[2012] FWAFB 5184 |
FAIR WORK AUSTRALIA |
DECISION |
Fair Work Act 2009
s.302 - Equal remuneration order
Equal Remuneration Case
VICE PRESIDENT WATSON |
SYDNEY, 22 JUNE 2012 |
[1] On 16 May 2011 Fair Work Australia (FWA) issued a decision 1 concerning an application made by the Australian Municipal, Administrative, Clerical and Services Union (ASU) on its own behalf and on behalf of a number of other unions for an equal remuneration order under Part 2-7 of the Fair Work Act 2009 (Cth) (the Act) in the social, community and disability services industry throughout Australia (the SACS industry). In that decision we summarised our findings as follows:
“[291] In this decision we have concluded that for employees in the SACS industry there is not equal remuneration for men and women workers for work of equal or comparable value by comparison with workers in state and local government employment. We consider gender has been important in creating the gap between pay in the SACS industry and pay in comparable state and local government employment. And, in order to give effect to the equal remuneration provisions, the proper approach is to attempt to identify the extent to which gender has inhibited wages growth in the SACS industry and to mould a remedy which addresses that situation. We have reached some preliminary views about how that might be done, recognising that simply adopting the pay rates resulting from the Queensland Equal Remuneration decision is not appropriate. It is desirable, however, that we give the parties the opportunity to make further submissions on the matters.” 2
[2] On 1 February 2012 FWA issued a further decision 3 having regard to the submissions made by the parties in accordance with its earlier decision. In that decision, a majority of the Full Bench of FWA concluded as follows:
“[55] In the May 2011 decision, having indicated that we intended to make an equal remuneration order, we recommended that the parties enter into discussions with a view to reaching agreement on the terms of an order. The Joint Submission contains an agreement between the Commonwealth and the applicants on the main elements of an order. Although the Commonwealth is not a SACS industry employer, it plays a very important funding role, both directly and through the provision of funds to the states.
[56] An important, though provisional, view expressed in the May 2011 decision is that any equal remuneration order we make should take the form of an addition to rates in the modern award. In light of the submissions we have now received, we confirm that conclusion...
[61] ...we have decided that any equal remuneration order we make should be based on the wages in the modern award. The proposals in the Joint Submission are consistent with that requirement. Importantly, the percentage additions to the modern award wages, as varied from time to time in annual wage reviews, will provide an ongoing remedy for the part gender has played in inhibiting wages growth in the SACS industry...
[66] The percentages we have decided on at the various modern award levels in response to the proposals set out in paragraph 5 of this decision are as follows:
Level 2—19%
Level 3—22%
Level 4—28%
Level 5—33%
Level 6—36%
Level 7—38%
Level 8—41%
[67] These percentages are in line with the proposals in the Joint Submission. As we have already indicated, however, we have decided to extend the length of the agreed implementation period. The percentage loadings will be introduced over eight years, in nine equal instalments, commencing on 1 December 2012 and ending on 1 December 2020. This extends the implementation period proposed in the Joint Submission by two years. This extension is in recognition of the potential effects of the equal remuneration order on employment and service provision, and on state finances...
[68] We deal now with the proposal for cumulative annual loadings of 1 per cent over the first four years of the implementation period. The parties to the Joint Submission proposed, under the heading “Minimum wage adjustments and transitional arrangements”, a loading of 1 per cent per annum in December of each of the years 2012, 2013, 2014 and 2015 to recognise impediments to bargaining in the industry and to provide national consistency with the position in Queensland. It was said that these amounts would “provide short term compensation for the SACS industry for its historical inability to bargain while it transitions to the new funding and workplace relations environments.”
[69] We have already indicated that the percentages proposed at each level are too close to current public sector wage levels. For this reason and because of the concerns we have already expressed about the potential impact of the order, we have decided that the proposed loadings, totalling a 4 per cent addition to wages, should be subject to the same implementation arrangements as the percentage additions to wages at each level. Therefore our order will provide for a loading of 4 per cent to be introduced in nine equal instalments over the period 1 December 2012 to 1 December 2020...
[73] We are prepared to make an equal remuneration order in the terms indicated. Such an order will ensure that for the employees to whom the order will apply, there will be equal remuneration for work of equal or comparable value. The percentage additions at each wage level and the further 4 per cent loading will be introduced in nine equal instalments on 1 December in each of the years 2012 to 2020.
