Industrial Relations Commission of New South Wales CITATION: Shop Employees (State) Award and others [2008] NSWIRComm 197 Aged and Community Services Association Aged Care Association Australia Federation of Employers and Industries Australian Business Industrial Australian Retailers' Association New South Wales Australian Workers Union PARTIES: Catholic Commission for Employment Relations Motor Traders' Association of New South Wales New South Wales Nurses' Association Shop Assistants and Warehouse Employees' Federation of Australia, Newcastle and Northern New South Wales Shop, Distributive and Allied Employees' Association, New South Wales Unions New South Wales United Services Union FILE NUMBER(S): IRC 1062, 1064, 1312 and1308 of 2008 CORAM: Boland J President; Walton J Vice-President; Schmidt J; Tabbaa C Award - Wage fixation - Application to vary - Training wages - Application of decision in 2008 State Wage Case to training wages - Whether the percentage increase awarded in 2008 State Wage Case should apply to training wages or some other formula adopted - Held that percentage increase should be applied - Consideration as to whether increase should be applied retrospectively - Orders made CATCHWORDS: Wage fixation - Award - Application to vary - Training wages - Application of decision in 2008 State Wage Case to training wages - Whether the percentage increase awarded in 2008 State Wage Case should apply to training wages or some other formula adopted - Held that percentage increase should be applied - Consideration as to whether increase should be applied retrospectively - Orders made Industrial Relations Act 1996 LEGISLATION CITED: Workplace Relations Act 1996 (Cth) Workplace Relations Amendment (Work Choices) Act 2005 State Wage Case 2006 (2006) 150 IR 393 CASES CITED: State Wage Case 2008 [2008] NSWIRComm 122 State Wage Case 2007 (2007) 163 IR 253 HEARING DATES: 10 September 2008 DATE OF JUDGMENT: 17 October 2008 APPLICANTS Mr D Bliss Shop, Distributive and Allied Employees' Association, New South Wales Shop Assistants and Warehouse Employees' Federation of Australia, Newcastle and Northern New South Wales United Services Union Unions New South Wales Ms K Wild New South Wales Nurses' Association Mr S Crawford Australian Workers Union (Matter no IRC08/1213 only) RESPONDENTS LEGAL REPRESENTATIVES: Ms C Fielding Australian Business Industrial Australian Retailers' Association New South Wales Aged and Community Services Association Aged Care Association Catholic Commission for Employment Relations Mr R Warren Australia Federation of Employers and Industries Mr A Baumgartner Motor Traders' Association of New South Wales JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: BOLAND J, President WALTON J, Vice-President SCHMIDT J TABBAA C Friday 17 October 2008 Matter No IRC 1062 of 2008 SHOP EMPLOYEES (STATE) AWARD AND OTHERS Application by the Shop, Distributive and Allied Employees' Association, New South Wales, for variation re: State Wage Case 2008 Matter No IRC 1064 of 2008 SHOP EMPLOYEES (STATE) AWARD AND OTHER AWARDS Application by the Shop Assistants and Warehouse Employees' Federation of Australia, Newcastle and Northern New South Wales, for variation re: State Wage Case 2008 Matter No IRC 1213 of 2008 TRAINING WAGE (STATE) AWARD Application by Unions New South Wales for variation re: State Wage Case 2008 Matter No IRC 1308 of 2008 NURSES (PRIVATE SECTOR) TRAINING WAGE (STATE) AWARD Application by the New South Wales Nurses' Association for variation re: State Wage Case 2008 DECISION OF THE COMMISSION [2008] NSWIRComm 197 1 On 3 July 2008, the Shop, Distributive and Allied Employees' Association, New South Wales ("SDA") filed an omnibus application pursuant to s 17 of the Industrial Relations Act 1996 ("the Act") to vary the Shop Employees' (State) Award and 16 other New South Wales common rule awards in accordance with the decision in the State Wage Case 2008 [2008] NSWIRComm 122. 2 The SDA application contained draft variations with respect to five awards which contained traineeship rates of pay. The relevant affected awards were: · Retail Industry (State) Training Wage Award; · University Unions (State) Award; · Vehicle Industry - Repair, Services and Retail (State) Award; · Motor Vehicle Salespersons (State) Award; and · Drug Factories (State) Award. 3 On 3 July 2008, the Shop Assistants and Warehouse Employees' Federation of Australia, Newcastle and Northern New South Wales ("SAWEFA") filed a similar omnibus application with respect to the Shop Employees' (State) Award and 14 other New South Wales common rule awards. The SAWEFA application also contained traineeship rates of pay with respect to the same five awards. 4 Both unions sought an adjustment in salaries based on the State Wage Case 2008 decision, but rather than seeking the available four per cent increase in the current traineeship classification rates of pay, the increases sought were calculated by reference to a four per cent increase to the C10 tradesperson rate of pay, as provided in the Metal Engineering and Associated Industries (State) Award, as the starting point for calculating increases for the traineeship rates. 