COMMISSION TO MAKE ORDERS AS TO TERMS OF THE CITY OF JOONDALUP INSIDE WORKFORCE AGREEMENT 2022

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2025 WAIRC 00733

DELIVERED : Monday, 1 SEPTEMBER 2025

FILE NO. : APPL 31 OF 2025

Applicants

AND

(Not Applicable)

Respondent

CatchWords : Industrial Law (WA) - City of Joondalup Inside Workforce Agreement 2022 - Application for Commission to make orders as to specified matters under s 42G - Percentage Wage Increases -Voluntary superannuation contribution matching - Agreement's nominal expiry date passed - Relevance of past wage freeze during COVID -19 pandemic - Maintaining real wages - Employee attraction and retention - Employer capacity to pay  - Order issued.  

Legislation : Industrial Relations Act 1979 (WA)

Fair Work Act 2009 (Cth)

Minimum Conditions of Employment Act 1993 (WA)

Local Government Act 1995 (WA)

Superannuation Guarantee (Administration) Act 1992 (Cth)

Result : Orders issued

Representation:

Counsel:

First Applicant : Mr C Beetham of counsel on behalf of the City of Joondalup

Second Applicant : Mr C Fogliani of counsel on behalf of the Western Australian Municipal, Administrative, Clerical, and Services Union of Employees (WASU)

Solicitors:

First Applicant : Jackson McDonald

Second Applicant : Fogliani Lawyers

Case(s) referred to in reasons:

City of Swan, Local Government, Racing and Cemeteries Employees Union (WA), Western Australian Municipal, Administrative, Clerical and Services Union of Employees v (Not Applicable) [2024] WAIRC 00989

Western Australian Police Union of Workers v Commissioner of Police [2021] WAIRC 00047; (2021) 101 WAIG 293

Re Tramways Employees (Melbourne) Award 1949 [1951] CthArbRp 528; (1951) 72 CAR 26

Fire and Emergency Services Authority of Western Australia v (Not Applicable) [2007] WAIRC 00469; (2007) 87 WAIG 1283   

Reasons for Decision

1         The City of Joondalup and the Western Australian Municipal, Administrative, Clerical and Services Union of Employees (WASU) wish to make an industrial agreement called ‘City of Joondalup Inside Workforce Agreement 2022’ to apply to the City’s ‘inside workforce.’ They have reached agreement on all the terms of the Agreement, except:

(a) Percentage annual Wage Increases:

(i) The percentage annual wage increase to be applied on 1 July 2022, 1 July 2023 and 1 July 2024 to determine the salaries prescribed by Schedule 1 to the Agreement and the allowances in clause 19.

(b) Voluntary Superannuation Contribution Matching:

(i) What, if any cap should be applied to the maximum total contribution to superannuation that must be paid by the City, where an employee makes voluntary superannuation contributions.

2         The parties have applied to the Commission under s 42G of the Industrial Relations Act 1979 (WA) (IR Act) for the Commission to register a new industrial agreement in the terms the parties have agreed, together with any other provisions as ordered by the Commission about the two matters that the parties have not agreed.

3         An unusual feature of this arbitration, at least as it concerns Wage Increases, is that it relates only to retrospective wage increases. The Agreement’s nominal expiry date has already passed. There is information available to the Commission now that bears on wage increases that is more certain and complete than what the parties had available to them when bargaining.

Section 42G principles

4         I set out the relevant principles in City of Swan, Local Government, Racing and Cemeteries Employees Union (WA), Western Australian Municipal, Administrative, Clerical and Services Union of Employees v (Not Applicable) [2024] WAIRC 00989 at [4]-[7] as follows:

4 Section 42G says:

(1) This section applies where —

(a) negotiating parties have reached agreement on some, but not all, of the provisions of a proposed agreement; and

(b) an application is made to the Commission for registration of the agreement as an industrial agreement, the agreement to include any further provisions specified by an order referred to in subsection (2); and

(c) an application is made to the Commission by the negotiating parties for an order as to specified matters on which agreement has not been reached.

(2) When registering the agreement, the Commission may order that the agreement include provisions specified by the Commission.

(3) An order referred to in subsection (2) may only be made in relation to matters specified by the negotiating parties in an application referred to in subsection (1)(c).

(4) In deciding the terms of an order, the Commission may have regard to any matter it considers relevant.

(5) When an order referred to in subsection (2) is made, the provisions specified by the Commission are, by force of this section, included in the agreement registered by the Commission.

(6) Despite section 49, no appeal lies from an order referred to in subsection (2).

5 In s 42G proceedings, there is no onus in the usual sense. The parties put their respective cases and the Commission decides the matter in accordance with equity and good conscience: Western Australian Police Union of Workers v Commissioner of Police [2021] WAIRC 00047; (2021) 101 WAIG 293 (WA Police Union of Workers v Commissioner of Police) at [14].

6 However, the assessment of the competing proposals advanced by each party requires that there be a firm evidentiary basis to justify any orders the Commission makes. Though the Commission is not bound by the rules of evidence, this does not mean the Commission is able to act without any evidence. This has been a longstanding principle of industrial arbitration. In Re Tramways Employees (Melbourne) Award 1949 [1951] CthArbRp 528; (1951) 72 CAR. 26, the Commonwealth Court of Conciliation and Arbitration stated at [27] - [28]:

Although the Court is not bound by rules of evidence, this had never been held to mean that the Court would act without evidence. If a tribunal were to so act, obvious injustices and insecurities could result. ...  The industrial system has been functioning for so long that even an inexperienced advocate should know that an industrial claim is not to be had for the asking but is necessarily dependent upon the quality of the relevant evidence produced.

7 In determining a dispute under s 42G, the Commission:

(a) has a broad discretion to reach a conclusion based on the evidence before it;

(b) can and should consider a range of elements including the IR Act’s objects set out in s 6, and any other matter it considers relevant;

(c) is subject to the requirements of s 26; and

(d) is not bound to take into account the Statement of Principles made under s 50A(1)(d)(i) of the IR Act:

Fire and Emergency Services Authority of Western Australia and Anor v (Not Applicable) [2007] WAIRC 00469; (2007) 87 WAIG 1283 at [377]; WA Police Union of Workers v Commissioner of Police at [37], [61].

Overview of the agreed matters

5         Except for the matters referred to below, the terms of the Agreement largely represent a roll-over of the City of Joondalup Inside Workforce Enterprise Agreement 2018, being an enterprise agreement made under the Fair Work Act 2009 (Cth) (FW Act), and applying from 1 January 2023 as a new State instrument under s 80BB of the IR Act. I will refer to both the enterprise agreement made under the FW Act and the new State instrument which contained the terms of the enterprise agreement as ‘the 2018 Agreement.’ The 2018 Agreement’s nominal expiry date was 30 June 2022.

6         The term ‘inside workforce’ in the Agreement’s title is a loose description of who the Agreement will cover. The Agreement will apply to approximately 585 of the City’s professional, administrative, catering, library and fitness employees. Employees covered may have roles in a variety of areas including governance to community services, environmental and health, planning, and information technology. Some of the employees covered work predominantly from the City’s administration buildings. Others supervise the parks, engineering and maintenance employees. Others work in the community or at City events.

7         The Agreement contains modestly improved conditions for employees compared to the 2018 Agreement in the following respects:

(a)               There is a new provision establishing an employee consultative group: cl 7.

(b)               There is an on-call allowance in place of the previous ‘Availability by Telephone’ allowance, with higher allowance rates: cl 19.7.

(c)               Paid compassionate leave for full-time and part-time employees has increased from two days to three days paid leave: cl 33.

(d)               There is a new provision for unpaid community service leave: cl 34.

(e)               The family and domestic violence leave provisions have been revised for compliance with what are now statutory minimum requirements: cl 35.

(f)                There is a new provision for up to three days paid dispute resolution training leave for eligible union delegates: cl 39.

8         The Agreement’s nominal expiry date is 30 June 2025.

9         The Agreement is intended to operate as a stand-alone industrial instrument, replacing any other instrument including awards which might otherwise apply: cl 3.7.

