TransAdelaide v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - [2010] FWA 3849

[2010] FWA 3849

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.240 - Application to deal with a bargaining dispute

TransAdelaide
v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Another
(B2010/2740)

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

ADELAIDE, 28 MAY 2010

Matter in dispute relates to wage increases.

[1] This decision determines an application lodged by TransAdelaide on 5 March 2010 pursuant to section 240 of the Fair Work Act 2009 (the Act). The reference of this matter to Fair Work Australia in this form was supported by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (collectively herein referred to as the unions). The parties provided a Memorandum of Understanding in which they set out the agreed background facts and defined the single matter which they sought to be arbitrated.

[2] The parties have provided extensive background information to me and the matter has been the subject of a hearing in Adelaide on 13 May 2010. I note at the outset that the AMWU supported the CEPU position but took no active part in these proceedings.

[3] The matter which I have been asked to determine relates to the negotiation of a proposed enterprise agreement to replace the TransAdelaide Maintenance Certified Agreement 2005 and the TransAdelaide (Maintenance Employees) Collective Workplace Agreement 2006 (2006 agreement). The parties have agreed that negotiations to date have achieved agreement, subject to employee approval, with respect to all matters to be included in the proposed agreement, with the exception of the commencement wage rates to operate from 1 January 2009 until an agreed 3% wage increase applies from 1 January 2010. The parties have agreed on minimum and maximum parameters within which these commencement wage rates for the agreement will be determined. Thus, the only issue which I am required to determine relates to these wage rates.

[4] The TransAdelaide position is that the appropriate starting point for the increases to be applied in a new agreement from 1 January 2009 are the rates of pay derived from the South Australian Government Wages Parity (Plumbing, Metal and Building Trades Employees) Agreement 2008 (‘the Wages Parity Agreement’) with the absorption of certain nominated allowances.

[5] The unions’ position is that these TransAdelaide employees have traditionally been paid rates in excess of those generally applicable to South Australian Government trades employees so as to recognise the nature of the work and the skills required. As a result, the unions argue that the starting point for the increases to be applied from 1 January 2009 should re-establish the differential which previously existed between the TransAdelaide employees and the South Australian Government trades employees generally, together with maintenance of allowances provided for under the 2006 agreement. The unions submit that this approach is supported by an assessment of ongoing changes to skill requirements and the rates of pay applicable to comparable employees in other states.

Jurisdiction

[6] On 7 May 2010 I invited the parties to provide additional information with respect to a significant number of matters. The initial issue about which I sought clarification related to the jurisdiction to pursue the application. My advice to the parties stated:

“[4] The application is made pursuant to section 240 of the Fair Work Act 2009 (the Act). This section is a component of Part 2-4 of the Act. Section 170 defines an employee, for the purposes of this Part, as a national system employee, and an employer, as a national system employer. I invite clarification of the extent to which TransAdelaide, as a public corporation, and presumably covered by the Public Sector Management Act (1995), can be regarded as such a national system employer in the context of the South Australian Referral Legislation.”

[7] On 10 May 2010 TransAdelaide advised:

“On the issue of jurisdiction, TransAdelaide is a body corporate established pursuant to section 4 of the TransAdelaide (Corporate Structure) Act 2004 (SA). It is a Trading Corporation and therefore a National System Employer under section 14 of the Fair Work Act 2009 (Cth). Section 14(2) allows particular employers to be declared not to be National System Employers but subsection (6) prevents such a declaration being made about an employer that operates a rail service.

Accordingly, it is TransAdelaide's position that it is a National System Employer over which Fair Work Australia has jurisdiction. ….”

[8] On the same day the CEPU provided advice in the following terms:

“It is the position of the CEPU that the status of TransAdelaide as a national system employer has not been affected by the South Australian state referral legislation.

Specifically, it is our understanding on reading the South Australian Referral Legislation referred to by the Tribunal that the Fair Work (Commonwealth Powers) Act 2010 (the Act) does not appear to purport to bring constitutional corporations that were previously in the federal jurisdiction back into the state jurisdiction. Section 5 of the Act refers certain matters to the federal jurisdiction, although notably it does not purport to refer matters that are already in the federal jurisdiction (s.5(2)(a)). Although there are exclusions to the referral in section 6 of the Act, there does not appear to be any process contained within the Act by which bodies are to be brought into the state jurisdiction, out of the federal jurisdiction.

In our view, TransAdelaide is a trading corporation under s.51(xx) of the Commonwealth Constitution and therefore a national system employer under subsection 14(a) of the Fair Work Act 2009: see for example in relation to trading corporations, Quickenden v. Commissioner O’Connor of the Australian Industrial Relations Commission [2001] FCA 303.

We are aware that the Fair Work Act 2009 as amended provides for a process where in certain circumstances a declaration can be made that removes a national system employer from the coverage of the Fair Work Act 2009: s.14(2) and s.14A. We however note the operation of s.14(6)(d) and are unaware of any such declaration being made in relation to TransAdelaide employees.”

[9] At the hearing on 13 May 2010 both parties confirmed their position, to the effect that section 240 has application to TransAdelaide and its employees. The Fair Work (State Referral and Consequential and Other Amendments) Act 2009 permitted specified constitutional corporations and parties in South Australia to be declared to be not a national system employer. TransAdelaide was not named in that context in the corresponding South Australian Legislation, and, nor was it included in the Deputy Prime Minister’s Declaration under the Federal Legislation. Consequently, I have proceeded on the basis that the jurisdiction to determine this issue is available to Fair Work Australia. Obviously, this jurisdiction should not be confused with the fact that any findings I make do not obviate the need for employees, covered by the proposed agreement, to approve it consistent with the provisions of the Act.

[10] Before setting out the background to this matter, it is appropriate that I outline the approach that I have adopted.

[11] The application is made pursuant to section 240. This section states:

“240 Application for FWA to deal with a bargaining dispute

Bargaining representative may apply for FWA to deal with a dispute

(1) A bargaining representative for a proposed enterprise agreement may apply to FWA for FWA to deal with a dispute about the agreement if the bargaining representatives for the agreement are unable to resolve the dispute.

(2) If the proposed enterprise agreement is:

(a) a single-enterprise agreement; or

(b) a multi-enterprise agreement in relation to which a low-paid authorisation is in operation;

the application may be made by one bargaining representative, whether or not the other bargaining representatives for the agreement have agreed to the making of the application.

(3) If subsection (2) does not apply, a bargaining representative may only make the application if all of the bargaining representatives for the agreement have agreed to the making of the application.

(4) If the bargaining representatives have agreed that FWA may arbitrate (however described) the dispute, FWA may do so.”

[12] Consistent with the approach adopted by Hamberger SDP in Caltex Australia Ltd and AIMPE and others 1, I have had regard to sections 577 and 578 of the Act. Section 577 relevantly states:

“577 Performance of functions etc. by FWA

FWA must perform its functions and exercise its powers in a manner that:

(a) is fair and just; and

….