5 The current rate for the C10 classification, following the decision in the State Wage Case 2007 (2007) 163 IR 253, is $618.20 per week, effective from the first full pay period to commence on or after 11 October 2007. Application of the four per cent increase to that rate provides a $24.70 per week increase, rounded to the nearest 10 cents. Adding that amount to the current traineeship rates produces a marginally higher outcome than the strict application of a four per cent adjustment to those rates: this difference accounting for the dispute in this matter. 6 Both applications were listed before Bishop C on 23 and 28 July 2008. The Australian Federation of Employers and Industries ("AFEI") notified the applicant Unions, shortly prior to the commencement of the proceedings on 23 July, that it had decided to oppose the traineeship rates of pay, as it opposed the method of calculation of the increase to those rates. No alternative draft variations were proposed by the AFEI. All other industrial parties, with the exception of the Motor Traders' Association of NSW ("MTA"), supported, or did not oppose the method of application of the four per cent increase to the traineeship rates of pay proposed by the SDA and SAWEFA. 7 As a consequence of that disagreement, all the relevant awards were varied by consent or without opposition, including full-time adult classification rates of pay and existing work related allowances, in accordance with the decision in State Wage Case 2008 , save for the traineeship rates. 8 The five disputed awards were varied from the following dates, being no less than 12 months since the rates of pay were varied with the respect to the decision in State Wage Case 2007 in accordance with Principle 5 - Adjustment of Allowances and Service Increments of the State Wage Case 2008 Wage Fixing Principles: · Retail Industry (State) Training Wage Award: 24 July 2008, · University Unions (State) Award: 04 September 2008, · Vehicle Industry - Repair, Services and Retail (State) Award: 04 August 2008, · Motor Vehicle Salespersons (State) Award: 24 August 2008, · Drug Factories (State) Award: 11 September 2008. 9 On 28 July 2008, Unions NSW filed an application with respect to variation of the Training Wage (State) Award 2002 and in doing so adopted a similar approach to the adjustment of traineeship wages to that of SDA and SAWEFA. In proceedings before Bishop C on the same date, the Commissioner agreed with the submission of all parties that the traineeship rates of pay in the five disputed awards in both the SDA and SAWEFA applications should be determined consistent with any determination in respect of the application by Unions NSW. 10 We note the Unions are seeking that the variations to the traineeship rates apply from the same dates as those for the full-time adult classifications. 11 On 8 August 2008, the NSW Nurses' Association filed a similar application with respect to the Nurses' (Private Sector) Training Wage (State) Award. 12 Thus, the issue between the parties is the appropriate method of calculating increases to the pay rates in awards that contain training wages, having regard to the decision in State Wage Case 2008. Background 13 The National Training Wage Award 2000 was made by the Australian Industrial Relations Commission in 1994 with the consent of peak national industrial bodies, including the Australian Council of Trade Unions and Australian Chamber of Commerce and Industry. The traineeship rates of pay are applicable to employees engaged on formally recognised traineeships. The key characteristics of the Award are that: · rates of pay are not determined by the relevant classification in the underpinning Award but by four skill levels including Industry/Skill Levels A, B and C and AQF Level IV; and · the equivalent of 80 per cent of the relevant full-time rate of pay for each of the four industry/skill levels recognising that the structure of training delivered in traineeships generally provided for 80 per cent on the job (workplace) and 20 per cent off the job (eg TAFE) training. 14 The rates of pay which apply to classifications for work performed pursuant to the individual awards which underpin the National Training Wage Award fall both above and below the C10 tradesperson rate, with Industry/Skill Levels B and C rates applying to types of work classified below the C10 tradesperson rates and AQF IV rates applying to types of work classified above the C10 tradesperson rates. 15 Both the Training Wage (State) Award 2002 and the Retail Industry (State) Training Wage Award were made as counterpart Awards to the National Training Wage Award. 16 The Training Wage (State) Award was made by Wright J, President on 6 September 2002. 17 Up until March 2006, the rates of pay in both awards were based upon, and mirrored, the rates contained in the National Training Wage Award as determined by the Australian Industrial Relations Commission. 