For The Labourer is Worthy of His Hire
Tasmanian Problems and Opportunities
In my judgement, the time is right for the Liberal
Government in Tasmania to review and overhaul the existing
industrial legislation. There is a growing expectation
throughout the business community that the new Government
will ring changes to accelerate workplace reform in
order to speed up the process of economic recovery.
As at 31 December 1990, Tasmania's preliminary estimated
resident population was 458,600, 2.7 percent of the
Australian total of 17,210,800.
Tasmania is divided into three distinct Regions; viz
Southern, Northern and North Western. These regions
are geographically different, and over the years parochial
regional cultures have developed. These parochial attitudes
are the constant source of bickering and promote an
intrastate rivalry that extends well beyond the sporting
fields. Phrases like:...'did you shut the gate behind
you when you passed through Oatlands?' directed by
Northerners to Southeners are a constant reminder that
parochialism is alive and well in Tassy.
The purpose of highlighting this apparent cultural
division is deliberate. Why? The answer rests in the
opportunity available for the rest of Australia
to benefit by the microcosms of the Australian community
contained in each of the Regions so easily discernible
in Tasmania. The population size and distribution makes
it an ideal social laboratory to trial new projects
The problems of 'tyranny of distance' which bedevil
larger States is simply not an issue in Tasmania.
Labour Market Regulation---an Historical Perspective
- "This Authority has clearly stated it will have regard
for, but will not be bound by, the Wage Fixing Principles
previously enunciated by the Australian Conciliation
and Arbitration Commission for the reason that it believes
this would constitute an abrogation of responsibility.
- J. W. Miley1
The history of industrial regulation in Tasmania demonstrates
the independent path that has been the hallmark of
the local industrial relations scene for many years.
The system has gone through three fundamental changes
as evidenced by the following diagram:
The Tasmanian Wages Board System
Victoria and Tasmania were the only States in which
State regulation of wages, working conditions and other
industrial matters operated through a system of Wages
Boards. The Boards were instituted in Tasmania in 1910,
some fifteen years after they were introduced in Victoria.
The first Act (Wages Board Act 1910) established Boards
for individual crafts. The Wages Boards Act 1920 provided
for Boards on an industry basis, i.e. a trade or group
Each Board consisted of an equal number of representatives
of employers and of employees, selected and appointed
by the Member (the Chief Secretary) for a period of
three years and a Chairman appointed by the Government.
Until 1970 the powers of the Boards were limited to
determining minimum wage rates, ordinary hours of work,
margins for skill, penalty rates, recreational leave
and several other matters.
Whilst blowing the dust off some old files during
my research I came across an address by the State Industrial
Registrar to the Economic Society of Tasmania in 1942
in which he made some interesting observations of the
Wages Board System.
- "... another lack in the State Wages Board System
causing it to be used as the last resort for convenience
by certain workers, is the fact that officials of their
organisations unless bona fide employees in the industry
are forbidden from participating in the deliberation
except if called as witnesses."
The report went on to identify some good features
of the Act.
- "... a good point in connection with the Wages Board
System is the fact that the machinery can be made to
function within a few days of the necessity arising."2
In 1970 the Act was amended by extending the jurisdiction
of the system by binding the Crown and enlarging the
powers of the Boards by increasing the range of matters
they dealt with. The Boards were authorised to, 'determine
any industrial matter' in relation to the trade in
respect of which they were appointed, except for matters
dealing with - trading hours, superannuation, bonus
payments and the engagement, dismissal or reinstatement
The main functions of the Board System were to regulate
industrial matters not otherwise subject to specific
legislation and to deal with industrial disputes.
A feature of the Wages Board System was the authority
vested in the Chairman to make a common rule decision
on matters concerning a basic or minimum wage, hours
of work or paid leave of absence.
The public or the press were excluded from Board Meetings
and the reasons for decisions (determinations) were
Meetings of Boards were convened by the Minister as
required. The Chairman had a casting vote on which
to decide matters on which the two sides fail to agree.
