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Determination - 23 March 2005

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Remuneration of Commissioners of the Western Australian Industrial Relations Commission

DETERMINATION MADE ON THE REMUNERATION OF COMMISSIONERS OF THE WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

2005 March 23rd

Pursuant to section 6(1)(e) of the Salaries and Allowances Act 1975, the Tribunal at intervals of not more than twelve months is required to enquire into and determine the remuneration to be paid to the Chief Commissioner, Senior Commissioner and Commissioners of the Western Australian Industrial Relations Commission (WAIRC).

COMMISSIONERS (WAIRC) REMUNERATION

BACKGROUND

Until 1984, the remuneration of the positions of Commissioner, Senior Commissioner and Chief Commissioner was dealt with as prescribed offices under the Salaries and Allowances Act 1975.

The Industrial Arbitration Act 1984 amended section 20 of the Industrial Arbitration Act 1979 and specified a fixed link to judicial salaries.

The Chief Commissioner's salary and expense allowance was to be the same as a Judge of the District Court.
The Senior Commissioner was to receive 95 per cent of the salary and 66.67 per cent of the annual expense allowance received by the Chief Commissioner.
The Commissioners were to receive 90 per cent of the salary and 50 per cent of the annual expense allowance received by the Chief Commissioner.

Accordingly, up until the legislative amendments in 2002, the salaries of the members of the WAIRC had been linked to the salaries of the judiciary.

The Industrial Relations Reform Act 2002 at section 186 legislated that all positions in the Commission, other than the President, were prescribed for the purposes of section 6(1)(e) of the Salaries and Allowances Act 1975

It also established that existing remuneration rates would remain in place until the Tribunal's first determination. Furthermore no existing Commission member would receive less remuneration.

Under the new legislation, the Tribunal issued its first determination in 2003 and maintained the link with judicial salaries. Accordingly the Commissioners received a 9.2 per cent adjustment to their salaries. However at that time the Tribunal noted that:

"Continuation of the linkage will remain under review."

In its judicial report on salaries of December 2003, the Tribunal continued its review into the matter and noted that:

"In the opinion of the Tribunal, it would not be appropriate in the circumstances of the review automatically to pass on the current recommended judicial increase in salary... Accordingly, this determination has the effect of fixing the salary rates applicable to Commissioners at their current levels."

In April 2004, the Tribunal granted the WAIRC members an increase of 3.6 per cent with effect from 1 May 2004. This was inline with the general increase for Special Division members and Prescribed Officer holders.

The Tribunal subsequently undertook a comprehensive review of the remuneration of the Commissioners of the WAIRC. It commissioned input from independent remuneration experts as well as from the Government and the WAIRC itself.

CURRENT INQUIRY

Through this review the Tribunal has received valuable input from the independent remuneration experts, Government and the WAIRC and all input has been considered.

Most of the submissions expressed the need for the established relativities to be maintained.

1. Input from Mercer Consulting

In mid-2004, Mercer Consulting was engaged by the Tribunal to undertake an independent review and provide advice on the remuneration of members of the WAIRC. In its work value assessment of the Commissioners' roles, it identified that the Commissioners are required to exercise, at their discretion, four different types of power in fulfilling their duties.

  1. Judicial as in determining contractual benefit claims;
  2. Administrative as in registration of industrial agreements;
  3. Arbitral as in resolving matters in a way, which could reasonably have been agreed between the parties;
  4. Legislative as in issuing orders enforcing or preventing certain conduct

The Tribunal noted from this that, whilst Commissioners do exercise judicial power, only a portion of their work is of this nature.

It identified that the role of the Commissioners was complex, diverse and discretionary. When compared to other jurisdictions it assessed the work value thus:

"We conclude with a high degree of confidence that WAIRC Commissioners exercise a broader range of powers and functions than their Commissioner counterparts in other jurisdictions, hence they would have a higher work value. However, Mercer cannot further conclude that the work value of WAIRC Commissioners is equivalent to Deputy Presidents elsewhere. We expect it would be lower, but not significantly lower."

It went on to note and explained specifically that:

"When compared with similar positions in other jurisdictions Mercer notes that the WAIRC Commissioners are higher [in work value] than other Commissioners... are marginally higher than Deputy Presidents in South Australia and Queensland, but significantly lower than Deputy Presidents in the AIRC and IRC NSW"

Mercer's report also provided comment on the historical linkage with the judiciary by providing a qualified acceptance of its relevance.

"Mercer's view in relation to a link with the judiciary is that we consider the link to be an appropriate one, but we do not believe a fixed link to be appropriate by itself... We found that other external benchmarks are also relevant, and we believe that the automatic and fixed percentage link to be the potential cause of error."

2. Input from the Government

In its submission to the Tribunal, the Government expressed the view that this fixed judicial link should be broken.

"The desire to break the previously existing nexus between the salaries of the WAIRC members and the judiciary was the reason for making the [legislative] amendment."