10      Other than its 20% casual loading rate, the terms of the Agreement are generally in line with what would be expected of a contemporary industrial instrument in terms of the topics it covers and entitlements contained in it. Only the following matters are worthy of remark.

11      All employees covered by the Agreement are classified under the structure in Schedule 8. That structure contains nine classification levels with four pay increments within each level above Level 1.

12      Employees may progress through the increments within their classification level in accordance with clause 13. That clause provides that at the conclusion of each 12-month period following commencement at a classification level, employees are eligible for incremental progression, subject to the City’s assessment of their skills, experience and training as well as:

(a) The employee giving satisfactory performance over the preceding 12 months;

(b) The employee acquiring new and/or enhanced skills within the classification, utilising those new and/or enhanced skills and this being certified in writing following or as part of the assessment process;

(c) The employee not being subject to performance management;

(d) The employee not being the subject of disciplinary action resulting in a formal warning, in which case increment review may be delayed for up to a year at the City’s discretion.

13      The Agreement contains generous redundancy and severance benefits relative to the Local Government Officer (Western Australia) Award 2021. Under clause 16, an employee whose employment is terminated because their position has been made redundant, and who has two or more years of completed service, is entitled to severance payment of 3 weeks’ pay for every completed year of service to a maximum of 52 weeks, in addition to 4 weeks’ notice.

14      The Agreement contains more favourable personal leave provisions compared with the Minimum Conditions of Employment Act 1993 (WA) (MCEA). On commencement of an employee’s fourth and subsequent years of service, the entitlement increases from 76 hours per annum to 91.2 hours. Further, an employee who has at least five years’ service is entitled to be paid out a portion of accumulated but unused personal leave on termination of employment: cl 31.8.

15      Eligible employees are entitled to 12 weeks’ paid parental leave: cl 36.6.

16      The City is obliged to maintain a current insurance policy providing employees with journey insurance cover for travel to and from work: cl 42.

The Arbitration

17      The City’s evidence for the arbitration was provided through three witnesses:

(a) Ms Jacquleine Anne Vernon, the City’s Manager of Human Resources.

(b) Mr Mathew Keith Humfrey, its Director of Corporate Services.

(c) Ms Deborah Leanne Baird, who is employed by the City as a Data and Systems Analyst.

18      These witnesses’ evidence-in-chief was given by written witness statements.

19      WASU called witnesses to give oral evidence at the hearing in support of its case:

(a) WASU’s Secretary, Wayne Wood.

(b) Caroline Collingwood. Ms Collingwood is an Industrial Organiser employed by WASU and was involved in the bargaining for the Agreement through 2023 and 2024.

(c) Six WASU members who are employed at the City. All six employees have worked at the City for 10 years or more. Some of these employees were involved in the bargaining for the Agreement.

20      The evidence before the Commission also included:

(a)               The City’s Annual Reports, Budgets and Financial Statements for the relevant period.

(b)               Records produced during and for the bargaining for the Agreement.

(c)               Communications from the City to Employees concerning a proposal for a wage freeze during the COVID-19 pandemic, discussed further below.

(d)               Earlier inside workforce industrial instruments, and industrial instruments that applied to the outside workforce at relevant times.

(e)               Communications between the Union and the Western Australian Local Government Association (WALGA) during the COVID-19 pandemic,

(f)                Documents provided to the Fair Work Commission in support of an application to vary the 2018 Agreement during the COVID-19 pandemic, to give effect to a wage freeze.

(g)               Evidence about cost of living pressures, changes in the Consumer Price Index, Perth (CPI) and changes in the combined public sector and private sector Wage Price Index for Western Australia (WPI).

21      I received evidence about events that occurred before the local government transition to the State industrial relations system. Until 1 January 2023, the City operated under the federal industrial relations system. WASU’s federal counterpart, the Australian Services Union (ASU) was the organisation named in the 2018 Agreement as being covered by it under s 201(2) of the FW Act. In these reasons, if it is not necessary to distinguish between them, ‘the Union’ refers to WASU or the ASU or both depending on the context.

Wage Increases

22      I was provided with a table setting out the current rates of pay for employees at all levels covered by the Agreement: Exhibit B10. The current adult rates of pay under the 2018 Agreement start at $53,361.98 per annum for a Level 1 employee and progress through to $115,479.96 per annum for a Level 9 employee at the highest increment, increment 4.

23      The City proposes that the wages in the 2018 Agreement be increased by 4% each year, totalling 12% over three years. The City’s claim is informed by:

(a) Comparison with movements in the WPI. The City says its proposed increases are above WPI in the aggregate.

(b) A long-term view of real wages. The City accepts that its proposal involves wage increases that are less than the movements in CPI measured as at March quarter over some of the relevant years. But it says wage increases have been and will be higher than movements in CPI as measured in the March quarter of other years.

(c) Comparison with the percentage increases applied in other local governments.

(d) The City’s capacity to pay. The City’s budgets as approved by Council in accordance with the requirements of the Local Government Act 1995 (WA) do not provide for wage increases above what it has proposed. Increases beyond what it has budgeted and planned for will have ongoing adverse impacts on the City’s ability to fund planned and required asset renewal and capital works in the future.

24      WASU seeks wage increases of 7.6% from 1 July 2022, 6% from 1 July 2023 and 6% from 1 July 2024, being 19.6% over the three years. WASU justifies its claim by reliance on:

(a)               The fact that employees missed out on a wage increase on 1 July 2020, because of a variation to the 2018 Agreement which reduced the previously agreed 2% increase on that date to nil and extended the nominal expiry date of the 2018 Agreement by 12 months.

(b)               The fact that increases in the Perth CPI were abnormally high in the relevant period, leading to a significant reduction in real wages and cost of living pressures on employees.

(c)               The City can afford to pay the increases sought.

(d)               The increases sought are necessary to enable the City to attract and retain a skilled workforce.

The COVID-19 pandemic wages freeze, rates reduction and their consequences

25      While the parties are heading in different directions on the Wages Increase issue, they are both driven to some extent by events that arose during the Covid-19 pandemic and their consequences.

26      The COVID-19 pandemic was declared by the World Health Organisation in March 2020. State government-imposed lockdowns occurred for relatively short periods in February 2021, April 2021 and June/July 2021. Inevitably then, some of the City’s facilities closed temporarily and some community events were cancelled: Exhibit B2.16.

27      On 25 May 2020 the City sent its employees a newsletter titled ‘Inside Enterprise Agreement- Update.’: Exhibit A1.7. In the update, the City’s then Chief Executive Officer (CEO) Garry Hunt advised employees that the City would be asking them to support, vote and agree to a variation to the 2018 Agreement, by deferring the operative date of the next pay increase from 1 July 2020 to 1 July 2021. The update is shown here.

28      Employees were also given access to a video of a presentation by Mr Hunt. In it, Mr Hunt makes an either outlandish or unintended claim that local governments were coming under increasing pressure from the community to reduce rates to zero.  He says his aim is to provide transparency to employees about the impact of COVID-19 on the organisation’s finances. He says nothing specifically about the City’s finances. Instead, he refers to unemployment rates in the local government area as the justification for seeking a wage freeze, implicitly because a wage freeze would avoid job losses within the City.

29      The City was not alone in adopting a wage freeze strategy in response to the COVID-19 pandemic. The City produced a copy of a letter from WALGA to the Union dated 9 April 2020 which referred to the fact that ‘some Local Governments are seeking to vary their enterprise agreements so they can freeze wage increases to assist with maintaining job security’ in the face of tightening budgets at that period of the COVID-19 pandemic: Exhibit A1.10.

30      The Union’s response to WALGA effectively agreed that freezing rates, fees and charges was necessary. The Union said it supported negotiations to address this and committed to amending agreements in the interest of protecting jobs and maintaining a living wage during the pandemic. The Union stated that its willingness to participate in negotiations should not be viewed ‘as an opportunity for employers to permanently lower the standard of workers’ pay and conditions of employment.’: Exhibit A1.11.