18 In 2006, the Full Bench of the Commission of New South Wales, determined in the State Wage Case 2006 (2006) 150 IR 393 that it would no longer follow or rely upon nationally determined wage increases in making its annual minimum wage determinations. This was a consequence of fundamental differences between the wage setting parameters under the Act compared to federal workplace relations legislation, which no longer provided an appropriate platform to determine the wage increases applicable to employees under the Commission's jurisdiction. The Full Bench stated at [10]: By the passage of the Workplace Relations Amendment (Work Choices) Act 2005, the legislative scheme for wage fixation in the Federal industrial system under the WR Act so dramatically diverged from the requirements of the legislation governing our jurisdiction, in both its objects and provisions governing wage-fixing, as would render a deferral of our decision-making in favour of the AFPC a failure to properly discharge our statutory functions. 19 In the present case, Unions NSW, SDA, SAWEFA the Nurses' Association and the Australian Workers' Union, New South Wales ("the Joint Unions") submitted that, as a consequence of this change: (a) The Commission determined different minimum wage increases for employees and employers within the NSW jurisdiction to those determined by the Australian Fair Pay Commission (and the Australian Industrial Relations Commission) for employees and employers within the federal jurisdiction since 2006; (b) Industrial parties, including Unions NSW, the Shop, Distributive and Allied Employees' Association, New South Wales ("SDA"), the Shop Assistants and Warehouse Employees' Federation of Australia, Newcastle and Northern New South Wales ("SAWEFA"), the Catholic Commission for Employment Relations ("CCER"), the Australian Retailers' Association ("ARA"), the Motor Traders' Association of NSW ("MTA"), Australian Business Industrial ("ABI") and the Australian Federation of Employers and Industries ("AFEI"), have adopted the same calculation method used for determining the rates of pay in the National Training Wage Award since 1994 for determining the rates of pay in the Training Wage (State) Award 2002, the Retail Industry (State) Training Wage Award and the Nurses' (Private Sector) Training Wage (State) Award in 2007 and 2007. Such variations are consistent across all rates of pay and all industries; and (c) Differences in the amount awarded in NSW compared to the amount awarded federally since 2006 have resulted in different rates of pay in NSW traineeship awards compared to the relevant federal instruments - the Pay Scale derived from the National Training Wage Award (Transitional) (applicable for non-constitutional corporations covered by 5 year transitional arrangements) - but the calculation method agreed and adopted by the parties for over a decade has been maintained. 20 Since 1994, both the Australian Industrial Relations Commission and this Commission have awarded "flat dollar" increases in National Wage/Safety Net Case decisions and State Wage Case decisions. The calculation method for traineeship rates has relied upon a "flat dollar" determination. The key characteristics of the calculation method are as follows: · The "key rate" (highest rate of pay for each industry/Skill Level) is increased by 80 per cent of the "flat dollar" amount awarded by the Commission, subject to rounding to the nearest dollar; · The other rates of pay for each industry/Skill Level are increased by a proportionate amount maintaining internal relativities, subject to rounding to the nearest dollar; and · Hourly rates are determined by taking the relevant weekly rate and multiplying by 1.25/38, subject to rounding to the nearest cent. This decade-long practice had been effective in maintaining the counterpart status of the rates of pay in the Awards until federal legislative changes in 2006 intervened and rendered counterpart status null and void. Flow-on of State Wage Case 2008 21 In State Wage Case 2008 the Full Bench determined that, upon application, award rates, including junior rates, may be increased by four per cent per week. Those increases would not be available until at least 12 months had elapsed since the rates in the relevant award were increased in accordance with the State Wage Case 2007, except in accordance with Principle 8(h). 22 The Commission had hitherto awarded a flat monetary increase. As earlier mentioned, the parties have relied upon that dollar figure for determining an appropriate proportionate increase to training wages. The training wages were calculated by taking 80 per cent of the flat dollar figure and adding it to the "plus 5 years or more" trainee wage rate under Skill Levels A, B and C and maintaining proportionality throughout the table. The method of calculation was obtained through a consent position between all the union and employer parties. 23 The percentage increase granted in State Wage Case 2008 is incompatible with the historical formula agreed between the parties. The options, therefore, would appear to be: · apply the four per cent increase in its entirety; or · apply the old formula agreed between the parties; or · determine some other new fair and reasonable calculation method. Unions' submissions 24 The Joint Unions contended that the parties had encountered a number of problems in applying State Wage Case 2008 to trainee wages. 