The Industrial Relations Act 1975
The legislation provided for a new authority referred
to as the 'Office of the Chairman of Industrial Boards
and previous determinations of Wages Boards became
Awards of Industrial Boards'.
Major changes brought about by the new Act included:
- Meetings convened by the Chairman of Industrial Boards
and not the Minister; dispute hearings and common rule
hearings were still required to be convened by the
- Organisations with no direct representation on Industrial
Boards could now attend meetings that involved matters
affecting those organisations subject to the approval
of the Chairman;
- Provision for Industrial Agreements to cover single
employers in multi employer industries subject to certification
by the Chairman;
- Provision was made for Boards to determine the date
from which an award will have effect;
- An Industrial Appeals Tribunal was provided for under
the new Act, its function being to provide an avenue
of appeal for affected parties against Awards of Industrial
- Provision for a general 'Right of Entry' for officials
representing employees in an industry covered by an
Establishment and Constitution of Industrial Boards
Boards are established by order of the Government
for particular industries. The Constitutional Nexus
of a Board is the industry of the employer not the
common occupation of the employees as is the case under
At the promulgation of the Act there were about 70
Boards in existence, consisting of an equal number
of employer and employee representatives and a Chairman.
Board Members are appointed by the responsible Minister.
The Act provided for the Minister to call Compulsory
Conferences for the purpose of settling or preventing
an industrial dispute. The Compulsory Conference is
presided over by a person appointed by the Minister;
in practice this person is usually a Chairman or Deputy
Chairman of Industrial Boards.
The Tasmanian Industrial Commission
The Industrial Relations Act 1984 provided for the
establishment of a Tasmanian Industrial Commission
with jurisdiction in both the public and private sectors
of employment. The power of the Commission includes:
- the making of industrial awards;
- the conducting of hearings;
- the convening of compulsory conferences for the purpose
of settling disputes;
- the certification of industrial agreements;
- and the registration of employer and employee associations.
There are five Commissioners, including the President
and Deputy President, who are empowered to make and
amend awards relating to industrial matters affecting
permanent, temporary, full-time part-time and casual
An 'industrial matter' means any matter pertaining
to the relations of employers and employees, but does
- trading hours;
- long service leave entitlement and payments;
- workers compensation;
- bonus payments;
- insurance; and
- appointments or promotions.
The Commission is constituted as follows:
The Act also provides for the reference of industrial
matters to the Australian Industrial Relations Commission
for determination, as well as providing for joint sittings.
The President of the Tasmanian Industrial Commission
also holds the office of Deputy President in the Australian
Industrial Relations Commission.
Registration under the Act as an Employer or Employee
Association entitles the organisation to:
- Make applications;
- Be notified of hearings;
- Appear before the Commission;
- Lodge Appeals;
- Intervene; and
- Enter into industrial agreements.
Appeals may be made to Full Benches against an award
made by a Commissioner sitting alone, interpretation
of awards made by the President, determinations made
by a Commissioner on award interest by a registered
Employer or Employee Association and refusal of the
Registrar to grant application for registration of
Employer or Employee Associations.
There is a total workforce of 190,000 in Tasmania.
Approximately 80,000 of the workforce is covered by
ninety five State Awards.
The Labour Government Reforms
On the last day of sittings of the House of Assembly
the Labour Government brought on for debate three Bills
affecting the Tasmanian workforce. The Bills were the:
- Industrial Relations Amendment Bill 1991;
- Workplace Protection Bill 1991; and
- Occupational Health and Safety (Miscellaneous Amendments)
This eleventh hour action by the Labour Government
had the effect of limiting debate in the Lower House
and putting the Legislative Council in the position
of either accepting them without alterations or killing
The Hobart Chamber of Commerce not having been involved
in the consultative process vociferously raised its
concern at the Government action in pushing the Bills
through without allowing a wider community debate.
The Government reluctantly withdrew the Workforce
Protection Bill and the Occupational Health and Safety
Bill to be brought on at a later date. However, they
refused to adjourn debate on the Industrial Relations
The upshot was a tense and awkward period of behind
the scenes manouvering between the Employer Associations,
which eventually led to the Legislative Council adjourning
debate on the Bill.