31      Mr Wood painted a picture of the context at the time: the health and mortality consequences of the COVID-19 pandemic internationally and throughout Australia, its effects on communities and economies, occurring at the same time when bushfires and cyclones were also affecting Western Australian communities and requiring response and action from the Union and its membership. He noted that the Western Australian State Government was attempting to introduce vaccination mandates, and this was itself an issue the Union was called on to respond to in its dealings with the Government, members and employers.

32      While this was a busy time for Mr Wood and the Union, members in local government, many of whom were frontline and essential workers, were also feeling immense pressure and uncertainty.

33      The Union’s position as expressed in the letter to WALGA was prudent, and in the wider community interest.

34      On 8 June 2020 employees were able to cast their vote in relation to the proposed variation. Of 568 inside employees eligible to vote, 266 cast a valid vote, and 173 of those voted in favour of the variation: Exhibit A1.3. A majority of the outside workforce who voted in relation to a proposal to vary the City of Joondalup Outside Workforce Enterprise Agreement 2018 voted against the proposal to freeze wages. 

35      The application to vary the 2018 Agreement was lodged by the City with the FWC for approval on 18 June 2020.

36      The FWC approved the variation on 26 June 2020.

37      In the meantime, the City prepared a budget for 2020/2021 with a 5.2% rates reduction to assist residents and businesses affected by the pandemic. The reduction was achieved by a reduction in the gross rateable value, mainly of residential properties. The rates in the dollar ratio was not reduced: Exhibit B3.27. This resulted in a reduction in rates revenue of $5.3 million. The budget included a deficit of $9.2 million of operating revenue after deduction of operating expenses. This budget was approved at a Council meeting held on 30 June 2020.

38      On 1 July 2020, employees in the outside workforce received a pay increase of 2% in accordance with the terms of the unvaried City of Joondalup Outside Workforce Enterprise Agreement 2018: Exhibit A1.1.

39      Employees in the inside workforce remained on the same wages until 1 July 2021 when wages increased by 2%. The outside workforce received no increase at that point in time, with their next pay increase of 2.75% taking effect from 1 July 2022, under the City of Joondalup Outside Workforce Enterprise Agreement 2021, registered on 12 December 2022.

40      In the meantime, at least some parts of the City’s workforce also had to accommodate changes to working arrangements, for example by setting up to work from home, and increased workloads resulting from stimulus funding and infrastructure projects being brought forward.

41      As it transpired, the City’s actual operating revenue in 2020/2021 was slightly higher than expected, and its operating surplus was $3.2 million rather than the $9 million operating deficit that had been budgeted. However, its net result for the year (including depreciation, capital grants and asset disposals) was a $2 million deficit, primarily explained by an unbudgeted one-off loss of $15.8 million incurred due to the recognition of the transfer of Marmion Avenue and Ocean Reef Road and associated assets to Main Roads WA for no consideration: Exhibit B2.16.

42      The City’s actual spend on employee costs in 2020/2021 was approximately $4 million less than budgeted.

43      The varied 2018 Agreement nominally expired on 30 June 2022.

44      The City increased inside workforce wages administratively by 8% on 11 May 2024 and a further 4% on 9 September 2024. The administrative arrangement did not involve making any payment of backpay, with those increases applying from the dates 11 May 2024 and 9 September 2024 respectively.

WASU’s and Employee’s interests

45      WASU’s interest in this matter is the advancement of the interests of its members who work at the City. WASU’s interests are therefore indirect rather than direct but are still to be taken into account.

46      The interests of the members who work at the City are the same as the interests of employees who work at the City.

47      Accordingly, I can deal with WASU’s interests and employee interests together.

Were the City’s communications about the wage freeze ‘dishonourable’?

48      WASU invited me to find that the City’s conduct in inducing employees to approve the 2018 Agreement variation was ‘dishonourable’ because the City told employees that there would be a $12 million loss of revenue, when it knew that was false, and the actual reduction of revenue expected was much less dire, at approximately $7 million. It says employees feel aggrieved, because the City was not transparent and honest with employees when seeking their support for the wage freeze.

49      The City’s communication in May 2020, referred to the need ‘for the 2020/2021 period’ to ‘accommodate approximately a $12 million reduction in rates, fees and charges.’ At about the time of this statement, the City’s estimated shortfall in income budgeted for fees and charges for 2019/2020 was approximately $4.2 million. It had budgeted $138.8 million total revenue from rates, fees and charges for 2020/2021 compared with $146.3 million budgeted for these sources in 2019/2020: Exhibit B3.27. So, it was planning a reduction of $7.5 million in the 2020/2021 year in addition to the then estimated $4.2 million reduction in the 2019/2020 year. This is a combined loss of approximately $11.7 million, which the City reasonably needed to adjust for in the 2020/2021 period.

50      The City’s communications were not untrue nor misleading. The City fairly represented the City’s genuinely and reasonably held views of the financial consequences of the rates reduction which it had decided to implement, together with the impacts of COVID-19 on revenue from fees and charges as at May 2020.

Expectation of recouping ‘missing’ pay increases

51      Some employee witnesses gave evidence to the effect that they understood that the 2% pay increase that they forewent in July 2020 would be made up in the future, ‘recouped’ or ‘repaid’ when the financial situation improved. They point to the fact that the City’s communications referred to the pay increase being ‘deferred.’ They say they understood that this meant the 2% pay increase would occur later, 1 July 2021, on top of whatever other increases would ordinarily have occurred on 1 July 2021.

52      The City rightly points out that the language the City used in its updates to employees did not amount to any promise, guarantee or representation that the deferred pay increase would be made up at a later point in time. Deferral of the July 2020 pay increase simply meant that it would take effect later than originally planned, and that is precisely what then happened.

53      The City’s communications in this regard were comprehensive. As well as the May 2020 Update referred to above, the City issued a 3 June 2020 Update which included two tables:  Exhibit A1.8. The first represented the pay rates for each classification covered by the 2018 Agreement, with the increases that applied without a variation. The second table set out the proposed new rates of pay which would apply if the variation was approved, including the date the increases would take effect. It therefore made it clear that no increase would be paid on 1 July 2020 and only one 2% increase would be paid on 1 July 2021 if the variation was approved. Naturally, there was no increase promised, mentioned or provided for beyond the nominal expiry date of the 2018 Agreement, but it was noted that if the variation was approved, bargaining for a replacement agreement would also be deferred a year.

54      Most of the employees who gave evidence accepted that the express words contained in the City’s updates accurately set out the consequences of the proposal to vary the 2018 Agreement. Viewed objectively, the May 2020 and June 2020 updates cannot reasonably be understood to mean that any further pay increase would be made, other than the 2% increase on 1 July 2021.The meaning of ‘deferral’ is clear.

55      Accordingly, even if some individual employees misunderstood the meaning of the May 2020 Update and the June 2020 Update, I am unable to conclude that such a misunderstanding permeated the workforce generally, or that the City is to blame for that misunderstanding. I note that there was a large number of employees who voted against the variation, although they were not in the majority. It is likely that many of those who voted against the variation did so because they understood the consequences of the variation perfectly well.

56      Mr Shaw is the City’s Coordinator of Transport and Engineering. His evidence is consistent with the conclusion that there was not widespread misunderstanding about the consequences of the variation. He said that the Updates were a talking point in the workplace, that there was a lot of discussion about what the City had proposed and various opinions expressed. He noted it was a time of significant uncertainty. People who exercised a vote, must have done so after giving the City’s proposal their serious consideration including by considering job security and community benefits.

57      The variation of an industrial agreement to defer previously negotiated, and no doubt hard won, pay increases is an extraordinary measure. It is virtually unheard of, except perhaps in the case of firms facing insolvency or closure.  It would not have happened if not for the COVID-19 pandemic context, and the urgent sense within the community that selfish interests needed to be put aside for the sake of the wider community’s wellbeing, while the pandemic was occurring. Employees’ behaviour in response to the City’s call for wage freezes was not driven by selfish motivations.