25 First, the Full Bench used its standard wording in Principle 8 and Order 2 in the decision. However, on this occasion, it granted a percentage increase as opposed to a flat dollar amount without attaching any conditions to it, such as how that percentage increase should be applied to trainees. 26 Secondly, the Full Bench did not distinguish or provide any guidance as to which "trainees" the decision refers to. The Joint Unions pointed out that, at an "industrial level", the term "trainees" may refer to those who are required to undergo a period of training upon commencement in a new role until they achieve competency and it may also refer to those persons, the subject of this claim, who are on an indentured traineeship identified by the authorities. 27 Thirdly, the State Wage Case 2008 decision provided for an increase of four per cent. It was being assumed by the AFEI and the MTA that adjustment of the trainee rates in accordance with the formula agreed between the parties in preceding years would result in outcomes which were more than four per cent and would, therefore, be in breach of the State Wage Case 2008 decision. The Joint Unions pointed out that the State Wage Case 2008 decision did not stipulate that the increase must not exceed four per cent and, in any event, an increase beyond four per cent was inevitable in some circumstances because of the requirement to round up to the nearest 10 cents. 28 Finally, the Joint Unions were concerned that the parties may have been, albeit by consent, applying previous State Wage Case decisions incorrectly. For example, the flat rate amount awarded in previous State Wage Case decisions has been reduced by 20 per cent and then applied to the key rate in acknowledgement of the fact that, up until recently, those trainees spent approximately 20 per cent of their time off the job. Had the State Wage Case decisions being strictly applied, the rates within the Retail Industry State Training Wage Award, for example, would be $37 higher. 29 The issue between the parties was the application of Principle 8 and Order 2 of the decision in State Wage Case 2008; whether a four per cent increase should be applied across the board or, as the Unions submitted, it should be applied to a particular key rate of pay and then internal adjustments would take place such that proportionate amounts would apply. 30 The Joint Unions submitted that their approach should be adopted for five main reasons: (1) the C10 classification is an industrially recognised common point (100 per cent relativity) for all skills based classifications structures spanning across different industries. Traineeship rates of pay are based upon the recognition of, and support for, skills based career paths. The skills based pathways and rates of pay in training wage awards have evolved from the recognition of the C10 classification and rate of pay is the key rate and other rates have been determined "around" this rate; (2) the State Wage Case 2008 decision awarded a percentage increase in recognition of the compression of relativities between classifications as a consequence of that "flat dollar" increase awarded over a decade. It would be counter-intuitive to adopt an approach which does not recognise the C10 rate for the purposes of skills based traineeship rates of pay; (3) the adoption of some other classification and rate of pay as the key starting point rate (eg shop assistant rate for all retail training wages) would lead to different outcomes for different awards and industries and necessarily lead to the fracturing of the common rates applying to training wages under New South Wales awards. It would also be contrary to the purpose of having Industry/Skill Levels developed to stretch across different industries; (4) adoption of a four per cent increase was not clearly supported by the Wage Fixing Principles and, if it was, then all increases agreed and adopted in both the Training Wage (State) Award 2002 and the Retail Industry (State) Training Wage Award were less than what the relevant State Wage Case decisions provided (ie full increases of the "flat dollar" amounts should have been applied and not 80 per cent of those increases, as has been the practice and understanding of the parties); and (5) paragraphs [295] and [296] of the State Wage Case 2008 decision suggested that the maintenance of internal relativities between award classifications with respect to the C10 classification was an important consideration of the Commission in awarding a four per cent increase: [295] To illustrate his point about deteriorating wage relativities Mr Thistlethwaite also referred to the Metals, Engineering and Associated Industries (State) Award and noted that whereas in 1997 the rate for the C14 classification was 79.65 per cent of the C10 rate, by 2007 flat dollar increases had closed the gap to the point where the C14 rate was 85.95 per cent of the C10 rate. [296] The original wage relativities in the Metals, Engineering and Associated Industries (State) Award did not occur by accident but were derived from the parent federal award to which the State award is