Note: An appeal pursuant to s.45 (C2005/3367) was lodged against this decision - refer to Full Bench decision dated 8 March 2006 [PR969473] for result of appeal.

AW782505CR  PR964271
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AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996
s.113 application for variation

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
(C2005/4064)

GRAPHIC ARTS – GENERAL – AWARD 2000
(ODN C No. 22956 of 1995)
[AW782505CR  S1716]

Graphic Arts

   

SENIOR DEPUTY PRESIDENT MARSH

SYDNEY, 26 OCTOBER 2005

Classification structure.

DECISION

Introduction

[1] This decision resolves an extremely protracted exercise which commenced sixteen years ago under the auspices of the Structural Efficiency Principle which was introduced by the August 1989 National Wage Case Decision which required the parties to provide “consistent, coherent award structures based on training and skills acquired.” 1 For sixteen years the major parties to what is now the Graphic Arts - General - Award 20002 (the award) have been attempting to reach agreement on a skill based classification structure to be inserted into the award and apply across the industry. Various Members of the Commission, most notably Merriman C and Munro J, have made determinations and given guidance to the parties along the way. The most recent impetus for the award classification structure arises out of award simplification proceedings between 1998 and 2000. The classification structure remained a reserved matter at the time the award was made and the parties have been relatively active since that time in developing and testing classification levels which are capable of practical application throughout the disparate graphic arts industry.

[2] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) has applied, pursuant to s.113 of the Workplace Relations Act 1996 (the Act), to vary the award to insert into it a classification structure which is agreed in large part by the Printing Industries Association of Australia (PIAA) and The Australian Industry Group (AIG). On one key aspect relating to the problem of classifying an employee without formal qualifications PIAA and AIG do not consent to clauses 5.1.1(b)(vii) and (viii) (and consequential clauses) of the application and an arbitrated outcome is required on this issue. However, in relation to almost all other aspects of the AMWU’s application there is consent.

[3] The matter was listed for hearing on 10 August and 29 and 30 September 2005. Ms S Taylor with Mr S Walsh appeared for the AMWU, Mr S Smith appeared for AIG and Mr G Parkes appeared for PIAA.

Brief history

[4] In response to the August 1989 National Wage Case Decision which required the parties to provide “consistent, coherent award structures based on training and skills acquired”, the then Printing and Kindred Industries Union (PKIU) and the then Printing and Allied Trades Employers Federation of Australia (PATEFA) established a “working party” and “negotiating party” process to drive award restructuring.

[5] In 1993, Merriman C granted the “interim” 12 level classification structure for testing and further application regarding amongst other matters:

[6] In 1995, Munro J “urged” the parties to:

[7] In 1997, Munro J recommended that the parties adopt a 9 step process for progressing the classification structure including:

[8] In 1999, the Commission, as constituted, observed:

[9] A full chronology as contained in the AMWU’s submission is reproduced as Attachment A. Even that chronology masks the many hours of negotiation and conciliation which have continued on and off since 1990. All parties accept that conciliation is at an end and that the remaining issues amongst them require an arbitrated outcome.

Outline Of Submissions

AMWU written submissions

Legislative Context

[10] The AMWU relied on the scheme of the Act to support the granting of the application. They showed the statutory obligation for the Commission to perform its functions in a manner which, inter alia, maintains an effective award safety net of fair minimum wages and conditions. 7

[11] In particular, ss. 88A(d)(ii) and 88B(2) were relied on 8.

[12] Section 88A(d)(ii) states:

[13] Section 88B(2) states:

[14] It was submitted that as well as supporting and implementing the objects of the Act, the AMWU application is allowable under s.89A(2)(a) and contains incidental award provisions under s.89A(6).

[15] The AMWU also submitted that its application provides a means for addressing gender based pay discrimination by delivering a transparent and objective classification process. As such it is consistent with the concept of equal pay for work of equal value.

[16] Finally, it was submitted that the application meets the public interest test set out in s.90 of the Act by:

[17] The AMWU submitted that the orders and recommendations referred to above continue to guide the settlement of the dispute in relation to the classification structure.

