WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION. Nos. 551 and 552 of 1984. Between the Federated Miscellaneous Workers' Union of Australia, Hospital, Service and Miscellaneous, WA Branch, Applicant and the Anglican Church and Others, Respondents. Before the Commission in Court Session. Mr Senior Commissioner B.J. Collier, Mr Commissioner G.G. Halliwell, and Mr Commissioner G.J. Martin. The 7th day of February 1985. Mr J.A. McGinty on behalf of the applicant and inter- vening on behalf of the Trades and Labor Council of WA. Mrs P.E. Bentley on behalf of the respondents and intervening on behalf of the Confederation of Western Australian Industry (Inc). Mr K.J. Dwyer intervening on behalf of the Attorney General and Public Service Board. Reasons for Decision. THE SENIOR COMMISSIONER: These are the reasons for decision of Mr Commissioner Halliwell and myself. The two applications for consideration before us seek to amend the Cleaners and Caretakers Award No. 12 of 1969 and the Cleaners (General and Window) Contrac- tors Award No. 3 of 1968 to provide for reduced working hours. They may be described as claims for a 38-hour week. Shortly after the completion of the hearing the Commission in Court Session delivered its decision in the Laundry Employees' case and we see little point in traversing once again the ground then covered. It is sufficient to state that decisions of the Commission in Court Session in the Plastic Manufacturing case (64 WAIG p. 1575) as to nexus and the Watchmakers' and Jewellers' case (64 WAIG p. 1319) as to comparisons with like employees elsewhere in Australia were endorsed. With respect to the latter matter the Commission in Court Session said — ... where it can be shown that the majority of like employees elsewhere in Australia are enjoying a 38-hour week then a prima facie case exists for the adoption of those hours in this State. Unless financial incapacity or inattention to cost offsets dictate otherwise such claims should succeed without difficulty. (Decision dated 17 December 1984 — unreported.) Although it would seem unnecessary to further endorse the above finding we do so in the hope that it will enable claims of this nature either to be withdrawn or settled with greater expedition. In the instant cases the applicant has satisfied the Commission as to both nexus and the position in the Eastern States. The fact that a 38-hour week was intro- duced into New South Wales and Victoria prior to the advent of the present Wage Principles has no effect on the principle which we have enunciated on comparisons with employees outside of this State. The reality is that there is a nexus with Eastern States rates and the majority of like employees elsewhere in the nation enjoy a 38-hour week. As was said in both the Watchmakers' and Jewellers' case and the Laundry Employees' case — We re-emphasise that employees in this State should be treated no less favourably than the majority of their counterparts elsewhere in the nation. By the same token they should not be treated more favourably. (64 WAIG p. 1319.) 65 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE. 1677 The respondents, however, raise additional matters which require consideration. First, it is said that a number of awards in the retail industry still provide for a 40-hour week and employers in that industry request that a decision in these cases should await the outcome of the Kelly inquiry into retail trading hours. It is said that until the results of that enquiry are known none of the parties is in a position to adequately negotiate all of the circum- stances which will result from any change in trading hours which may occur. We are not prepared to delay a decision on that account. There is no clear indication of when the Kelly Report will be presented to the Hon Minister and if any changes to retail trading hours are recommended our experience tells us that consideration of reports and preparation and passage of any consequential amending legislation takes considerable time. A delay of that order in determining the present claims would not be consistent with our obligations under the Act. Secondly, it has been submitted that in the private sector cleaning area a very large proportion of cleaning staff are part-time and casual employees. The respondents say that at least 50 per cent of employees who work under the Cleaners and Caretakers Award are casual or part-time and some 90 per cent of those working under the Cleaners (General and Window) Contractors Award are in those categories. It is argued that if reduced working hours are designed for greater leisure time then this does not apply in the case of casual and part-time workers. Regardless of reduced "standard hours" for full-time employees they would continue, in most cases, to work the same hours, the only difference being that they would receive a wage increase as a result of the decrease in standard hours. In order to reduce the cost of implementation and maintain the real purpose of shorter hours it is submitted that the Commission should assess the hourly rate of part-time and casual employees using the weekly rate with a divisor of 40. At first sight there appears to be some merit in the proposition. Improvements in wages and conditions other than from CPI movements and national productivity must constitute a very small addition to overall labour costs, according to the Wage Principles. The