a counterpart. The relativities in the federal award were determined after an extensive restructuring of the classifications in that award in order to provide for a skills based career path. To allow the relativities to be further compressed will destroy the integrity of the skills based career path. 31 The Joint Unions submitted that all other industrial parties with the exception of AFEI, had agreed to a compromise settlement proposed during conciliation by Australian Business Industrial ("ABI"). The Joint Unions noted also that the Australian Retailers Association, NSW Division ("ARA"), ABI, Aged and Community Services Association, the Catholic Commission for Employment Relations and the Aged Care Association Australia (the "Joint Employers") submitted that the Joint Unions' applications should be granted in the terms sought. 32 The Joint Unions outlined three options for disposing of the matters. Firstly, that the Full Bench determines that the applications comply with the Principles and Orders of the decision in State Wage Case 2008. Alternatively, if the Full Bench was to find against the Unions, it was submitted the Full Bench should find that this matter constituted a Special Case under Principle 10 of the Wage Fixing Principles and should vary the awards in accordance with the methodology advanced by the Joint Unions pursuant to s 17(3)(d) of the Act on the basis that the relevant Awards were past their nominal term and that it was not contrary to the public interest to do so. That alternative, it was submitted, would maintain the integrity of the consent arrangement put in place by the parties over the last decade. Finally, the Bench might elect to determine that the matters be disposed of on this occasion, as a one off solution, in the manner prescribed in the compromise solution (see below) proposed by the Unions with liberty to the parties to apply at the next Wage Case to more appropriately define the issue. Joint Employers' submission 33 The Joint Employers confirmed that they supported both the Unions' applications in the terms sought as well as the compromise position proposed (see below) but did not put forward any submissions, either in writing or orally, in that regard. Motor Traders' Association submission 34 The MTA explained that it had supported the compromise arrangement proposed in conciliation proceedings before Walton J, Vice-President on 12 August 2008 to apply the four per cent increase to the C10 tradesperson rate of pay as a starting point to derive the benchmark monetary amount in order to progress the variations expeditiously on the basis that the parties' positions would be reserved for final determination in the 2009 State Wage Case. However, its position was similar to that of the AFEI in that its primary support was for a four per cent increase across the board. 35 The MTA opposed the increase of trainee rates using the methodology advanced by the Joint Unions. Whilst the MTA acknowledged that the C10 rate had played a pivotal role in establishing relative skill levels both nationally and at a State level, reliance on it, on this occasion, was illogical as its application, in the manner proposed by the unions, would distort relativities between the relevant lower skill levels. 36 It was noted that skill level B was mainly applicable in the vehicle industry. The roles for which the trainees were being trained to perform led them to perform roles at non-trades levels in the Vehicle Industry - Repair Services and Retail (State) Award and the Motor Vehicle Salesperson (State) Award. 37 It was pointed out that the Unions had acknowledged in their submissions that the Training Wage (State) Award was a counterpart of the National Training Wage Award which, at Schedule C, provided under Wage Level B for "Automotive Industry Retail, Service and Repair" with relevant training at non-trades Certificate II and III. 38 It was also pointed out that the Unions further acknowledged that other rates of pay, including the rates of pay in training wage awards, have been determined "around" the C10 classification key rate of pay. The Unions had also acknowledged the national historical approach to wage fixation of rates for trainees. 39 It was submitted that Skill Level A had been set having regard to the C10 rate. The other skill levels had been set at a lower proportion of the C10 rate. Therefore, if a key rate was to be established, regard must be had to the national relationships that had been established for the roles being performed. 40 In addition, historically, rates for Skill Level B had been related to non-trade roles and, therefore, it would be inappropriate to determine rates for that level at the C10 trade rate. Therefore, if the Commission was minded to use a key rate in order to determine trainee rates, then it needed to establish an appropriate key rate in relation to those skill levels that related to non-trades roles. 