Industrial Relations Commission of New South Wales CITATION : Transport Industry (State) Award [2002] NSWIRComm 246 APPLICANT TRANSPORT WORKERS' UNION OF AUSTRALIA, NEW SOUTH WALES BRANCH RESPONDENTS PARTIES : NSW ROAD TRANSPORT ASSOCIATION INC AUSTRALIAN BUSINESS INDUSTRIAL EMPLOYERS' FIRST FILE NUMBER: IRC4459 of 2002 CORAM: Peterson J CATCHWORDS : State Wage Case 2002 - variation of award - increasing expense-related and work-related allowances - compounded result of application of 2000, 2001 and 2002 State Wage Cases - whether the adjustment of allowances under principle 5 is linked to increases in wages under principle 8 - whether special case - award varied. LEGISLATION CITED : Industrial Relations Act 1996 CASES CITED : Transport Industry (State) Award (1996) 95 IR 126 HEARING DATES: 08/30/2002 DATE OF JUDGMENT: 09/25/2002 APPLICANT Mr A Hatcher of counsel with Mr A Metcalfe TRANSPORT WORKERS' UNION OF AUSTRALIA, NEW SOUTH WALES BRANCH RESPONDENTS LEGAL REPRESENTATIVES: Mr M Baroni, solicitor NSW ROAD TRANSPORT ASSOCIATION INC Ms R Brady as agent for AUSTRALIAN BUSINESS INDUSTRIAL Mr J De Celis EMPLOYERS' FIRST JUDGMENT: - 7 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: PETERSON J DATE: 25 SEPTEMBER 2002 Matter No IRC 4459 of 2002 TRANSPORT INDUSTRY (STATE) AWARD Application by the Transport Workers' Union of Australia, New South Wales Branch for variation DECISION 1 The Transport Workers' Union of Australia, New South Wales Branch ('TWU') has applied to vary the Transport Industry (State) Award in the following respects: · By increasing wage rates by $18.00 per week. · By increasing the long distance cartage rates, which brings them into line with the relevant Federal Award. · By increasing expense-related and work-related allowances. The application with respect to long distance rates and allowances was heard on 30 August, at the conclusion of which I announced that I would increase the relevant rates in accordance with the application and publish my reasons subsequently. This judgment constitutes those reasons. 2 The application for an increase in wages was accepted by the parties as involving the Special Case principle because of the history of wage increases in the award over recent years and the fact that an increase of $18.00 would exceed the maximum allowable under State Wage Case decisions. That matter has been referred to the President who has determined that it should be heard by a Full Bench. 3 The increase in respect of long distance rates is consented to by all employer parties, that is the NSW Road Transport Association Inc ('RTA'), the Australian Industry Group ('AIG'), Australian Business Industrial ('ABI') and Employers' First. The increases sought will bring the long distance rates into line with those prescribed in the Federal Transport Workers (Long Distance Drivers) Award 1993, an award of the Australian Industrial Relations Commission. The connection with that Award was established by the agreement approved by the Full Bench (Bauer and Peterson JJ., McKenna C) in Special Case proceedings in which judgment was delivered on 20 December 1996 (1996) 95 IR 126. 4 The reimbursement allowances provide for the payment of expenses met on overnight stays, weekend and holiday expenses, camping out allowances and meal allowance. They are intended to reimburse for expenses met. The basis of the claim is to increase them within a range of 13.48 to 21.94%, according to the movements in the Consumer Price Index which have occurred in the relevant groups since these allowances were last adjusted in November 1998. In that sense it may be readily accepted that the claim involved a catch-up process. 5 The work-related allowances provided by the Award are numerous and provide hourly, daily and weekly allowances to compensate for special or particular types of work, although one such allowance distinguishable in that context is the garaging allowance, which is compensation for the provision of garaging facilities for the employer's vehicle. Nothing turns on that distinction here. 6 The increases claimed in work-related allowances was 9.9%. These allowances were last adjusted on 10 April 2000 to take into account increases flowing from the 1999 State Wage Case. The total increase of 9.9% is a compounded result of the application of 3.1% in respect of the 2000 State Wage Case, 3% for the 2001 State Wage Case and 3.5% for the 2002 State Wage Case. 7 Differences of approach emerged in the employers' positions in respect of allowances. Firstly, it was accepted that the increased allowances as contained in Exhibit 3 in the proceedings were accurate in the sense that they properly reflected the application of the percentages upon which the TWU relied. 8 The RTA, and ABI sought to rely on a pattern which it was submitted was created in the last two allowance increases in the Award. In 1998, by consent, increases were phased in, 50% of the increase being payable from the date of variation of the Award and the remainder three months later. In the 2000 Special Case the Commission itself deferred 50% of the increase for 12 months. It was submitted, relying upon that pattern, that it would be appropriate to increase the allowances by 50% of the increases claimed now with the balance payable six months later. It was also submitted that these parties would be amenable to any other just alternative which the Commission felt was appropriate. 9 Employers' First took the same approach with respect to the expense related allowances but adopted a different approach in relation to work related allowances. 10 Mr De Celis for Employers' First submitted that principle 5 of the Wage Fixing principles permitted an increase of 3.5% for the State Wage Case 2002 adjustment. That principle is in the following terms: 5(b) Existing allowances which relate to work or conditions which have not changed, including shift allowances expressed as monetary amounts and service increments, may be increased by 3.5 percent for the State Wage Case 2002 adjustment. 11 The State Wage Case 2002 adjustment referred to is the $18.00 increase provided by principle 8 as the 2002 State Wage Case adjustment, as a percentage of the weekly rate for a tradesman. Accordingly, the 3.5% increase may be seen as a reflection in respect of work-related allowances of the State Wage Case adjustment. This, it was submitted, conforms with the words in principle 5(b) "3.5 percent for the State Wage Case 2002 adjustment" (my emphasis). Principle 5(b) is in similar terms to that applicable in the context of the 2000 and 2001 State Wage Cases. 