1 Queensland Industrial Relations Commission Industrial Relations Act 1999 s.287 - Application for a General Ruling (Matter No.B2014/28/30) THE AUSTRALIAN WORKERS’ UNION OF EMPLOYEES, QUEENSLAND ‘STATE WAGE CASE 2014’ SUBMISSIONS [1] Introduction: [1.1] It the submission of the Australian Workers’ Union of Employees, Queensland (AWU) that Queensland’s award-reliant employees should be granted a wage increase consistent with the principles of fairness, economic advancement and social justice. The AWU is of the strong submits that the decline in the relative earnings of low-paid workers must be prevented by the Queensland Industrial Relations Commission (‘QIRC’) awarding a fair increase in minimum wages consistent with the following submission. The Claim: [1.2] The AWU application seeks the following: 1. A $22.30 wage adjustment for workers employed at award classification rates equivalent to or below the Engineering Award – State 2002 C10 classification; 2. A 3.0 percent adjustment for workers employed at award classification rates above the Engineering Award – State 2002 C10 classification; 3. A 3.0 percent allowance adjustment for award employees; 4. A $22.30 adjustment to the Queensland Minimum Wage as it applies to all employees. [1.3] For the purposes of this application, the wage adjustments outlined above will hereby be referred in these submissions as ‘the claim’. The claim seeks to deliver a flat-dollar increase to workers who are employed at rates of pay equivalent to or lower than C10 of the Engineering Award – State 2002
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Queensland Industrial Relations Commission
Industrial Relations Act 1999
s.287 - Application for a General Ruling
(Matter No.B2014/28/30)
THE AUSTRALIAN WORKERS’ UNION OF EMPLOYEES, QUEENSLAND
‘STATE WAGE CASE 2014’
SUBMISSIONS
[1] Introduction:
[1.1] It the submission of the Australian Workers’ Union of Employees, Queensland (AWU) that
Queensland’s award-reliant employees should be granted a wage increase consistent with the
principles of fairness, economic advancement and social justice. The AWU is of the strong submits
that the decline in the relative earnings of low-paid workers must be prevented by the Queensland
Industrial Relations Commission (‘QIRC’) awarding a fair increase in minimum wages consistent
with the following submission.
The Claim:
[1.2] The AWU application seeks the following:
1. A $22.30 wage adjustment for workers employed at award classification rates equivalent to or
below the Engineering Award – State 2002 C10 classification;
2. A 3.0 percent adjustment for workers employed at award classification rates above the
Engineering Award – State 2002 C10 classification;
3. A 3.0 percent allowance adjustment for award employees;
4. A $22.30 adjustment to the Queensland Minimum Wage as it applies to all employees.
[1.3] For the purposes of this application, the wage adjustments outlined above will hereby be referred
in these submissions as ‘the claim’. The claim seeks to deliver a flat-dollar increase to workers who
are employed at rates of pay equivalent to or lower than C10 of the Engineering Award – State 2002
2
as well as percentage increase to workers employed at rates of pay higher than C10 of the Engineering
Award – State 2002.
[1.4] The AWU submits that there is sufficient capacity for the Queensland economy to accommodate
these wage increases, given its good standing for other significant reasons which will be outlined in
these submissions.
[1.5] The AWU submits that should the Queensland Industrial Relations Commission (QIRC) awards
this wage increase, it will assist employees who are disadvantaged when it comes to the bargaining
process with employers; it will assist in addressing Queensland’s gender-pay inequalities and will
assist in maintaining wages that are relative to community standards which will ensure that low paid
award-reliant workers are able to acquire fair and reasonable living standards.
[1.6] The AWU submits that the claims for increases to award rates and to the Queensland Minimum
Wage are fair, reasonable and appropriate in light of the current state of the Australian and
Queensland economies.
[2] Legislative Requirements:
[2.1] In hearing this application, the QIRC is required to provide a framework for economic prosperity
and social justice by ensuring that awards comply with the objectives of the Act, as described in s3 of
the Industrial Relations Act 1999 (Qld), providing a framework for industrial relations that supports
economic prosperity and social justice by—
(a) providing for rights and responsibilities that ensure economic advancement and social
justice for all employees and employers; and
(b) providing for an effective and efficient economy, with strong economic growth, high
employment, employment security, improved living standards, low inflation and national and
international competitiveness; and
(c) preventing and eliminating discrimination in employment; and
(d) ensuring equal remuneration for men and women employees for work of equal or
comparable value; and
(e) helping balance work and family life; and
(f) promoting the effective and efficient operation of enterprises and industries; and
(g) ensuring wages and employment conditions provide fair standards in relation to living
standards prevailing in the community; and
(h) promoting participation in industrial relations by employees and employers; and
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(i) encouraging responsible representation of employees and employers by democratically run
organisations and associations; and
(k) meeting the needs of emerging labour markets and work patterns; and
(l) promoting and facilitating jobs growth, skills acquisition and vocational training through
apprenticeships, traineeships and labour market programs; and
(m) providing for effective, responsive and accessible support for negotiations and resolution
of industrial disputes; and
(n) assisting in giving effect to Australia’s international obligations in relation to labour
standards; and
(p) ensuring that, when wages and employment conditions are determined by arbitration, the
following are taken into account—
(i) for a matter involving the public sector—the financial position of the State and the relevant
public sector entity, and the State’s fiscal strategy;
(ii) for another matter—the employer’s financial position.