evidence of a very experienced cleaning contractor was to the effect that the industry is working in a very competitive environment and productivity is at its highest. The chances of cost offsets of any consequence taking place is seen as impossible so either increased labour costs would be passed on to clients where rise and fall clauses exist in contracts or else borne by the contractor. It seems to us that the interests of consistency and fair play require us to refuse to assess part-time and casual rates on a 40-hour working week divisor basis. The advocate for the respondents acknowledges that the wage divisor for part-time and casual employees in New South Wales and Victoria is 38. That is the pattern also in awards of this Commission which provide for both part- time employment and a 38-hour week. In these circum- stances to adopt the suggestion of the respondents would be to create an anomaly with both relevant intra and interstate awards and we see no good purpose being served by following that course. Nonetheless every effort must be made to minimise the cost of a 38-hour week and we will not be satisfied that these claims fit within Wage Principle 5 until the parties have further conferred to this end. We recognise that little may be achieved in the contracting area and that discussions may take time if negotiations are necessary on an individual employer basis. We have decided therefore to agree to both claims in principle with an indication to the parties that we would envisage the reduced working hours taking effect from 1 May 1985. The parties are now directed to confer with a view to maximising cost offsets and agreeing on proposed amendments to the awards. We expect to be informed of the finality of the negotiations by the end of March so that the necessary amendments may be pro- cessed well in advance of the proposed operative date. 42511—2 MR COMMISSIONER MARTIN: Application No. 551 of 1984 seeks to vary the provisions of the "Cleaners and Caretakers" Award No. 12 of 1969 as varied (49 WAIG p. 945, a consolidation thereof appearing in 62 WAIG p. 332) by reducing the quantum of ordinary hours of work prescribed in Clause 6.—Hours from 40 per week to 38 hours per week by a system whereby the reduction in hours is effected by accrued days off up to a maximum of 12 days per annum and with consequential variations to other provisions of the award related thereto. Application No. 552 of 1984 seeks to vary the provisions of the "Cleaners' (General and Window) Contractors" Award No. 3 of 1968 as varied (48 WAIG p. 523, a consolidation appearing in 63 WAIG p. 308) in the same manner, the appropriate clause also being Clause 6.—Hours. The respondents to both applications oppose the claims made therein. The details of the applications were expanded from their original form by the presentation of new amending schedules at the commencement of the proceedings before the Commission in Court Session. The applications are to be considered according to Principle 5 — Standard Hours — of the Principles enunciated in the Commission in Court Session General Order of the 13th day of October 1983 in Matter No. 461 of 1983 and which reads as follows: 5.—Standard Hours*. (a) In dealing with agreements and unopposed claims for a reduction in standard hours to 38 per week the cost impact of the shorter week should be minimised. Accordingly, the Commission should satisfy itself that as much as possible of the required cost offset is achieved by changes in work practices. Opposed claims should be rejected, but this will not prevent determination by the Commission of a disputed claim where the Commission is satisfied that the claim is based on a well-recognised nexus with an award or awards of another tribunal. (b) Claims for reduction in standard weekly hours below 38, even with full cost offsets, should not be allowed. (c) The Commission should not approve or award improvements in pay or other conditions on the basis of productivity bargaining. These improve- ments should only be allowed on the basis of the' appropriate Principles. (63 WAIG p. 2210 at p. 2211.) (My emphasis.) The applicants firstly submitted that there was a "well recognised nexus with an award or awards of another tribunal" in that: (a) The "Cleaners' and Caretakers" Award No. 12 of 1969 as varied derives its rates of wages from a comparison with similar awards operating in other states of Australia, and (b) The "Cleaners' (General and Window) Con- tractors" Award No. 3 of 1968 as varied whilst originally based upon the first mentioned award (see 60 WAIG p. 2503) also derives its rates of wages from a comparison with awards operating in other states of Australia in this section of the cleaning industry. The respondents neither confirmed or denied that assertion. Having claimed such a prima facie nexus with "an award or awards of another tribunal" the applicant went on to refer to other decisions of Commission in Court Sessions on that subject. In particular reference was made to the decision of a Commission in Court Session in Matter No. 470 of 1982 of the 31st day of July 1984 (the Watchmakers' and Jewellers' Case) and in which it was said inter alia: We re-emphasise that employees of this State should be treated no less favourably than the majority of their counterparts elsewhere in the 1678 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE. 65 W.A.I.G. nation. By the same token they should