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Wednesday, 13 May 1970

Mr SNEDDEN (Bruce) (Minister for Labour and National Service) - The matter of public importance before the House deals with the employment conditions for Commonwealth public servants in 3 areas. One is 4 weeks annual leave; another is pay rates comparable in private industry; and the third is outright equal pay. I will be assisted in argument by the honourable member for Issacs (Mr Hamer) and the honourable member for Canning (Mr Hallett). The honourable member for Isaacs will be dealing in some detail with annual leave and the honourable member for Canning will be dealing in some detail with equal pay. The part which I will deal with in some detail is the middle one of the three, that is, the pay rates comparable with those in private industry.

Firstly, I think that the Commonwealth's wage fixing structure for public servants should be put in perspective. The Commonwealth is, as is well known to everybody, the biggest single employer if we regard it as a single entity, but of course it is not a single entity in terms of employment, because there are a great number of departments, authorities and commissions that employ people. All these separate employment arrangements are drawn together insofar as that is possible in the Public Service Board. The Public Service Board is the co-ordinator of wages and conditions for all Commonwealth public servants who are employed under determinations. My own Department is the co-ordinator insofar as the wages and conditions are fixed by the Conciliation and Arbitration Commission. The wages and conditions of those who are employed under the Public Service Board authority are fixed in the first point of time by the Public Service Board. The Board is a primary wage fixing authority. The way in which it operates is that a claim is made to the Public Service Board on behalf of an organisation. The Board then takes into consideration a variety of different criteria which have built up over a period of years and which are well publicised in the Public Service Board's annual reports in which it states the basis of its wage fixation.

The purpose of the Board is to negotiate with the respective unions or associations the wage rates that are claimed. If the negotiations fail the parties can take the matter to the Public Service Arbitrator where the matter can be arbitrated. From recollection I think that the Public Service Arbitrator has 2 assistant arbitrators. If the arbitration is not satisfactory to either the Public Service Board or, as is more usual, the associations or the unions then they may go on appeal to the Conciliation and Arbitration Commission. The Commonwealth's long stand in relation to the fixing of wages and conditions has been that the parties ought to proceed through conciliation in the form of negotiation and then through arbitration. The honourable member for Hindmarsh (Mr Clyde Cameron) may not accept the validity of the position but the Commonwealth's position is that all major conditions ought to be determined by negotiation if possible, and if not by negotiation then by arbitration.

In the case of a claim for equal pay or for 4 weeks annual leave the Commonwealth has said consistently that it is not able to negotiate such a claim as an individual employer separate from the entire range of the employment field, that as so many other people would be affected by a flow-on which would inevitably occur if the claim were granted by the Commonwealth the claim ought only be granted through the arbitration procedure. Equal pay has been granted, although I know from what the honourable member for Hindmarsh has said that the decision is not satisfactory to him. The decision was given by the Conciliation and Arbitration Commission to apply over the broad range of industry. The Commonwealth's attitude is that that is the proper way in which it should be done. Whether it be a good decision or a bad decision is open for people to argue about, as no doubt they will.

The same thing applies to annual leave. I will mention annual leave very briefly because, as I said before, the honourable member for Isaacs will take it in more detail. Three delegations representing Public Service unions and the Australian Council of Trade Unions have come to the Government to ask for an increase in annual leave to 4 weeks. The last of those delegations was in December last year. The delegation put its arguments to Ministers and officials including the Chairman of the Public Service Board, the Secretary of my Department, and some other officials whose names ] have forgotten. The Prime Minister (Mr Gorton) and I also were present. The arguments were put and then, in accordance with the undertaking given at the time, the matter was taken to the Cabinet for its consideration. The Cabinet gave very serious consideration to the representations that were made. The honourable member for Hindmarsh knows that I have not had time to turn up all the records on this matter in the short time that has been available - they were not immediately available to me - but my recollection is that the Cabinet considered the very matter that I mentioned earlier, that is, this would have been a major condition of employment change.