58      For example, Ms Ironmonger, a Library Community Outreach Officer, said it was a very turbulent time, there was uncertainty in the community and the world and, for her, the numbers were less important than doing the right thing, in good faith, for the sake of holding onto jobs. She thought ‘the missing year was going to be given back to us once Joondalup, and the world, settled down’.

59      While I do not place any reliance on individual employees’ misunderstanding about the effect of the variation, I do factor in that the variation benefited the City.

60      It gave the City certainty as to employee costs until the new nominal expiry date, as well as some breathing space to manage the forecast reduction in revenue. The City obtained this benefit at the employees’ expense.

61      For a majority of employees to have voted for the variation, two conditions must have been present. First, employees must have had a high degree of loyalty to the City, by which I mean care for the interests of both the organisation and the community it serves. Second, employees must have had a high degree of trust that the City would reciprocate that loyalty by caring for the interests of employees. Mr Wood and three employee witnesses all described the employees’ action in approving the variation as being done ‘in good faith’ or ‘doing the right thing’ for the City.

62      The City’s counsel submitted that the evidence could go no higher than that employees had a general expectation that the City would deal with them in good faith, but that expectation does not elevate the position to one where there was an expectation that employees would recoup the 2% or any other amount. The City also submitted that to award a pay increase to the employees amounting to a recoup of the wage freeze, would amount to unwinding the deal that  was made by varying the 2018 Agreement.

63      By agreeing to forego a wage increase in 2020, employees acted in good faith and could reasonably expect the City to act likewise once the COVID-19 pandemic was over and the City’s financial position had recovered. I find that the variation reasonably created an expectation on the part of employees that the loyalty and care shown by them, and the sacrifice they incurred by making the variation for the City’s benefit, would be rewarded at a later time when the City was able to do so.

64      I agree with the City, that accepting this evidence does not equate to a requirement that a pay increase in any particular amount, or that a pay increase that is more than that which the City is proposing, must necessarily follow. It just means that, in fairness, the pay increases contained in the Agreement should adequately recognise that there was no pay increase on 1 July 2020 because the majority of employees agreed to vary the 2018 Agreement. Employees have a goodwill credit with the City, which the City should honour.

65      The City relied on the fact that in the course of bargaining, WASU gave up a claim for a 2.25% increase in wages in addition to annual percentage increases as a reason why the Commission need not factor in any increase in wages on account of the earlier wage freeze. The evidence in this regard was uncontentious. In its original log of claims, dated July 2023, WASU claimed, in addition to the annual wage increases it advances in these proceedings:

An increase to recoup the pay freeze which applied by variation of City of Joondalup Agreement of 2020, for the dates 1 July 2020 to 1 July 2021 of 2.25% salary increase: Exhibit A3, JAV 3.

66      At a bargaining meeting held relatively early in the bargaining on 1 September 2023, WASU withdrew this part of the log of claims. The City says this shows that any dispute about the variation of the 2018 Agreement was resolved for WASU’s part.

67      I disagree. Clearly, the fact of the wage freeze, together with the ‘goodwill credit’ that was then created, are significant underlying causes of the present industrial dispute about wage increases. As WASU’s counsel said, it is a key reason why the negotiations ended up in a stalemate, and why the Commission is now asked to arbitrate wage increases.

68      To round off this topic, I note that while in May and June 2020 the City was forecasting roughly $12 million in loss of revenue during the 2020 and 2021 financial years, its actual financial performance over those two years was better than it had planned. The City’s net result in 2020 was a surplus of $18.975 million against a budgeted surplus of $5.7 million: Exhibit B2.3, Exhibit B3.1. While its net result in 2021 was a deficit, as I previously noted, this was attributable to a one-off asset disposal. Its operating revenue after operating expenses was roughly $12 million better than planned, having budgeted a $9 million deficit but achieving a $3.2 million surplus.

69      Mr Humfrey explained that a surplus may be attributable to budgeted projects not being completed as expected, resulting in underspending on materials, contracts and employee costs. Increased interest rates can be another contributor to an unplanned surplus. He said the greatest contributor to the City’s surpluses has been unexpected federal government general purpose grants which are not included in the development of the budget.

70      It is fair to say that by the time the 2021-2022 Annual Report was published, and in the period during which bargaining for the Agreement was happening, the City could be confident that its cautious predictions about the adverse impact of COVID-19 on its financial performance had not occurred. In fact, over the period from 2020 to 2024 its retained surplus increased, albeit modestly, from $566 million to $569 million while its total equity increased in the order of $163 million.

Maintaining real wages and cost of living pressures

71      WASU says that wages have not kept up with changes in CPI and WPI since 1 July 2020. It says that the workforce has suffered the brunt of five years of significant cost of living increases with no meaningful pay increases to ensure that the value of their labour remains relative to the increase in the cost of living.

72      The City agrees that CPI and WPI changes are relevant to determining a fair wage increase. However, the City says that movement in the WPI is a better gauge of fair wage increases. That is because conceptually, it should not generally be expected that there be a direct connection between CPI movement and wage increases because CPI is a point in time measure. Accordingly, in some periods wage increases will be greater than increases in CPI and in others wage increases will be less than increases in CPI. The City notes that the period the Agreement covers includes an unusually high spike in CPI, but a more gradual increase in WPI. Further, the spike in CPI not only affects employees, but also means that the City must bear higher prices.

73      The City says it is artificial to focus only on the last 5 years, because in the longer term, wage increases for this workforce have actually outpaced both CPI and WPI changes. It notes that the employees who gave evidence in the proceedings have all been employed by the City over at least a 10 year period, so have had the benefit of real wages growth in the past.

74      Cumulatively over the 10 year period to June 2021, CPI increased by 8.5%, WPI increased by 11.5% and wages for the inside workforce increased by 12%, not factoring in compounding effects. So, until the nominal expiry date of the 2018 Agreement, employees had not suffered a decline in real wages, even accounting for the fact that there was no wage increase in 2020.

75      The table below shows the relative movements CPI and WPI in percentage change terms from the nominal expiry date of the 2018 Agreement, to June 2024.*

*CPI refers to % Annual Change Perth, March quarter. WPI refers to % Annual Change Western Australia (Public Sector and Private Sector), March quarter.

76      Notably, after many years at benign levels, inflation escalated to 7.6% for Perth for the year to March 2022.

77      It is no surprise, then, that employees who gave evidence described cost of living pressures impacting on them.

78      One witness described rent increasing by around $160 per week over the last 12 months, and by more than $400 per week since 2020. The cost of rent represents 55% of the employee’s current net Level 3 salary, including the City’s administrative pay increases of 12%, leaving around $500 a week for all other expenses.    

79      This witness has sought discounts on their telephone and internet costs from their provider, and no longer maintains comprehensive car insurance, in order to manage balancing their household finances.

80      Even an employee at a relatively high level in the classification scale described being in a position where ‘every dollar counts in my household’. The employee was a single parent with a dependant child. The employee is able to manage, but has had to cut back. In other words, their living standard has gone backwards, counter to the expectation that most of us have of things getting easier over our working life.       

81      In answer to WASU’s counsel’s question about managing the cost of living pressures, one witness said that he regularly volunteers to do overtime. But he also said he had been doing so for at least the last ten years. Another employee is dipping into their superannuation to maintain their and their family’s living standards.      

82      The witnesses generally accepted that their position has improved since the City administratively increased wages. However, even with the administrative increases, some people are still doing it tough.         

83      I accept that the wage increases should provide a measure of cost of living relief. However, that does not necessitate increases that are completely aligned with changes in CPI. Nor does it require complete preservation of the value of real wages, particularly when the date of effect of the wage increases has already passed, and parties have an imminent opportunity to make a new agreement.

The City’s capacity to pay wage increases

84      According to Ms Baird, the City’s payroll cost for the entire workforce for the year ending 30 June 2025 was $76.6 million, including administrative pay increases of 12% made to the inside workforce in 2024. Of the total workforce, 57% are covered by the Inside Agreement. Ms Baird attributes current employee costs of $43 million annually to the inside workforce.