(d) promotes harmonious and cooperative workplace relations.”

[13] Section 578 relevantly states:

“578 Matters FWA must take into account in performing functions etc.

In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), FWA must take into account:

(a) the objects of this Act, and any objects of the part of this Act; and

(b) equity, good conscience and the merits of the matter; and

(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.”

[14] The objects of the Act are set out in section 3 which states:

“3 Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations; and

….”

[15] I have had regard to all of these objectives and all of the extensive information made available to me.

[16] The parameters within which I am required to assess the competing positions are set out in the agreed Memorandum of Understanding in the following terms:

“11. TransAdelaide and the CEPU have agreed that if the dispute is otherwise unable to be resolved, FWA may arbitrate (however described) the dispute pursuant to s.240(4) of the Fair Work Act 2009 to the following extent, and only to the following extent:

(a) That FWA make a determination on the wage increases to be paid to employees covered by the proposed enterprise agreement.

(b) That FWA be limited in its determination to a total wage increase that is no lower than the offer of TransAdelaide provided for on pages 46 to 49 of Appendix B and no higher than the claim of the CEPU provided for in Appendix A.

(a) That the parties otherwise agree to the terms of the proposed enterprise agreement in the terms of the document of Appendix A.

(b) For the avoidance of doubt, the parties have agreed that the wage increase determined by FWA will be effectively back dated to 1 January 2009. The nominal expiry date of the proposed agreement will be 31 December 2011.”

[17] As a result of changes to the position put to me by the CEPU, in the course of these proceedings, I have had some difficulty in discerning the precise wage rates now sought by the CEPU. As a result I have addressed the various premises upon which the CEPU has based its claim without necessarily specifying the amounts claimed on the basis of each premise.

[18] This extensive information is summarised below.

Background

[19] TransAdelaide is the statutory authority responsible for the operation of Adelaide metropolitan rail and tram services.

[20] TransAdelaide, the CEPU and the AMWU commenced discussions directed at achieving agreement on an enterprise agreement proposal in July 2008. These discussions included consideration of the scope of the proposed agreement. Agreement was reached in mid-2009 with respect to the TransAdelaide infrastructure employees and an agreement covering those infrastructure employees was ultimately put in place.

[21] Some 57 mechanical and electrical maintenance employees remain unable to reach agreement. These employees are based at the Glengowrie Tram Depot and the Adelaide Railway Station. The unions agree with the TransAdelaide description of these employees in the following terms:

“13. The majority of the affected employees (43) are in what is known as the Power & Signals Group. These employees are generally responsible for attending to the maintenance and rectification of faults associated with electrical and mechanical equipment installed across the Adelaide metropolitan rail network and affecting signals, rail switching equipment, boom gates, overhead tram cables, rail station facilities and ancillary equipment.

14. There are 12 members of the Tram Maintenance Group. They are located at the Glengowrie Tram Depot and undertake mechanical and electrical maintenance of TransAdelaide’s tram fleet.

15. The third group is the General Group. There are 2 employees in this group. They are responsible for minor maintenance activities generally undertaken in and around the Adelaide Railway Station and are responsible to the Property Services Manager located at that site.

[22] It is proposed that these employees will be covered by a single agreement. This proposed agreement identifies a number of classifications. However, the parties are agreed that these all have appropriately expressed relativities, in percentage terms, of the C5 Engineering Tradesperson Base Grade.

[23] This classification is defined in the proposed agreement and the 2006 agreement in the following terms:

“S2.1.6(a) A C5 Engineering tradesperson is an employee who has a recognised trade by successfully completing an Apprenticeship, an Adult Apprenticeship or Tradespersons Right Examination. Employees at this classification perform work and apply trade skills to the level of their training. Additional accredited training will be provided complementary to basic trade skills to facilitate progression to C6 classification. Employees at this classification will perform work within one of the electrical/electronic, mechanical or fabrication streams under general supervision and have an understanding of the Occupational Health and Safety Act.”

[24] The 2006 Agreement provides for three work groups. The first group is a general group, the second, relates to the employees engaged in Tram maintenance work and the third, to employees on power and signals work. Whilst the base rates are common, separate wages schedules reflect the operation of differently applicable allowances. Two of these allowances are particularly relevant.

[25] The 2006 Agreement wages rates for the C5 classifications are:

General Employees Base Trades (C5 Year 1) $794.79

General Employees Base Trades (C5 Year 1+) $811.78

Tram Employees Base Trades (C5 Year1) $810.69 comprising the base rate plus a 2% multiskilling allowance.

Tram Employees Base Trades (C5 Year1+) $828.02 comprising the base rate plus a 2% multiskilling allowance.

Power and Signals Group Base Trades (C5 Year 1) $830.56 comprising the base rate plus a 4.5% Attraction and Retention allowance specified in that agreement.

Power and Signals Group Base Trades (C5 Year 1+) $848.32 comprising the base rate plus a 4.5% Attraction and Retention allowance specified in that agreement.

[26] In late 2008, the South Australian Government reached an agreement, approved in the South Australian Industrial Relations Commission, which was the South Australian Government Wages Parity (Plumbing, Metal and Building Trades Employees) Enterprise Agreement 2008 (the Wages Parity Agreement). The Wages Parity Agreement involved the CEPU, the AMWU and other unions. It had application to a broad range of public sector agencies, but did not apply to TransAdelaide. The Wages Parity Agreement was the ultimate product of substantial negotiations and disputation, including an earlier section 170MX arbitration under the Workplace Relations Act 1996 which was conducted before the Australian Industrial Relations Commission (the Commission) in 2005. In summary terms, the Wages Parity Agreement provided for the absorption of a range of allowances paid in various forms to South Australian Government trades employees on the basis of the establishment of a common set of all-purpose wage rates applicable generally across the public sector.

[27] The benchmark wage rate utilised to establish the base trades rate specified in the Wages Parity Agreement was the rate applicable under the 2006 Agreement to the TransAdelaide Power and Signals group base trades employee (the C5 classification), inclusive of the 4.5% Attraction and Retention Allowance specified in that agreement.

[28] TransAdelaide have proposed that the rates in the proposed new agreement should commence on the basis that both the general and the tram maintenance base trades classification (the C5 classification) will adopt the base trades rates now applicable under the Wages Parity Agreement. These rates include a 3.5% wage increase, for 2008, under that Wages Parity Agreement. TransAdelaide propose that the Power and Signals base Electrical trades rate be set 2.5% higher, to re-establish the relativity between those employees and the Trams maintenance employees under the 2006 agreement. On the basis that the Wages Parity Agreement provides for the absorption of a range of allowances, TransAdelaide proposes the across the board absorption of nominated allowances, being the:

Electrical Tradesperson Licence Allowance ($16.85 per week in the 2006 agreement)

Construction Allowance ($22.15 per week in the 2006 agreement)

Tool Allowance ($13.95 per week in the 2006 agreement).