41 The MTA pointed out that prior to the introduction of the amendments to the Workplace Relations Act 1996 (Cth) in March 2006, the Vehicle Industry - Repair Services and Retail (State) Award and the Motor Vehicle Salespersons (State) Award were state counterparts of the federal Vehicle Industry Repair, Services and Retail Award 2002 and the relevant rates of pay were identical. Under the classification structure of the federal award, the trade rate fell within the wage group level "R6" and level 4, a non-trade classification, fell within the wage group level "R4" which was set at 92.4 per cent of the trade rate. 42 The MTA submitted that, in establishing a key rate, regard must be had to the original counterpart nature of the trainee rates in New South Wales and Skill Level B should reflect this historical relationship. It was submitted that would overcome the problem identified by the applicant Unions of having different outcomes for different awards and industries and thereby fracturing the common rates enjoyed under all training wage awards across this State. 43 It was suggested that the approach proposed by the Joint Unions ran counter to the approach espoused by the Full Bench in the State Wage Case 2008, as it would distort internal relativities established as a result of the consent variations made in the flow on of the State Wage Case 2007 decision. 44 Finally, it was submitted that the correct methodology was to apply a four per cent increase to each individual trainee rate, which would have the clear mathematical benefit of exactly maintaining the agreed relativities set when the trainee rates were last varied by consent as a consequence of the State Wage Case 2007. Australian Federation of Employers and Industries submission 45 The AFEI offered a number of reasons in support of its position, the most significant of which was that it was entirely consistent with the intent of the Full Bench in its decision in the State Wage Case 2008, particularly in relation to Order (2) and Principle 8(d) wherein "trainees" were specifically mentioned. The Full Bench granted a percentage increase on this occasion having accepted the submission by Unions NSW that a succession of flat dollar increases had, over the years, compressed the relativities between skill levels in awards. Nowhere in that decision did the Commission consider a quantum in excess of four per cent. Indeed, Principle 8(d) contemplated a lesser amount being applicable to trainees. 46 The applications, for which there was consent amongst some employer groups, sought to increase trainee rates by in excess of four per cent in every case - ranging from 4.005 per cent up to 4.7 per cent. 47 The proposal espoused by the Joint Unions for variation of the training wage was inconsistent with the submissions they put before, and which found favour with, the Full Bench in the State Wage Case 2008. The Commission, as currently constituted, was being asked to depart from one of the fundamentals in that decision. 48 The AFEI further submitted, and demonstrated with use of a table, that the Joint Unions' proposal would result in not only further compression of relativities between the Skill Levels within the Training Wage Awards, but also further compression of the relativities between the pay rates for skills levels in Training Wage Awards and the C10 Metals pay rate. 49 The AFEI pointed out that the Joint Unions' submission acknowledged that the training outcomes associated with Training Wage awards sat above or below the C10 (tradesperson) Metal rate. It was submitted, therefore, that the arbitrary selection of that rate, as a basis for deriving the 2008 training wage increases, was not justified. This was so, particularly when one took into account that the training outcomes were not at the C10 level and the fact that the Training Wage (State) Award stipulated that "the wage rates prescribed by this clause [Clause 7(b)] do not apply to complete trade level training which is covered by the Apprenticeship system." 50 A compromise proposal designed to split the difference between the four per cent (as proposed by AFEI) and the proposal put by the Unions was not, it was submitted, an appropriate way of determining, in a settled sense, the manner for setting trainee rates for the future. 51 The consent arrangement entered into in previous years was predicated on the fact that flat dollar amounts were granted to adults and percentage increases to juniors and apprentices to ensure the maintenance of the relativities between juniors and adults, apprentices and tradespersons. The AFEI argued that such an arrangement was not contrary to the Wage Fixing Principles in existence at that time because those Principles permitted there to be an increase of the full quantum awarded, or a lesser amount as agreed between the parties, or as determined by the Commission. 52 The AFEI further argued that the orders sought by the Unions, in other words, their primary submission, as well as their compromise submission, were not available elsewhere in the Principles other than as a Special Case with its attendant principles. 