85      The City estimates that an increase in wages of 4% from 1 July 2002, 4% from 1 July 2023 and 4% from 1 July 2024 will cost between $4.5 million and $4.8 million in wages to be back paid. The estimate is based on modelling that Ms Baird performed using point-in-time payroll data and payroll functions. It is not a precise calculation. For example, Ms Baird’s methodology did not account for increases to allowances. The actual cost will depend on who is employed at the date of registration of the Agreement, as wage increases will only be payable to employees who are employed at that time. It is accepted that the estimate is a reasonable ballpark figure though.

86      The City has budgeted for back pay to the extent of this estimate, that is, it has allowed for an increase in employee costs of $4.9 million in its 2024/2025 budget.

87      The City contends that it is constrained in its capacity to pay wage increases beyond the $4.9 million it has budgeted for. In summary, Mr Humfrey’s evidence, supported by the City’s 2025/2026 Budget: Exhibit A4.MKH5, was:

(a) The budget process for 2025/2026 is completed. The Budget was approved by Council on 24 June 2025.

(b) A $12.8 million deficit of operating revenue after payment of operating expenses is budgeted, with a net operating result of a $6.5 million surplus.

(c) The budgeted expenditure for employee costs is $84.6 million.

(d) The City cannot exceed budgeted expenditure without a resolution of the Council.

(e) Such a resolution would involve reducing the year’s net surplus which effectively means reducing the City’s payment to its reserve accounts.

(f) Reserve accounts are maintained for specific intended purposes, determined by Council. There are over 20 separate reserve funds, including, for example, a Performing Arts and Cultural Facility Reserve, a Public Art Reserve, an Ocean Reef Sea Sports Club Reserve.

(g) Most of the funds held in reserves are proceeds from asset sales.

(h) Council determines how to allocate any surplus funds. Generally, Council will allocate surplus to the reserve fund for asset renewal or towards capital projects that have gone over budget.

(i) The reserve accounts include a Funds Carried Forward Reserve which had a 2025/2026 opening balance of $2.47 million from which $1.88 million will be transferred to other reserves in 2025/2026 leaving a balance of $462,000.

(j) The reserve accounts include an Asset Renewal Reserve which had a 2025/2026 opening balance of about $15 million from which over $14 million will be transferred in 2025/2026 leaving a balance of $586,000.

(k) From an accounting perspective, an amount of $500,000 is immaterial and would be considered ‘zero’ in the context of asset renewal costs, which should be at a level of $15 million to $20 million per annum given the total value of the City’s assets.

(l) The Asset Renewal Reserve is forecast to be insufficient to meet the City’s costs of asset renewal at a desirable pace in the future.

(m) A Council resolution to reduce payments to reserve accounts would therefore have highly undesirable consequences, which will compound in future years. It is unlikely that these consequences can be managed through future rate increases, because the level of rate increases required to cover a significant reduction in the City’s surplus would involve a rate shock, which Council is likely to want to avoid. Further, such a strategy is unsustainable in the long term.

(n) The alternative to a Council resolution to reduce the net surplus or transfer from reserves is to achieve a reduction in employee costs elsewhere to offset the cost of the wages increase, for instance, by reducing overall staff numbers, limiting overtime and training costs, or leaving vacant positions unfilled.

(o) Wage increases have both short-term, and long-term effects. The short-term effects involve managing employee costs within the year’s budget, as described in the previous point. The long-term effects are that there will be less funds available for asset renewal and the capital works program will need to be reduced. This means having deteriorating buildings, unkempt parks, poor street lighting and flooded drains. The problem might be compounded if the City has less employees to carry out the necessary works.

88      Mr Humfrey’s evidence about the importance of funding asset renewal is supported by the City’s 10 Year Strategic Financial Plan: Exhibit B1.37. It records that the City is responsible for over $2 billion worth of assets at full replacement cost. The Financial Plan notes that renewal expenditure should be ‘a first priority’ so that the City can continue to provide services to the community at existing levels, as long as the service or asset is still required.

89      The Financial Plan forecasts a $227 million spend on asset renewal, being 67% of the City’s forecast capital expenditure. Of this expenditure, in the three to ten year period, $121.1 million will be funded from reserves, and the balance from grant and municipal funding.

90      The Financial Plan also notes that if the full pipeline of projects was approved, total reserves will be depleted to circa $70 million.

91      WASU suggested that Mr Humfrey’s evidence was inconsistent with some aspects of the Financial Plan. For example, WASU says Mr Humfrey’s prediction of the Asset Renewal Reserve fund being depleted is inconsistent with the Financial Plan’s expectation that reserves will increase to $250 million. In making this comparison though, WASU has failed to distinguish between the Asset Renewal fund and other reserve funds the City maintains.

92      The City’s Council can make decisions to amend its budget and to make transfers from its reserve funds to the extent the funds are not tied. Mr Humfrey did not suggest otherwise. However, transferring funds from particular reserves set aside for particular purposes, involves changes in the City’s policy and long-term strategy. WASU’s observation that the City could ‘pull levers’ to be able to fund wage increases is uncontroversial. The real issue is the longer-term effects of diverting funds planned for reserves to employee costs.

93      Mr Humfrey’s evidence was frank, cogent and informative. Mr Humfrey was alive to the tension between the impact of the size of wage increases on staff engagement, wellbeing and morale and the City’s fiscal responsibilities. Mr Humfrey’s evidence goes a long way to providing a picture of the implications of wage increases for the City’s fiscal planning and financial position, as well as the City’s capacity to pay. I have no hesitation in accepting his evidence.

94      However, there are some other key points that emerge from the City’s Annual Reports, Budgets and its Financial Plan that provide added perspective.

95      First, the City has generally performed better in each year than it has budgeted. Mr Humfrey said that the City is conservative about estimating future revenue, and that unexpected grant funding is not included in budgeting. It has consistently underspent on employee costs against budget. There is no reason to consider this year will be any different. And so, there is a realistic prospect that the City will have a higher net surplus than it has budgeted and that its budget for employee costs will cover some extent of wage increases exceeding the assumed increases.

96      Second, the City’s cash position is undoubtedly strong. The Financial Plan notes:

The City has deliberately planned for an operating deficit of $2.3m in 2023/24. The operating deficit is possible because of the strong cash position and because the City’s assets are still relatively young which means less spent on renewals compared to depreciation.

97      This does not mean that the City need not plan for, undertake or save for asset renewal, nor that asset renewal is not a significant financial issue for the City to manage. The high level of depreciation costs the City reports now, which are ‘book entries,’ means that the City has healthy cash reserves at present. With time, renewal expenditure will eventually exceed depreciation costs, so I acknowledge the strong cash position is not indicative of the long-term position.

98      Third, the City uses a Financial Sustainability Indicator to measure and monitor its ability to be financially viable while meeting community expectations. The Financial Sustainability Indicator involves a score out of 100, across eight key indicators and a benchmark target of 70. The City performed below the benchmark in the 2022/2023 and 2023/2024 years, but the Financial Plan predicts a return to above target performance from 2024/2025 and ongoing.

99      Fourth, the City’s rate revenue is lower than it could be. In their Executive Summary to the City’s 2019/2020 Budget, the City’s then CEO and Director of Corporate Services observed that by way of comparison to other local governments, the City’s rates and charges ‘are at the lower end of the scale.’: Exhibit B3.26 This observation was made before the City decided to reduce rates in 2020/2021. By the 2022/2023 financial year, 67% of residential properties were still paying general rates levies below that which they paid in 2019/2020: Exhibit B3.28. In June 2025, the City’s Executive Summary to the Annual Budget noted that the City had cumulative rate increases over 5 years of only 4.7%, compared with 13.6% against benchmarked Councils: Exhibit A4.MKH5.