[2.2] Therefore, the AWU requests that the Full Bench of the QIRC give genuine consideration to the
claim, in order to ensure that the award rates of pay accurately reflect the current living standards of
citizens within Queensland.
General Ruling under the Act:
[2.3] Since 1997, the administrative process for awarding wage and allowance increases has taken
place by way of General Ruling, pursuant to section 287 of the Act. Section 287(2) states that the
QIRC ‘must ensure a general ruling about a Queensland minimum wage for all employees is made at
least once each calendar year’. 1
[2.4] The operative date for such increases has generally been 1 September. The AWU seeks a
continuation of this operative date.
[3] Capacity of the Queensland Jurisdiction:
[3.1] The State jurisdiction consists of approximately:
250, 000 State Government employees
With approximately 1, 000 directly being affected by this State Wage Case
decision
1 Industrial Relations Act 1999 , s. 287(2)
4
37, 000 local government employees
Less than 2, 000 are award-reliant
1250 Parents and Citizen’s Associations
Which employ 3, 000 to 4, 000 employees which are covered by the State system
and are award-reliant.
[4] Economic Conditions:
[4.1] The Australian economy remains strong with continuing economic growth. The Australian
economy has grown by 3.5 percent, seasonally adjusted, over the year to the March quarter 2014, with
1.1 percent of seasonally adjusted growth occurring in the most recent quarter. This is the highest rise
since June 2012.2 The increase in GDP has also surpassed the previous Australian Budget forecast of
2.75 percent increase in GDP, indicating emerging strength in the economy.3 Real trend GDP grew by
0.8 percent in the March quarter for an annual increase of 3.2 percent from March quarter 2013.4 The
Australian economy strengthened in the latter half of 2013, with the RBA noting that “the economy
looking like it grew at close to its long-run average pace over this period.”5 The Reserve Bank has
indicated that more recent economic indicators are consistent with some improvement in the overall
pace of growth.6 During the March quarter 2014, seasonally adjusted real net national disposable
income rose by 1.3 percent, for growth of 2.2 percent since March quarter 2013.7 Leading industry
contributors to growth over the year up to the March quarter 2014 were mining (1.1 percentage
points), finance (0.6 percentage points), construction (0.4 percentage points) and health care (0.3
percentage points.)8 Seasonally adjusted exports of goods and services increased by 10.4 percent
from March quarter 2013 to March quarter 2013, including a 4.8 percent increase from December
quarter 2013 to to March quarter 2014.. This quarterly increase included seasonally adjusted exports
of goods increasing by 5.3percent, with rural exports up 7.3 percent and non–rural exports up 5.4
percent.9 Seasonally adjusted imports decreased by 1.4 percent from December quarter 2013 to March
quarter 2014, and 4.2 percent from March quarter 2013 to March quarter 2014.10
2 Australian Bureau of Statistics, 5206.0 – Australian National Accounts: National Income, Expenditure and
Product, March 2014 3Ibid; Australian Government, Budget 2013-14, Budget Paper No. 2: Economic Outlook, 3.
4 Ibid.
5 Reserve Bank of Australia, Statement of Monetary Policy – May 2014 .
6 Ibid.
7Australian Bureau of Statistics, 5206.0 – Australian National Accounts: National Income, Expenditure and
Product, March 2014 8Ibid.
9 Ibid.
10 Ibid.
5
[4.2] Inflation was within the Reserve Bank’s target band in 2013-14, rising by 2.9 percent from
March quarter 2013 to March quarter 2014, including a 0.6 percent increase from December quarter
2014.11
This was a slight rise on the 2013 rise of 2.9 percent to the December quarter 2013. Brisbane’s
CPI’s grew at 3.1 percent, the second highest rate of any capital city, from March quarter 2013 to
March quarter 2014.
[4.3] In relation to Compensation of Employees (COE), trend total COE rose 0.8 percent, reflecting a
rise of 0.7 percent in average earnings per employee.12
Trend COE represented 53.0 percent of Total
Factor Income, continuing an ongoing fall in recent years.13
Market sector Gross value added (GVA)
per hour worked (in trend terms) rose 0.8 percent in the quarter and 2.4 percent through the year,
reflecting an ongoing trend of increasing productivity over 11 successive quarters. Over the past five
years to the March 2014 quarter, GVA measures of labour productivity rose by 12.9 percent.14
[4.4] The AWU contends and reiterates its position from the 2013 state wage case, that the QIRC
should be concerned about the failure of real wages to keep up with increases in productivity, driving
effective income down. Aside from concerns of equity and legislative objectives to maintain a
reasonable standard of living for workers and their facilities, real wage decline creates significant
issues for consumer spending. Real income growth is the engine of household spending. Sustainable
increases in spending require household income growth. This also reduces the likelihood of increasing
levels of private debt effecting consumer spending, rather than consumers relying on borrowing or
running down savings.