[18] Clause 5.1.1(b) of the award states:

[19] It is the AMWU’s view that the application now before the Commission is consistent with and complements the above decisions.

[20] It is the AMWU’s contention that varying the award to insert a classification structure which is skilled based will give effect to the objects of the Act, “particularly those objects relating to a maintenance of a safety net of fair minimum wages and conditions and those eschewing discrimination in the workplace.” 9

[21] It is also submitted that the new classification structure will replace the award’s current classification structure which is demonstratively inadequate.

[22] The application effects a resolution of issues outstanding from Merriman C’s decision 10 and settles the outstanding issue from the Item 51 review of the award.

[23] In the AMWU’s view, the evidence supporting the application includes:

[24] The AMWU’s draft order is set out in full at Attachment B. Specific provisions will be reproduced later in this decision.

Outline of the AMWU draft order

[25] The classification structure set out in the draft order is limited to the competency standards that exist as part of the printing industry’s accredited training package. This package is regularly reviewed such that the integration of the package with the classification structure would ensure that the structure remains a relevant tool for both employers and employees. The draft provisions provide for processes for classifying two categories of employees, namely those with formal qualifications and those without on the basis of an objective transparent method of skills and classifications.

[26] Table ‘A’ in clause 5.1.1(a)(ii) sets out the proposed classification structure:

TABLE ‘A’

Column A
Employee
Classification
Level

Column B
Minimum Weekly
Wage Rate
($)

Column C
Alignment to
Qualification from
the Printing and
Graphic Arts
Training Package

Column D
Equivalent Points
Range for the
Level

Level 1

467.40

 

Entry level

Level 2

484.10

 

6

Level 3

506.60

 

18

Level 4

527.50

Certificate II

28

Level 5

561.20

Trade Certificate/
Certificate III

41 (including at least 5 units of 3 or more points)

Level 6

582.10

 

51 (including at least 5 units of 3 or more points and 2 units of 4 or more points)

Level 7

602.90

 

61 (including at least 5 units of 3 or more points and 4 units of 4 or more points)

Level 8

621.80

Certificate IV
(except as set out
in 5.1.1(a)(iii))

71 (including at least 6 units of 4 or more points)

[27] The AMWU submitted:

[28] Flexibility is provided to the large and disparate industry:

[29] I now turn to the specific clauses of the AMWU draft order.

[30] Clause 5.1.1(a)(iii) excludes certain qualifications contained in the Printing and Graphic Arts Industry Training Package from Table ‘A’ Column C and reflects coverage issues 14.

[31] It is submitted that clauses 5.1.1(a)(iv) and (v) are consistent with the requirement of the Commission’s Statement of Principles.

[32] Clause 5.1.1(b)(i) provides principles to be applied when an employee is first classified on joining a company or when an existing employee is reclassified.

[33] Clause 5.1.1(b)(ii) provides for absorption into overaward payment of any wage increase arising from the implementation of the new classification structure and clause 5.1.1(b)(iii) provides that no employee’s existing ordinary rate of pay shall be reduced as a result of implementing the new classification structure.

[34] Clause 5.1.1(b)(iv) provides that there is ability for an employee to retain not only their existing ordinary pay rate but also existing classification in circumstances where:

[35] Clause 5.1.1(b)(v) provides for appropriate consultation (including the union) to occur in accordance with clause 3.1 of the award regarding the implementation of the new classification structure.

[36] Clause 5.1.1(b)(vi) provides for classification of employees with a formal AQF qualification recognised in the package and at Table ‘A’, and who are utilising that qualification in accordance with the needs of the enterprise. Employees will transfer into the structure, at a minimum, on the basis of the alignment of classifications to qualifications set out in Table ‘A’. Where employees have obtained and utilise skills additional to those acquired through package qualifications, the employee may be classified at a higher level.

[37] Clauses 5.1.1(b)(vii) and (viii) provide for classifications of employees without a formal AQF qualification are opposed by PIAA and are dealt with later in this decision.

