Award Review Taskforce report and Work Choices

By Bruce Heddle.

Key Points:
This Report is but one step along the way with no one recommendation made but a range of options put forward.

In October last year, the Award Review Taskforce was established by the Commonwealth Parliament to inquire into and review awards and make recommendations about reductions in the number of awards, and to establish award classifications and pay rates which were simpler and clearer.

September 2006 Report released

On 4 September 2006, the Task Force released its final report on Rationalisation of Wage and Classification Structures (dated July 2006). The report - of 117 printed pages - was written after the award system, which operated at both federal and state levels before the new Work Choices system was introduced, was "extensively investigated" (p 116).

Diversity of approaches to wages between federal and state commissions and within the states

The Report noted that the Task Force’s investigations "have highlighted a substantial degree of diversity in approaches to wage and classification issues between both federal and state industrial commissions" and "revealed a level of diversity of approaches within each State commission." (p 116)

Rationalisation of wages interwoven with minimum wage adjustment by Fair Pay Commission

There was no specific recommendation for the rationalisation of wage and classification structures. There was acknowledgement, however, that rationalisation was interwoven with the adjustment to minimum wages to be undertaken by the Fair Pay Commission. While it did not wish to pre-empt what the Fair Pay Commission would do, the Taskforce noted that it ‘remains prepared to assist the Fair Pay Commission' (p 117).

Chapter 9 contains specific recommendations arising from its investigations which should be considered before any rationalisation.

There were problems of definition of job and comparison of pay scales and further investigation was required of these. Two recommendations advised the Fair Pay Commission as follows:

Recommendation 1

The adoption of any simplified or rationalised system of minimum classifications and wage rates for inclusion in Scales should recognise the diversity which exists in preserved Scales and include a process for clarification of definitional uncertainties.

Recommendation 2

That the Fair Pay Commission undertake further consideration of the relevance and use of classifications to underpin the development of a rationalised classification structure.

The Fair Pay Commission should also have regard to the Australian Industrial Relations Commission decision in relation to the 38 hour week in adjusting pay classifications

Safety net increases and redundant awards

The Task Force also:

• identified areas where safety net increases had not been applied; and
• identified awards which are redundant.

Need for legislative changes

The Task Force identified some aspects which might need legislative change.

The three-year time frame to eliminate state and territory differences in pay was too short and would need amendment by legislative change.

Rationalisation of casual loadings may have to be achieved by legislative change.

Characteristics of a rationalised system

Options for consideration were contained in Part 3 of the Report. The Task Force identified:

• characteristics which a rationalised system should have (eg. minimum rates consistently applicable throughout Australia; simple and consistently applied rates for casual and juniors and so on); and
• a series of implementation issues (eg. avoiding freezing wages simply to introduce rationalised system).

Options for a rationalised system

The Task Force did not make opt for one approach but put forward a range of options for a rationalised system. In chapter 11, for example, it considered methodologies for groupings of like classifications through either broadbanding on the basis of designated monetary wage rates; or matching similar classifications. In chapter 12, it examined a series of approaches around the establishment of designated pay points.

Conclusions and legislative change foreshadowed

This Report, highlighting problems, has confirmed that rationalisation of awards and pay rates is not an easy task. This Report is but one step along the way with no one recommendation made but a range of options put forward. The Australian Fair Pay Commission also has a role - and the Task Force made recommendations for that Commission. Legislative change was recommended in the Report and we will keep you informed of further developments.

Thanks to Marilyn Pittard for her help in writing this article.

For further information, please contact Bruce Heddle.