[29] In addition, specified disability allowances are to apply to the Power and Signals employees only, and are to be absorbed in the wages to be paid to other employees.

[30] TransAdelaide argues that its approach is consistent with that adopted by the Wages Parity Agreement. In the hearing and in its submissions 2, TransAdelaide assert that ‘the amount of allowances payable to TransAdelaide employees totalled $44.32’.

[31] Subsequent to the hearing, and in response to a question from me, TransAdelaide provided the following advice:

“2. The figure of $44.32 per week is calculated as follows:

Electrical Licence

3. Under the previous Agreement, this was $16.85. It is assumed that employees receive 20 days annual leave and 7.9 days of sick leave. The allowance will not be earned on those days. That makes 337.1 days a year. Dividing that by 7 gives 48.1571 weeks a year.

4. Multiplying the allowance of $16.85 by 48.1571 gives $811.448. Over a full year (dividing by 52) that makes an average $15.555 per week.

Construction

5. This is usually $22.15. This was converted to a 75% figure to take account of the fact that it was not paid all of the time (this is reflected in the payslip supplied by the CEPU). The figure used is actually $16.05 (which is slightly lower than 75%). This may be to account for rostered days off. Using the same process above, multiplying $16.05 by 48.1571 gives $772.922. Over the whole year makes on average $14.816.

Tool

6. This is paid for all purposes and so stays at $13.95.

Total

7. The total is $44.32.”

[32] I note that this calculation does not refer to the disability allowances.

[33] The all-purpose weekly wage rates for the C5 base trades classification (in excess of one year’s service) which are proposed by TransAdelaide are set out in the table below.

06 Agreement 1-1-08	Wages Parity Agreement L5 M10	TransAdelaide Proposal
General
C5 Yr 1+	811.78	923.78	923.78
Trams Maintenance	- including multiskilling Allowance 2%
C5 Yr 1+	828.02	923.78	923.78
Power & Signals	- including Attraction & Retention Allowance 4.5%
C5 Yr 1+ (Electrical)	848.32	923.78	946.87

Note: The rate proposed for the C5 Power and Signals Mechanical employee is reduced by an amount which I have taken to reflect the absence of the Electrical Licence Allowance.

[34] In summary, the CEPU position is that the traditional relativities between the Power and Signals and Electrical employees under the 2006 agreement and other South Australian Public Sector trades employees should be maintained.

[35] There were a number of supplementary elements in the initial CEPU claim. Firstly, the CEPU argued that, prior to the operation of the current Wages Parity Agreement, Power and Signals trades employees were paid $125.72 per week more than the base Electrical trades employee under the predecessor to the Wages Parity Agreement, and that, accordingly, this relativity should be restored on the basis that $125.72 should be added to the appropriate Wages Parity Agreement base rate so as to establish the appropriate wage rate for Power and Signals base trades classifications.

[36] In support of its position in this respect, the CEPU argued that the allowance absorption arrangements applicable to the Wages Parity agreement were inherently inadequate when these were translated into the TransAdelaide proposal. Further, that even within the TransAdelaide classifications, the proposed absorption of allowances particularly disadvantaged Tram maintenance employees who were generally entitled to allowances with greater frequency than other employees. Further, again, that the absorption approach disadvantaged the Power and Signals employees.

[37] Additionally, in this respect the CEPU argued that uncertainty in skills recognition for TransAdelaide employees should be taken into account.

[38] A further element to the initial CEPU claim was that, in addition to the $125.72 payment, Power and Signals employees should also receive the 4.5% Attraction and Retention Allowance established by clause 20.1.1 of the 2006 agreement. During the hearing on 13 May 2010, the CEPU conceded that this 4.5% allowance had already been taken into account in the development of the Wages Parity Agreement rates and this aspect of the claim was not subsequently pursued. The CEPU noted that the decision not to pursue this claim had implications for relativities given the 2% multiskilling allowance summarised below.

[39] The CEPU argued that, whilst the Power and Signals classification should be established as the "benchmark" classification, account should be taken of the 2% multiskilling allowance applicable to the Trams Maintenance employees as specified at clause 20.1.2 of the 2006 agreement. The CEPU proposed that the most equitable means of achieving this was to reduce the $125.72 claimed for the base trades Power and Signals employees by 4.5% so as to arrive at the rate for the Trams Maintenance employees.

[40] Finally, the CEPU provided me with copies of a range of current agreements applicable to employees who it argued undertook comparable work in South Australia and in other states. The CEPU position was that I should have regard to this material in reaching a conclusion.

The Evidence

[41] Evidence relative to the negotiation process from TransAdelaide’s perspective was provided by Mr Moritz, the TransAdelaide Employee Relations Services Manager.

[42] Evidence relative to the negotiation process and the CEPU claim was provided by Mr Annells, a TransAdelaide Maintenance Fitter, together with Mr Pisoni and Mr Deakin, as officials of the CEPU who have been involved in the negotiations.

Findings

[43] I have separately considered the various aspects of the CEPU claim. In doing so, I have endeavoured to apply a very broad assessment of each of these aspects. I have also noted that the position of both the CEPU and TransAdelaide has changed or been differently explained, relative to which allowances are included and the impact of their inclusion during, and subsequent to the hearing of this matter. In these respects I have taken into account the CEPU correspondence of 17 May 2010 and the TransAdelaide correspondence of 18 May 2010.

[44] The overall approach that I have adopted involves consideration of the extent to which the TransAdelaide approach may be iniquitous relevant to other South Australian Public sector wage movements. Secondly, the extent to which the TransAdelaide approach may be demonstrably iniquitous relevant to wage rates for comparable classifications elsewhere, and finally, the extent to which the TransAdelaide approach involves inequity for one or more of the work groups to be covered by the proposed agreement.

The $125.72 or relativity based claim

[45] The evidence before me indicates that wage rates for Power and Signals employees at TransAdelaide have historically been negotiated on the basis that consideration has been given to:

the nature of the work undertaken

the skills required

comparable wage rates in other states

an assessment of the commercially appropriate "market" rate.

[46] The CEPU provided me with the submission prepared by TransAdelaide to gain South Australian Public Sector approval for the wage proposals included in the 2006 agreement 3. This submission addressed TransAdelaide’s future management strategies and the basis upon which it proposed to fund the 2006 agreement. It outlined the basis of the claim that the CEPU was, at that time, pursuing. TransAdelaide identified that the CEPU claims were based on the rates of pay applicable to contractors. In this submission, TransAdelaide took account of the rates and increases applicable to employees in:

ETSA Utilities

Queensland Rail

The WA Public Transport Authority.