100   Finally, employee costs account for 43% of the City’s operating expenditure. The inside workforce employee costs account for 57% of total employee costs. Accepting Ms Baird’s estimate of inside workforce employee costs of $43 million annually, the inside workforce employee expense represents, very roughly, 23% of the City’s budgeted operating expenditure of $198.6 million. A change in wages for this cohort of 1% should roughly equate to a change of $430,000. This is a crude analysis which does not take into account any compounding effects over time, but it does give some perspective to the issue, particularly in light of Mr Humfrey’s evidence that $500,000 is considered immaterial from an accounting perspective. From another angle, Mr Humfrey indicated that a 1% increase in rates would generate $1.2 million in additional revenue. A rate increase of 0.5% would likely cover a 1% increase in inside workforce wages.

101   The City submitted that the Commission should be slow to make orders which depart from the City’s budgeted wage increases, for two reasons. First, because the wage increases are retrospective, they must be accommodated in future budgets, rather than the budgets for the years that the wage increases relate to. Second, because of that impact on future budgets, it will in turn have an impact on future bargaining. In other words, the larger the wage increase resulting from these proceedings, the more constrained the City will be in bargaining for the replacement industrial agreement.

102   The City also urged me to give deference to the views of, and decisions made by, those whose job it is to run local government and who have done so for many years. The submission is that caution should be exercised in departing from decisions made by highly qualified and experienced officers in local government service, and that before departing from those views and decisions, I should feel an actual persuasion about the cogency of the position ultimately arrived at, ‘because what you’re being asked to do, in effect, is to make a business decision for a local government...’   

103   WASU’s counsel took issue with the City’s submissions. WASU fairly says that having agreed to arbitrate the industrial dispute by the s 42G mechanism, the City cannot seek to fetter the powers available to the Commission under s 42G. By exercising its powers, the Commission is not stepping into the position of management or exercising financial control over the City.

104   I agree with WASU’s observations about this process under s 42G. The City’s submissions are not inconsistent with those observations. The approach espoused by the City is consistent with good sense and the s 26’s requirement that I act according to equity, good conscience and the substantial merits of the case. The timing of this determination relative to the wage increases taking effect, the impacts on the City’s future finances and the impacts on bargaining are all relevant matters. I also have regard to the fact that the City’s fiscal planning and governance are soundly managed by qualified and experienced individuals with better knowledge of the City than what can be conveyed in proceedings like these.

105   I am persuaded that there are reasons related to the City’s capacity to pay to approach wage increases cautiously. My decision should not hinder the City’s ability to manage and plan for the future prudently.

Employee attraction and retention

106   WASU submitted that the City was experiencing high turnover as a result of both low morale caused by this industrial dispute, as well as the uncompetitive conditions offered by the City. WASU said that higher wage rates were justified by the need to attract and retain a skilled workforce.

107   Several of the employee witnesses WASU called gave evidence to the effect that they had observed higher than usual turnover at the City or difficulties filling vacancies. Not only were many experienced people leaving the City, it appeared that the City was struggling to recruit to replace those who had left, leaving the remaining workforce under pressure and with higher or more onerous workloads.

108   Mr O’Brien was in a unique position to offer insights into employee turnover trends. Mr O’Brien works as an IT Service Desk Officer. Part of his role is to onboard new employees, configure their devices and disable user accounts when employees leave the City. He described having a significant uptick in his work of this nature, indicating to him that turnover levels had increased.

109   Ms Vernon said that she had heard employees were leaving the City for other jobs, and in exit surveys, employees gave their reason for doing so was to receive higher wages, in circumstances where they were going to other local governments. She received feedback from hiring managers that they were not seeing quality applicants apply for vacant roles because equivalent roles at other local governments were advertised as more attractive. This was one of the reasons the City made the administrative pay increases.

110   WASU produced a copy of minutes of a Council meeting held on 23 January 2025: Exhibit B4.13. A question is recorded about the number of employees who had left the City ‘who would have been entitled to pay increases under the EBA if the EBA had been finalised’. Although the question had an assumption implicit in it which was unable to be verified at that time, the answer given was that 219 employees including casual, part-time and full-time employees engaged under the 2018 Agreement had left the City since 30 June 2022.

111   The City’s 2023-2024 Annual Report confirms that over 5 years, the turnover rates at the City for its entire workforce was trending upwards. The reported rate of turnover was 16% with a ‘voluntary separation’ rate of 14%: Exhibit B2.19.

112   This is broadly consistent with the turnover rate reported to the Council meeting in January 2025. The 2023-2024 Annual Report also reports an increase in the City’s total headcount and full-time equivalent employment. These figures do not indicate a particularly high or unusual turnover rate, particularly given it includes casual employees.

113   The City produced data concerning turnover confined to the full-time and part-time inside workforce: Exhibit A1.13. It shows that voluntary separation rates were 5% in 2019/2020 and 2020/2021 but then increased to 8% in 2021/2022, before coming down again to 6% between 2022 and 2024, and down further to 5% in 2024/2025. Unlike the 2023-2024 Annual Report numbers and the numbers reported to the Council meeting, these figures do not include casual employees.

114   I accept that the City’s inside workforce turnover increased to levels higher than had historically existed. However, the turnover rates in the City’s permanent inside workforce cannot be described as alarming, nor is there a trend of turnover increasing over the period of the bargaining. The peak turnover in 2021/2022 occurred when the 2018 Agreement was within its nominal expiry date. Turnover has decreased since then.

115   Mr Humfrey said that turnover rates had improved, and difficulties with recruitment had abated, since the administrative pay increases were made in May and September 2024. This was consistent with Mr Young’s and Mr Shaw’s evidence. Mr Young is employed by the City as a Senior Landscape Architect. He said that there have been a lot of new staff commence since the administrative pay increases, and workload had settled down, although it remained steady.

116   While the City’s need to attract and retain skilled employees is certainly a relevant consideration for wage increases, the evidence does not indicate that this factor justifies increases exceeding those the City has administratively implemented.

Fair terms and conditions of employment

117   The City’s evidence was to the effect that in arriving at its offer of wage increases of 4% each year, it had regard to:

(a) what other local governments were paying their staff.

(b) percentage wage increases provided by some other local governments in the period from January 2022 to July 2024.

(c) the increases in wages under the City of Joondalup Outside Workforce Enterprise Agreement 2021.

118   The City did not suggest that its comparisons with other local governments or other groups of workers were direct or perfect comparisons. But it said that the information it had collated provided a rough measuring stick against which the Commission can sense-check the parties’ competing propositions. 

119   It is notoriously difficult to make reliable and apt comparisons between different industrial agreements. The City cannot be criticised for attempting rough comparisons and having regard to them. WASU was content to rely on hearsay evidence that employees were leaving the City for the same but better paid jobs at other local governments. WASU must therefore accept that the conditions at other local governments are a relevant gauge. Yet WASU made no attempt to itself compare terms and conditions under other local governments’ industrial instruments or to establish its claimed increases were consistent with the market.

120   Instead, WASU’s counsel put various propositions to Ms Vernon to show that the classification structures for different local governments differ, and therefore, the same job might be classified at different levels across different local governments. Ms Vernon agreed with this general proposition. She described the comparisons as ‘inexact.’ But Ms Vernon did not agree that particular examples of jobs put to her would be classified at a lower level at the City compared with the City of Wanneroo. None of her evidence detracts from the purpose for which the City provided the comparisons, that is, as a rough measuring stick for a ballpark level of wages.

121   What the comparison evidence uncontentiously showed was:

(a) The City’s rates of pay current at 1 July 2021 at the lowest classification level and the highest classification level were above the rates of pay for the lowest and highest classification levels respectively in the Local Government Industry Award 2020 and the Local Government Officers (Western Australia) Award 2021.

(b) The City’s proposed rates of pay incorporating a 4% increase as at 1 July 2022 at the lowest classification level would be slightly below the 1 July 2022 rate of pay for the lowest classification level at the City of Wanneroo but the highest classification level would be above the highest classification levels at the City of Wanneroo. The City considers the City of Wanneroo to be a particularly relevant comparator because both local governments were created from a single demerger in 1998 and at that time had the same classification structures. Further, being geographically close, employees often compare conditions across the two local governments and move between the two.

(c) The City’s rates of pay current as at 1 July 2021 at the lowest classification level and the highest classification level were within the ballpark of a select number of other local governments compared, with the exception of the City of Canning which had an extended classification structure.

