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Determination - 20 March 2009

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Remuneration of Commissioners of the Western Australian Industrial Relations Commission

Sections 6(1)(e) and Section 8(a) of the Salaries and Allowances Act 1975

Under Sections 6(1)(e) and Section 8(a) of the Salaries and Allowances Act 1975 (the Act) the Tribunal is required to enquire into and determine the remuneration paid to or provided to the Chief Commissioner, Senior Commissioner and Commissioners of the Western Australian Industrial Relations Commission (WAIRC). In so doing, the Tribunal is to ensure that not more than a year lapses between one determination and another.

BACKGROUND

In March 2008 the Tribunal determined an increase of 4.2% in remuneration for these statutory office holders. Significant weight was given to the framework of judicial and quasi-judicial rates of remuneration in Western Australia. Subsequent adjustments during 2008 to other positions coming within the Tribunal’s jurisdiction were in line with increases then determined for members of the WAIRC.

The impact of the Commonwealth’s ‘Work Choices’ legislation on the State’s industrial relations jurisdiction, pending industrial legislation in this State and rates of remuneration paid to members of other Commonwealth and other State industrial tribunals were noted.

CURRENT ENQUIRY

Members of the WAIRC were invited to present a submission for this review.

A public notice calling for submissions was placed in ‘The West Australian’ on 14th January 2009 with a closing date of 11th February 2009.

Submissions were received from members of the WAIRC and from the Minister for Commerce. No other submissions were received in response to the public notice.

SUBMISSIONS

Members of the WAIRC draw the Tribunal's attention to the continuing impact of Commonwealth industrial relations legislation, a position consistent with industrial tribunals in other States.

The WAIRC role in public sector industrial matters in this State continues. Notice is given of the WAIRC’s wider jurisdiction with proclamation of the Owner-Drivers (Contacts and Disputes) Act 2007 and the Employment Dispute Resolution Act 2008 on 1st August and 1st December 2008 respectively. Current levels of remuneration for office holders in other industrial tribunals throughout Australia are provided in the WAIRC submission.

The submission from the Minister for Commerce includes information on pay increases in the pipeline for public servants, teachers and TAFE lecturers over the next three years. Attention is drawn to the impact of the global economic down turn on the labour market in this State and to the level of investment and the likely affect on the State’s growth.

The Minister advises that a review of the State’s industrial relations system is to be undertaken. Notice is also given that the Government’s wages policy is being reviewed.

CONSIDERATIONS

This determination is the first to be handed down by the Tribunal in 2009.

The environment which the Tribunal and indeed the community now faces, is significantly different from that which prevailed only six months ago.  The deterioration in the global economy that followed the meltdown of financial markets in the United States has impacted on the wider economy at international, national and regional levels.

The downturn in the economy evident from national accounts and economic performance statistics for the December 2008 quarter reflect only the initial deterioration from a high point in the nation’s and the State’s economic activity.

The Reserve Bank notes that at this time there is insufficient data available to “get a good reading on the trends that might be emerging in the early part of 2009” (‘The Economic Landscape in 2009’, address by the Assistant Governor Reserve Bank to the Australian Industry Group Annual Economic Forum, Sydney, 4th March 2009).

The International Monetary Fund (IMF) predicts that 2009 will be the weakest year for the global economy since the World War 2. However an improvement in the economic outlook is forecast for the end of the year and into 2010 as stimulus packages take effect throughout the world.

The March 2009 quarterly review of economic indicators will not be available until April. However the often repeated warnings from economists, public commentators and political leaders has been that “things are bad and there is worse to come before it gets better”.  There are daily reports of work force layoffs, reductions in working hours, cancellation of contracts and the dramatic deterioration in international trade. It is likely that the March 2009 quarter statistics will confirm fears held about the state of the economy and identify the magnitude of the challenge in restabilising financial stability which is fundamental to prosperity. Statistics disguise the human cost of an “economic downturn”. Bankruptcies, unemployment and personal hardship are reality for many in the community.

The global orientation of the State’s economy which has been the basis of our prosperity and could now be the source of our own vulnerability is evident from the composition of the Gross State Product (GSP). In 2007-08 mining accounted for  30% of GSP (for Australia mining is 8% of Gross Domestic Product GDP), exports were 47% of GSP (for Australia 21% of GDP) and business investment  26% of GSP (for Australia 17%). (Source ABS Cat. 5220).

Critical to the State’s economic performance are commodity prices and business investment. Fortunately the sharp decline recorded in prices for resource commodities in the December 2008 quarter have not continued to deteriorate at the same pace.  At this time the IMF forecast some improvement in prices in 2009 and 2010; however the levels reached before the economic downturn will not be repeated.

While surveys show the dramatic deterioration in business confidence at a national level in the December 2008 quarter (refer to NAB Business Survey, January 2009), this has not been reflected in the level of business investment in Western Australia so far this year. In 2007-08 business investment in this State stood at $23 billion in the December 2008 quarter survey. Projections based on Private New Capital Expenditure surveys has this rising to $33 billion for 2008-2009 and then dipping to $28 billion in 2009-10; levels above current actual amounts. (Source ABS Cat. 5265.0)

However the critical time for the State’s economy will be mid to late 2009 when several major resource developments have peaked. Whether there is sufficient confidence to invest on other projects will depend on the state of international markets, including financial market stability and commodity prices.