[47] The TransAdelaide submission sought approval for the 3.5% per annum increases incorporated in the 2006 agreement and for the 4.5% Attraction and Retention allowance on the basis that:

“All rail operators are experiencing difficulties with attraction and/or retention of staff. TransAdelaide’s concerns relate to the retention and/or attraction of particular occupational areas and particular demographics within the workforce.

The current age profile of TransAdelaide’s signals group is more acute than the ageing of the general workforce. In the next 5-10 years a significant proportion of the employees within this group will reach retirement age.

It takes between two to four years to train a tradesperson to the level required to confidently perform the duties of a signal fitter in TransAdelaide. In addition, the rates being paid by some other rail operators and in the power industry is making it exceptionally difficult to retain highly trained signal fitters and then to attract applicants when TransAdelaide advertises a vacancy.

The combination of these factors will see the convergence of the loss of skills and experience from a key group of employees, coupled with the lack of suitably trained people to fill their positions. Once the group of workers who are nearing retirement leave TransAdelaide, there will not be the experience and mentors available to develop the necessary capabilities, and pass on knowledge to younger or less experienced employees.

The parties have recognised that the development of workforce capability through the addressing of recruitment and retention issues warrants serious consideration, particularly given the outcomes of the consultancy project work undertaken in partnership with Locher Human Resource Consultants.

TransAdelaide proposes to pay a once off 4.5% attraction/retention allowance for Signal group employees with payment backdated to the first full pay period on or after 1 January 2006 (payable for all purposes).”

[48] Significantly, neither the TransAdelaide 2006 proposal nor, on the information before me, the union claims in this respect, incorporated the rates paid to South Australian Public Sector Trades employees as a basis for the claims then being pursued against TransAdelaide. There was no apparent attempt at that time to link the TransAdelaide rates of pay with those applicable in the South Australian Public Sector generally.

[49] This is hardly surprising given the history of disputation relative to the South Australian Public Sector Trades employees now covered by the Wages Parity Agreement. These employees, substantially covered by the Australian Government Departments and Instrumentalities (Metal Trades) Award 1999, have been covered by predecessors to the Wages Parity Agreement since at least 2002.

[50] Bargaining periods initiated in 2004 by the unions involved at that time, including the CEPU, were terminated by the Australian Industrial Relations Commission in October 2004 4 with the consequent result that the matter of the appropriate wages and conditions was then referred to the Australian Industrial Relations Commission pursuant to section 170MX of the then Workplace Relations Act 1996.

[51] The outcome of this arbitration was set out in the Full Bench decision of 5 April 2004 5. That decision stated:

“[91] In determining the provisions of a s.170MX Award we draw the following guidelines from the Authorities:

• reliance solely on the outcome of enterprise bargaining between other employers and employees and other industrial instruments is of limited relevance;

• the level of remuneration and conditions of employment of the same class of workers in the same industry is one factor which is appropriate to take into account;

• consideration must be given in a s.170MX context to the particular set of circumstances. This may include factors which have historically been taken into account in determining wage rates and conditions of employment;

• the level of wages or rate of increase in comparable instruments is one factor to be taken into account or may be given a "sideways glance";

• comparative wage justice on the basis of maintaining "a level playing field" is not a fair basis on which to fix wage rates in a s.170MX Award. Nor is "conditions parity" a sufficient ground to alter conditions of employment;

• it is appropriate to take into consideration market rates in determining a s.170MX Award; and

• any claim based on work value grounds should be assessed against the proper application of the "Work Value Changes Principle".”

[52] In that matter the CEPU relied only to a limited extent on arrangements applicable to TransAdelaide employees. Its primary reliance was on the rates of pay applicable to contractors who undertook work in conjunction with trades employees to be covered by the Wages Parity Agreement. The Full Bench noted:

“[135] It is important to make clear the basis upon which the CEPU's case was argued - a claim for comparative wage justice to be met by the adoption of rates applying to contractors employed under certified agreements and who from time to time are engaged to perform work alongside the SA Government's direct employees.

….

[150] Importantly, there is no material before us to enable us to conclude that the rates contractors receive have been reached on the basis of work value considerations to the exclusion of other relevant factors of an historical nature or which are peculiar to the matters in negotiations before the parties in reaching agreed outcomes. For example, we are unaware of whether the agreements contain an element of attraction and retention, a criterion expressly rejected by the CEPU. In addition, we are unaware of any productivity or flexibility provisions which may underpin part or all of the wage levels. By way of example, the CEPU relied on the work performed by TransAdelaide employees as comparable to the metal trades electricians and as such their rates of pay were relevant to this s.170MX arbitration. However, in its submissions the SA Government explained the history of wage fixation under the various organisations which have preceded this statutory corporation. That history, including wage rates, are linked to targeted and measured productivity movements in the period July 1997-April 2000.

[151] It may be that the contractors' employees have traditionally paid higher rates to meet market conditions or skill requirements. It is not appropriate to simply equate the outcome of a history of wage negotiations arising in wage rates in one agreement as the sole basis for an increase in an arbitrated s.170MX Award for another group of employees employed by a different employer.”

[53] In these circumstances it is not necessary that I detail the outcome of this section 170MX proceeding. The critical issue is that no relativity between the general trades employees engaged under the precursors to the Wages Parity Agreement and Power and Signals employees engaged by TransAdelaide was either argued or determined.

[54] The section 170MX Award determined by the Commission was superseded by the Wages Parity Agreement.

[55] The parties agree that the fundamental basis of the Wages Parity Agreement was agreement on the adoption of the TransAdelaide Power and Signals base trades classification (C5) as the appropriate trades person’s rate for the South Australian Public Sector Trades employees.

[56] The CEPU were actively involved in negotiating this arrangement. This is clear from the evidence of both Mr Deakin and Mr Pisoni. Mr Pisoni’s statement 6 clarifies the CEPU position in the following terms:

“15. Paragraph 35 and 45 of Mr Moritz’s statement appear intended to imply that the Unions representing the public servants covered by the South Australian Government Wages Parity (Plumbing, Metal and Building Trades Employees) Enterprise Agreement 2008, which includes the CEPU, negotiated that agreement with the aim of achieving the same pay rate for all public sector trades employees. The minutes of the TransAdelaide EBA negotiation meeting dated 1 December 2008 state Mr Wilf Deakin, then a representative for the CEPU, confirmed that the Signals and Power rates were initially used as the benchmark/starting point when formulating the basis of the Wage Parity Agreement. Mr Deakin led the negotiations on behalf of the employee representatives for the new SA Government Wages Parity (Plumbing, Metal and Building Trades Employees) Enterprise Agreement 2008. I was also personally involved in those negotiations for the CEPU.

16. Mr Moritz was not involved in the negotiations for the SA Government Wages Parity (Plumbing, Metal and Building Trades Employees) Enterprise Agreement 2008.