The February Election ushered in a Liberal Government
and hopefully we are looking at a totally new ball
The major concern of the Chamber of Commerce and other
Employer Associations with the Amendment Bill was in
the following areas:
- Compensation for Unfair Dismissals - the Bill made
specific reference to the capacity of the Commissioner
to award monetary compensation in cases of unfair dismissals
(where reinstatement was not appropriate) and in cases
- The Chamber was fearful that this clarification of
the power of the Commission would encourage unions
to seek arbitration ahead of consultation. The majority
of unfair dismissal cases traditionally have been settled
'out of court'. Small business felt particularly threatened
by this proposed change.
- The Tasmanian Confederation of Industries, which
had agreed to the passage of the Bill, stridently argued
the major benefit of the change for employers resided
in an appeal provision being inserted to enable parties
to a dispute to challenge the ruling of a Commissioner
sitting alone on dispute hearings dealing with alleged
- Award Enforcement---a major reform contained
in the Bill was provision for the Commission to hear
and determine matters involving alleged underpayment
of wages or any other alleged breach of an award with
a right of appeal to a Full Bench. Currently such matters
are technically beyond the jurisdiction of the Commission
and are dealt with in the Magistrates Court.
- From the Chamber of Commerce's point of view the
Bill in providing for the Secretary of Labour or a
union to apply for a hearing increased the power and
influence of the union movement, thus allowing the
union to assume a 'policeman' role.
- A further concern from small business was the apparent
centralisation of power with the Commission. The role
of the Commission is often misunderstood by small business,
many of whom do not belong to Employer Associations.
However, the main point of issue with regard to
the Amendment Bill was the lack of proper consultation
across the business community. The Bill was the outcome
of consultations between the Government, the Tasmanian
Confederation of Industries and the Tasmanian Trades
and Labour Council.
Current Industrial Issues
The Liberal Government's short honeymoon in office
has rapidly come to an end with industrial relations
issues beginning to occupy the front page of the papers.
At the time of writing this paper the APPM ultimatum
to its workforce had not expired. APPM had instructed
its employees that after the 2 April all overaward
arrangements will cease and employees will be paid
strictly in accordance with the Federal Award. The
action has prompted one union official in a letter
to the editor of The Mercury to write, "...the waters
of Robe River have begun to trickle on to the Tasmanian
The Government appears headed for a major confrontation
with the public sector unions following the Premier's
announcement to lodge an incapacity to pay agreement
with the Tasmanian Industrial Commission to head off
pay rises, which will cost an estimated minimum payout
of $43 million.
About 14,000 public sector workers are expected to
get pay rises during the course of this year under
a landmark award restructuring decision handed down
by the Tasmanian Industrial Commission last November.
Special wage cases for teachers and police have been
underway in the Commission for some time and could
add to the bill.
If the hearing before the Commission is unsuccessful
the Government could be forced to resort to compulsory
The public sector restructuring decision sent shockwaves
through the private sector. The Commission's decision
to eliminate junior rates established on the basis
of age is of particular concern. The precedent set
in the public sector creates the potential for flow
on into private sector awards, particularly in the
It is noted that the Full Bench in its reasons for
the decision stated that, 'we are mindful of the cost
of a restructuring of this magnitude, but we have no
doubt that to continue with the existing awards will,
in the long term prove counter-productive to the employer
and to the community generally' --- time will
The Tasmanian Picture
- "Industrial relations is like watching cricket - you
either love it a lot or detest it immensely."
In the relatively small Tasmanian community it is
difficult to avoid exposure to industrial relations.
Like the recent saturation cricket coverage during
our best forgotten World Cup fiasco you cannot escape
from the ever present coverage of industrial relations,
which seem to dominate our local media outlets.
The Tasmanian population is more dispersed than any
other State population: some 40% of Tasmania's population
resides in the Capital City, Hobart, compared with
73% of South and Western Australia's residing in Adelaide
and Perth; or the 70% of Victorians residing in Melbourne.
One of the consequences of this population dispersement
is that local industries supplying local markets operate
on a small sales base. The preponderance of small business
throughout the State to some extent can be explained
by the size of the local markets.