(d) Wage increases at a select number of other local governments for July 2023 were in the range of 2.5% to 6% and for July 2024 were in the range of 3% to 7%.

(e) Under the City of Joondalup Outside Workforce Enterprise Agreement 2021, wage increases were 2.75% from 1 July 2022, 3% from 1 July 2023 and 3% from 1 July 2024. Additionally, from the date of registration, 12 December 2022, a new classification structure was implemented, which delivered increases of 4% to 16% depending on a role’s original classification. The range of wages under the outside workforce agreement started at $57,957 to $68, 054 on 1 July 2022 and ended at $64,098 to $83,877 by 1 July 2024.

122   The City’s submission was to the effect that these general, albeit imperfect comparisons, provide a limited basis for confidence that the City’s proposed increases represented fair conditions of employment.

123   I agree. The evidence does have limited use in demonstrating what are fair wages. I decline WASU’s invitation to place no weight on this evidence at all, on the basis that it was both unreliable and completely unhelpful. WASU’s attempts to undermine the reliability of the comparisons, does not translate to establishing that the City’s proposed wage increases are unfair, below market, or uncompetitive.

124   The City also relied on evidence as to the offers that WASU made during bargaining in relation to the issue of fairness in wages and conditions. During her evidence, Ms Collingwood accepted that at one point during the bargaining, WASU was prepared to agree to wage increases of 13% over the life of the Agreement, plus a one-off cost of living payment of $2,500. The City submitted that I should draw an inference from this evidence that WASU considered such a pay increase to be fair and reasonable, and that it should therefore follow that such an increase practically represents a de facto ceiling on what can be awarded in these proceedings, in the same way that an employer’s offer is a de facto floor.

125   Ultimately, the question of fairness is to be considered objectively, not by reference to parties’ positions taken in bargaining, which could be taken for any of a number of subjective reasons.

Interests of the community as a whole

126   Neither party addressed this factor specifically. The community that the City of Joondalup serves includes, but is not confined to, the City’s ratepayers and residents. Tertiary and other education institutions, health facilities, popular beaches, retail precincts, commercial precincts and recreational facilities within the City’s boundaries serve the broader Western Australian community.  To that extent, the need for the City to have sufficient fiscal health to ensure it can continue to deliver the services required and expected by the community, is an interest of the community as a whole.

127   Similarly, it is in the interests of the community as a whole that employee terms and conditions be sufficient to ensure that the City can attract and retain the employees it needs to deliver those services and maintain the City’s assets.

State of the national and Western Australian economy

128   Neither party led evidence or placed any reliance on this factor, beyond reference to CPI and WPI changes discussed above.

Changes in productivity that have occurred or are likely to occur

129   Neither party led evidence or placed any reliance on this factor.

The need to facilitate the efficient organisation and performance of work according to the needs of the enterprise balanced with fairness to employees

130   Neither party led evidence or placed any reliance on this factor, beyond the issues concerning employee attraction and retention discussed already.

Encouraging agreements appropriate to the needs of the City and its employees

131   As I have already observed, the parties will commence bargaining for a replacement industrial agreement, immediately following the registration of the Agreement. This is a relevant factor. I consider there is a need to resolve the grievance that employees have as a result of the perception that the City has not reciprocated the good faith employees showed by agreeing to the 2020 wage freeze. At the same time, wage increases ought not be imposed if they will simply result in tight fistedness by the City in bargaining, either because of financial necessity, fiscal prudence, or just to notionally regain lost ground.

Conclusion regarding Percentage Annual Wage Increases

132   I am satisfied that the City has some constraints if it is to govern in a fiscally sustainable way into the future, but those constraints do not preclude increases modestly higher than what it has budgeted for. In my view, something more is needed, to meet employees’ understandable expectation that their goodwill credit be honoured.

133   Maintaining the value of real wages is a relevant and important factor, but it is not the end goal of these proceedings, particularly with the chance to make a new agreement just around the corner.

134   Accordingly, weighing each of the considerations I have discussed above, I conclude that the Agreement should provide for wage increases of:

(a) 5% from 1 July 2022;

(b) 4.5% from 1 July 2023; and

(c) 4% from 1 July 2024.

135   Such increases will provide some cost of living relief and recognition of employee goodwill, without unmanageable consequences for the City’s fiscal planning.

Voluntary Superannuation Contribution Matching

136   The parties agree to include a clause in the Agreement by which the City will match voluntary contributions made by employees into their superannuation fund, over and above the superannuation guarantee charge (SGC) rate as specified in the Superannuation Guarantee (Administration) Act 1992 (Cth). The issue in dispute is at what point should the City’s voluntary contribution matching stop?

137   The current position under the 2018 Agreement is contained in clause 19:

19.1 Eligible employees will receive superannuation entitlements in accordance with the Superannuation Guarantee (Administration) Act 1992.

19.2 In addition:

a) Eligible employees who commenced employment with the City prior to 26 March 2002 and who voluntarily contribute up to 6% to superannuation will have their voluntary contribution matched by the City up to a maximum of 6%. Once an employee contributes 5% or more, the City will contribute 6%.

b) Eligible employees who commenced employment with the City on or after 26 March 2002 and who voluntarily contribute up to 5% to superannuation will have their voluntary contribution matched by the City up to a maximum of 5%.

c) Notwithstanding what is provided for in this clause, all superannuation arrangements must comply with the requirements of the Local Government Superannuation Scheme Trust Deed for superannuation.

19.3 The Maximum Total Contribution will consist of the compulsory Superannuation Guarantee Contribution (e.g. currently 9.5%) and an additional co-contribution of no more than the difference between the compulsory Superannuation Guarantee Contribution and 14.5% (e.g. currently 5.0%), or in the case of employees employed prior to 26 March 2002 15.5% (e.g. currently 6.0%).

138   At the time the 2018 Agreement was made, the SGC rate was 9.5% of ordinary time earnings. The SGC rate changed to:

(a) 10% from 1 July 2021.

(b) 10.5% from 1 July 2022.

(c) 11% from 1 July 2023.

(d) 11.5% from 1 July 2024.

139   As of 1 July 2025, the SGC rate is 12%.

140   So, the current position is that:

(a) For employees employed prior to 26 March 2002, up to 3.5% of an employee’s voluntary contributions over and above the compulsory 12% SGC rate is matched by the City. The maximum contribution payable by the City is 15.5%.

(b) For employees employed on and from 26 March 2002, up to 2.5% of an employee’s voluntary contributions over and above the compulsory 12% SGC rate is matched by the City. The maximum contribution payable by the City is 14.5%.

141   The City proposes that these same limits remain in place. WASU’s proposal is that the limit in sub-clause (3) be removed, so that the effective limit is the amounts specified in sub-clause (2) plus the SGC amount. As at today’s date, the practical limits would therefore be 17% and 18% respectively (depending on the date of commencement of employment).

WASU’s interests

142   In support of this claim, Mr Wood gave evidence about the history of voluntary contribution matching in local government industrial instruments, and their prevalence in local government.

143   Mr Wood’s evidence was to the effect that voluntary contribution matching has been common in industrial agreements made between the Union and local governments going back to the early 2000s. He said that the Union would typically claim for the employer to match any voluntary contributions made by employees up to a maximum of 5%. Some local government agreements have this provision by way of a sliding scale with a 5% cap, and others as an all of 5% or nothing contribution. He said voluntary contribution matching clauses are ‘pretty common’. WASU does not suggest they are universal.

144   The City’s inside workforce industrial agreements have provided for voluntary contribution matching since 2008. Until the 2018 Agreement, the entitlement was to a maximum of 6 % for employees who commenced prior to 26 March 2002 and 5% for other employees, without any cap on the total of the City’s contribution. However, the practical reality was that the maximum the City was required to contribute was always the SCG rate plus 6% or 5%. Before the 2018 Agreement commenced operation, the maximum total contribution the City was required to pay was 15.5% and 14.5% respectively.