17. What Moritz appears to be saying in his statement is that the unions during the parity agreement negotiations argued that all government trade workers should be on the same rate. To be clear, this is not correct.

18. As I indicated above, I personally participated in a number of meetings in those negotiations. I have also spoken extensively to Mr Deakin and Mr Bob Donnelly who were also involved.

19. In relation the SA Government Wages Parity Agreement, when we started negotiating a wage rate, we had to start somewhere. We used the Signals and Power TransAdelaide rate as something as a starting point. It was a high, perhaps the highest, public sector trades rate that we were aware of in South Australia and so it was chosen.

20. During the negotiations for the SA Government Wages Parity (Plumbing, Metal and Building Trades Employees) Enterprise Agreement 2008, the unions agreed to a common base rate for tradespeople under that agreement. At no stage in those negotiations did we say that all public sector trade workers, including those at TransAdelaide, should be on the same rate. Nor has the CEPU made that claim in the subsequent TransAdelaide negotiations.”

[57] It is clear that the CEPU position is that it did not seek a common trades rate of pay to apply across the South Australian Public Sector so as to include the TransAdelaide Power and Signals employees. However, it is equally clear that the CEPU sought and supported a wage increase for the South Australian Public Sector Trades employees which was founded on the rates paid to the TransAdelaide Power and Signals Electrical employees.

[58] Of itself, this cannot justify a subsequent wage increase for the Signals and Power employees. The negotiated comparison of wage rates for trades employees under the Wages Parity agreement was just that. Those negotiations resulted in agreement on a wage increase for the South Australian Public Sector Trades employees but cannot provide a sustainable basis for a subsequent review of the TransAdelaide Power and Signals rates of pay. Were it to be the case that wages were founded on the increases awarded under the Wages Parity agreement, wage fixing arrangements would rapidly become illogical. In simple terms, if a $125.70 wage increase was granted to TransAdelaide Power and Signals employees on the basis that it reflects the increase granted to the South Australian Public Sector Trades employees, a subsequent wage claim on the basis of the agreed relativity between the South Australian Public Sector Trades employees and the Power and Signals employees could then be anticipated.

[59] This is one of the key reasons why it is impractical to found wage increases simply on the basis of increases granted in other areas. It underpins the importance of consideration of actual wage rates for comparable jobs and an assessment of skill requirements as the basis for arbitrated wage adjustments.

[60] Consequently, to the extent that the CEPU claim is founded on the maintenance of absolute wage relativities with other South Australian Public Sector Trades employees, I am unable to consider this to be a valid basis for a wage increase. The only conclusion that can be reached relative to the Wages Parity Agreement is that the parties to that agreement picked the Power and Signals employee rate and agreed that this rate was relevant to employees under the Wages Parity Agreement. That does not enable subsequent conclusions about the appropriateness of the Power and Signals employee wage rates.

[61] Consequently, to the extent that the CEPU wage claim is made on the basis of the restoration of previous relativities with South Australian Public Sector employees covered by the Wages Parity Agreement, this is rejected. For the sake of completeness, I note that I am not required to reach conclusions relative to whether the TransAdelaide proposal is an appropriate starting point.

[62] Notwithstanding this first conclusion, I have considered the extent to which the proposed adoption, by TransAdelaide of the Wages Parity Agreement rates in the context of the absorption of nominated allowances, involves inherent unfairness to the TransAdelaide employees in comparison to other public sector employees and then within the TransAdelaide Agreement. My observations in this respect are directed at the Electrical trades employees, to whom the Electrical Licence Allowance is historically applicable.

[63] The Wages Parity Agreement established an all-purpose hourly rate which included nominated allowances. These allowances varied across different public sector functions and also differed in terms of their application to different groups of employees.

[64] In order to reach a conclusion relative to whether the TransAdelaide approach to the application of the Wages Parity Agreement represents an inequity in terms of allowances, I have considered the operation of the TransAdelaide proposal to the 3 groups of TransAdelaide employees covered by the 2006 agreement. If the Wages Parity Agreement involved a different absorption process to that proposed by TransAdelaide, or if the allowances which were absorbed totalled lesser payments than those to be absorbed by the TransAdelaide proposal, there is the potential for an inherent unfairness.

[65] Given the variety of allowances absorbed on an agency specific basis by the Wages Parity Agreement, it is difficult to make a definitive assessment. However, as a minimum, the Wages Parity Agreement absorbed the following:

Tool Allowance

Licence Allowance (Electrical Tradespersons)

Disabilities Allowance

Industry Allowance (for on-site and other than on-site construction work).

[66] The proposed agreement provides for the following allowances to be absorbed by the revised wage rates (clause 20.1.1):

Electrical trades persons Allowance ($16.85 per week under the 2006 agreement)

Construction Allowance $22.15 per week under the 2006 agreement)

Tool Allowance ($13.95 under the 2006 agreement).

[67] In addition, clause 20.3 of the proposed agreement states:

“The weekly rates listed in Schedules S1.1 and S1.2 are inclusive of the allowances listed below. The parties agree there is no entitlement to the payment of these allowances to employees other than Signals and Power employees subject to the classifications listed in Schedules S1.3 and S104. Payment of those allowances affected prior to the acceptance of this Agreement by employees will be unaffected.

Subject to 20.3.2 and 20.3.3 the following special rates will be paid to Signals and Power employees including apprentices and juniors subject to S1.3 and S1.4.

....”

[68] This subclause continues, to specify disability allowances for the following:

Acid Solutions (20.3.3)

Cold Places (20.3.4)

Confined Spaces (20.3.5)

Dirty Work (20.3.7)

Explosive Powered Tools (20.3.8)

Height Work (20.3.9)

Hot Places (20.3.10)

Oil Tanks (23.11)

Wet Places (20.3.12)

[69] In terms of internal relativities, the parties disagree over the extent to which certain of these allowances have general application to employees in each of the general, Tram maintenance and Signals and Power work areas.

[70] The CEPU position is that, consistent with the provisions of the 2006 agreement, only 75% of the construction allowance is paid to Signals and Power employees and no payment of this nature is made to Trams maintenance employees. No information about the application of the construction allowance to general employees is available to me but I have concluded that this allowance is not generally payable to those employees and have relied on the CEPU advice that the only disability allowance, set for absorption which is regularly paid to the Trams Maintenance employees is the Dirty Work allowance.

[71] In its supplementary submission of 17 May 2010, the CEPU asserts:

“11. This means that tram maintenance employees in the electrical stream are currently paid, as the payslip at Attachment 2 shows, a dirt allowance, ticket (crouzet) allowance and an electrical allowance.