In July 1989 Tasmania had 19,500 small business establishments
employing fewer than 20 people. With the exception
of mining and manufacturing industries, over 95% of
all establishments employ fewer than 20 people. The
total numbers employed in small business in July 1989
were, 48,000, representing approximately 40% of private
It is often stated that Tasmania's private sector
is in essence a branch economy. Management functions
are centralised in the company's mainland head offices
leaving operative functions in the branches. More than
half the organisations controlling the local Mining,
Manufacturing, Transport, Communication and Finance
Sectors of the Tasmanian economy have their head offices
registered outside the State. Thus more than 60% of
Tasmania's private sector employment is controlled
by firm's with head offices outside the State.
I raise this point to indicate that small business
is a major stakeholder in the Tasmanian Industrial
System. Its voice must be heard despite the oft quoted
difficulties in coming to grips with the problems of
Of the major companies operating in Tasmania the majority
are covered under the Federal Industrial Jurisdiction.
The likes of Australian Pulp and Paper Manufacturers,
Australian Newsprint Mills and Comalco are covered
by Federal Awards or Agreements.
The one exception is Pasminco Metals-EZ Company. All
of its operations in Tasmania are covered under the
The performance of the labour market is closely linked
to the performance of the economy overall.
Tasmania enjoys a relatively stable industrial relations
record as illustrated in the chart below. The lower
level of militancy of the Tasmanian workforce is probably
attributed to the small size of the Tasmanian community.
This enables a closer and more frequent contact between
the participants in the system than elsewhere in Australia.
The character of the Tasmanian community is generally
regarded as fairly conservative as are the individual
characteristics of the leading personalities in the
However, there is an independent spirit in Tasmania
which surfaces in the application of industrial relations.
A recent example of this independence was evident
in the negotiations that took place in 1991 on the
development of a tri-partite Tasmanian Wages Accord,
following the rejection of Accord Mark VI by the Australian
The parties to the Tasmanian Accord---The Tasmanian
Government, Private Sector Employers and the Tasmanian
Trades and Labour Council had regard to the following
- The unique nature of the Tasmanian economy, particularly
its sensitivity because of the export oriented nature
of its productivity base;
- The depth and length of the current recession on the
- An unacceptable high level of unemployment, particularly
in the area of youth unemployment.
The parties were also promoting a continuing high
level of co-operation between employers and employees
to provide benefits to all sections of the Tasmanian
The Tasmanian Accord died in the ditch due to a number
of major hurdles that could not be quickly and easily
overcome, such as the Federal Award Coverage of Tasmanian
Tasmania like other States has a relatively low level
of unionisation in small business enterprises. It is
apparent that those who work in small business enterprises,
both employers and employees, are more removed from
the mainstream of the industrial relations system than
their larger counterparts. Consequently they do not
participate to the same extent in decision making nor
are they as a general rule consulted by Government
or the major parties.
I support the conclusion of Richard Sappey that the
position of small business enterprises in the industrial
relations system has not been fully explored to date.
Further research is required into a number of aspects,
such as---the attitudes of employees; the extent
of membership and influence within employer associations;
the impact of tribunal decisions and the difference
Labour Market Reform - Expectations and Opportunities
As I stated at the outset of this paper, in my judgement
the time is right for the Ray Groom, Liberal Government,
to review and overhaul the existing industrial legislation.
- "There is no magic source of productivity outside
the workplace. Accords, national union amalgamation
and efficiency principles are no substitute for the
reorganisation of work at the front line by the people
in the enterprise."
- Fred Hilmer
The heart of industrial relations is at the workplace
so we are being constantly told by the Federal Government
and the proponents of award restructuring.
The expectation from the private sector has been built
up with the focus of 'Enterprise Bargaining' heralding
a shift away from the centralist system of Federal
and State Industrial Tribunals. Unfortunately in Tasmania
the gloss of Enterprise Bargaining is beginning to
dull as disillusionment begins to surface throughout
In Tasmania the opportunities for workplace reform
are being shifted by the need to process Enterprise
Agreements through registered employer organisations
and the unions.