not be treated more favourably. Where a clear wage nexus exists between an award of this Commission and another award which provides for a 38-hour week and where it is shown that the majority of employees in similar occupations in Australia are enjoying those hours we consider that a prima facie case exists for the adoption of a 38-hour week in the State Award. In such cases we consider that claims should normally be granted unless the Commission is convinced that other considerations such as finanacial incapacity or inattention to cost offsets warrant refusal or defer- ment in the interests of all concerned. (64 WAIG p. 1319.) The applicant then went on by way of Exhibits to demonstrate that the awards operating in the two cleaning industries in question, in other states, did provide for 38 ordinary hours of work each week. Those exhibits are: Exhibit "A" — "Caretakers, Cleaners, Lift Attendants etc (State)" Award of the Industrial Commission of New South Wales (and being the counterpart of the "Cleaners' and Caretakers" Award No. 12 of 1969 as varied), Exhibit "D" — "Cleaning Contractors (State)" Award of the Industrial Commission of New South Wales [and being the counterpart of the "Cleaners' (General and Window) Contractors" Award No. 3 of 1968 as varied], Exhibit "C" — "Caretakers Award" of the Caretakers Conciliation and Arbitration Board of Victoria (and being part the counterpart of the "Cleaners and Caretakers" Award No. 12 of 1969 as varied) and Exhibit "B" — "Cleaners Award" of the Cleaners Conciliation and Arbitration Board of Victoria [and being the remainder of the counterpart of the "Cleaners and Caretakers" Award No. 12 of 1969 as varied and the counterpart of the "Cleaners (General and Window) Contrac- tors" Award No. 3 of 1968 as varied], and do demonstrate that the quantum of ordinary hours prescribed in those awards as 38 hours per week for all purposes of those awards. The two basic criteria of "nexus" and the hours of work applicable in the awards providing that nexus having been satisfied the applicant then submitted that it must follow that the two awards now under review should be varied in accordance with the amended schedules submitted by it. I find it convenient before proceeding to the respondent's position to make some comments about the proposition advanced by the applicant as there are some aspects of it which concern me. Firstly the question of "a well recognised nexus with an award or awards of another tribunal". In the absence of any comment on this aspect of the applicant's submissions by the respondents, I am left to wonder just what form that nexus takes. Is it a nexus in the sense of a direct transplantation of the rates of wages for comparable classification from the New South Wales and Victorian Awards into these awards? — is it a percentage or other contrived relativity? — or is it as loose as "having regard to the rates of wages payable under those awards"?. To that extent I feel I am in a similar position to the then Senior Commissioner in his minority decision in Matter No. 484 of 1982 of the 10th day of July 1984 (the Plastic Manufacturing Case) and wherein he said inter alia: I find myself in agreement with that part of the employers' submission wherein it was said that, first, there is an onus on the applicant to establish a well recognised nexus — as I would put it to "open the door" under Principle 5 — and then to establish that the claim should be granted. In the ordinary course an applicant is required to establish a case to cause a claim to be granted and Principle 5, insofar as there is an award which has a well recognised nexus with an award of another tribunal, merely enables a claim to be judged on its merits — a course, which would otherwise not be open under the Principle. It creates no prima facie entitlement to a shorter working week. (64 WAIG p. 1316.) (My emphasis.) Subject to the need for particular classifications of employees in this State, as a general rule I do not disagree with the employer's view that "a nexus must involve a precise relationship which firstly deals with an identical classification structure and identical rates between those classif ications". In my view the applicant union has not shown why that should not be so in this case and it follows that the Union has not discharged the onus placed on it as applicant to demonstrate that there is a nexus between the awards of a kind required by the Principle. (64 WAIG p. 1316 at p. 1317.) (My emphasis.) Whilst those views were not shared, in the result by the majority of that Commission in Court Session it seems to me that the nexus relied upon in these sorts of applications must be more than tenuous. And then it must be remembered in my view the significance which that "well recognised nexus with an award or awards of another tribunal" has in the context of Principle 5 — Standard Hours. In the reasons for decision accompanying the enunciation of the Principles in General Order Matter No 461 of 1983 on the 13th day of October 1983 it was said of Principle 5 — Standard Hours: In Principle 5 relating to Standard Hours the TLC sought a modification to that part of the principle which says that opposed claims should be rejected. It was put to us that as the source of the conditions in many of our awards is to be found in Eastern States and Federal awards with which they have a well recognised nexus, it would be inequitable if