12 It was submitted that principle 15 of the Wage Fixing principles authorises the phasing-in of increases and that principle should be applied in respect of the increases sought under the principles circa 2000 and 2001. It was submitted that principle 8(b) required that the $18.00 State Wage Case adjustment was able to be inserted in an award only after 12 months had elapsed since the rates were increased in accordance with the State Wage Case 2001 decision (principle 8(b)) and, since this Award has not been varied for that increase, nor indeed those flowing from the 2000 and 2001 State Wage Cases, because of the Award's special case history, the increase sought by the TWU in work-related allowances of 9.9% constitutes a special case and should be referred to the Full Bench. 13 In reply, Mr Hatcher of counsel for the TWU submitted that the RTA's submissions with respect to the impact of the allowances was not supported by any evidence as to the employers or whether there was any detrimental effect on them. The application does not involve wage increases but only allowances applying to some particular employees on particular occasions. The employers' application could not succeed without the support of evidence and reference to past patterns of phasing-in are not determinative because they were by consent. It was submitted that there was no linkage between principles 5 and 8 requiring their application together. The provisions in principle 8 including the 12 months gap between increases are conditions which relate only to principle 8. If they were intended to relate to principle 5 the Full Bench would have so prescribed. Conclusions 14 In my view the Commission's Wage Fixing principles are determinative of each of the contested issues raised by this application. 15 The first issue concerns the employers' proposal that there should be a phasing-in of increases in allowances. Where the principles provide for increases in allowances, as they do by principle 5, an individual member of the Commission has no independent discretion to do other than what the principles themselves permit. The principles are prescribed in permissive terms. For example, in relation to allowances constituting a reimbursement of expenses incurred, principle 5(a) expresses its authorisation in this way "... may be adjusted from time to time where appropriate to reflect relevant changes in the level of such expenses". The words "where appropriate" do not, in my opinion, confer a discretion in general, unrestricted terms but one which is dependent upon the applicant being able to establish the necessary elements of a claim to justify an increase. Similarly, the phrase "may be adjusted" authorises the Commission to make the change in an appropriate case, but again is not intended, in my opinion, to convey a discretion which may be exercised in the negative save in circumstances where it is held to be "appropriate" so to do. Once an applicant has established that the necessary elements of its claim are made out, principle 5 itself has the effect of requiring an increase to be granted. The alternative interpretation would lead almost inevitably to a mish-mash of results across awards based upon the individual exercises of a broader discretion and thus an inconsistency of application of the principles. 16 The answer to any increase sought in excess of that allowed by the principles is principle 10, dealing with Special Cases. On the other side of the coin, a case where an increase lower than that permitted by the principles is sought by employers, is principle 15, Economic Incapacity. That principle provides in part as follows: Any employer or group of employers bound by an award may apply to, temporarily or otherwise, reduce, postpone and/or phase in the application of any increase in labour costs determined under the principles on the ground of very serious or extreme economic adversity. . . ." 17 Such a case also is required to be processed according to the Special Case principle. In the present matter no such application was made for a reference of the claim as a Special Case. That position is consistent with the nature of the submissions of the employers which were in general terms and not dependent upon a claim of very serious or extreme economic adversity. In my view, the only avenues by which a phase-in of increases may be achieved is either by consent or pursuant to principle 15. 18 As to the argument advanced by Employers' First of a link between principles 5, Allowances, and 8, State Wage Case Adjustment, I consider the submissions advanced by the TWU were correct. 19 The authorisation in principle 5(b) of an increase of 3.5% "for the State Wage Case 2002 adjustment" does not limit or restrict such an increase to the occasion of the application of the State Wage Case 2002 adjustment to wage rates. In my opinion, the effect of the principle is to describe the percentage increase in allowances in respect of, or as, the State Wage Case 2002 adjustment to allowances. Where, as here, the wage rate pattern has developed over a period of years independently of Stage Wage Cases but the allowances have not, there is no apparent good reason for treating the allowances outside the Wage Fixing principles in the context of a special case if the applicant is desirous of maintaining the application of principle 5. Here the allowances in question have not kept pace with increases flowing from the State Wages Case in 2000, 2001 and 2002, nor have they been related to special case increases in the award rates. 20 In any event, were it intended that principle 5 operate only in the context of the application of principle 8, or subject to some or all of the limitations imposed in principle 8, such would have been readily prescribed in principle 5. To hang that intention upon the word "for" in the phrase "for the State Wage Case 2002 adjustment" principle 5(b) seems to me to read into principle 5 a limitation which could never have been intended. 21 On that basis the argument with respect to allowances was rejected and the allowances were ordered to be increased in accordance with the terms of Exhibit 3, the variation to take effect on and from the first pay period to commence on or after 30 August 2002. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.