12. Under the proposed enterprise agreement – only the ticket crouzet allowance would be separately payable to tram maintenance employees (see. clause 20.1.1, 20.1.4 and 20.3). The dirt allowance, electrical allowance and tool allowance will be wholly absorbed. This means that the total amount of allowances to be absorbed, which are actually currently paid, would be, consistent with the payslip which we understand to be representative of all of the relevant employees, $38.03 in dirty work allowance (the CEPU is unaware why this figure is not $38.00), $27.90 in tool allowance and $33.70 in electrical licence allowance per fortnight. This gives a total of $99.63 per fortnight or $49.82 per week.

13. With respect to the issue discussed at paragraphs 5 and 6. The CEPU’s investigations into this matter suggest that the actual figure for absorption of allowances for signals and power employees, at least in terms of what is actually paid, is neither $44.32 nor $52.95. The actual figure is $48.29 (see paragraph 8 of these submissions). The figure in terms of the agreement is $52.95.

14. We note that the figure of $44.32 appears to have been used in the parity agreement calculations to determine a wage increase inclusive of allowances that was purportedly to allow relevant employees in the parity agreement to be paid at the same, or similar, rates as tradespeople in signals and power at TransAdelaide. The CEPU has been unable to discover why the figure of $44.32 was chosen and not either $48.29 or $52.95.”

[72] The TransAdelaide position is that:

“8. As a general rule, the tram maintainers would not receive the construction allowance. To that extent, TransAdelaide agrees with the CEPU submission at paragraph 9. Their work is in a workshop and as a consequence they would do next to no construction work.

9. The rate under the TransAdelaide proposal has not been reduced on account of the tram maintainers not being in receipt of the construction allowance.

10. As to the dirt allowance, given that the tram maintainers are working in a workshop environment and generally on machinery and equipment associated with a modern tram fleet, they ought not be paid continuously for the performance of work which might be of an “unusually dirty or offensive nature” (see Clause 20.3.6 of the previous Agreement). This allowance is meant to be determined and paid on an hourly basis and is unlikely to apply for all 11 employees for the duration of an entire 38 hour week.

11. Whilst the wage slip provided by the CEPU tends to suggest that the dirt allowance was paid for 38 hours a week to the employee concerned, even if all tram maintainers were to receive the allowance for 38 hours a week, it would total $19. This allowance is not payable for all purposes and is not claimed when an employee is absent from duty.

12. The difference between that allowance and the agreed $14.82 component calculated for the construction allowance, which the tram maintainers would not normally be considered for, is $4.18 per week.

13. Using the two payslips, the weekly amount received by the signals and power employee for construction is $17.48. For dirt work, the tram maintainer has received $19. The actual difference then is $1.52. It is only marginal and is in any event compensated by the wage increases in the TransAdelaide proposal.

14. If it is accepted that the previously agreed figure of $44.32 is not appropriate in considering how the absorbed allowances should be treated, TransAdelaide submits that annual leave, sick days and rostered days off should be taken into account in such calculations.

15. If, as the CEPU says, the dirt allowance is effectively paid for all purposes, it would still not be paid for days when an employee is absent.

16. TransAdelaide agrees with the CEPU’s figures of $48.29 per week for signals and power employees and $49.82 per week for tram maintenance employees as reasonable estimates, but reiterates that the marginal difference involved is offset, in the case of tram maintenance employees, by the absorption of the Construction Allowance component not previously paid, their continued access to the Tradesperson Crouzet Allowance of $3.40 per shift potentially $17 per week) and the quantum of the overall wage increase proposed.”

[73] Leaving aside for the time, the issue of how all purpose amounts should be calculated, I have concluded that there is nothing inconsistent with the overall approach to absorption detailed in the proposed agreement to that set out in the Wages Parity Agreement. The Wages Parity Agreement requires absorption of allowances of different quantums and effects across the public sector. The effect of this Wages Parity Agreement in this respect is summarised in the explanatory advice prepared by the South Australian Department of Premier and Cabinet at the time the Wages Parity agreement was made. This advice states:

“The increases for employees will vary depending upon the employee’s classification, trade and the allowance they currently receive. Some of the allowances employees receive are currently paid for all purposes and some allowances are not.”

[74] Like the Wages Parity Agreement, the proposed agreement will affect different categories of employee in different ways. However, on an overall basis it does not require the TransAdelaide employees to absorb a greater number, or differing type of allowance than that requested by South Australian Public Sector Trades employees at the time of the commencement of the Wages Parity Agreement.

[75] I have next considered the comparative effect of this absorption arrangement on the 3 different work groups to be covered by the agreement to determine whether the absorption requirements create an inequity which should be remedied by changing the wage rates.

[76] To the extent that the CEPU is arguing for increases for both Power and Signals and Tram maintenance employees on the basis of different approaches to the allowance absorption issue, I have considered the effect of the allowance absorption requirements on the 3 workgroups covered by the agreement. I have considered the application of the 3 allowances to be absorbed pursuant to clause 20.1 of the proposed agreement, being the Electrical Licence Allowance, the Construction Allowance and the Tool Allowance. I have also considered the dirty work allowance which, on the basis of August 20 .3 of the proposed agreement is also absorbed for the Trams Maintenance employees.

[77] On the information before me only two allowances apply differentially to the three TransAdelaide workgroups. I have commenced this consideration with the Trams and Maintenance C5 classification which TransAdelaide propose to align with the Australian Public Sector base trades rate. The issue then becomes a matter of whether the TransAdelaide allowance absorption approach, despite being generally consistent with the Wages Parity Agreement approach, creates an inequity in that group of employees when compared to other groups covered by the proposed agreement.

[78] The Dirty Work allowance is to be absorbed only by the General and Trams Maintenance employees. This allowance is set out in the proposed agreement in the following terms:

20.3.7 Dirty work

Where an employee and their supervisor agree that work is of an unusually dirty or offensive nature will be paid a special rate as set out below per hour extra. In case of disagreement between the supervisor and employee, the employee or his/her representative will be entitled to pursue the matter in accordance with clause 9.

DATE OF OPERATION	First full pay period on or after 1/1/09	First full pay period on or after 1/1/10	First full pay period on or after 1/1/11
Rate per hour	$ 0.53	$0.55	$0.57

[79] There is no indication that this allowance is regularly paid to General employees. The allowance continues to have potential application to Power and Signals employees. The parties have disagreed over the extent to which it is generally applicable to the Trams and Maintenance employees at the present time, but despite an indication to do so, have provided only very limited information to support their respective positions.

[80] Notwithstanding the provision of a single pay advice for a Trams and Maintenance employee for a fortnight which included Sunday and public holiday work and which showed the dirty work allowance was paid for all ordinary hours, it is difficult to reconcile such a payment with the requirement in the 2006 agreement that the payment is only due when the work is of a "unusually dirty or offensive nature".

[81] Consequently, the logical application of the agreement indicates that the dirty work allowance should not be regarded as an integral component of the Trams and Maintenance salary so as to mean that its absorption changes relativities within the agreement.