145   Mr Wood did not articulate any particular rationale or purpose for voluntary contribution matching provisions other than to say that they were a ‘perk’ of working for local governments and helped to attract people to work for local government.

146   It is uncontroversial that the Union did not agree to the introduction of the 15.5% and 14.5% caps in the 2018 Agreement. The 2018 Agreement was not the result of a bargain struck with the Union.

Interests of employees concerned

147   In support of its position, WASU relied on the evidence of its members who are employed at the City. Of the six members who gave evidence, three have made voluntary superannuation contributions in the past; one of whom commenced employment with the City prior to 26 March 2002.

148   These members expressed that they felt disadvantaged by the 15.5% and 14.5% cap on the City’s total superannuation contributions. As Mr O’Brien said, there is a feeling that one of few employee benefits is being lost or whittled away.  They told the Commission that the benefit was important to employees. Why it was important was not really spelled out. Some of the witnesses were drawing from their superannuation, so for them the benefit appeared to be about maximising cash flow. Presumably for others the benefit is in boosting retirement savings.

149   Employees are not technically any worse off because of the 15.5% and 14.5% caps, because the City’s SGC amount has increased by the same amount that their matching contribution has decreased. Nevertheless, it seems that employees perceive a loss of the value of one of the ‘perks’ of working for the City.

150   While the cost to the City might not have changed, it is understandable that employees perceive that the introduction of the 15.5% and 14.5% caps have advantaged the City. While other employers who do not match voluntary contributions are required to absorb the SGC rate increases, the City has been able to offset the SGC increases against what it would otherwise have been required to pay by way of voluntary contribution matching.

151   One of the employee witnesses told the Commission that the City’s caps on its voluntary contribution matching obligation may be hindering its competitiveness and its ability to recruit employees with in-demand skillsets. He described the late stages of recruiting a Senior Transport Engineer in about 2020 or 2021. The candidate was then working for the City of Stirling. The candidate withdrew from the recruitment apparently because the City of Stirling’s voluntary contribution matching was more generous than the City’s.

152   However, the City of Stirling Inside Workforce Agreement 2019, which was the industrial instrument which would likely have applied to this candidate at the relevant time, made no provision for employer voluntary contribution matching over and above the SGC amount: cl 14. The current City of Stirling Inside Workforce Agreement 2023 makes no provision for employer voluntary contribution matching over the SGC amount either.

153   The City of Wanneroo Salaried Officers Industrial Agreement 2025 provides for voluntary contribution matching ‘up to a maximum of 15%’: cl 35.1.4.

154   The City of Swan does not have a collective agreement for its inside workforce, but a new State instrument covers the workforce containing the terms of the Local Government Industry Award 2020 as it was at 1 January 2023. Clause 20.3 permits employees to authorise the employer to pay specified amounts from post-taxation wages to their superannuation fund, but it does not require the employer to make any additional contributions exceeding the SGC amount.

155   If there was a competitive or comparative disadvantage during the life of the 2018 Agreement, it does not appear that this is a current issue, nor that it is likely to be an issue in the immediate future.

156   The City presented evidence from a survey it conducted of employees, which showed that 81% of employees responding to the survey considered that an increase in voluntary contribution matching was important to them, with importance weighted at 2.3 (1 being most important, and 3 being least important): Exhibit A3, JAV5.

157   I was not provided with the number of employees who commenced work with the City prior to 26 March 2002. Nor was I provided with information about the level of uptake in employee voluntary contributions.

158   However, according to the City’s 2023-2024 Annual Report, 12% of the City’s total workforce had a length of service of 20 years or over as at 30 June 2024.

159   The 2023-2024 Annual Report also indicates that the total number of employees aged 51 years of age and over as at 30 June 2024 was 407, or about 40% of the total workforce.

160   These numbers explain why voluntary contribution matching is an important issue for the City’s workforce. A significant proportion of the workforce are at an age that is within 10 or 15 years of the age when they will be able to access their superannuation.

City’s interests

161   In her witness statement, Ms Vernon says that a number of employees move between the outside and inside agreements when they undertake acting or higher duties. The City has a preference for alignment in terms and conditions across the agreements, as it is simpler from a payroll perspective.

162   In this regard, I note that the City of Joondalup Building and Maintenance Workforce Industrial Agreement 2022 has a single voluntary contribution matching cap of 14.5%. The City of Joondalup Outside Workforce Enterprise Agreement 2021 has a voluntary contribution matching cap of 15%, or 16% for those who commenced prior to 26 March 2002. The City’s proposal for the inside workforce does not achieve alignment with either of these other instruments.

163   The City also pointed out that because the Commonwealth government can legislate to change the SGC rate at any time in the future, a cap on the City’s co-contribution was needed to provide the City with certainty for its budgeting and planning. This is a relevant consideration.

Encouraging agreement making

164   Unlike the position with the wage increases, my decision about this matter will not have any retrospective operation. Nor should it have any permanence. The slate should remain, if not clean, at least writeable, for the parties to bargain. It would be contrary to the requirement to encourage agreement making to include a cap on total contributions which might create a status quo that is unresponsive to potential future changes to superannuation legislation.

Other relevant matters

165   There are two features of voluntary superannuation contribution matching which were not the subject of evidence, yet are evident.

166   First, higher income earners receive a greater benefit from voluntary contribution matching than lower income earners, because the value of the percentage of income paid is higher, and the tax benefit is also greater.

167   Second, not all employees use the benefit. Indeed, lower paid employees are less likely to make voluntary contributions because they have less disposable income. Not all of the witnesses who gave evidence in these proceedings make voluntary contributions. Employees who live pay to pay, or have significant financial commitments, are unlikely to make voluntary contributions to their superannuation. Younger employees are less likely to value the benefit as they are unable to access superannuation savings for many years into the future.

168   Finally, while both parties proposed different contribution matching rates depending on length of service with the City, no one led any evidence about this or explained why a lesser benefit for those with service commencing after to 26 March 2002 was necessary or justified. Similarly, there was no evidence as to why a greater benefit for those with service commencing on or before 26 March 2002 was justified.

Conclusion regarding voluntary contribution matching

169   I consider the Agreement should provide for voluntary contribution matching at a sufficient level for it to continue as a ‘perk’ of working in local government. A benefit may be a ‘perk’ because it is not a standard industrial condition, or because it is slightly better than a standard condition. 

170   Voluntary contribution matching may be common in local government in Western Australia but it is not a standard industrial condition. To that extent, any amount of voluntary contribution matching is a perk. WASU’s proposal is not justified as it goes beyond what is necessary for the condition to be a perk of working for local government.

171   Further, any provision about voluntary contribution matching will be better than the conditions for the inside workforce at some other comparable local governments. On this measure, any provision for voluntary contribution matching is a perk. Again, it need not be at the level WASU proposes.

172   No case has been made out for distinguishing between employees whose service predates 26 March 2002 and others.

173   I am not persuaded that the cap on the City’s contribution matching must be lifted or increased for reasons related to competitiveness.

174   Any term I decide should leave the door open for the parties to reach their own agreement about this matter in future bargaining, particularly in light of any changes to the superannuation legislation or changes to the SGC rate.

175   I therefore propose that the Agreement include the following term:

20.7

(a) this clause will apply from the date that this Agreement is registered to the exclusion of sub-clause 20.6.

(b) In addition to the superannuation paid by the City under clause 20.1, the City will match an employee’s voluntarily contributions to their superannuation fund up to a maximum of 3% of the employee’s ordinary time earnings.

Disposition and Orders

176   For the above reasons, I propose to order that the City of Joondalup Inside Workforce Agreement 2022 include:

(a) Provision for a 5% increase to wages with effect from 1 July 2022.

(b) Provision for a 4.5% increase to wages with effect from 1 July 2023.

(c) Provision for a 4 % increase to wages with effect from 1 July 2024.

(d) Provision in clause 20 for voluntary contribution matching up to a maximum of 3% of an employee’s ordinary time earnings, in the terms set out in paragraph [175] above.

 I will hear from the parties as to the form of orders and the next steps required for registration of the Agreement.