53 The AFEI submitted that the most appropriate method of flowing on the increase to the training wage was to apply the percentage increase in full to the training rates thereby negating the necessity, or justification, for a special formula. Conclusions regarding the claim 54 The parties to the State Wage Case 2008 had ample notice that the Commission had been considering, with increasing favour, the claim by Unions NSW for a percentage increase in the State Wage Case. 55 In the 2006 State Wage Case decision, the Full Bench stated at [272]: There is substance in Unions NSW's submission supporting a percentage increase in award rates... .... But we are concerned that if flat increases are to continue as the method of adjusting wage rates in State Wage cases, the question of award based relativities may develop into an industrial issue in some industries. 56 In the 2007 State Wage Case decision, the Full Bench stated at [184]: On this occasion, we would have been inclined to grant a percentage increase had it not been for our concern to avoid placing undue pressure on the State's economy.... but we do emphasise that the question of a flat versus percentage increase remains a live issue. A lessening in the economic performance difficulties in New South Wales next year may well create a proper environment to commence reviewing wage relativities in awards. 57 In the State Wage Case 2008, the parties were expressly invited to make submissions to the Full Bench as to any matters that might arise should the Commission be minded to express the outcome as a percentage increase. No party availed itself of that opportunity. 58 The Full Bench could not consider the position of trainees in any particular way as no party had raised the issue in those proceedings or, indeed, in previous State Wage Case proceedings. Nor was the Full Bench made aware in those proceedings, or previous State Wage Case proceedings, of the arrangements that had been agreed in the past. 59 Yet, the Commission is now advised that parties had reached a consent arrangement for the flow on of flat dollar State Wage Case increases which, if the agreed formula was contrary to the intention of the Full Bench in those State Wage Cases, may have resulted in an underpayment to those trainees of up to an amount of $37 per week. 60 The Joint Unions pointed out that if, however, the consent arrangement entered into between the parties was held to be in compliance with previous State Wage Case decisions then, on the best case scenario, the problem appeared to be confined to the application of the 2008 State Wage Case decision. 61 The Commission accepts the submission made by the AFEI that the previous consent wage arrangements were not contrary to the Wage Fixing Principles in existence at the relevant times. The parties were permitted to make such consent wage arrangements that were subsequently approved by this Commission. In fact, the Commission considers that, in the absence of a formula in the relevant awards for such translation, the agreed arrangements were a commendable and pragmatic compromise to translate a flat rate increase awarded to adult employees to traineeship awards. 62 The issue, therefore, is confined to the State Wage Case 2008 decision granting a percentage adjustment, which materially changed the arrangement between the parties. The fact that the claim involves a low paid group is significant. However, it does not detract from the fact that the issue could have been addressed during the State Wage Case 2008 proceedings and was not. 63 It was not disputed that, should the Orders sought be granted, then trainees would be the only award covered employees who would have received increases greater than four per cent, particularly in comparison with apprentices and juniors whose wages are fixed, in many instances, as a percentage of the adult rate in the relevant award. 64 The issue in dispute clearly satisfies the requirements of a Special Case. Having considered the options available for the flow on of the 2008 State Wage Case decision, the Commission has determined that the orders being sought by the Joint Unions will be dealt with pursuant to the Special Case principle. 65 In the 2008 State Wage Case decision the Commission determined that a four per cent increase would be applied to minimum award wages in New South Wales. The determination of the Commission remains what it is - a percentage adjustment, which will be applied in full to the training rates in the relevant awards. However, consistent with the State Wage Case 2008 decision, the question of retrospectivity raises different questions, warranting consideration under the Special Case principle. Retrospectivity 66 The Joint Unions pointed out that the applications had been filed in a timely manner - shortly after the State Wage Case decision was issued and three weeks prior to the earliest anniversary date in the awards which fell due to be varied in accordance with Principle 5 of the Wage Fixing Principles. 67 The only cause of the delay to the variations to the traineeship rates in the five disputed awards beyond the 12 months minimum requirement under the Wage Fixing Principles, was the AFEI opposition to the method of calculation proposed by the Unions. Those awards would have been approved on the first occasion they were listed before Bishop C (on 23 July 2008) but for the AFEI opposition to the method of calculation at that time. 68 The Joint Unions sought that the Commission apply its decision retrospectively to ensure that employees were not disadvantaged by the time required by the Commission and parties to resolve this "arithmetic" dispute. 