[74] We note that the transitional provisions in Schedule A to the modern award were amended in January 2012. The transitional provisions recognise that there are SACS industry employees covered by this decision whose current minimum wage, in a transitional minimum wage instrument or award-based transitional instrument, is lower or higher than the minimum wage for their classification in the modern award. Consideration should be given to the interaction between the transitional provisions and the implementation arrangements for the equal remuneration order. We encourage the parties to review the position to ensure there are no unintended consequences and that in any one year the overall cost impact is appropriate...
[76] ... In our view, it would be appropriate to provide that any amounts payable under the equal remuneration order could be subject to salary packaging, complementing the provisions of the modern award in that respect.
[77] The next matter is whether the order should provide for the absorption of overaward payments. There was general support for absorption. We think it is appropriate that the order should include a provision similar to clause 2.2 of the modern award.
[78] The final matter is whether the order should form part of the award or stand alone. Most parties took the view that the order should stand alone. Of the parties who addressed the operation of the better off overall test for enterprise agreements, most took the view that the benefit of the order would be protected by the terms of s.306 of the Act regardless of the operation of the better off overall test. We agree. The order should stand alone. Steps will be taken to include a notation in the modern award alerting readers to the existence of the order...
[82] We require the applicants to file draft orders to give effect to this decision within 21 days.” 4 (Endnotes omitted)
[3] Discussions concerning the draft orders took longer than 21 days and the ASU did not file draft orders until 16 May 2012 and amended draft orders until 4 June 2012. Australian Business Industrial (ABI) filed draft orders and amended draft orders on 30 May 2012 and 6 June 2012 respectively and the Australian Federation of Employers and Industries (AFEI) filed draft orders on 6 June 2012. We heard the parties on the respective draft orders on 8 June 2012.
[4] The applicants’ amended draft order was supported by the Commonwealth, the South Australian Government and, in general, by numerous employers in the SACS industry. It was not opposed by the Victorian Government and was neither supported nor opposed by the New South Wales Government. Aspects of the applicants’ draft order were opposed by the ABI and AFEI.
[5] The current members of the Full Bench comprising the majority in the February 2012 decision consider that the applicants’ amended draft order is consistent with the majority decision of 1 February 2012 in this matter. Amongst other things, it is a stand alone order that takes into account the full and ongoing remedy the majority indicated it was prepared to make. It also takes into account the current minimum wages for the relevant employees under the Social, Community, Home Care and Disability Services Industry Award 2010, 5 including those in relevant transitional minimum wage instruments and/or award based transitional instruments, as well as the outcome of annual wage reviews. Subject to the absorption of overaward payments, it ensures each relevant employee receives the benefit of the remedy from the commencement of the phase-in period, throughout a year and in the nine equal instalments decided. The instalment date of the first full pay period on or after 1 December each year is administratively consistent with the decision. The quantum of each of the nine equal instalments is dependent on the difference between the current minimum wages and the full remedy. This evens out the overall cost impact over the nine instalments, making for an appropriate overall cost impact in any one year. It also provides for salary packaging.
[6] The draft orders and amended draft orders proposed by the ABI and AFEI do not provide all relevant employees with the nine equal instalments phase-in period decided by the majority of the Full Bench. Further, the amended draft orders proposed by the ABI do not maintain the percentage value of the equal remuneration payment throughout a year.
[7] The applicants’ amended draft order does delay the movement to uniform minimum wage rates for the relevant employees. However, that is a necessary consequence of the majority decision to appropriately phase-in equal remuneration for work of equal or comparable value for the relevant employees in the SACS industry, in circumstances where there are currently various minimum wages for those employees.
[8] FWA will issue an equal remuneration order generally in the form of the amended draft order of the applicants of 4 June 2012, subject to some variations designed to aid its clarity and to ensure its frequency and methods of payment clause recognises arrangements made in an enterprise agreement. The equal remuneration order is being issued at the same time as this decision as PR525485. The existence of the equal remuneration order will be noted in the Social, Community, Home Care and Disability Services Industry Award 2010.
VICE PRESIDENT WATSON
Appearances:
P Lowson of counsel and T Slevin of counsel for the Australian Municipal, Clerical and Services Union and others.
M Harding of counsel for the Australian Government.
S Moore of counsel for the Minister for Employment and Industrial Relations for the State of Victoria.
L Doust of counsel for the Minister for Finance and Services for New South Wales.
R Warren of counsel for the Australian Federation of Employers and Industries.
S Haynes for Australian Business Industrial.
M Pegg for Jobs Australia.
Hearing details:
2012.
Sydney and Melbourne, by Video Link:
8 June 2012.
1 Equal Remuneration Case - May 2011 Decision,
[2011] FWAFB 2700.2 Ibid.
3 Equal Remuneration Case - February 2012 Decision, [2012] FWAFB 1000.
4 Ibid.
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