an approved reduction in hours in the relevant "nexus" award could, regardless of its merit, be avoided by employers here by the simple process of refusal. We think there is substance in the argument and we have decided to add after the words "opposed claims should be rejected", the passage, "but this will not prevent determination by the Commission of a disputed claim where the Commission is satisfied that the claim is based on a well recognised nexus with an award or awards of another tribunal". In so deciding, we have thought it reasonable to assume that a reduction of hours will not occur in Eastern States or Federal awards unless it meets the test of relevant principles. Furthermore, we emphasise that the variation which we have made merely permits an argument to be heard and determined and carries no implied promise as to its outcome. (63 WAIG p. 2207 at p. 2209.) (My emphasis.) In my view that rationale is clear. It does not say simply, look at other awards in Australia in the same industry to ascertain what ordinary hours of work apply therein and then transplant it into an award in this State. It says if you have and do structure the award rates in this State upon an award or awards of another or other states (or the Commonwealth) and that award or those awards have been varied to provide for less than 40 ordinary hours of work within the life of the Principles there is a strong case for that pattern to be followed in this State subject to the cost impact being minimised. (It is noted that the variations to the New South Wales and Victorian awards were varied to provide for a 38 hour week in 1982 prior to the 1983 National Wage Case and the adoption of the Principles therein in this State and those states.) 65 W.A.l.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE. 1679 I detect in the applicant's submissions on this aspect, a change of emphasis (the substance of the nexus apart) going to the proposition that the prime consideration is the quantum of ordinary hours of work being enjoyed by the majority of employees in the same industry in other states per se. That may be due to the manner in which it construes the decision of the Commission in Court Session in Matter No 470 of 1982 earlier herein referred to and in which extract there is clearly no suggestion that such was the case and in my view the intent of and content of Principle 5 — Standard Hours can in no way be said to have altered in any way from the original declaration in 1983. I now turn to the respondent's submissions and evidence. In the first instance the respondents requested the Commission to stand over application No 552 of 1984 as it relates to the retail industry, on the ground that the majority of employees in that industry, employees in the callings of shop assistants, storemen, clerks, general butchers and catering personnel were still subject to a 40 hour week and any consideration of reducing that quantum would be viewed when the report on the inquiry into retail trading hours becomes available. Such a request would involve, if the application is successful, a sectional exemption for some respondents to a multi industry award, which the "Cleaners and Caretakers" Award No 12 of 1969 as varied most certainly is, as a perusal of its respondency clearly reveals. That poses not technical or practical difficulties but the question becomes should there be a distinction made in the ordinary hours of work of persons employed in the same calling by virtue of the ordinary hours of work existing for the majority of employees employed by a particular employer, and if so, should it be limited to one particular industry, the retail industry. If the proposition has merit which I consider it does, it is belatedly advanced as there are employed in that industry employees subject to the "Metal Trades (General)" Award No 13 of 1965 as varied and the "Transport Workers (General)" Award No lOof 1961 as varied, at least, and which have been varied to provide for a 38 hour week without exclusions to employers in the retail industry. Additionally if it is valid for that latter industry it is valid for others and which as the respondents pointed out, who they are is not known. At that point the proposition's merit becomes somewhat blurred and I would not consider it specific enough to be given effect. The main thrust of the respondent's opposition to the application goes to the very nature of the cleaning industry. That arises in two ways. Firstly the high level of efficiency in the contract cleaning industry which militates against cost offsets from improved work practices and secondly the relatively small number of full-time employees employed in the industries, the majority of cleaning employees being part-time or casual employees. For those latter employees increased leisure time would be meaningless and any automatic higher hourly rate of wage resulting from a reduction of the ordinary hours of work from 40 to 38 without any reduction in the ordinary weekly rate of wage would mean the generation of increased wages and which would have to be passed on to the world at large in increased costs of the services provided. The respondent entered Exhibit I, a survey of employers affected by applications 551, 552 and 546 (not relevant to these reasons for decision) of 1984. The contents of that exhibit and the evidence adduced from a large cleaning contractor were directed to demonstrating