Australian Bureau of Statistics (ABS) Labour Market statistics released on 12th March 2009 show a big drop in full time employment of 14,000 jobs in Western Australia, but a bigger increase in part-time employment with 16,000 positions being created. However the significant increase in underlying unemployment has flowed from the increase of 13,000 in the participation rate. There has been an accelerating increase in the underlying unemployment rate from September 2008 in this State with the percentage monthly increase in January and February 2009 being the biggest since 1978 when records began. Job advertisements and surveys of hiring intensions show a dramatic downturn in vacancies. The ANZ Bank February 2009 survey of newspaper job advertisements records a 29% drop from January to February 2009 and a 64% drop for the twelve months to February 2009.

It has already being noted that the Tribunal is obliged to ensure that not more than a year elapses between one determination in respect of an office under Section 6(1)(e) and another. While it is clear that the WAIRC’s jurisdiction has increased since March 2008 and a review of the industrial relations system is to take place, a further wave of Federal legislation, the Commonwealth’s “Fair Work” Act may also impact on the Commission.  None of these matters would in normal circumstances act to persuade the Tribunal not to adjust the members’ remuneration in line with rates accorded other office holders and judicial and quasi judicial positions in this State.  However at this time, the Tribunal, after anxious consideration, believes that it would be reckless to determine an adjustment in the members’ remuneration during deteriorating economic circumstances and in the absence of a clear indication of a recovery.

The Tribunal recognises the value of the WAIRC to the community, the imperative to fulfil our statutory obligation and to ensure that this is discharged with equity and good conscience.

The Tribunal considers that it is prudent to maintain remuneration at existing levels until it can be satisfied that the state of economy is sufficiently stable enough to sustain increases in line with principles which the Tribunal will apply to each of the Statutory offices and judicial positions coming within its jurisdiction.

There is nothing to prevent the Tribunal reassessing the situation in the short term. Members of the Commission can be assured that this opportunity will be taken as soon as it presents. 

DETERMINATION

The Tribunal, pursuant to section 6(1)(e) of the Salaries and Allowances Act 1975, determines the Commissioners of the Western Australian Industrial Relations Commission will receive the amounts specified in the attached Schedule.  This will mean that the Commissioners will continue to receive the current rate of remuneration with effect from the 1st of May 2009.

The determination will now issue.

Signed at Perth this 20th day of March 2009.

W S Coleman AM C A Broadbent B J Moore
CHAIRMAN MEMBER MEMBER


SALARIES AND ALLOWANCES TRIBUNAL

 

SCHEDULE

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

 

1. Remuneration

1.1   Chief Commissioner - $282,730 per annum.

1.2   Senior Commissioner - $268,593 per annum.

1.3   Commissioner - $254,457 per annum.

2. Motor Vehicles

The following arrangements apply to the entitlement of each Commissioner to the provision of a fully maintained motor vehicle for business and private use.

2.1   The Chief Commissioner is entitled to the provision of a 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.

2.2   The Senior Commissioner and Commissioners are entitled to the provision of a prestige vehicle selected from Item 1008 (Prestige Class), as amended from time to time.

2.3   Vehicles with supercharged or V8 engines are not included.  Turbo charged engines with a capacity greater than 3.0 litres are not included.

2.4   The Chief Commissioner, Senior Commissioner and Commissioners may choose any vehicle and accessories in the Common Use Contract the total cost of which does not exceed the maximum cost of accessing a vehicle to which an entitlement exists in the relevant Prestige Class. The total cost will be based on individual usage patterns. Each lease should be tailored to achieve the most cost-effective arrangement, but with the maximum lease term being two years, and include any standard accessories (including a tow bar or, for those entitled to a prestige vehicle selected from Item 1009, also a sunroof).  Where the total cost of the chosen vehicle and accessories exceeds the maximum cost of accessing a vehicle to which an entitlement exists in the relevant Prestige Class, the additional cost must be borne by the individual. This includes the purchase cost of accessories, the installation cost and removal costs if required before disposal of the vehicle.

2.5   The Chief Commissioner must approve the selection of the vehicle for the Senior Commissioner and Commissioners.

2.6   The Chief Commissioner must approve that the provision of a 4-wheel drive vehicle is clearly substantiated by demonstrated operational need.

2.7   All vehicles (being part of the Government-owned State Fleet) should be managed in accordance with the policies and conditions established and amended from time to time by the Department of Treasury and Finance (the effective owner of the State Fleet).  Applicable terms and conditions are currently set out in the document, "State Fleet - Agency General Agreement".

2.8   Selection of appropriate vehicles should be subject to consultation between the Chief Commissioner and the Department of the Registrar of the Western Australian Industrial Relations Commission (as the department administratively supporting the Commission and therefore the "Agency" responsible for managing the leasing arrangements for vehicles provided to Commissioners of the WAIRC).  Although the cost of the vehicles is centrally funded, as a consequence of the vehicle being an emolument recommended under the Salaries and Allowances Act 1975, it remains an administrative responsibility of the Department of the Registrar of the Western Australian Industrial Relations Commission to manage in a cost effective manner.

Signed at Perth this 20th day of March 2009.

W S Coleman AM C A Broadbent B J Moore
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.