It also expressed the view that:

"The focus of the work done and the skills required are therefore different from those in the mainstream court system and warrant separate consideration... The Government believes that the salaries and allowances of Commissioners should reflect a balanced, fair and reasonable approach and be comparable with that of their equivalents in other jurisdictions"

3. Input from the Commissioners of the WAIRC

The Commissioners of the WAIRC considered, in their submission to the Tribunal, that there still was relevance in the long-standing judicial link as a material consideration in the future. It strongly suggested that the five guiding principles; independence, recruitment and retention, workload and related factors, comparative remuneration data and economic circumstances which were used by the Commonwealth review of 2002 and resulted in the special 17 per cent increase, still impacted equally on the WAIRC.

The Tribunal considered the current relevance of each of these principles to the WAIRC.

Independence

Although the Tribunal is aware of the importance of the actual and perceived independence of the WAIRC, in its determination of April 2004 it did not accept the argument, strongly stated by the Commissioners, that a direct link with judicial salaries was important in preserving this independence.

Recruitment and Retention

The Tribunal is of the opinion that remuneration is not the sole factor that influences a person's decision to accept or reject appointment to the WAIRC. No evidence has been presented to the Tribunal of any major impediments to attracting quality candidates to the WAIRC.

The Tribunal considers that retention issues are not highly significant in the assessment of remuneration in this case.

Workload and Related factors

The Tribunal accepts the view of the independent remuneration experts that the Commissioner's role has an onerous workload and complexities, together with much diversity, and full and public accountability. The Tribunal has given due weight to this in its deliberations.

Comparative remuneration data

The Tribunal has noted the advice from Mercer Consulting on the issue of comparative work value and has itself examined the relativities interstate with Commissioners and Deputy President positions in other states. Although, as Mercer has pointed out, making comparisons is not easy, the Tribunal considers that the salaries of WAIRC Commissioners warrant some comparison with the Deputy Presidents' salaries in Queensland and South Australia.

Economic circumstances

In its deliberations on the Commissioners' remuneration rates the Tribunal has given consideration to a range of economic and other indices, as is its practice in all its determinations. These have included the latest relevant data issued by the Australian Bureau of Statistics, such as the 2004 December Quarter Consumer Price Index (CPI) and the 2004 August Quarter Average Weekly Earnings Index, and a number of Government and private sector forecasted movements in CPI and wages. It also has considered the Western Australian Wage Cost Index and Average Weekly Earnings for 2004 and the Government's current Wages Policy. The Tribunal has been mindful of increases received by other officeholders under its jurisdiction over the past twelve months.

DETERMINATION

The Tribunal has considered all of the information, general and specific, available to it in formulating this determination of the remuneration of the Commissioners of the WAIRC. The determination reflects the particular account taken of the following role-related factors.

  1. The Commissioners' roles are complex and demanding in their work value, workload and accountabilities.

  2. There is a dimension of judicial power in the Commissioners' roles, though this power does not characterise all or even the greater part of their work.

  3. Examination of the roles of the Industrial Relations Deputy Presidents and Commissioners in other states show some specific elements of comparison with some states. Where these have been established, they have been taken into account.

  4. The Commissioners operate within the context of the Western Australian public sector. Relativities with the remuneration levels set by the Tribunal for other senior executives within this sector have been considered.

  5. The existing internal remuneration relativities between the Chief Commissioner, the Senior Commissioner and the Commissioners have been reviewed and deemed by the Tribunal to continue to be appropriate.

The Tribunal, accordingly, pursuant to section 6(1)(e) of the Salaries and Allowances Act 1975, determines the Commissioners of the Western Australian Industrial Relations Commission are entitled to remuneration on the following basis with effect from 1 May 2005.

  • The holder of the office of Chief Commissioner is entitled to a salary of $249,662 per annum.
  • The holder of the office of Senior Commissioner is entitled to a salary of $237,179 per annum.
  • The holders of the office of Commissioner are entitled to a salary of $224,696 per annum.

The holder of the office of Chief Commissioner is entitled for business and private use to the provision of a fully maintained "Prestige" vehicle, selected from the Government's Common Use Contract no. 012A1994, Items 1008 (Prestige Class) and 1009 (Restricted Prestige Class), as amended from time to time. Vehicles with supercharged or V8 engines are not included.

The holders of the offices of Senior Commissioner and Commissioner are entitled for business and private use to the provision of a fully maintained "Prestige" vehicle, selected from Item 1008 (Prestige Class), as amended from time to time.

The determination will now issue.

Signed at Perth this 23rd day of March 2005.

Professor M C Wood J A S Mews M L Nadebaum
CHAIRMAN MEMBER MEMBER


SALARIES AND ALLOWANCES TRIBUNAL

 

Acknowledgement of Country

The Government of Western Australia acknowledges the traditional custodians throughout Western Australia and their continuing connection to the land, waters and community. We pay our respects to all members of the Aboriginal communities and their cultures; and to Elders both past and present.