that: * The mode of work within the cleaning industry militated against a reduction in ordinary working hours * The high level of efficiency in the cleaning industry did not allow any scope for cost offsets from improved work practices * Due to the composition of the work force in the cleaning industry more part-time and casual employees than full-time employees, additional leisure time was meaningless to those employees and had the prime effect of artificially increasing their level of earnings. Exhibit I shows that 62 employers subject to the provisions of the "Cleaners and Caretakers" Award No 12 of 1969 as varied employ 206 full-time employees, 92 part-time employees, and 118 casual employees. That award applies to many different industries and in addition to employees in the calling of "cleaner" applies to employees engaged in the calling of "caretaker". To that extent the reduction in the ordinary hours of work would be of meaning for approximately 50 per cent of the employees concerned and does not pose practical problems to the same degree as in the cleaning contracting industry [the "Cleaners (General and Window) Contractors" Award No 3 of 1968 as varied] and which Exhibit I discloses that 16 employers employ 81 full-time employees and 1 335 part-time and/or casual employees. The practical difficulties envisaged by the employers go basically to replacing employees who work from 5.00 p.m. to 7.00 p.m. or 5.00 p.m. to 9.00 p.m. and the increased costs associated therewith. The scheme of implementation of reduced hours contained in the applications, is that; ordinary hours shall be worked with two hours of each week's work accruing as an entitlement to a maximum of 12 Accrued Days Off in each 12 month period. The Accrued Days Off shall be taken in a minimum period of one week made up of five consecutive Accrued Days Off in conjunction with a period of annual leave or at a time mutually acceptable to the employer and the worker The effect upon part-time workers is provided for in the following terms: (6) The provisions of this clause apply to a part- time worker in the same proportion as the hours normally worked bear to a full-time worker. In circumstances where less than 16 hours per week are worked an employer may pay a worker for all hours actually worked at an hourly rate based on a 38 hour week in lieu of accrual of Accrued Days Off (My emphasis.) Casual employees appear to benefit only by virtue of the claim that the hourly rate for award purposes is the weekly rate divided by 38 hours in lieu of 40 hours. That scheme of implementation is common to both applications and does not entail a reduction of the hours worked each day or week by an employee thus dissipating the replacement problem which would arise if the reverse was the case. A replacement of employees there will have to be when the periods of accrued time off are availed of but that will not be the same or such a difficult problem if the reduction in ordinary hours was effected each week. This is the first occasion to my knowledge that this Commission has had to consider the effect of a reduction in the ordinary hours of work in circumstances where the employment of persons on a part-time or casual basis is the rule rather than the exception. In the awards in which a reduction in ordinary hours of work has been effected part-time and casual workers have not been highlighted or shown to warrant separate 1680 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE. 65 W.A.I.G. or special attention, they being peripheral to the basic mode of employment namely full-time or of little con- sequence in the totality of any employer's operations. The areas in which there are counterparts to the mode of employment encountered in the two awards now under review, namely retailing, liquor, accommodation, catering and clerical have yet to be subjected to analysis for a reduction of ordinary hours and it appears to me that the problems raised in these applications will arise in those industries and may also need treatment of a different form. So far as these two applications are concerned I find the "well recognised nexus with an award or awards of another tribunal" tenuous in the extreme and I conclude that the applications do not meet the criteria of Principle 5 — Standard Hours and should not be allowed. If they were to be held as meeting the criteria of Principle 5 — Standard Hours I would only allow the applications to the extent of full-time employees, as I believe that the benefit of increased leisure and which reduced hours of work is all about, is meaningless to part-time and casual employees in these industries particularly for the casual employees some of whom are moonlighting to supplement their own incomes or working to supplement family income. In so doing I would endorse the scheme of application embodied in the applications for full-time employees, namely "accrued days off" but I would not reduce the ordinary hours of work and which variation would have the effect of increasing all hourly rates of wages for all purposes of the award. (Such a scheme for increased leisure is operating within some sectors of the mining industry.) (See 64 WAIG p. 1302.) THE SENIOR COMMISSIONER: The claims are agreed to in principle and the parties are directed to confer in accordance with the majority decision. EDITOR'S NOTE: Consent Order No 551 of 1984 can be found at 65 WAIG p. 800. BEFORE THE