We had to take into account the impact that the decision would have had if it spread to the entire work force, for we believed that it could not be looked at in isolation from the remainder of the work force. The cost that would be occasioned by granting the extra annual leave had to be taken into account. The cost would not be confined to the Public Service but would spread into general industry. Consideration had to be given to prices and cost pressures that the increase would have stimulated. The state of Labour pressures at that time, in December, had to be taken into account. Labour pressures have not in any way slackened; indeed they have tightened since December.

I refer briefly to equal pay as that will be dealt with in more detail by the honourable member for Canning. Equal pay is an issue that has been before this House on a great number of occasions, ft has been a matter for great public controversy and debate. Ultimately the matter was pursued before the Conciliation and Arbitration Commission. The Full Bench of the Conciliation and Arbitration Commission brought down a decision which is now in the process of being applied. Essentially, the decision meant that those women in the work force who were eligible for equal pay would receive it on a stage basis over a period of 3 or 4 years, if my recollection is right. Nine principles were laid down by the Commission in order to give guidance to other arbitral authorities as to what the tests were to decide whether or not a woman in the work force was entitled to that graduated achievement of equal pay.

The middle leg of this proposition of public importance is the Government's refusal to grant pay rates comparable with those in private industry. It is important to get into context the factors taken into account by the Public Service Board. The simplest way for me to do it is to refer to the 1969 annual report of the Public Service Board, which is the most recent report. Under the title 'Rates of Pay' the Public Service Board makes the following statement:

In reviewing the rates of pay for each employment group the Board makes a careful examination of the information available to it on rates paid by other employers for comparable work.

The report then goes on to point out that there are some difficulties in obtaining those comparisons in every case. It says: . . the usefulness of comparisons wilh rates paid outside the Commonwealth Service may be limited, in some cases, by inability to obtain sufficient information on either the rales paid elsewhere, or the duties, responsibilities and organisation of employment groups outside the Service.

I am leaving out some words which are not relevant. The report continues:

Despite these limitations, comparison with rates paid by other employers provides an important first step in determining fair and reasonable pay rates.

At a later point the report says:

In making such comparisons, however, the Board has followed the principle, which has the support of arbitral dicta, that pre-existing relativities between groups do not in themselves provide a sufficient basis for determining new rates of pay.

In two recent examples, which will be well known to those who are concerned with industrial matters, the Board has specifically reached a decision on the rates it would pay having regard to the rates being paid outside the Public Service.

The first of these is what has been called the physical grades review for tradesmen and others which increased all rates by 6.6% as from 1st January 1970. This covered some 60,000 staff in the Commonwealth Public Service and was reached with the full agreement of the ACTU. The new rates were justified on the basis of the Board's examination of the going rates of pay outside the Service - that is, basic pay plus over-award payments. That would seem to negate at least in that instance the broad statement that the Commonwealth does not pay nates comparable to those in private industry. There was an even later specific instance with the review of the technical and drafting grades which involved increases of 5.8% or 5.9% for particular groups. Some 20,000 persons were involved. The agreement on this was reached within the last few weeks and the new rates were accepted without qualification by the unions involved. Within the last few week.the Public Service Board has received new pay claims covering the Third Division clerical and administrative area seeking increases of 14% in pay. The Board has also received claims from 2 professional engineer associations seeking increases for engineers. These claims rely, as put to the Board, on companison with the rates of pay of other staff employed within the Service, as well as other grounds. The Board will examine them and see whether it is appropriate to increase the rates having regard to the going rates outside the Public Service in general industry.

Perhaps the biggest single argument which shows that the Government or the Public Service Board, which is the proper authority in this case, does not pay claims lower than or that it meets the claims of outside industry is that the vast majority of pay claims made on it are settled without the need for the parties to resort to arbitration. That is an indication in itself that the Board is not following a policy of allowing the rates of pay of Commonwealth employees to fall significantly behind the rates of pay of comparable staff in other organisations. For example, over the last 4 years the Arbitrator determinations as compared to consent determinations were 10 as to 131, 18 as to 116, 9 as to 132, and in the year 1968-69 there were only 14 Arbitrator determinations as to 232 that were reached by consent on the basis of the principle.; which 1 have outlined here this afternoon

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