Six monthly wage indexation 1983–1987

Updated time

Last updated

20 December 2016

In the National Wage Case 1983[1] the Commission reintroduced six monthly wage indexation.  The principles also provided for a 38 hour week to be introduced by consent, if there were ‘cost offsets’, and provided tests for other award increases in a package of principles. 

In taking this decision the Commission took account of three ‘significant developments’ by way of background, these being:

  • the ‘Statement of Accord by the Australian Labor Party and the Australian Council of Trade unions on a prices and incomes approach to economic management’, the importance of which was emphasised by the ACTU and Government
  • the ‘National Economic Summit Conference initiated by the newly elected Prime Minister’, the importance of which was emphasised by employers because the Accord contained provisions with which the CAI ‘expressly disagrees’
  • the ‘President’s Conference’, in which the ‘desirability of a return to a centralized system’ was agreed but in which there was disagreement about the way the system should operate, including a lack of agreement on the reintroduction of wage indexation.

The lack of commitment to the principles had ended the previous indexation system. The Commission would now require a ‘no extra claims’ commitment to be made when each award was varied.  This commitment was included as a requirement for National Wage increases until September 1994. The Commission said:

‘More emphasis than usual was put in these proceedings on the requirement that unions should publicly and expressly commit themselves to accepting this decision of the Commission and to abiding by its terms.  Both the ACTU and the Federal Government made this concept of commitment central to their submissions and it was an integral part of the Federal Government support of the ACTU position.  Without a commitment of the kind suggested we would have been reluctant to introduce the package and in particular to award an increase of 4.3%. We have therefore provided under Principle 3 that before any award is varied to give effect to this decision every union party to that award will be required to give a public and unequivocal commitment to the Principles.’[2]

Under the indexation principles:

  • in the National Wage Case 1984[3] awards were generally varied to give effect to the 4.1% CPI increase, effective first pay period on or after 6 April 1984
  • in the National Wage Case 1985[4], an increase of 2.6% operative 6 April 1985 was made
  • in the National Wage Case November 1985[5], an increase of 3.8% effective 4 November 1985 was provided.

The National Wage Case June 1986[6], continued to provide for six monthly wage indexation, with some changes to the principles.  In particular a new superannuation principle provided for agreements to be approved for superannuation contributions of up to 3 per cent, but rejected a claim for such payments to be arbitrated.  The package was to operate for two years from 1 July 1986. It also provided for a national wage increase of 2.3% from 1 July 1986.

Under the indexation principles, the National Wage case December 1986[7] was adjourned.

Footnotes

[1] Print F2900 23 September 1983

[2] Ibid p.47

[3] Print F5000 4 April 1984

[4] Print F8100 3 April 1985

[5] Print G0700 4 November 1985

[6] Print G3600 26 June 1986

[7] Print G6400 23 December 1986