[4.5] In its most recent monetary statement, the RBA noted that housing turnover and prices had
continually increased, with forward-looking indicators of dwelling investment remaining at high
levels.15
In addition, the RBA interest rate, as at 3 June 2014, was 2.5 per cent16
, having remained
unchanged since a 25 point drop (0.25 percent) from 2.75 percent August 2013.17
The RBA has
forecast further stability to continue to encourage demand and consumption while keeping inflation
within the target band.
[4.6] Queensland workers are under significant financial pressure as the cost of living continues to
press hard on working families and households. Brisbane’s headline consumer price index (CPI)
11
Australian Bureau of Statistics, 6401.0 – Consumer Price Index, Australia, March 2014. 12
Australian Bureau of Statistics, Australian National Accounts: National Income, Expenditure and Product
5206.0 March 2014. 13
Ibid. 14
Ibid. 15
Reserve Bank of Australia, Statement on Monetary Policy – May 2014, 30. 16
Reserve Bank of Australia, Statement by Glenn Stevens, Govenor: Monetary Policy Division, 3/06/2014
<http://www.rba.gov.au/media-releases/2014/mr-14-10.html>; Reserve Bank of Australia, Statement by Glenn
Brisbane City Council, Annual plan and budget 2014-15, 139. 22
Ipswich City Council, ‘Budget focuses on building for the future.’Media release (26 June 2014) http://www.ipswich.qld.gov.au/about_council/media/view_release/?id=4625&action=viewMediaRelease 23
Sunshine Coast Regional Council, ‘Budget builds confidence for a stronger community.’ Media release (26 June 2014). http://www.sunshinecoast.qld.gov.au/sitePage.cfm?code=council-news&stid=0&id=14211 24
Queensland Competition Authority, ‘Regulated energy prices for 2014-15 released’
For example, see Kim Stephens, ‘Brisbane water bills to increase by $72 a year’ Brisbane Times (March 27, 2014) http://www.brisbanetimes.com.au/queensland/brisbane-water-bills-to-increase-72-a-year-20140327-35l1p.html. 26
transport fares increased by 7.5 percent, following a similar increase of 7.5 percent in 2013.29
Queensland’s public transport fare structure continues to be one of the most expensive in Australia.30
These rising cost pressures will have a disproportionately higher impact on lower paid workers. An
increase in the minimum wage of quantum suggested by this claim will help to reduce the real and
disproportionate impact of cost of living pressures on Queensland workers directly and indirectly
affected by this decision.
Conclusion on economic conditions:
[4.7] The Australian and Queensland economies continue to fare well compared to international
counterparts, with stable monetary policy containing inflationary pressures and encouraging increased
consumption.
[4.8] Wage pressures on business have been moderate in face of increasing CPI and other measures of
cost of living for working Australians. However, underlying softness in the labour market is
contributing to restrained household income, and thus reduced spending.31
Award-reliant employees
depend on a wage increase to maintain the real value of wages to offset significant increases in
housing prices, interest repayments and rent payments as this can be a significant financial strain and
pressure for many working families. The AWU submits that the Australian and Queensland
economies are sufficiently robust to support the claim of the AWU. Thus, the AWU submits that it is
confident that our claim is appropriate and reasonable in light of the prevailing economic conditions.
[5] Australia’s Economic Outlook:
[5.1] The Australian economy is predicted is to grow by 2.5 percent in 2014-15 before returning to
near trend growth of 3 percent in 2016-16.32
The Reserve Bank has forecast similar year-average GDP
growth of 3 percent for 2014, 2.25 to 3.25 percent for 2015 and 2.5 to 4 percent for 2015/16.33
This is
only slightly below trend pace for the Australian economy. The RBA has forecast that overall growth
29
Translink, Translink fares and ticketing 2014, http://translink.com.au/content/translink-fares-and-ticketing-2014-0 30
For example, see Kim Stephens, ‘Fare hike to make Brisbane Australia’s most expensive’ Brisbane Times 3 January 2014 http://www.brisbanetimes.com.au/queensland/translink-fare-hike-to-make-brisbane-australias-most-expensive-20140103-30910.html; Maria Hatzakis, ‘SE Qld Public Transport among most expensive’ 7.30 Queensland http://www.abc.net.au/news/2013-03-16/se-qld-public-transport-among-the-most-expensive/4577694. 31
Australian Government, Budget Paper No. 1 (2014), Statement 2: Economic outlook, 9. 32
Australian Government, Budget Paper No. 1 (2014), Statement 2: Economic outlook, 5. 33
Reserve Bank of Australia, Statement on Monetary Policy – May 2014, 63.