[38] Clause 5.1.1(b)(ix) provides a six month period for employer and employee to consult on and implement the new classification structure.

[39] Clause 5.1.1(b)(x) provides a mechanism for dealing with classification disputes.

[40] Clause 5.1.1(b)(xi) establishes the right of employers to seek a phasing-in period from the Commission as a result of any wage increases resulting from implementation of the new classification structure based on evidence of the employer’s incapacity to pay.

[41] Clause 5.1.1(b)(xii) establishes a requirement for the parties to review the implementation and operation of the new classification structure within 18 months of the order being issued 16.

[42] Clause 5.1.1(c) provides classification definitions which are based on the first 8 levels of the 12 level structure inserted by Merriman C in 1992 17. The definitions are included as a facilitative provision subject to clause 5.1.1(b)(vii) and can be used to classify employees where both employers and employees agree. The definitions are general and include indicative tasks of limited scope.

[43] The classification levels and their definitions are in clause 5.1.1(c) of the draft order at Attachment B.

[44] Clause 5.1.1(d) contains definitions to assist in interpretation and disputes avoidance.

[45] Clause 5.1.1(e) is a training provision modelled on the training provision clause provided for in the Metal, Engineering and Associated Industries Award 1998 19 (Metals Award). This provision has been determined to be incidental and necessary for the effective operation of the award20.

[46] Appendix “F” contains the competency units to be selected when classifying employees consistent with the points system contained in the AMWU proposed draft and supported by AIG.

[47] Clause 5.1.1(b)(viii) explains the points system. It states:

[48] The competencies set out in Appendix “F” are lifted from the Package and cover all sectors of the industry. Each competency has been assigned a points rating based on its level of complexity (1-5) derived from Australian National Training Authority (ANTA) and industry testing and endorsement.

[49] The AMWU submitted that the “points” approach set out in clause 5.1.1(b)(viii) of its draft order:

[50] The contentious clauses are set out in Attachment C.

Industry Structure

[51] The AMWU submitted that its application is appropriate given the structure and nature of the printing and allied industries.

[52] The AMWU provided comprehensive documentation in relation to the structure and nature of the industry:

New South Wales and Victoria combined contain 69% of employees in the industry, Queensland 14%, Western Australia and South Australia 7% each and Tasmania 2%. The AMWU notes that within PIAA it was only the South Australian Regional Council (7% of the printing industry) which did not support the “points” system. 27

[53] The economic forecast for the printing industry is for growth across all sectors with the exception of book printing. Current growth is between 2 - 5.5% and strong growth is expected over the next few years. 28

[54] Industry profitability is at a record high. Between 1991-92 and 2003-04 there has been a 242% increase in profit before tax. 29

[55] The AMWU submitted that the industry is in a strong position to absorb any increase to wages arising from its application. The level of overaward payments and the incapacity to pay provisions enforce the minimal impact of the application on profitability.

[56] The AMWU provided reports showing the issue of skills and training in the printing industry has been extensively researched. The industry has identified that in order to survive and grow, enterprises will have to provide customers with comprehensive print and digital solutions. “Industry has also identified that providing comprehensive solutions requires the ability to acquire and utilise new technology and skills.” 30:

[57] The AMWU submitted:

[58] The AMWU submitted that its application is responsive to the factors identified by printing industry as impacting on its viability, namely, skill acquisition, the promotion of training packages, new work processes, technology, related skills and a shift to the provision of services. The AMWU’s application 38:

PIAA Written Submission

[59] Whilst a large measure of the AMWU’s application is agreed to by PIAA, it nevertheless opposes in part the application of the AMWU for a new classification structure and a points based competency assessment system under the award. The principal objections to the AMWU’s application include the following 39:

[60] Section 143(1B) of the Act states:

[61] In particular, PIAA opposes clause 5.1.1(a)(i) in the AMWU’s draft order on the basis that it makes a mandatory requirement that the classification structure be read in conjunction with proposed Appendix “F” of the award. Clause 5.1.1(a)(ii), Table ‘A’, Column D, proposed by the AMWU is opposed by PIAA in that it makes reference to a “points system” that in PIAA’s view is best dealt with at the workplace or enterprise level where competencies can be aligned to business needs. Column A, Classification Levels, Column B, Minimum Weekly Wage Rates, and Column C, Alignment to Qualification from the Printing and Graphic Arts Training Package, are agreed matters and consistent with the settlement in other awards during the structural efficiency exercise.