[82] However, even if I took the TransAdelaide submission of 18 May 2010 as conceding that the dirty work allowance is generally paid for all time worked, this means that, on a 38 hour week basis, the Trams Maintenance employee is required to absorb $49.82 in contrast to the two General employees, who are required to absorb only $30.80, representing the Tool Allowance and Electrical Licence Allowance components.

[83] The comparison with the Power and Signals employees is more complex. On the advice provided to me, these employees do not generally qualify for the dirty work allowance but do qualify for a 75% payment of the Construction Allowance. Again, there is no question that the absorption of this Construction Allowance is consistent with the approach to absorption generally applied in the Wages Parity Agreement. The general 75% payment of this allowance, on a 38 hour week basis, equates to $16.61. On this basis, the parties agree that the Power and Signals C5 Electrical employee is absorbing $48.29.

[84] Given the uncertainty associated with any regularity of payment of the dirty work allowance, I am unable to regard the additional amount being absorbed by the Trams and Maintenance employees in excess of the amount being absorbed by the Power and Signals employees as significant, in terms of internal relativities.

[85] The only remaining issue then goes to whether the lower absorption requirement applicable to the two "General" employees means that the wage rates for the remaining 55 employees should be increased.

[86] I am unable to regard this as a plausible basis for increasing wage rates as distinct from being an obvious consequence of the inexact absorption arrangement agreed relative to the Wages Parity Agreement.

[87] Consequently, I have concluded that the absorption of allowances does not provide a basis, either as a matter of principle, or on the basis of its effect on internal relativities, so as to change the rates proposed by TransAdelaide.

Comparisons with other agreements

[88] Whilst it did not comprehensively argue the issue, the CEPU sought to rely on wage rates applicable to comparable employees covered by a range of other agreements.

[89] In the absence of an overall assessment of employment conditions and a detailed work value analysis supported by appropriate evidence, it is difficult to accurately compare wage rates.

[90] However, I have endeavoured to do this on the basis of the C5-base electrical trades rate.

[91] I have considered the following agreements provided to me.

Rail Corporation NSW Union Collective Agreement 2008	I have not been provided with wage rates under this agreement. I have noted that it achieved its nominal expiry date on 31 March 2010 and that it provided 4% per annum wage increases. Further, the agreement provides for specific nominated productivity savings. I am not able to draw any conclusions with respect to the comparability of wage rates on the basis of the information provided to me.
Trackside System Union Collective Workplace Agreement 2009	This agreement has application to Queensland Rail Ltd. It has a nominal expiry date of 30 April 2011. It incorporates rostering and other flexibility commitments. It provides for a 5% initial wage adjustment, 4% or $34 per week from 1 October 2009 and 2.33% from 1 October 2010. It also provides the productivity bonus payments. It provides for the separate payment of Electrical Licence Allowances, Tool allowance and various other allowances. I am not able to identify a clearly comparable classification.
Transfield Services Ltd (Rail Infrastructure Maintenance Services-AL) Union Collective Agreement 2008-2011	This is a private sector agreement which does not appear to provide certain traditional public sector benefits. This agreement is to be read in conjunction with other awards. It relies on a skills matrix not available to me such that I am unable to identify comparable classifications. It provides for annual wage increases of 5%, 4% and 4%.
Mainco Melbourne Enterprise Agreement 2009	This agreement operates until June 2012. It provides a specified continuous improvement rewards and annual wage increases of between 2% and 3%. It provides for construction site allowances together with various other allowances. I am not able to compare the quantum of allowances or actual wage rates under this agreement on the information before me.
Western Australian Railroad (Western Australia) Rollingstock Maintenance Union Collective Agreement 2008	This agreement operates until 10 May 2011. It is structured in a very different fashion to the TransAdelaide agreement in terms of employment arrangements. Whilst it provides for a base trades rate per hour of $26.04 from 11 May 2008, this includes incorporation of a 1.3% increase in lieu of annual leave loadings. I have not been provided with information which enables a valid comparison. I note that an electrical licence allowance and certain other allowances are separately payable.
WestNet Rail Collective Agreement 2008	This agreement applies on 2 or 3 July 2010. It separately recognises former employees of the Western Australian Government Rail Corporation. Whilst it specifies pay rates, I am not able to compare the relevant classifications on the information provided to me. I note that a tool allowance is included in the hourly rate but that various other allowances are separately applicable.
O’Donnell Griffin Pty Ltd (Victoria) Rail Division Enterprise Agreement 2007-2010	This is a private sector agreement which does not appear to provide various traditional public sector benefits. It provides for the payment of various registration and licensing allowances. I am not able to compare the wage rates on the information provided to me.
Utilities Management Pty Ltd Workplace Agreement 2008	I have noted that this agreement applies in the South Australian power distribution industry and operates until December 2010. It provides for 3 annual increases of 4.5% up to July 2010. It also separately recognises former ETSA employees. On the information before me I am not able to compare classifications or allowance arrangements.
Transfield Services Electrical Services Group South Australia Power Enterprise Agreement 2005-2008 (as varied in March 2009)	This agreement applies in the South Australian power generation and distribution industry. It separately recognises certain construction work. It is to be read in conjunction with the National Electrical, Electronic and Communication Contracting Industry Award. It provides for the separate payment of certain licensing, tool and industry allowances. On the information before me I am not able to compare classifications.
TransAdelaide (Infrastructure Employees) Collective Workplace Agreement 2009	While this agreement applies to other TransAdelaide employees, I have noted that it was reached after the Wages Parity agreement was made. The Infrastructure Employee Level 4 is the base trades equivalent classification. The rate of this classification is $907.82 (greater than 1 year’s service) in contrast to the base trades rate (C5) proposed by TransAdelaide for General and Trams maintenance employees, which is $905.54. I am unable to discern the reason for this small difference. I have noted that, under this agreement, the Industry Allowance, Construction/repaint allowance and Tool Allowance are subsumed in the all-purpose rate. On the information available to me, I have concluded that TransAdelaide applied the same approach to this agreement as that which is proposed in this matter in that the Wages Parity Agreement rates were applied to the base trades classification with the absorption of nominated allowances.

[92] My consideration of these agreements does not represent a comprehensive work value analysis of the nature that would be required to determine appropriate rates in the TransAdelaide agreement. Indeed, that was not seriously argued before me. Further, my review of these agreements demonstrates that any comparison of negotiated arrangements is fraught with difficulty in that, unless all of the relevant circumstances are taken into account, it may easily result in a quite misleading comparison. Finally, I make the obvious observation that the agreements demonstrate a broad variety of negotiated approaches to the treatment of allowances and the recognition of collective performance.

[93] Accordingly, I am unable to base any wage increase over and above the minimums proposed by TransAdelaide on the provisions of these nominated agreements.