69 It was submitted that the Training Wage (State) Award and the Nurses' (Private Sector) Training Wage (State) Award did not have retrospective operative dates and sought that they be varied in terms of the respective applications filed. 70 The Joint Employers pointed out that, on a proper application of Principle 8(a) of the Wage Fixing Principles, the rates of pay in the relevant awards would be prevented from being increased any earlier than the date of variation. Therefore, in so far as those applications were concerned, they must proceed as a special case. 71 The Joint Employers submitted that the arguments put forward by the applicants in favour of retrospectivity could be accommodated pursuant to Principle 10 of the Wage Fixing Principles. 72 The Joint Employers agreed that the SDA and SAWEFA had filed their applications in a timely manner, that the matters were listed before the anniversary date of increases to rates in the relevant awards and that the relevant adult rates of pay in the awards have already been varied. 73 It was submitted that different effective dates for increases to rates under the same awards would result in an administrative burden for, and unduly inconvenience, employers employing both adults and trainees. In conclusion, it was submitted that the case was not ordinary and the retrospective increases should be granted pursuant to Principle 10 of the Wage Fixing Principles. 74 The MTA supported and adopted the submissions made by the Joint Employers with regard to retrospectivity. 75 The AFEI submitted that the operative dates for increases to the relevant awards should be the commencement of the first full pay period on or after the date of the Full Bench decision in these matters. It was pointed out that the AFEI opposition to the applications was based on the Joint Unions' claim for outcomes inconsistent with the State Wage Case 2008. Conclusions regarding retrospectivity 76 It is not disputed that the applications for variation of the relevant awards were filed in a timely fashion by the appropriate unions and were listed for hearing prior to the anniversary date of the increases. Nor was it disputed that the adult rates and allowances in the relevant awards have already received the 2008 State Wage Case increase. 77 The Commission notes that the Joint Employers and the MTA support the Joint Unions' claim for retrospectivity. The Commission further accepts that to apply a different operative date would result in an administrative burden for employers employing both adult employees and trainees. 78 Having regard to the above, the Commission is satisfied that a Special Case has also been made out in relation to the operative date. 79 In making orders in these matters the Commission has considered the following factors: i) the issue affects low paid employees; ii) the delay to the variations to the wages of these low paid employees has been caused by the failure by the parties on both sides to address, at the appropriate time, the flow on of a percentage amount to trainee wages. The Commission accepts that the trainees to which these awards relate should not be disadvantaged as a consequence of such failure; iii) the SDA and SAWEFA applications could have been determined before Bishop C in July 2008. The operative dates determined by the Commissioner at that time should apply to trainee wages. It is noted that whilst the parties did not reach an agreement in conciliation before the Commissioner, they acted in good faith to attempt to apply past consent arrangements. It is important, therefore, that the pay increase due to trainees not be delayed beyond the 12 months' delay required by Principle 8; and iv) variation of the Awards in the terms of the applications will not result in financial hardship to any affected employer. Orders 80 We make the following orders: (a) The Commission orders that trainee rates in the following awards be varied in accordance with the Commission's Wage Fixing Principles to include a State Wage Case adjustment of 4.0 per cent per week applicable from the first full pay period commencing on or after the dates shown alongside the relevant award: · Retail Industry (State) Training Wage Award: 24 July 2008, · University Unions (State) Award: 4 September 2008, · Vehicle Industry - Repair, Services and Retail (State) Award: 4 August 2008, · Motor Vehicle Salespersons (State) Award: 24 August 2008, · Drug Factories (State) Award: 11 September 2008. (b) The Training Wage (State) Award is varied in the terms of the application to take effect from the first full pay period commencing on or after 4 October 2008. (c) The Nurses' (Private Sector) Training Wage (State) Award is varied in the terms of the application to take effect from the first full pay period commencing on or after 29 January 2009. (d) These Orders will take effect on and from the date of this decision. ___________________ 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.