.

(ii) Regional Yamatji Murni Wangga Aboriginal Corporation: was registered, but notice of its proposed deregistration was published before the Award was made on 11 January 2011, and it was deregistered shortly thereafter on 2 April 2011.

39      It is reasonable to infer that Yamatji Marlpa Aboriginal Corporation was the intended party to the Award when it was made, and the correct name.

40      The following party no longer exists:

(a) Kullari Regional Council: no organisation with this name is currently registered, nor has it ever been registered. Kullarri Regional CDEP Incorporated was registered under the Associations Incorporations Act 2015 (WA) in 2009. It was deregistered on 6 October 2016.

41      The following named parties have changed names:

(a) The Aboriginal Alcohol and Drug Service (Inc): upon registration with the Office of the Registrar of Indigenous Corporations, this association changed its name to Wungening Aboriginal Corporation.

(b) Goldfields Land Council Aboriginal Corporation: this organisation, registered on 13 April 1985, changed its name in 2003 and again on 1 March 2023. It is now known as Goldfields Aboriginal Community Services Aboriginal Corporation.

42      The Award’s scope clause, clause 4, defines the scope by reference to the ‘Aboriginal Communities and Organisations industry’ and to each employer in that industry, and each employee eligible for membership of WASU employed in the Award’s classifications. The list of employer names in Schedule F does no more than create a rebuttable presumption that those employers are engaged in the industry referred to in the scope clause.

43      Schedule F does not directly affect the scope of the Award. It is not an operative provision. Its practical significance is that the entities listed are parties to the Award pursuant to s 38 of the Act. They are, therefore, entitled to be served with applications made under Part II, Division 2A of the Act and to participate in proceedings initiated by such applications. Additionally, the named parties are presumed to operate within the Aboriginal Communities and Organisations industry.

44      The upshot is that there is no good reason for retaining a named employer in the Award who is deregistered. Its inclusion is obsolete. Further, it is desirable to update the names of those corporations who remain registered, but have changed names.

45      Schedule F should be amended to reflect the correct and current names of these organisations and to delete Kullari Regional Council accordingly.

46      WASU proposed that the following employers be added to Schedule F:

(a) Kullarri Regional Communities Indigenous Corporation. This organisation was registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) on 6 October 2016.

(b) Yamatji Southern Regional Corporation Limited. This company was incorporated in January 2020 as an Australian Public Company limited by guarantee.

47      I do not consider variation under s 40B is the appropriate vehicle to add new parties to an award. Section 38(2) of the Act makes specific provision for an application to add parties to an award.

48      In any event, no evidence has been presented to the Commission to establish that these entities are employers, that they operate in the Aboriginal Communities and Organisations industry, or that they employ employees who are covered by the Award. Without knowing that these entities have an interest in the Award, I am not satisfied that they ought to be added to Schedule F, having regard to the practical significance of being named a party as set out above.

Disposition and Orders

49      In accordance with my reasons, I propose to order that the Aboriginal Communities and Organisations Western Australian Interim Award 2011 be varied as follows:

1. Clause 6 Definitions:

(a) Renumber subclauses 6.9 to 6.11 as 6.10 to 6.12.

(b) Insert a new definition of ‘Partner’ as follows:

6.9 Partner means a spouse or de facto partner.

2. Clause 7 Enterprise Flexibility: Delete this clause in its entirety.

3. Clause 19 Allowances:

(a) Delete subclause 19.1.1 in its entirety and insert in lieu thereof the following:

19.1.1 In this clause:

(1) Dependant in relation to an employee means:

(a) a partner; or

(b) if there is no partner, a child under 18 years of age who lives in Western Australia and who relies on the employee for their main financial support; or

(c) if there is no partner, any relative of the employee who lives in Western Australia and who relies on the employee for their main financial support

who does not receive a district allowance or location allowance of any kind.

(2) Partial dependant in relation to an employee means:

(a) a partner; or

(b) if there is no partner, a child under 18 years of age who lives in Western Australia and who relies on the employee for their main financial support; or

(c) if there is no partner, any relative of the employee who lives in Western Australia and who relies on the employee for their main financial support

who receives a district allowance or location allowance of any kind under an award, agreement or any other provision regulating their employment, and that allowance is less than the applicable allowance for an employee without dependants under this award.

(b) Delete subclause 19.2 Adjustment of District Allowance Rates in its entirety.

(c) Delete subclause 19.3.2 in its entirety and insert in lieu thereof the following:

19.3.2 In this subclause, immediate dependants means:

any child, adult child (including an adopted child, a step child or an ex nuptial child), parent, grandparent, grandchild or sibling of the employee or partner of the employee, who relies on the employee for their main financial support; and

a partner of the employee.

(d) Delete subclause 19.3.6 in its entirety and insert in lieu thereof the following:

19.3.6 If a couple are employed by the same employer, only one relocation allowance is payable.

(e) Delete subclause 19.4.2 in its entirety and insert in lieu thereof the following:

19.4.2 In this subclause, immediate dependants means:

(1) any child, adult child (including an adopted child, a step child or an ex nuptial child), parent, grandparent, grandchild or sibling of the employee or partner of the employee, who relies on the employee for their main financial support; and

(2) a partner of the employee.

(f) Delete subclause 19.4.5 in its entirety and insert in lieu thereof the following:

19.4.5 If a couple are employed by the same employer, only one removal allowance is payable.

4. Delete subclause 32.1.4 in its entirety and insert in lieu thereof the following:

32.1.4 Immediate family includes:

(1) a partner (including a former partner); and

(2) a child or an adult child (including an adopted child, a step child or an ex nuptial child), parent, grandparent, grandchild or sibling of the employee or the employee’s partner.

5. Clause 34 Parental Leave: Delete this clause in its entirety and insert in lieu thereof the following:

Parental leave is provided for in accordance with Division 5 of Part 2‑2 of the Fair Work Act 2009 (Cth) and the Minimum Conditions of Employment Act 1993 (WA).

6. Schedule B Annual Salaries: Delete this schedule in its entirety and insert in lieu thereof the following:

SCHEDULE B – ANNUAL SALARIES

7. Schedule F Named parties to this award:

Delete this schedule in its entirety and insert in lieu thereof the following:

SCHEDULE F ‑ NAMED PARTIES TO THIS AWARD

Union Party

Western Australian Municipal, Administrative, Clerical and Services Union of Employees

Employer Parties

Perth Region

Wungening Aboriginal Corporation

Derbarl Yerrigan Health Service

Swan Valley Nyungah Community Aboriginal Corporation

Albany Region

Southern Aboriginal Corporation

Port Hedland Region

Bloodwood Tree Association

Onslow Women’s Group Corporation

Geraldton / Carnarvon Region

Yamatji Marlpa Aboriginal Corporation

Kalgoorlie Region

Bay of Isles Aboriginal Community Inc.

Goldfields Aboriginal Community Services Aboriginal Corporation

Western Desert Region

Ngaanyatjarra Council (Aboriginal Corporation)

Warburton Community Incorporated

Kununurra Region

Kalumburu Aboriginal Corporation

Derby Region

Winun Ngari Aboriginal Corporation

SCHEDULE ‑ AWARD’S CURRENT WAGES