The 4.5% Attraction and Retention Allowance

[94] Consequent upon the CEPU concession that the 4.5% Attraction and Retention allowance incorporated in clause 20.1.1 of the 2006 agreement was taken into account in the development of the base trades rate adopted by the Wages Parity Agreement, it is not necessary that I now deal with that aspect of the original claim.

[95] However, it is appropriate that I note that Schedule 1 of the 2006 agreement specifies wage rates on the basis of agreed percentage relativities. In the case of the Signals and Power employees and the Tram Maintenance employees these percentage relativities were applied so as to be founded on both the 4.5% Attraction and Retention Allowance and the 2% Multiskilling allowance which applied to Tram Maintenance employees. A change in the recognition of either of these allowances means that, when the agreed percentage relativities are applied, wage increases relative to the actual 2006 agreement rates may vary across different workgroups.

[96] In developing its wages proposal, TransAdelaide recognised the 2006 agreement wage relativity between the Signals and Power employees and the Trams Maintenance employees. I have concluded that this relativity is significant and should be preserved.

The 2% Multiskilling Allowance

[97] The CEPU argued that continued account should be taken to the 2% Multiskilling allowance specified in clause 20.1.2 of the 2006 agreement. This provision states:

“20.1.2 Multi-skilling allowance

An employee classified as a Tram Maintainer, upon being assessed as competent against all elements of the Tram Maintainer Skills Matrix, is entitled to be paid a 2% multi-skilling allowance.”

[98] Limited information was provided to me with respect to the basis for this allowance. The 2006 TransAdelaide submission seeking South Australia Public Sector endorsement of the 2006 agreement proposal stated:

“3.5.4 Multi-Skilling Allowance

On 23 August 2004, Cabinet approved the purchase of nine Bombardier Flexity Classic Light Rail Vehicles (“LRVs”) to replace the existing 75 year old Glenelg “H” Type Trams. That order has since been increased to 11 LRVs. Five of the “H” Type Trams will be retained to provide weekend and Public Holiday services.

The “H” Type trams that are currently in service require a high level of maintenance support while the new LRVs require significantly lower levels of maintenance.

In addition, there is a quantum leap in the technology differences between the “H” class and the new LRVs. The new LRVs are predominantly an electronic systems based unit. The maintenance employees need upskilling and/or specific training in the requirements for the new LRVs.

In recognition of the upskilling necessary, a once off 2% multi-skilling allowance payable to employees within the Tram Maintenance Team upon being assessed as competent against all elements of a Tram Maintenance Skills Matrix is proposed.”

[99] The issue of a Multiskilling allowance must be seen in the context of the proper application of competencies in the classification structure in the agreement. In the course of the hearing in this matter the issue of classification review applications arose as it has been the subject of previous negotiations between the parties. TransAdelaide provided the following advice:

“PN778

THE SENIOR DEPUTY PRESIDENT: Now, if I recall the evidence of Mr Moritz correctly, it was to the effect that a matrix was prepared and all employees have ultimately met those requirements.

PN779

MR STRATTON-SMITH: Yes.

PN780

THE SENIOR DEPUTY PRESIDENT: If I recall the evidence correctly, it is to the effect that there exists the potential for future reclassification of employees, and it would seem to me to be logical that a reclassification would have the potential at least to recognise the skills that are in that matrix.

PN781

MR STRATTON-SMITH: Yes.”

[100] Further, TransAdelaide confirmed its position with respect to the operational date for any reclassifications in the following terms:

“PN452

MR STRATTON-SMITH: Your Honour, I just have one small matter to deal with before my learned friend begins his case. There were some questions about back dating of reclassifications.

PN453

THE SENIOR DEPUTY PRESIDENT: Yes.

PN454

MR STRATTON-SMITH: We found some correspondence, I can say that the commitment remains that any reclassifications arising from the classification review process proposed will be affected from the first pay period commencing on or after 1 January 2009. So that's what Mr Moritz was referring to and that commitment remains and I'm trusting that's sufficient for my learned friend.”

[101] In the context of an agreed recognition of multiskilling requirements in the 2006 agreement through a skills matrix, and the subsequent commitment by TransAdelaide to apply classification changes from 1 January 2009, I am unable to agree that there is any basis for increasing the proposed rates of pay for the C5 classification so as to retain the one-off 2.0% Multiskilling allowance set out in the 2006 agreement.

Conclusion

[102] I have rejected the proposition that the wages for the Power and Signals employees should be increased as a result of the wage increases granted to South Australian Public Sector Trades employees.

[103] I do not consider that the information before me with respect to other agreements enables any conclusions about wage increases for these employees to be reached.

[104] I have similarly rejected the proposition that there is an inherent inconsistency in the TransAdelaide approach to the absorption of allowances to that adopted in the Wages Parity Agreement or that the effect of this absorption fundamentally impacts on agreed internal relativities.

[105] The wage increases proposed by TransAdelaide amount to increases of 5.5% to 5.9% on the 2006 Agreement rates after the absorption of allowances is taken into account. The exception in this respect relates to the two employees engaged in the General category. Whilst higher increases have been agreed through bargaining processes generally, many agreements provide for much lesser amounts such that I see nothing fundamentally unfair or iniquitous about the TransAdelaide wages proposal.

[106] Accordingly, I do not consider that a basis for increasing the rates of pay proposed by TransAdelaide has been made out on the material provided to me. It may be that an increased rate of pay for all or some of the classifications can be agreed or made out on work value grounds in the future but that is an entirely separate issue to the matter which I have been asked to determine.

[107] Some final comments are appropriate. First and foremost, there is nothing in this decision which, in the scheme of the Act, requires that employees must approve an agreement proposal in these terms. That is a matter for the employees to be covered by the agreement.

[108] Secondly, it is appropriate that I note that the approach I have applied does not provide anything other than a mechanism for considering the wage rates for TransAdelaide employees. It should not be taken as establishing implications for other South Australian Public Sector employees.

[109] Thirdly, the requirement that I deal only with wage rates within specified upper and lower limits, creates the potential for distortion relative to other elements of the proposed agreement. Whilst I have endeavoured to avoid this, it may be appropriate for the parties to consider alternative bargaining strategies in the future. It is apparent that the bargaining process is, at best, cumbersome. Earlier assistance from Fair Work Australia may be considered in the future to avoid these frustrations, and possibly expedite the negotiation process.

SENIOR DEPUTY PRESIDENT

Appearances:

E Stratton-Smith Crown Solicitors Office and B Moritz for TransAdelaide.

A Kentish and S Pisoni for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

Hearing details:

2010.

Adelaide:

May 13.

1 (2009) FWA 424

2 (Exhibit T2, para 42)

3 (Exhibit C5, attch 1)

4 PR952252

5 PR957094

6 Exhibit C4

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