For small business, the experience of award restructuring
has been a painful experience. The productivity trade
offs negotiated between the parties to an award in
most cases do not filter through to smaller enterprises.
Labour market reform in Tasmania is essential in the
eyes of the private sector. There are a number of issues
that have been earmarked by the private sector for
change. They include:
- Enterprise bargaining---Without oversimplifying
the problem a dramatic shift is required away from
the existing requirement of processing agreements through
registered employer organisations and unions. The freedom
of choice should be available to the employers and
the employees to negotiate an agreement with minimum
reference to the tribunal.
- An opportunity should also be made available for small
business to collectively negotiate industry or group
agreements in a similar manner to an Enterprise Agreement.
This would allow small business operators to achieve
some direct and realisable productivity benefits.
- Right of Entry of Union Officials - The current unfettered
right of unions to enter an employer's premises to
inspect employment records at best should be scrapped
altogether, or at worst be restricted to inspection
of records only of those employees who are members
of the union. The existing legislation is a constant
source of criticism and concern by employers in Tasmania.
- Occupational Superannuation - The industrial legislation
to be varied to preclude the Tasmanian Industrial Commission
from nominating specific funds in awards. Such decisions
by the Commission represent a strong case of restraint
- The long term interests of employees is surely best
served by a free and competitive environment where
success will depend upon the performance and merit
rather than a position of privilege.
- Penalty Rates and Leave Loading---A recent survey
of Tasmanian businesses carried out for the Tasmanian
Chamber of Commerce in 1991 revealed penalty rates
and leave loading as the most important industrial
relations issue affecting employment. The recreation
and personal services sector reacted particularly strongly,
followed by the wholesale and retail sector.
- Both these issues have been recognised as 'no go' areas
in the past. However, the oft quoted 'one man's wage
rise means another man's job' could well be translated
nowadays into, 'the payment of penalty rates is preventing
the employment of additional employees.'
- A review of the role of the Tasmanian Industrial Commission
Ä I do not support the total abolition of the
Commission. Nor do I support the State Tribunal being
an arm of the Australian Industrial Relations Commission.
The feedback I pick up from the private sector on
this vexatious issue is generally directed toward deregulating
the system to recognise the shift toward the workplace
and away from a centralist industrial relations system.
- Education---The advent of award restructuring,
coupled with the push to deregulate the industrial
relations system places demands on management, many
of whom in this State do not have the skills to handle
the added responsibility of Workplace Reform Programmes.
Negotiations are giving way to communication, consultation
and common understanding, built on mutually shared
The Government and Employer Associations need to grasp
the nettle and embark upon programmes to lift managerial
skill in workplace relations.
- The Term 'Industrial Relations'---As I move throughout
the business community in Tasmania I am continually
confronted with a negative reaction to the term 'Industrial
Relations'. It smacks of the I.R. Club; it is a constant
reminder of the 'them and us' confrontationalist approach
to employee relations.
The opportunity exists for the Government to turn
over a new leaf and adopt a new term to describe workplace
Tasmania has exhibited an independent attitude to
labour market regulation since Federation. Whilst there
has been a progressive shift toward a system that lines
up with mainland standards there has been a dominant
theme of 'we will do it our way'.
Tasmania is an ideal situation to embark upon a significant
labour market reform programme. The size of the community
and the regional make up of the State provides a good
opportunity for the rest of Australia to assess and
monitor the impact of change. The moment should not
be lost by the State Government to embark upon a complete
review of labour market regulations.
There are always plenty of good reasons for putting
reform programmes on hold. It requires a commitment
from the Government to act now before it is too late.
The key imperatives for change have been addressed
in this paper. I am certain there are others.
I would like to conclude with the following quote:
- "The most prominent place in hell is reserved for
those who take a neutral stand on the great issues
- Billy Graham
- 1. Miley, J.W., Chairman of Industrial Boards., State
National Wage Decision 12th January 1929.
- 2. Ogilvie, E.J., State Industrial Registrar, Address
to the Economic Society of Tasmania, 22nd September