[62] Clause 5.1.1(b)(vii), Classification of Employees Without a Formal (AQF) Qualification, is opposed by PIAA. This is because the AMWU clause provides the opportunity for employees to chose the points system for classification purposes if there is a dispute. In PIAA’s view:

[63] PIAA also opposes clause 5.1.1(b)(viii) using the points system to determine an employee’s classification as proposed by the AMWU.

[64] In addition, in PIAA’s submission the points system in the AMWU’s application goes much further than the resolution of a new classification structure linked to competency standards as contemplated by Munro J and Merriman C in their respective decisions and orders.

[65] In PIAA’s view, the introduction of a new broadband classification structure with generic classification definitions linked to qualifications from the training package, and without the points system, resolves the structural efficiency and minimum rates adjustment process from the 1989 Safety Net Review. Accordingly, the points system as proposed by the AMWU is best dealt with through collective or individual agreements negotiated at the workplace or enterprise level.

[66] The AMWU’s proposal based on a points system is directly contrary to the objectives of s.3 of the Act and is best dealt with at the workplace or enterprise level where skill levels and training requirements can be tailored to business needs. The “one size fits all” approach 40 to competency assessments also fails to recognise the diversity of the industry where many subsectors come within the scope of the award and all have different requirements for skills and training.

[67] PIAA’s proposal is to determine an employee’s classification level under the award in conjunction with the classification definitions by linking the corresponding level as identified in clause 5.1.1(a)(ii), Table ‘A’, Column C and clause 5.1.1(c) classification definitions.

[68] In PIAA’s view, the AMWU evidence fails to substantiate other than minimal disputation under the interim classification structure or any gender based discrimination.

[69] PIAA submitted that the evidence of industry wide skills shortages is confined to tradespeople (see Mr Tchamkertenian’s evidence).

[70] In PIAA’s view, the cost impact will be greatest on small and medium size businesses that pay award wage rates or small margins above award rates.

[71] PIAA reserves the right to make further changes to the classification structure in line with any Commonwealth Government reforms to the Act or the proposed review of classification structures by the designated taskforce.

[72] Clause 5.1.1(b)(ix), timing of translation into the new classification structure, is an agreed matter. However, PIAA makes clear in its submission that reclassification to a higher level will be operative from the date of appointment by the employer within the six months’ timeframe and no retrospective claim for wages will be facilitated.

[73] Clause 5.1.1(b)(x), dealing with classification disputes with respect to the reference to Appendix “F”, is opposed by PIAA on four grounds:

[74] Clause 5.1.1(c), classification definitions, is opposed by PIAA on the following grounds:

[75] Appendix “F” is opposed by PIAA in terms of its application by way of the operation of clause 5.1.1(b) on the following grounds:

PIAA draft order

[76] PIAA tendered a draft order which highlighted the differences with the AMWU draft order. The main differences are:

AIG Written Submission

[77] AIG submitted that proceedings relating to the skill based classification structure in the award have operated for approximately 15 years. Over this period AIG and its predecessor organisations have devoted substantial resources to endeavour to achieve a workable outcome.

[78] AIG agreed in large measure with the AMWU’s application.

[79] AIG tendered a draft order setting out the key differences between its draft order and the draft order of the AMWU. The key differences are 47:

[80] The key difference between AIG’s draft order and PIAA’s draft order is:

[81] The AIG submitted that the points system should be used to resolve classification disputes because it enables the issues in dispute to be assessed with more precision than simply applying the wording in the classification definitions in clause 5.1.1(c). The competency standards describe the elements of each competency unit and the standard which is required to be made. They also give guidance on assessment. 49

[82] AIG submits the Commission should adopt AIG’s layout in regard to the points system for the following reasons: