Airbus Australia Pacific Limited T/A Airbus Australia Pacific v Australian Workers' Union [2023] FWC 2996

1 Fair Work Act 2009 s.240 - Application to deal with a bargaining dispute Airbus Australia Pacific Limited T/A Airbus Australia Pacific v Australian Workers' Union (B2023/695) DEPUTY PRESIDENT GRAYSON SYDNEY, 16 NOVEMBER 2023 Application to deal with a bargaining dispute – consent arbitration – proposed enterprise agreement – wage increases [1] On 11 July 2023, Airbus Australia Pacific Limited, trading as Airbus Australia Pacific (Airbus) filed an application for the Fair Work Commission (Commission) to deal with a bargaining dispute pursuant to s.240 of the Fair Work Act 2009 (Cth) (FW Act). [2] The dispute concerns negotiations between Airbus and the Australian Workers’ Union (the AWU) for the approval of a new enterprise agreement (the 2023 Agreement) to replace the current Airbus Australia Pacific (Richmond) Enterprise Agreement 2019 (the 2019 Agreement). Negotiations have been on foot between the AWU and Airbus in respect of the proposed agreement since July 2022. Proposed agreements have been put to a vote of employees by Airbus on two occasions, neither of which were successful. [3] The Commission conducted conferences with the parties on 19 July 2023, 2 August 2023, 8 August 2023 and 5 September 2023. These conferences were productive in that the parties reached agreement on many of the unresolved issues in bargaining. The parties agreed to have one of the remaining issues in dispute arbitrated by the Commission as contemplated by s 240(4) of the FW Act, being the quantum of three percentage and whole dollar increases in rates of pay to be contained in the proposed agreement, within parameters agreed by the parties. The parties have not agreed for the Commission to make an order that the determined wage rates are to be included in the 2023 Agreement, replacing the 2019 Agreement. Rather, the Commission is required to determine, based upon the evidence and submissions made during the proceedings, what wages should be incorporated into an enterprise agreement. The parties have agreed that these will then be incorporated into an enterprise agreement which will be put to a vote under the FW Act in the ordinary way. Question to be arbitrated [4] The parties agreed to have the Commission arbitrate the dispute by deciding the quantum of wage increases to be contained in the proposed agreement, within the following agreed parameters: [2023] FWC 2996 DECISION -- 1 of 53 -- [2023] FWC 2996 2 (a) The amount of the first wage increase that will apply to the rates of pay from the first full pay period after any decision made by the Commission in this matter is: i. An increase of 2.8% plus a $1,000 increase to wage rates per year; ii. An increase of 4.8% plus a $1,000 increase to wage rates per year; or iii. A figure in between those set out at (i) and (ii) above (b) The amount of the second wage increase that will apply to the rates of pay from the first full pay period after 1 February 2024 is: i. An increase of 2.35% plus a $1,000 increase to wage rates per year; ii. An increase of 3.85% plus a $1,000 increase to wage rates per year; or iii. A figure in between those set out at (i) and (ii) above; and (c) The amount of the third wage increase that will apply to the rates of pay from the first full pay period after 1 February 2025 is: i. An increase of 2.35% plus a $1,000 increase to wage rates per year; ii. An increase of 3.35% plus a $1,000 increase to wage rates per year; or iii. A figure in between those set out at (i) and (ii) above. Legislative background [5] The power of the Commission to arbitrate the dispute is at Part 2-4, s.240 of the FW Act, as follows: 240 Application for the FWC to deal with a bargaining dispute Bargaining representative may apply for the FWC to deal with a dispute (1) A bargaining representative for a proposed enterprise agreement may apply to the FWC for the FWC to deal with a dispute about the agreement if the bargaining representatives for the agreement are unable to resolve the dispute. See also section 255A (limitations relating to greenfields agreements). (2) If the proposed enterprise agreement is: (a) A single-enterprise agreement; or -- 2 of 53 -- [2023] FWC 2996 3 (b) A supported bargaining agreement; or (c) A multi-enterprise agreement in relation to which a single interest employer authorisation is in operation; The application may be made by one bargaining representative, whether or not the other bargaining representatives for the agreement have agreed to the making of the application. (3) If subsection (2) does not apply, a bargaining representative may only make the application if all of the bargaining representatives for the agreement have agreed to the making of the application. (4) If the bargaining representatives have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so. [6] The objects of Part 2-4 of the FW Act are at s.171 of the FW Act, as follows: 171 Objects of this Part The objects of this Part are: (a) To provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and (b) To enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through: (i) Making bargaining orders; and (ii) Dealing with disputes where the bargaining representatives request assistance; and (iii) Ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay. [7] I also note that the exercise the Commission’s power to arbitrate is to be exercised in accordance with ss. 577 and 578 of the FW Act, which provide as follows: 577 Performance of functions etc. By the FWC (1) The FWC must perform its functions and exercise its powers in a manner that: (a) Is fair and just; and (b) Is quick, informal and avoids unnecessary technicalities; and -- 3 of 53 -- [2023] FWC 2996 4 (c) Is open and transparent; and (d) Promotes harmonious and cooperative workplace relations. Note: The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581). (2) In performing its functions under paragraph 576(2)(b), the FWC must have regard to: (a) The need for guidelines and other materials to be available in multiple languages; and (b) The need for community outreach in multiple languages. 578 Matters the FWC must take into account in performing functions etc. In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account: (a) The objects of this Act, and any objects of the part of this Act; and (b) Equity, good conscience and the merits of the matter; and (c) The need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual orientation, breastfeeding, gender identity, intersex status, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin. [8] The parties’ submissions referred the Commission to the overriding object of the FW Act at s.3, specifically with respect to subsection (f): 3 Object of this Act The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by: … (f) Achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; … [9] Airbus’s submissions also referred and relied upon subsection (a) of s.3, which reads: (a) Providing workplace relations laws that are fair to working Australians, promote job security and gender equality, are flexible for businesses, promote -- 4 of 53 -- [2023] FWC 2996 5 productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations; [10] The AWU’s submissions also indicated that, although the Commission was not obliged to do so, guidance may be drawn from s. 275 of the FW Act,1 which provides as follows: 275 Factors the FWC must take into account in deciding terms of a workplace determination The factors that the FWC must take into account in deciding which terms to include in a workplace determination include the following: (a) The merits of the case; (b) For a low-paid workplace determination—the interests of the employers and employees who will be covered by the determination, including ensuring that the employers are able to remain competitive; (c) For a workplace determination other than a low-paid workplace determination—the interests of the employers and employees who will be covered by the determination; (d) The public interest; (e) How productivity might be improved in the enterprise or enterprises concerned; (f) The extent to which the conduct of the bargaining representatives for the proposed enterprise agreement concerned was reasonable during bargaining for the agreement; (g) The extent to which the bargaining representatives for the proposed enterprise agreement concerned have complied with the good faith bargaining requirements; (h) Incentives to continue to bargain at a later time.2 Hearing and Witnesses [11] A hearing was conducted in person on 12 October 2023. [12] Airbus was represented by Mr Fuller of Counsel instructed by Minter Ellison. I exercised my discretion to grant permission for Airbus to be represented, on the basis that: 1 Chassis Brakes International Castings Pty Ltd [2013] FWC 5615 (‘Chassis’) at [86]. 2 Airbus also submitted that it was relevant to consider, by analogy, these principles, to the extent that this was consistent with the scope of the arbitration agreed between the parties. -- 5 of 53 -- [2023] FWC 2996 6  Legal representation would enable the matter to be dealt with more efficiently pursuant to s.596(2)(a) and, pursuant to s.596(2)(c), on the basis of fairness between the parties and considering: (a) The legal complexity of the matter; (b) The volume of the material filed in the matter and relevant to the consideration of the question to be arbitrated, and; (c) The relatively truncated timetable within which this matter was to be dealt with. [13] The AWU was represented by Ms Doumit, Senior Legal Officer, and Mr Ward, Industrial Officer. The AWU did not oppose Airbus being granted permission to be legally represented. [14] Airbus filed the following material in the proceedings: (a) Statement of Richard Pegg dated 29 September 2023; (b) Statement of Kevin Kwok dated 29 September 2023; (c) Statement in Reply of Richard Pegg dated 6 October 2023; (d) Statement of Matthew Melverton dated 6 October 2023; (e) Statement of Angela Dawson dated 6 October 2023; (f) Statement in Reply of Kevin Kwok dated 6 October 2023. [15] The AWU filed the following material in the proceedings: (a) Statement of Joseph Gray Hutchings dated 29 September 2023; (b) Statement of William John Sinclair dated 28 September 2023; (c) Statement of Dale Ellington dated 28 September 2023; (d) Statement of Glen Curtain dated 29 September 2023; (e) Statement of Shane Roulstone dated 28 September 2023; (f) Statement of Taylor Warwick Rundell dated 29 September 2023; (g) Statement in Reply of Joseph Gray Hutchings dated 6 October 2023; (h) Statement in Reply of Taylor Warwick Rundell dated 5 October 2023. -- 6 of 53 -- [2023] FWC 2996 7 [16] With the exception of Mr Roulstone, all witnesses gave oral evidence and were required for cross-examination at the hearing before me. Background [17] As outlined above, this dispute arises in the context of protracted enterprise bargaining and industrial action involving Airbus and its employees, and the AWU as bargaining representative for the employees. [18] It is agreed between the parties that the 2023 Agreement will cover Airbus employees performing maintenance and warehousing work at its facility in Richmond, NSW only (Richmond employees). There are approximately 90-100 permanent Richmond employees. These employees support the Royal Australian Air Force (RAAF) C-130J Hercules fixed-wing fleet (fleet) at the RAAF base in Richmond.3 [19] Other staff employed by Airbus at Richmond are white collar, salaried workers. No evidence was before the Commission regarding their terms and conditions of employment. Across Australia, Airbus employs other employees on enterprise agreements at its Townsville, Darwin, Brisbane and Adelaide (Edinburgh) sites. [20] Airbus’s parent company (Airbus SE) operates globally in the fields of aeronautics, space and related services including the design and manufacture of aircrafts and aerospace technology.4 [21] The largest part of Airbus’s business involves providing support services for rotary and fixed-wing aircraft fleets operated by the Australian Defence Force and New Zealand Defence Force (Defence business).5 The other, and minor, part of Airbus’s business is civilian sales of Airbus-manufactured helicopters.6 [22] The majority of Airbus’s Defence business is conducted under contracts between Airbus and the Commonwealth of Australia through the Capability Acquisition and Sustainment Group within the Department of Defence (CASG).7 Currently Airbus has three main contracts with CASG: two rotary-wing contracts referred to as the ‘MRH Contract’ and ‘ARH Through Life Support Contract’, and the contract relating to Airbus’s work at Richmond (Richmond Contract) pursuant to which the Richmond employees perform their work.8 [23] The MRH Contract is the largest of these contracts and the ARH Through Life Support Contract is the second-largest.9 The MRH Contract is expected to end in December 2023 and the ARH Through Life Support Contract is expected to end in around 2026, as a result of the 3 Statement of Richard Pegg dated 29 September 2023 (‘Pegg’) at [10], [16]. 4 Pegg at [7]. 5 Pegg at [9(a)]. 6 Pegg at [9(b)]. 7 Pegg at [10]. 8 Pegg at [10]-[13]. 9 Pegg at [11], [13]. -- 7 of 53 -- [2023] FWC 2996 8 relevant aircraft going out of service.10 Should these contracts come to an end as expected, this would result in a substantial reduction in Airbus’s workforce and revenue,11 and would result in the Richmond Contract being the major contract in Airbus’s Defence business.12 The Richmond Contract requires the Commonwealth of Australia to make payments to Airbus for ongoing services. [27] The 2019 Agreement expired on 1 February 2023.20 Bargaining for the 2023 Agreement commenced in July 2022.21 10 Pegg at [12], [14]. 11 Pegg at [9(a)], [11]-[15]. 12 Pegg at [9(a)], [15]. . ]. . . 20 Pegg at Annexure RP-02. 21 Pegg at [41], Witness Statement of Joseph Gray Hutchings dated 29 September 2023 (‘Hutchings’) at [7]. -- 8 of 53 -- [2023] FWC 2996 9 [28] On 19 July 2022, Airbus prepared a session briefing pack to be presented to Richmond employees that set out the terms of the proposed 2023 Agreement and their effects.22 At this time, the 2023 Agreement was proposed to contain the following percentage increases:23 (a) An increase of 2.8% for the first operative year (plus the roll in of annual leave loading); (b) An increase of 2.35% for the second operative year; (c) An increase of 2.35% for the third operative year. [29] On or around 5 December 2022, a draft enterprise agreement was put to a vote by Airbus.24 I infer from the evidence that the wage offer in the draft agreement reflected the session pack summarised in the preceding paragraph and that it did not include the additional $1,000 increase per annum that is currently proposed by both parties in these proceedings. It is not clear on the evidence before the Commission whether the proposed agreement subject to the 5 December 2022 vote included any payment of backpay to Airbus’s employees for the period between the expiration of the previous enterprise agreement on 1 February 2023 and the commencement of the new enterprise agreement. Evidence from both parties suggested that any back payments made by Airbus to the Richmond employees would be contingent on the success of the vote.25 [30] At the time it was first put to vote on 5 December 2022, the proposed agreement returned 90 ‘no’ votes and 6 ‘yes’ votes.26 [31] The bargaining representatives then engaged in further bargaining. On 30 March 2023, Airbus prepared an updated session briefing pack to be presented to Richmond employees regarding the terms of the proposed 2023 Agreement. This briefing pack indicated that the proposed 2023 Agreement would contain the same percentage increases set out at [28] above,27 and an additional payment of $1,000 characterised as a KPI or performance-based bonus.28 Airbus’s evidence in reply was that this additional KPI or performance-based bonus offer was communicated to employees on 22 March 2023.29 On 1 June 2023, the Richmond employees voted once more on the proposed 2023 Agreement, returning approximately 71 ‘no’ votes and 18 ‘yes’ votes.30 [32] On 11 July 2023, Airbus applied to have the Commission deal with a bargaining dispute. The application was allocated to Deputy President Roberts and several conferences were convened before him. 22 Hutchings at Annexure E. 23 For the purposes of the dispute before the Commission, I do not propose to detail the balance of the terms of either of the draft Agreements put to a vote during the bargaining process. 24 Hutchings at [25], [27], PN401 – PN402. 25 Hutchings at [26], PNPN403 - PN405. 26 Hutchings at [27], PN405. 27 Reply, Hutchings at Annexure D. 28 Hutchings at [30], Witness Statement of Angela Dawson dated 6 October 2023 (‘Dawson’) [25]. 29 Dawson [25]. 30 Hutchings at [38], PN411. -- 9 of 53 -- [2023] FWC 2996 10 [33] In the most recent round of negotiations, matters that the parties have so far agreed to be included in the 2023 Agreement (in addition to the 2019 Agreement terms) include: (a) A change in classification structure which will see 22 Richmond employees (24 positions) receive an increase in their ‘starting’ base rate (prior to any wage increase awarded in this arbitration) of between 2.69% and 20.52%.31 While the base rates of eight employees (Impacted Employees) will decrease, the parties have agreed on a one-off payment of $2,500 as compensation, which is intended to offset or partially offset the effects on the Impacted Employees,32 although I note that the AWU’s position is that this does not neutralise these effects;33 (b) Four new allowances of between $21.50 and $69.75 per week,34 payable to thirteen of Airbus’s employees covered by the EA, with approximately three of these thirteen employees receiving the $69.75 secondary trade allowance;35 (c) An additional uniform allotment and increase in the boot allowance;36 (d) The introduction of an Adult Apprentice classification which will increase the wage rates for adult apprentices, 37 who under the previous Agreement did not have a specified classification scale,38 and, (e) Rolling annual leave loading into base rates, which results in the equivalent of a further 1.58% increase to wage rates.39 [34] Factoring in the increases in Richmond Employees’ base rates resulting from the change in classification structure (or the $2,500 payment for those employees whose base rates will decrease), and the $1,000 per year increase which both parties have put forward in their wage proposals for this arbitration, Airbus’s evidence is that total effective wage increases resulting from Airbus’s proposal (not including any annual leave loading being rolled into wages) are:40 a) Year 1 – 3.88% to 25.50% (apart from the eight employees referred to in paragraph [33](a) above, whose one-off payment is equivalent to a wage increase for that year of 3.35% to 3.96%.); b) Year 2 – 3.33% to 4.09%; and 31 Pegg at [51(a)]. 32 Pegg at [51(b)], PN1055 – PN1056. 33 Reply, Hutchings at [21]-[23], PN1132 - PN1133. 34 Pegg at [44(a)]. 35 PN94 – PN107. 36 Pegg at [44(d)-(e)]. 37 Pegg at [44(c)], PN109 – PN110, PN340. 38 PN336 – PN343. 39 Pegg at [56]. 40 Pegg at [55(a)]-[55(c)], Annexure RP-06. -- 10 of 53 -- [2023] FWC 2996 11 c) Year 3 – 3.30% to 4.02%. [35] Airbus’s figures in respect of its proposal include the 25.50% increase due to the change to its apprentice classification structure under the new agreement. The AWU excluded the effects of the changes to the apprentice classification structure from its modelling. Other than that, and factoring in those same increases, the AWU’s evidence is that the total effective wage increases resulting from Airbus’s proposal (exclusive of any annual leave loading being rolled into wages) are:41 (a) Year 1 – 3.80% to 4.64%; (b) Year 2 – 3.32% to 4.11%; and (c) Year 3 – 3.29% to 4.04%. [36] Factoring in the same increases described at [34] above and within those same parameters, Airbus’s evidence is that the total effective wage increases resulting from the AWU’s proposal are as follows:42 (a) Year 1 – 5.88% to 27.91% (apart from the eight employees referred to in paragraph [33](a) above, whose one-off payment is equivalent to a wage increase for that year of 2.74% to 3.13%.); (b) Year 2 – 4.82% to 5.56%; (c) Year 3 – 4.27% to 4.97%. [37] As per [35] above, the AWU excluded the affected apprentice classifications from its figures. The AWU’s evidence as to the total effective wage increases resulting from the AWU proposal (again, exclusive of any annual leave loading being rolled into wages) are:43 (a) Year 1 – 5.80% to 6.01%; (b) Year 2 – 4.80% to 4.99%; (c) Year 3 – 4.26% to 4.44%. Airbus’s case [38] Airbus relied on the evidence filed, a written outline of submissions and written submissions in reply. Airbus also made oral submissions at hearing. [39] Airbus proposes that any increase in wage rates to be incorporated into the 2023 Agreement for Richmond employees should be: 41 Rundell at [23(a)], [24]-[26] Annexure 7. 42 Pegg at [55(d)-[55(f)], RP-06. 43 Rundell at [23(b)]-[25], [27], Annexure 7. -- 11 of 53 -- [2023] FWC 2996 12 (a) From the first full pay period after the Commission’s decision – 2.8% plus $1,000 per year; (b) From the first full pay period after 1 February 2024 – 2.35% plus $1,000 per year; and (c) From the first full pay period after 1 February 2025 – 2.35% plus $1,000 per year. [40] Airbus made submissions that s 240 of the FW Act authorises the Commission to arbitrate a dispute about a proposed enterprise agreement where the bargaining representatives for the agreement are unable to resolve the dispute and have agreed for the Commission to do so. The scope of the arbitration is determined by the scope of the dispute and the parties’ agreement. [41] In exercising its power under s 240, the Commission is to observe the requirements of s 577, 578 of the FW Act. In so doing, the Commission must take into account the objects of the FW Act and of Part 2-4 of the Act. It was conceded that many of these factors were neutral or irrelevant factors when assessing the respective positions of the parties. Relevant objects in s 3 included: To provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by: (a) Providing workplace relations laws that are fair to working Australians, promote job security and gender equality, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations; and … (f) Achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; [42] Relevant objects in s 171 included: (a) To provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and (b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through: ... (ii) dealing with disputes where the bargaining representatives request assistance; -- 12 of 53 -- [2023] FWC 2996 13 [43] Airbus also submitted that it was relevant to consider, by analogy, the principles applying to the making of workplace determinations to the extent this is consistent with the scope of the arbitration agreed between the parties.44 [44] The factors that have been considered relevant by the Commission in arbitrating similar bargaining disputes in other cases include: (a) The value of the financial package to be provided to employees under the enterprise agreement as a whole, including benefits that will be provided to employees aside from wage increases;45 (b) Any additional benefits that will accrue to the employer under the enterprise agreement;46 (c) The financial situation of the employer’s business, including any cost pressures facing it and the likely impact of any wage increases on its operations;47 (d) The economic environment of both the business and employees, including inflation;48 (e) The history of wage increases for the relevant employees, including the time elapsed since the last increase;49 (f) Any productivity gains that have been achieved by employees since the last wage increase, or productivity consequences of a particular wage increase;50 and (g) Any wage increases that have been provided elsewhere, including by the employer’s direct competitors, in the sector, and among employers generally.51 [45] Airbus submits that its wage proposal should be incorporated into the 2023 Agreement as this would be the fair and just outcome consistent with the equity, good conscience and merits of the matter. This position was advanced as follows. Value of the financial package and benefits to be provided to employees and any additional benefits that accrue to Airbus under the 2023 Agreement. 44 Australian Licenced Aircraft Engineers Association v Cobham Aviation Services Engineering Pty Ltd T/A Cobham Aviation Services Australia - Engineering [2012] FWA 9444 (‘Cobham’) at [93]-[94]; Chassis at [86]. 45 Cobham at [92]; Chassis at [97]. 46 Schweppes Australia Pty Ltd v United Voice – Victoria Branch [2012] FWAFB 8599 (‘Schweppes’) [151]-[152]; Parks Victoria v Australian Workers’ Union [2013] FWCFB 950 (‘Parks Victoria’) [248]. 47 Chassis Brakes at [87]-[88]; Workers’ Union v Qantas Airways Ltd [2012] FWAFB 6612 (‘Qantas’) at [95]; Schweppes at [151]-[152]; Parks Victoria at [248]. 48 Cobham at [92]; Chassis at [89]-[91]; Qantas at [95]; Schweppes at [114], [151]-[152]; Parks Victoria at [177], [230], [248]. 49 Cobham at [92]; Chassis at [95]; Qantas at [95]; Schweppes at [131], [151]-[152]; Parks Victoria at [248]. 50 Cobham at [92]; Chassis at [103]; Qantas at [95]. 51 Cobham at [92]; Chassis at [92]-[94]; Qantas at [95]; Schweppes at [114], [151]-[152]; Parks Victoria at [177], [248]. -- 13 of 53 -- [2023] FWC 2996 14 [46] Firstly, Airbus submitted that its wages proposal is generous as all current Richmond employees would receive a minimum effective wage increase of 3.35% for year 1, with some employees receiving an increase of up to 25.50%. In year 2 all Richmond employees would receive between 3.33% and 4.09% and in year 3 they would receive between 3.30% to 4.02%. [47] Factoring in the increases in Richmond Employees’ base rates resulting from the change in classification structure (or the $2,500 payment for those employees whose base rates will decrease), and the $1,000 per year increase which both parties have put forward in their wage proposals for this arbitration, the total effective wage increases resulting from Airbus’s proposal (not including any annual leave loading being rolled into wages) are:52 a) Year 1 – 3.88% to 25.50% (apart from the eight employees referred to in paragraph 0 above, whose one-off payment is equivalent to a wage increase for that year of 3.35% to 3.96%); b) Year 2 – 3.33% to 4.09%; and c) Year 3 – 3.30% to 4.02%. [48] Under cross-examination Mr Pegg conceded that, excluding apprentices and those employees who were getting an increase or decrease as a result of Airbus’s proposed changes to the classification structure, in the first year under Airbus’s proposal the majority of employees would receive a 4.01% or less increase, 3.89% or less in the second year and 3.83% or less in the third year.53 [49] In closing submissions, Counsel for Airbus, adopting the characterisation of these increases contained in Mr Rundell’s evidence (which was exclusive of annual leave loading and the effects of any changes to the classification structure for adult apprentices) noted that this resulted in increases in Year 1 of between 3.8% and 4.64% across the classifications, an increase in Year 2 of between 3.32% to 4.11% and in Year 3 of between 3.29% to 4.04%54. [50] It was said that these increases must be seen in the context of the other increased benefits that Airbus has agreed to be provided to Richmond employees under the 2023 Agreement. The evidence of Mr Pegg was that these benefits included: (a) Incorporating annual leave loading into the base rate of pay (increasing the base rates of pay by another 1.58%) payable for all purposes;55 and, (b) A new classification structure, designed to align with Defence Aviation Safety Authority (DASA) requirements, which provided, before any increase under the 2023 Agreement, of an increase in the starting base rate of pay for 22 employees of between 2.69% and 20.52%.56 52 Pegg at [54]-[55(a)-(c)], Annexure RP-06. 53 PN136 -PN157. 54 PN1027. 55 Pegg at [56]. 56 Pegg at [49]- [51]. -- 14 of 53 -- [2023] FWC 2996 15 [51] Mr Pegg’s evidence was that for eight employees the starting base rate of pay would decrease by 2.62% and for one employee by 2.91%. As part of the 2023 Agreement these nine employees would receive a one-off payment of $2,500 on approval.57 This payment is not an increase to base rates of pay and is not cumulative.58 For the remaining approximately 60 employees there will be no change to their starting wage rates as a result of the changes to the classification structure.59 [52] Airbus also relied upon the agreed inclusion in the 2023 Agreement of four new allowances, the introduction of the Adult Apprentice Wage classification, the increase in the allotment of trousers and an increase in the boot allowance,60as set out in [33] above, and the bonus scheme that Airbus makes available to its employees outside the enterprise agreement. [53] It was further submitted that while Airbus will receive some benefits under the 2023 Agreement, these are non-financial, by way of the standardisation of terms and reduced payroll administration processes. In some cases (such as the change in classification structure and the rolling up of annual leave loading into wage rates) these benefits have come with corresponding costs.61 [55] Several matters remain in dispute between the parties in relation to the terms to be included (or not) in the 2023 Agreement, including whether three of the new allowances are paid for all purposes and the operation of the time in lieu provision.63 The parties have agreed that backpay back to 1 February 2023 will be payable to all employees but the parties do not agree on the quantum of any back payment- with the AWU proposing $2,500 gross and Airbus proposing $2,350 (gross).64 History of wage increases for the relevant employees [56] Secondly, Airbus submits that its proposed wage increases build upon a history of ongoing and significant wage increases and other payments made to Richmond employees, including from August 2016 to August 2021, being wage increases of 2.5% per year, with the exception of August 2019 when employees received between 2.34% and 8.41% by reason of a change in classification structure65. While no increase was given in 2022, that was by agreement 57 Pegg at [51(b)]. 58 PN120 – PN122, PN1056 – PN1059. 59 PN128. 60 Pegg at [44]. 61 Pegg at [45] 63 Pegg at [47(b)-(c)]. 64 Pegg at [57]. 65 Pegg at [27]-[38]. -- 15 of 53 -- [2023] FWC 2996 16 with the AWU, in exchange for the other wage increases under the 2019 Agreement being 2.5% rather than 2%.66 In any event, a lump sum payment, the quantum of which is not currently agreed,67 will be made to all Richmond employees in lieu of back payments back to 1 February 2023.68 [57] In addition, the benefits conferred on employees by the 2019 Agreement in comparison with its predecessor included: (a) Some trade groups received wage increases of between 4.84% and 8.41% on the commencement of the 2019 Agreement because of a change in classification structure (with the remaining employees receiving an increase of at least 2.34% on commencement), in addition to 2.5% wage increases in 2020 and 2021;69 (b) A four-day working week was introduced which allowed employees to work their ordinary hours Monday to Thursday;70 and (c) An additional allowance was introduced for employees holding a particular maintenance licence.71 [58] In respect of [57](b) above, I find that the four-day working week was not expressly provided for in either the 2019 Agreement or the 2023 Agreement72. Mr Pegg made this concession under cross-examination. Economic environment for both the business and employees [59] Airbus led evidence that inflation is likely to have peaked around the end of 2022 and is forecast to return to the target range over coming years. The central forecast is for CPI inflation to decline to 4.25% by December 2023. The inflation forecast for June 2024 is 3.5%, and for June 2025 is 3%.73 [60] While Airbus acknowledged that its employees are currently facing the effects of high inflation, it was submitted that the impacts of that inflation must be contextualised by reference to the following matters and their effects on both Airbus and the Richmond employees: a) The percentage wage increases given to Airbus’s employees exceeded inflation until 2021;74 66 Pegg at [36], [38]. 67 Pegg at [57] 68 Pegg at [35], [57], PN208 – 213. 69 Pegg at [37]. 70 Pegg at [39](a)]. 71 Pegg at [39(b)]. 72 Witness Statement in reply of Joseph Gray Hutchings dated 6 October 2023 (‘Reply, Hutchings’) at [5]-[6], Pegg at RP- 02. 73 Pegg at [70]- [73], Annexure RP-09. 74 Pegg at [31], [36], [54], [71] Annexure RP-06 & RP-09. -- 16 of 53 -- [2023] FWC 2996 17 b) The one-off payment characterised as an ‘Exceptional Premium Bonus’ (EPB) of $2,492 given to 98% of Airbus’s employees across Australia in 2022 was paid to employees in recognition of the inflationary environment and helped to compensate for that higher inflation.75 It was conceded by Mr Pegg that this payment was both exceptional in nature and independent of any current or future salary negotiations;76 c) Further compensation resulted from employees receiving much higher ‘Success Share’ payments in 2022 and 2023 compared with earlier, lower-inflation years;77 d) Inflation is forecast to reduce in 2024 and 2025 to levels that are closer to the minimum effective wage increase resulting from Airbus’s proposal in those years (3.5% inflation forecast in June 2024 compared with a minimum 3.33% wage increase, and 3% inflation forecast in June 2025 compared with a minimum 3.30% wage increase);78 and [61] Airbus led evidence by Mr Pegg that Airbus had paid the following Success Share bonuses to its employees each calendar year since 2020:80 Year Success Share Amount 2020 $3,601.22 2021 $2,300.00 2022 $4,936.00 2023 $5,040.00 [62] Mr Pegg’s evidence was that the determination of the quantum of the Success Share bonus payment is based on the overall performance of Airbus SE,81 and that, as a result, the Success Share payment in 2020 should have been zero.82 However, Airbus had determined to make a payment in consideration of the work that had been performed during the relevant period.83 Mr Pegg gave evidence that the lowest Success Share bonus that he could recall being distributed to employees was between $1,200 and $1,500.84 [63] Mr Pegg’s evidence was that between January 2019 and July 2022, Richmond employees were provided a total of 950 special leave days in the event they either could not attend work due to COVID-19 restrictions, had themselves contracted COVID-19, or were 75 Pegg at [63], PN166-176. 76 PN184 – PN189. 77 Pegg at [61]-[62]. 78 Pegg at [55], [71], Annexure RP-09. 80 Pegg at [62]. 81 Pegg at [61]. 82 PN191 – PN194. 83 PN195. 84 PN297. -- 17 of 53 -- [2023] FWC 2996 18 significantly impacted by the Hawkesbury and Greater Sydney natural disasters during that period. Mr Pegg’s evidence was that these special leave days were in addition to any other employee entitlements and were not externally subsidised or funded.85 [64] In response to evidence filed by the AWU, Airbus filed evidence regarding the cost of living in Sydney compared to other Australian states. This data compared the cost of living in Sydney and Hawkesbury City and was said to demonstrate that Hawkesbury City had lower living costs than Sydney.86 Airbus also led evidence regarding rental cost and house price comparisons between Sydney, Richmond and the Hawkesbury.87 Some limitations are presented with the validity and applicability of the data relied upon by both Airbus and the AWU concerning comparative costs of living.88 Financial situation of Airbus’s business, including cost pressures and the likely impact of any wage increases on its operations [66] The Richmond Contract accounted for approximately % of Airbus’s revenue in 2022.92 One of Airbus’s other major contracts, accounting for % of revenue in 2022 is ending in December 2023 and another major contract, accounting for % of revenue in 2022 is anticipated to end in around 2026.93 Following the end of these contracts, only one of which is likely to occur during the life of the 2023 Agreement, the Richmond Contract and another in Adelaide will become the dominant contracts for Airbus.94 85 Pegg at [64]-[65]. 86 Witness Statement in reply of Richard Pegg dated 6 October 2023 (‘Pegg, reply’) [11] – [12]. 87 Pegg, reply [13] – [17]. 88 PN214 – PN237, PN932 – PN962. 92 Pegg at [10]. 93 Pegg at [11] – [14]. 94 Pegg at [15]. -- 18 of 53 -- [2023] FWC 2996 19 . -- 19 of 53 -- [2023] FWC 2996 20 -- 20 of 53 -- [2023] FWC 2996 21 d -- 21 of 53 -- [2023] FWC 2996 22 -- 22 of 53 -- [2023] FWC 2996 23 Wage increases of competitors, in the sector and wage increases generally [83] Airbus filed evidence demonstrating that average annualised wage increases for March quarter 2023 Agreements were 3.9% in the private sector and 3.7% within the manufacturing sector.133These figures were superseded by later evidence filed by the AWU for the June 2023 quarter.134 [84] It was further submitted that the effect of Airbus’s proposed wage increases (including the $2,500 one-off payment to the employees who would have their base salaries reduced as a result of changes to the classification structure) are around, and for some employees higher than, the average annualised wage increases in enterprise agreements approved in the most recent quarter across the manufacturing sector and the private sector generally.135 [85] It was accepted by Airbus that Sikorsky is an appropriate comparator because it competes in the maintenance of Defence aircraft at comparable locations to Richmond.136 However, Airbus submitted that Sikorsky’s classification structure at its Holsworthy location did not match that of the proposed Airbus classification structure, and that as a result, a direct comparison of the Sikorsky rates at Holsworthy and Airbus’s proposal rates was difficult.137 Nevertheless, Airbus filed evidence and made submissions that its proposed wage increases were significantly higher than those being offered by Sikorsky at its Nowra location.138 Although Airbus acknowledged that in some cases, the rates of pay are lower under Airbus’s proposal than they are at the Sikorsky Holsworthy location, it was said that due to the differences in classification structures, a true comparison was not able to be achieved.139 133 Pegg at [67]-[69]. 134 Reply, Rundell at [26]-[29], Annexure 4. 135 Pegg at [67]-[69], Annexure RP-08, PN1123 – PN1125. 136 Pegg at [73]-[74]. 137 Reply, Pegg at [22] and PN252 - PN281, PN1122. 138 Pegg at [73]-[76]. 139 PN1122. . -- 23 of 53 -- [2023] FWC 2996 24 [86] Airbus filed evidence detailing wage rates across its Australian operations through its Manager HR Business Partnering, Ms Angela Dawson. [87] Ms Dawson gave evidence that the Richmond site differs to other Airbus sites due to their contrasting contract history, clients, the nature of the fleet and their locations (noting that Darwin and Townsville are more remote, regional sites when compared to Richmond, Adelaide and Brisbane).141 [88] Ms Dawson also gave evidence that until the 2019 Agreement the wage rates at Brisbane were equivalent to those at Richmond but that a difference had developed since then as a result of a difference in the duration of the agreements, the Brisbane enterprise agreement containing a CPI-matching clause when CPI exceeded 2.4% (with Airbus agreeing to match CPI rate up to 3%) and as no increase was paid to Richmond employees under the 2019 Agreement, with negotiations for a replacement agreement taking longer than expected.142 Under cross- examination Ms Dawson conceded that there are nine employees who are better off under the 2023 Agreement as compared to the enterprise agreement for Brisbane employees.143 Ms Dawson’s evidence was that the increases in the current Brisbane enterprise agreement are now lower than the increases that Airbus is proposing in the 2023 Agreement for Richmond employees.144 Productivity gains that have been achieved by employees since the last wage increase, or productivity consequences of a particular wage increase [90] Finally, Airbus had not identified any productivity gains realised by Richmond employees since their last wage increase.146 Mr Matthew Melverton, C130J Maintenance Manager at Airbus, gave evidence that acknowledged that the Richmond site had had difficulties in recruiting staff, and explained that this was due to aviation-industry-wide skill shortages, and the location of the Richmond site. Mr Melverton referred to challenges in connection with the ‘Block’ upgrade program and Airbus’s efforts to recruit within the program’s fixed completion date of late 2024. Mr Melverton said that, although there had been difficulties in recruiting staff, Richmond had no problem with retaining the staff it had recruited, with 33% of its employees having over 10 years of service with Airbus, and 60% of Richmond employees having over 5 years of service with Airbus.147Mr Melverton’s evidence was that Richmond employees were ‘favoured’ over contractors, and most contractors working at the 141 Statement of Angela Dawson dated 6 October 2023 (‘Dawson’) at [14]. 142 Dawson at [14]-[18], [20]. 143 PN357 - PN388, Pegg at [54], RP-06. 144 Dawson at [19], [20]. 146 Pegg at [40]. 147 Statement of Matthew Melverton dated 6 October 2023 (‘Melverton’) at [8]-[11]. -- 24 of 53 -- [2023] FWC 2996 25 Richmond site had significant professional experience and did not require further supervision or training by Richmond employees. Further, where contractors were engaged by Airbus to work at the Richmond site, employees ‘act up’ into supervisory roles for short periods and are paid accordingly.148 [91] Mr Melverton also gave evidence that, although the fleet’s age had contributed to a change in what he described as the focus of the work performed at Richmond, this had not appreciably impacted Richmond employees on a day-to-day basis.149 Where the work had generally become more complex, this complexity arose from the planning and execution of the work to be completed, where that work required the same skills and consisted of the same services that the Richmond employees have always completed.150 While Richmond had seen an overall increase in the volume of work, the number of hours worked by Richmond employees had not increased – Airbus had hired more permanent employees at Richmond in 2018 in anticipation of the difficulties that would arise as the fleet aged. Further, any overtime that is worked by Richmond employees is voluntary.151 Mr Melverton gave evidence to the effect that 80% of Richmond employees had not worked overtime since February 2023, and that a large number of the Richmond employees did not work any overtime at all.152 Mr Melverton conceded in cross-examination that the February 2023 decrease in overtime worked at Richmond had coincided with the industrial action in and from March 2023, including an overtime ban.153 Reply Submissions [92] The Reply submissions of Airbus focused on the AWU submissions on good faith bargaining and evidence led by the AWU regarding the history of negotiations and bargaining for the 2023 Agreement and the changes in Airbus and the AWU’s bargaining positions. [93] Airbus submitted that the Commission’s task in assessing the matter was to be properly defined by the parameters of the arbitration as agreed by the parties – and that being that the agreed parameters did not contain such considerations, the Commission must not consider them.154 Accordingly, the assessment of ‘an outcome which is fair in all the circumstances and that appropriately balances the interests of the parties’155 is not to consider the manner in which bargaining has been conducted, and that the Commission’s consideration of such a matter would be inappropriate and effectively punitive. Airbus submitted that circumstances giving rise to an application such as the application before me may indeed include robust negotiations, and that where the FW Act contains specific remedies for a party’s failure to engage in bargaining in good faith, the conduct of the parties is, logically, not relevant to the determination of the dispute. Airbus referred to the significance of distinguishing between negotiation and arbitration, except in circumstances where the conduct of the negotiations preceding the 148 Melverton [12]-[18]. 149 Melverton at [20]. 150 Melverton at [20]. 151 Melverton at [21]-[22]. 152 Melverton at [23]-[24], Annexure MM-01. 153 PN671 – PN677. 154 Airbus’s outline of submissions in reply dated 6 October 2023 (‘AOS-R’) [4(a)], citing Chassis at [86]. 155 AOS-R [3], citing Cobham at [94]. -- 25 of 53 -- [2023] FWC 2996 26 arbitration is relevant to assessing the merits of the claim at arbitration.156 Airbus further relied on Schweppes as support for the proposition that the consequences of parties’ engagement in protected industrial action are irrelevant to the determination of the quantum of wage increases, noting the statutory context concerning compensation for loss incurred in those circumstances.157 [94] Airbus reiterated the effect of these submissions at the hearing, further submitting that the conduct of the parties had not affected the merits of the dispute, and that as a result, any examination of the conduct was irrelevant to the question to be arbitrated by the Commission.158 Airbus’s oral submissions advanced the case that the only determination that could be validly made by the Commission in the matter was one that primarily considered which wages outcome was fair and just in the context of the equity, good conscience, and merits of the case.159 [95] Airbus’s proposition at hearing was that any matter outstanding arising from the negotiations, that was not expressly incorporated into the question to be arbitrated fell squarely outside the Commission’s remit in its assessment of the merits of the dispute.160 Airbus proposed that matters such as whether or not, and in what form, a time-in-lieu clause might be inserted into any agreement to be put to vote, are not relevant and must not be considered in determining the substantive merits of the parties positions in the dispute before the Commission.161 [96] However, Airbus submitted, matters such as the success share payments, the EPB, and special leave days162 (which fall outside of the payments contained in the agreement) are relevant to the assessment, in that they contextually affect the assessment of the financial benefits provided by Airbus to the Richmond employees.163 Airbus submitted that the COVID- 19 and natural disaster special leave days were relevant to the consideration of the ‘baseline’ entitlements for Richmond employees.164 Airbus contended that the relevance of Success Share payments was tied to the global performance of Airbus, as opposed to having any direct relationship with performance at the Richmond site (so as to otherwise be considered relevant to a productivity increase). Airbus posited that this was consistent with the fact that it had been paid in 2020 and 2021 despite the difficulties faced by Airbus in those years by way of COVID- 19.165 [97] In closing submissions, Airbus maintained that the Commission was bound to determine the dispute on precisely the parameters that were agreed between the parties – and that as a 156 AOS-R [4(b)], citing Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Curragh Queensland Mining Ltd (1998) 43 AILR 3-860, in Qantas at [30]. 157 AOS-R [4(c)], citing Schweppes at [113]. 158 PN21 – PN23. 159 PN1001 – PN1002. 160 PN1066 – PN 1077. 161 Pegg at [60]-[66], PN1064 – PN1082. 162 Per [60] to [63] of this decision. 163 PN1037. 164 PN1085 – PN1086. 165 PN1083 – PN1084. -- 26 of 53 -- [2023] FWC 2996 27 result, case authorities that dealt with different disputes within different agreed parameters (such as disputes to be determined subject to s.275 of the FW Act) could not apply.166 AWU’s case [98] The AWU relied on the evidence filed, a written outline of submissions and written submissions in reply. The AWU also made oral submissions at hearing. [99] The AWU proposes that any increase in wage rates to be incorporated into the 2023 Agreement for Richmond employees should be: (a) From the first full pay period after the Commission’s decision – 4.8% plus $1,000 per year; (b) From the first full pay period after 1 February 2024 – 3.85% plus $1,000 per year; and (c) From the first full pay period after 1 February 2025 – 3.85% plus $1,000 per year. [100] During cross-examination, Mr Pegg conceded that, excluding apprentices and those employees whose wages were affected by the proposed changed to the classification structure, the AWU proposal would result in the majority of Richmond employees receiving a 6.01% increase in the first year of the 2023 Agreement’s operation, a 4.99% increase in its second year, and a 4.44% increase in its third..167 [101] The AWU relied on the same statutory provisions relied upon by Airbus and extracted at [40] to [42] above. [102] The AWU made submissions that s 240 of the FW Act authorises the Commission to arbitrate a dispute about a proposed enterprise agreement in the context of negotiations for a new enterprise agreement. It was agreed between the parties that the Commission would arbitrate the wage increases that employees of Airbus would receive per year of the proposed agreement.168 [103] The AWU advanced submissions that the Commission must, pursuant to s 578, take into account the objects of the FW Act, in particular s 3 (f), the objects of Part 2-4 of the FW Act, in particular s 171(a) and equity, good conscience and the merits of the matter. The AWU submitted that the Commission should decide wage increases that reflect and emphasise the importance that a meaningful wage increase would have on productivity. [104] Where both parties relied on Chassis, the AWU also contended, given that there are no express considerations detailed in s 240 that it is therefore open to the Commission to consider any relevant matter in making its determination. Although not obliged to do so, the Commission may draw guidance from s 275 of the Act.169 166 PN1215. 167 PN161 – PN165. 168 AWU’s outline of submissions dated 29 September 2023 (‘ROS’) [3]. 169 Chassis at [86]. -- 27 of 53 -- [2023] FWC 2996 28 [105] The AWU’s material in chief did not specifically identify, as Airbus had, the relevant factors per Cobham and, to a lesser extent, Chassis. However, their material addressed similar, if not identical, considerations. Accordingly, and for the purposes of this decision, the headings below describe the AWU’s case by reference to the matters considered in Cobham and Chassis. [106] As I have mentioned at [55] above, the parties have agreed that an amount of backpayment will be paid to employees referrable to the period back to 1 February 2023, being the date that the 2019 Agreement expired. The exact quantum of that payment is not currently agreed and is not resolved by this decision. Economic environment for both the business and employees [107] The AWU submitted that in determining this matter, the Commission should consider the real wage impacts of any decision that it makes. The AWU submitted that the ‘real wage’ paid to Richmond employees is comprised by a consideration of: (a) The effects of the Consumer Price Index (CPI) and the Wage Price Index (WPI) on the general value of wages paid;170 and, (b) The specific cost of living impacts experienced by the employees to whom those wages are paid depending on where they live.171 [108] The AWU led evidence from Mr Taylor Warwick Rundell, Director of Policy and Strategy at the AWU, on the comparative effects of CPI and WPI. This evidence indicated that where the CPI rose by 6.0% in the 12 months before June 2023, the WPI rose 3.6% during the same period. Subtracting the CPI increase from the WPI increase illustrates that all ‘real wages’ nationally have declined by 3.6% during this relevant period.172 When broken down by city, the real wages of those residing in Sydney and Adelaide was said to have fallen by 3.2% - compared to a decrease of 2.6% for those in Brisbane, and 2.0% for those in Darwin.173 Mr Rundell conceded in cross-examination that values in respect of Sydney were averages and that the actual real wage decrease would vary across Sydney.174Mr Rundell also conceded that the index numbers across cities were not comparable, due to the cities themselves having index numbers and referable index periods specific to each city. Mr Rundell maintained (and I accept) that the numbers are indicative of price increases only, as opposed to the relevant basket of goods costing more in any particular city.175 Mr Rundell also properly conceded during cross- examination that city-specific CPI data alone cannot be compared to another city.176 [109] The AWU argued that because CPI is not an absolute measure in and of itself (being that it is referrable to the reference financial year ending in 2012), it is necessary to augment 170 Witness statement of Taylor Warwick Rundell dated 29 September 2023 (‘Rundell’) at [5]-[11], Annexures 1 and 2. 171 Rundell at [14]-[17], Annexures 3 and 4. 172 Rundell at [7]-[8]. 173 Rundell at [10]-[11]. 174 PN942-PN945. 175 PN950 – PN956. 176 PN957 – PN960. -- 28 of 53 -- [2023] FWC 2996 29 these measures against the costs of living in specific cities, in order to determine where any wage outcome sits within the spectrum of a ‘real wage’.177 The AWU led evidence from the database Numbeo, a source which was acknowledged had some deficiencies, which aggregates user-reported costs of living data and compares it across the cities in which the users live. Numbeo’s website indicates that its data has been relied upon by both domestic sources (including the Australian Broadcasting Corporation, The Australian, and the Sydney Morning Herald) and international sources (including the New York Times, the British Broadcasting Corporation, and the Economist).178 The Numbeo data indicates that the costs of living in Sydney, including rental payments, are 10.4% higher than in Adelaide, 13.5% higher than Brisbane, and 24.1% higher than Darwin.179 Therefore, because employees living in Sydney are more exposed to increases in costs of living as a proportion of their income than employees in Adelaide, Brisbane, or Darwin, the AWU argued that the wage increases of Sydney employees need to be higher to compensate – resulting in an actual, as opposed to apparent or cosmetic, ‘real’ wage increase.180 [110] The AWU’s evidence suggests that the effects of CPI since Richmond employees last received a pay increase in August 2021 has resulted in an overall and actual decrease to their real wage of 11.48%.181 Evidence was led by Richmond employees that their current rates of pay are insufficient to maintain cost-of-living security.182 [111] The AWU contended, as supported by Mr Rundell’s evidence, that Airbus’s proposal increases would result in the following decreases in the employees’ real wages when accounting for the effects of CPI:183 (a) 8.73% in December 2023, (b) 6.82% in December 2024, and (c) 3.64% in December 2025.184 [112] This was juxtaposed with the impact of the AWU’s proposed wage increases, where it was said that the cumulative reduction in employees real wage would be:185 (a) 7.36% in December 2023, (b) 4.46% in December 2024, and 177 Rundell at [12]-[13]. 178 Rundell at [14]-[15], Annexure 3. 179 Rundell at [16], Annexure 4. 180 Rundell at [9]-[19]. 181 Rundell at [30]-[35], Annexures 8 and 9. 182 Witness statement of Glen Curtain dated 29 September 2023 (‘Curtain’) at [8], [14], Witness Statement of Dale Ellington dated 28 September 2023 (‘Ellington’) at [20], [26]-[27], Witness statement of William John Sinclair dated 28 September 2023 (‘Sinclair’) at [9]. 183 Rundell at [34]-[37(a)-(d), (f)], [39], Annexure 10. 184 Rundell at Annexure 10. 185 Rundell at [34]-[37(a)-(d), (i)], [40], Annexure 10. -- 29 of 53 -- [2023] FWC 2996 30 (c) 0.74 % in December 2025186.187 [113] The AWU led evidence by Richmond employees that Airbus’s proposal kept them worse off when adjusting for a CPI of 6.1% and the cost of living in Sydney.188 It was submitted that, in light of the Reserve Bank of Australia’s publication of the forecast to nation annual CPI increases up to December 2025, the Commission should deliver a wage outcome which would see the resolution of the employees’ real wage decrease since August 2021 and accordingly balance this against forecasted CPI rates for Australia.189 On the AWU’s evidence, the AWU’s proposed wage increases would see the decline in real wages that Richmond employees have experienced since August 2021 nearly corrected.190 [114] It was submitted by the AWU that previous wage increases received by Richmond employees have seen a prolonged lack of growth through previous enterprise agreements, with repeated increases of 2.5% in the 2017 and 2019 Agreements.191 This stagnation was said to have been further compounded by the fact that the last wage increase received by Richmond Airbus’s employees was over two years ago, in August 2021 and was 2.5%.192 [115] The AWU averted to feedback received from its members throughout negotiations to the effect that they believe they have made a significant contribution to the success of Airbus but have endured conservative wage outcomes for many years.193 AWU members were said to be seeking a ‘competitive’ pay increase over its duration, with all members surveyed indicating an expectation of annual wage increases of 5% or greater.194 It was also said that wage increases of at least 5% were appropriate in the context of enterprise agreement bargaining generally, given both current and forecasted CPI pressures.195 Mr Ellington gave evidence to the effect that the continuing stagnation of Richmond Employees’ wages is detrimentally affecting morale,196 and Mr Curtain gave evidence that the AWU’s proposed increases would have a positive effect on morale at Richmond, as well as helping Airbus to attract and retain staff.197 Productivity gains that have been achieved by employees since the last wage increase, or productivity consequences of a particular wage increase [116] The AWU submitted that any wage increase determined by the Commission should acknowledge the improved productivity of the Richmond employees and provide adequate 186 Rundell at Annexure 10. 187 Rundell at [40], Annexure 9. 188 Curtain at [8]-[10], [14]. 189 Rundell at [35]-[41]. 190 Rundell at [40]-[41]. 191 Curtain at [7]. 192 Rundell at [30]-[31], Sinclair at [8]. 193 Sinclair at [15]. 194 Hutchings at [8]-[10], Annexure A. 195 Witness statement of Shane Roulstone dated 28 September 2023 (‘Roulstone’) at [8]-[9]. 196 Ellington at [33]-[35]. 197 Curtain at [15]. -- 30 of 53 -- [2023] FWC 2996 31 recognition of the contribution that Richmond employees make towards continued annual revenue and profit for Airbus. [117] Over the course of the life cycle of the 2019 Agreement and continuing to date, the workforce at Richmond have seen great increases to their workload. The AWU submitted that this workload increase was due to the following three, interrelated and compounding, factors at the Richmond site: (a) An increase in the volume and complexity of maintenance tasks required to service the ageing fleet at Richmond;198 (b) An increase in the amount of operational performance updates and modifications required by the Royal Australian Airforce (RAAF);199 and, (c) An increase in vacancies at Richmond resulting in less staff to complete the work required.200 [118] Long-term vacancies, in tandem with the uptick in the amount and complexity of the work having to be done, have resulted in internal completion deadlines being missed and maintenance schedules having to overlap.201 Put another way, an overall fewer number of employees are having to work simultaneously or between aircraft on any given day in order to complete a more significant workload. Mr Ellington and Mr Curtain gave evidence to the effect that, with approximately 25 positions vacant at the Richmond site, the Richmond employees are having to compensate for the work that would have otherwise been done by these now- vacant positions.202 [119] The Richmond employees are decidedly skilled aircraft maintenance engineers.203 There is significant market demand for these skilled employees, especially those with extensive experience in the industry – resulting in Richmond employees leaving for more competitive pay (an issue I will return to below at [122]).204 It was said that the increase in vacancies further warranted higher increases in rates of pay in order to address what was described as a difficulty by Airbus in attracting and retaining staff.205 [120] It was put by the AWU that Airbus’s measure to address these vacancies was the utilisation of contractors.206 Mr Ellington gave evidence that it was frustrating as an employee to see contractors at the Richmond site being paid twice as much for performing the same work as him.207 It was also contended that, rather than focusing on an already extensive workload 198 Ellington at [19]. 199 Sinclair at [11]. 200 Curtain at [11], Sinclair at [10], [12]-[13]. 201 Sinclair at [10]-[11]. 202 Ellington [33], Curtain [11]-[12]. 203 Roulstone at [10]. 204 Roulstone at [10]-[11], Ellington [29]-[31]. 205 Ellington at [28]-[31], Sinclair at [12]-[13]. 206 Curtain at [13], Sinclair at [14], Ellington at [32]. 207 Ellington at [32]. -- 31 of 53 -- [2023] FWC 2996 32 that is exacerbated by the ageing fleet, the permanent workforce is spending more time training and supervising contractors who are less experienced than the permanent employees, and that this contributed to a significantly more extensive workload over time.208 However, it was conceded under cross-examination by Mr Ellington209 and Mr Curtain210 that their work had not significantly changed since August 2021. Mr Sinclair maintained his evidence that the presence of contractors at Richmond increased the overall workload for Richmond employees due to the need to provide supervision and training but conceded that some contractors were experienced, and some had been employees of Airbus previously.211 Wage increases of competitors, in the sector and wage increases generally [121] The AWU led evidence regarding wages and wage increases of competitors, focusing on Sikorsky, and also led evidence regarding the pay rates for comparable employees covered by enterprise agreements in other Airbus sites across Australia. The AWU took the Commission to the rates of pay in the following Airbus agreements by way of evidence led from Mr Joseph Gray Hutchings, AWU Organiser:212  Airbus Australia Pacific (Townsville) Enterprise Agreement 2020,  Airbus Australia Pacific (Darwin) Enterprise Agreement 2020,  Airbus Australia Pacific (Brisbane) Enterprise Agreement 2022, and  Airbus Australia Pacific (Edinburgh) Enterprise Agreement 2021. [122] The AWU submitted that is not uncommon to see national employers implement different market rates for different cities.213 Competitive market rates that take into account different cost of living conditions are key in both attracting and retaining staff in locations where there are high cost of living pressures and this can be seen in the higher rates of pay in Sydney when compared with other cities in Australia (with the exception of remote regional locations).214 The AWU led evidence that suggested that Richmond employees had left Airbus due to their being able to be paid more for the same work at other employers.215 [123] The Sikorsky Aircraft Australia Limited Enterprise Agreement 2022 (Sikorsky EA) was said to reflect these considerations with rates of pay and a classification structure directly analogous to the 2023 Agreement. The Sydney Holsworthy engineers for Sikorsky are the only engineers under this agreement whose remuneration is inclusive of a “Holsworthy Cost of Living Allowance” of $5,000.216 208 Sinclair at [12]. 209 PN7974– PN805. 210 PN829 - PN833. 211 PN862 - PN878. 212 Hutchings at [11]-[12], [15], Annexure B. 213 Roulstone at [5]-[6]. 214 Roulstone at [7], Annexure A. 215 Roulstone at [10]-[11], Ellington [29]-[31]. 216 Hutchings at [13], Annexure C. -- 32 of 53 -- [2023] FWC 2996 33 [124] The AWU contended that Richmond engineers are the lowest paid in Airbus in Australia, apart from those in Adelaide (Edinburgh).217 In respect of engineers in Adelaide, the AWU submitted that the lower pay rate was effectively countervailed by Sydney’s comparatively higher costs-of-living. The AWU submitted that, at a minimum, Richmond employees, especially when having regard to the comparative cost of living in Sydney versus other Australian sites, should be comparable to Brisbane Airbus rates. This was supported by evidence led as to the comparability of the economic conditions that both Sydney and Brisbane employees experience and noting that these conditions remain worse for those Richmond employees operating out of Sydney.218 [125] As I have previously outlined, the AWU drew a link between the increased workload having to be met by existing Richmond employees (driven in part by ongoing and intensifying vacancies at Richmond) and the lack of competitive comparable rates paid at Richmond. A ‘real’ wage increase (with the effect of bringing Richmond into line with its main competitor, Sikorsky, as well as Airbus’s other sites) would therefore be justified when considering: (a) Fair compensation for the existing workforce at Richmond, whose work is of significant and competitive market value; (b) The need to attract new permanent employees to Richmond to fill existing vacancies; (c) Having to retain both the existing and new employees so as to, at least, maintain if not improve current productivity and contract performance at Richmond. Good Faith Bargaining [126] The AWU submitted that its good faith bargaining approach had been demonstrated by the number of concessions it made throughout the negotiations.219 By contrast, Airbus’s conduct during these negotiations indicated that Airbus’s approach had been ‘to undermine the process and maintain its unsustainable agreement’.220 A number of witnesses were critical of Airbus’s conduct during the negotiation process.221 217 Hutchings at [12], [15], Ellington at [18]. 218 Rundell at [9]-[19], Annexures 3 and 4, Curtain [10]. 219 Hutchings at [16]-[58]. 220 ROS at [33]. 221 Hutchings at [16]-[58], Ellington at [8]-[17], [21]-25], Curtain at [16]-[19]. -- 33 of 53 -- [2023] FWC 2996 34 Reply Submissions Financial situation of Airbus’s business, including cost pressures and the likely impact of any wage increases on its operations The AWU’s reply submissions and evidence222 addressed submissions and evidence led by Airbus, principally by way of Mr Kwok’s first statement, as to the labour costs of Airbus under the Richmond Contract.223 [128] It was not contentious between the parties that Airbus Richmond’s ability to meet the highest possible performance indicators ) is decreasing due to difficulties concerning the ageing fleet.225 The AWU submitted that these difficulties were and are further exacerbated by the amount of role vacancies that Airbus is experiencing and their continued inability to fill these vacancies at Richmond.226 The AWU contended that the decline in real wages will have likely contributed to the workforce vacancies Airbus are experiencing at Richmond.227 [129] In what were said to be similar circumstances, E Tū had secured an agreement with Airbus New Zealand of 6.4% in the first year and 5% in the second year.230 Relevantly, Mr Pegg conceded during the hearing that in 2022, the year during 222 Witness Statement in Reply of Taylor Warwick Rundell dated 5 October 2023 (‘Rundell, Reply’) at [4], [10]. 223 Kwok at [22]. 225 Rundell, reply at [14a.–c.]. 226 Rundell, reply at [14d.]. 227 Rundell, reply at [15-16], noting that Mr Rundell acknowledged in cross-examination that he had not done a particular analysis of Airbus’s workforce to reach this conclusion at PN971. . 230 Hutchings, reply at [40]-[44], Annexure G. -- 34 of 53 -- [2023] FWC 2996 35 which the Richmond employees did not receive any pay increases, t [131] The AWU refuted Airbus’s claim that the end of two of its major contracts (one in December 2023, and the other in 2026) would result in such a substantial increase of pressure on Airbus by its parent company to demonstrate Airbus’s ongoing viability that it would justify a leaner wage outcome. The AWU contended that Airbus had not filed any material that was capable of supporting that claim, as assessable by reference to the nature and extent of any existing cross-subsidy relationships concerning the Richmond operation and the Richmond contract’s historic profit levels.234 [132] The AWU also submitted that, in circumstances where Airbus’s ‘Success Share’ payments had risen by 39.9% between 2020 to 2023, Airbus’s capacity to pay Richmond Employees’ a higher wage was in a healthier position than represented – and was perhaps not as constrained by matters arising under the Richmond Contract as Airbus had indicated.235 Economic environment for both the business and employees [133] In response to the contention by Airbus that the EPB payment set out at [60]b) above provided a benefit to Richmond employees that should be considered in this dispute, the AWU relied upon a letter sent by Airbus SE to its employees on 24 October 2022 that said that the premium ‘exceptional in nature, is independent of current or future salary negotiations’.236 Mr Pegg conceded this under cross-examination. 237 [134] The AWU also submitted that the EPB had been paid to all Airbus employees internationally and was not a payment made to Richmond employees alone,238 and that the special leave days were provided for under the 2019 Agreement.239 Mr Pegg’s evidence at hearing was that Airbus had exercised its discretion (as provided for under the 2019 Agreement) to provide those leave days.240 Value of the financial package and benefits to be provided to employees and any additional benefits that accrue to Airbus under the 2023 Agreement . 234 Rundell, reply at [11]-[13]. 235 Rundell, reply at [17]-[20]. 236 Hutchings, reply at Annexure B. 237 PN184 – PN189. 238 Hutchings, reply at [26]-[28]. 239 Pegg at RP-02. 240 PN52. -- 35 of 53 -- [2023] FWC 2996 36 [135] Airbus had submitted that prior to any wage increase awarded in this arbitration, 22 employees will see wage increases of between 2.69% and 20.52%. The AWU contended that a portion of these 22 employees will be operating under a new job description and may also be expected to bear additional responsibilities. The evidence discloses that the new classification structure was developed to align with new DASA regulations.241 The evidence also disclosed that only 4 adult apprentices and 5 ‘stores workers’ would get the highest increase and that this was partially as a result of adult apprentices having been severely undervalued under the previous agreement and as a substantial increase was required to increase the retention and attraction of the position.242 The 8 employees receiving a payment of $2,500 to offset their devaluation will ultimately be devalued for the remainder of their career, as this payment is not recurring or incorporated into their salaries.243 [136] The AWU agreed that four new allowances will be paid of between $21.50 and $69.75 per week under the 2023 Agreement, however, the evidence discloses that these will not be applied to all employees. Of the employees who do receive the allowances:  the secondary trade allowance of $69.75 per week will be paid to three employees;244  the explosive ordnance management allowance of $24.50, the composite allowance and the machinist allowance both of $21.50 per week, will be payable across a group of ten employees.245 [137] In its reply submissions the AWU took issue with Airbus’s submission that the benefits Airbus would receive under the 2023 Agreement are non-financial and that its changes to the classification structure have come with corresponding costs. The AWU submitted that, although a payment of $2,500 is to be made to the employees who have been devalued, this payment is insufficient to compensate a number of employees previously classified at AME3, whose progression will be, in effect, forever in stasis by virtue of the 2023 Agreement.246 This was conceded by Mr Pegg during the hearing247 and reiterated in oral closing submissions by the AWU.248 Along with this, these employees will be performing more duties alongside the previous AME 4 employees at a similar rate of pay – and, the AWU submitted, saving Airbus money on future labour cost increases, in that the now-Specialist Trade 2 employees would always be paid at AME3 rates, and not progress to being paid at AME4 rates. History of wage increases for the relevant employees [138] The AWU submits, regarding Airbus benefits outside of the 2019 Agreement, that the one-off payment of $2,492 in 2022 was not a payment made simply to Richmond employees but to all Airbus’s employees across the globe up to and including Senior Management level 241 PN285-289 242 Hutchings, reply at [18]-[19]. 243 PN1056 – PN1059. 244 Pegg at [44(a)(i)], PN97 – PN103. 245 Pegg at [44(a)(ii)-(iv)], Annexure RP05, PN94 – PN108. 246 Hutchings, reply at [21]-[23]. 247 PN123. 248 PN1133. -- 36 of 53 -- [2023] FWC 2996 37 (Band IV). Further, the additional paid leave between January 2019 and July 2022 was not a benefit outside of the 2019 Agreement and was integral in ensuring Airbus continued to operate efficiently and meet their contractual obligations. [139] Airbus had submitted that the historic wage increases for employees at the Airbus Richmond had been 2.5% commencing in August 2016 until August 2018. In August 2019, the majority of workers (i.e. those not employed under the three affected trade groups of Surface Finishers, Non-Destructive Testing Technicians, and Life Support Engineers) received an increase of 2.34%. However, evidence relied on by the AWU indicates that these increases on their own do not provide an effective understanding of the actual or real wage increases. In other words, notwithstanding that the wage increases pre-2021 exceeded inflation rates, the AWU contended that any gains in wages made by way of the 2017 and 2019 Agreements are effectively negated when CPI rates are factored into a comparison of the actual purchasing power of Richmond employees in Sydney.249 Wage increases of competitors, in the sector and wage increases generally [140] Airbus submitted that Airbus’s proposed wage increases are significantly higher than those being offered by its competitor, Sikorsky. The AWU submitted that this is incorrect and that the evidence relied upon by Airbus provides misleading or otherwise artificially inflated figures that are based on an incorrect comparison of positions, classifications and wages.250 For example, Airbus had chosen to compare the new Richmond AME (tradesperson) to the AME 1 rate of the Sikorsky Holsworthy classification. The AWU led evidence that suggested that the correct comparator to a Richmond AME (tradesperson) within the Sikorsky Holsworthy classification would instead be an AME 2.251 The analysis relied on by Airbus was said to be inconsistent with the explanation in Airbus ‘briefing packs’ provided throughout the course of negotiations which explained to the workforce how the new classification structure would operate, including by reference to Sikorsky Holsworthy employees.252 It is noted that, in Mr Pegg’s reply statement, he acknowledged some errors and amended his calculations,253 but a number of the comparators remained disputed between the parties, with Mr Pegg’s evidence at hearing generally preferring the lower of any two possible comparators.254 It is also noted that Mr Pegg conceded that duties previously relegated to the now-defunct AME3 and AME4 classifications had been combined under the Specialist Trade 2 level, and that these employees may have already been or will be expected to perform duties of either of the previous levels.255 The AWU also referred to the Sikorsky cost-of- living allowance to the effect that on average, Sikorsky employees operating in Holsworthy in Sydney earn $5,000 more on top of their salary than the Richmond employees.256 [141] As to wage increases in the sector generally, the AWU led evidence that the average annualised wage increases for agreements in the manufacturing sector in the June quarter 2023 was 4.1% - up from the 3.7% put by Airbus (which was based on the previously released data 249 Rundell, reply at [21]-[25]. 250 Hutchings, reply at [31]-[32] Annexures D and E. 251 Hutchings, reply at [3]-[34], Annexure D. 252 Hutchings, reply at [34]-[37], Annexure D. 253 Pegg, reply [20]. 254 PN238 – PN282. 255 PN270 – PN 282. 256 Hutchings, reply at [38]-[39], Annexure E. -- 37 of 53 -- [2023] FWC 2996 38 available at the time that the Airbus evidence in chief was filed in this matter). The AWU submits that this is a clear indicator that agreement outcomes are trending upwards, which places Airbus’s proposed increases of 3.8%, 3.33% and 3.3% - well below the average annualised wage increases under agreements in this sector.257 Productivity gains that have been achieved by employees since the last wage increase, or productivity consequences of a particular wage increase [142] The AWU contended that it could be inferred that the rates of the Success Share payments, and their increases annually, had a relationship to the overall success of Airbus.258 The AWU led evidence that the Success Share payments had increased by 39.9% from 2020 to 2023,259 and accordingly submitted that Airbus’s contention that there had been ‘no identifiable productivity gains’ since the last wage increase was not consistent with this rate of growth. Put another way, productivity gains must have been appreciated by Airbus in order to increase the Success Share payments in that period.260 Mr Rundell conceded that he had insufficient information before him to conclusively determine the nature and extent of the contribution by Airbus, and more specifically, the Richmond site, to the overall international Success Share payment scheme.261 I infer that Airbus would be a contributor to any success of this entity, but the degree of this contribution is not in evidence before me. Good faith bargaining [143] The AWU led extensive evidence regarding the conduct of Airbus during negotiations262. In oral submissions, the AWU relied on Viva Energy Refining Pty Ltd v the Australian Workers Union (Viva),263 in turn citing the Full Bench’s consideration of predecessor legislation to the FW Act in CFMEU v Curragh Queensland Mining Ltd (the Curragh Case).264 In Viva, Vice President Watson considered, as one of the relevant factors in his assessment of the merits of the dispute and, as had been considered by the Full Bench in the Curragh Case, ‘the extent to which the conduct of the negotiating parties during the bargaining period was reasonable’.265 The AWU acknowledged Airbus’s submission that the consideration itself may not be a standalone relevant factor, but a factor that derived its relevance from its capacity to affect the merits of the case. The AWU also acknowledged that Vice President’s Watson’s consideration of the bargaining period conduct of the parties in Viva was ultimately not ascribed any weight, but that by virtue of it having been ascribed that weight, Vice President Watson had performed a high-level assessment of the bargaining period conduct. Accordingly, the Commission was asked to consider the reasonableness of the conduct of the parties during the bargaining period, and, in the AWU’s submission, consider that Airbus’s 257 Rundell, reply at [27]-[29], Annexure 4. 258 Rundell, reply at [17]-[20]. 259 Rundell, reply at [18]. 260 Rundell, reply at [20]. 261 PN974 - PN980. 262 Ellington at [11]-[17], [21-[25], Hutchings at [17]-[21], [23]-[44], Curtain at [16]-[19], Hutchings, reply at [10]-[14], 263[2014] FWC 6184 (‘Viva’). 264 Print Q4464. 265 Viva [30(e)]. -- 38 of 53 -- [2023] FWC 2996 39 conduct throughout the bargaining process had adversely affected the financial positions of the Richmond employees.266 Consideration [144] This decision involves an arbitration under section 240 of the FW Act. The arbitration proceeds by way of agreement between the parties. Accordingly, pursuant to s 240(4), I have jurisdiction to determine the dispute, within the agreed parameters set by the parties as set out above at [4]. Neither Airbus or the AWU bears the onus of proof. [145] The parties are not in dispute about the provisions of the FW Act that are relevant to my consideration. These include s 577 and s 578, and accordingly, the objects of the FW Act and the objects of Part 2-4 of the FW Act, at s 171. Both parties rely on Chassis and submit that the provisions of s 275 might provide guidance to the Commission in the resolution of the dispute in this matter. [146] I consider that the Commission’s role in this matter is to determine a fair and just wages outcome under the 2023 Agreement, that promotes harmonious and cooperative workplace relations, having regard to the equity, good conscience and merits of the matter. This outcome must appropriately balance the interests of the employer and employees who will be covered by the enterprise agreement. Whilst I have considered, in reaching my conclusions in this matter, the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of the protected attributes listed in s 578 (c) there is no evidence before me that deals with this issue. Nor is there any evidence that either of the parties’ proposals would help to prevent and eliminate discrimination or the converse. Accordingly, this is a neutral consideration in reaching my findings. [147] Having considered the objects in s 3 of the FW Act I have formed a view that the relevant objects are ss. 3(a), (f) and that all other objects are neutral in my consideration in relation to the parties competing positions or are not relevant to my consideration. [148] Having regard to this and previous decisions of the Commission on similar matters I have formed a view that the following issues are relevant to my consideration of the parties’ respective positions: (a) the value of the financial package to be provided to employees under the enterprise agreement as a whole, including benefits that will be provided to employees aside from wage increases;267 (b) any additional benefits that will accrue to the employer under the enterprise agreement;268 266 PN1202 – PN1207. 267 Cobham at [92]; Chassis at [97]. 268 Schweppes at [151]-[152] Parks Victoria at [248]. -- 39 of 53 -- [2023] FWC 2996 40 (c) the financial situation of the employer’s business, including any cost pressures facing it and the likely impact of any wage increases on its operations;269 (d) the economic environment of both the business and employees, including inflation;270 (e) the history of wage increases for the relevant employees, including the time elapsed since the last increase;271 (f) any productivity gains that have been achieved by employees since the last wage increase, or productivity consequences of a particular wage increase;272 and (g) any wage increases that have been provided elsewhere, including by the employer’s direct competitors, in the sector, and among employers generally.273 Value of the financial package and benefits to be provided to employees under the 2023 Agreement. [149] I have considered all of the evidence regarding the financial package and benefits to be provided to employees under the 2023 Agreement. As I have described at [48] and [100] above it was accepted at hearing that the parties’ proposals would result in the following median increases to Richmond Employees’ wages under the 2023 Agreement: Airbus’s proposal AWU proposal First year 4.01% 6.01% Second year 3.89% 4.99% Third year 3.83% 4.44% [150] There was evidence before the Commission that, including the $1,000 payment that forms part of both parties’ proposals and excluding the agreed classification structure changes, the proposals would result in the following annual increase ranges274: Airbus increase range AWU increase range First year 3.80% - 4.64% 5.80% - 6.01% Second year 3.32% - 4.11% 4.80% - 4.99% Third year 3.29% - 4.04% 4.26% - 4.44% [151] I find that approximately 22 employees will receive an increase to the starting base rate of pay of between 2.69% and 20.52% by virtue of changes to the classification structure arising from the alignment with DASA regulation to be incorporated into the agreement. Under the 269 Chassis at [87]-[88]; Qantas at [95]; Schweppes at [151]-[152]; Parks Victoria at [248]. 270 Cobham at [92]; Chassis at [89]-[91]; Qantas at [95]; Schweppes at [114], [151]-[152]; Parks Victoria at [177], [230], [248]. 271 Cobham at [92]; Chassis at [95]; Qantas at [95]; Schweppes at [131], [151]-[152]; Parks Victoria at [248]. 272 Cobham at [92]; Chassis at [103]; Qantas at [95]. 273 Cobham at [92]; Chassis at [92]-[94]; Qantas at [95]; Schweppes at [114], [151]-[152]; Parks Victoria at [177], [248]. 274 Rundell at Annexure 7 and PN1027-1031. -- 40 of 53 -- [2023] FWC 2996 41 new classification structure, a new Adult Apprentice classification will be introduced which will increase the wage rates for the four current adult apprentices. [152] Approximately 9 employees will receive a decrease arising from changes to the classification structure (with any decreases set off by a one-off payment of $2,500 on approval of the agreement). I find that this payment will not, on an ongoing basis, compensate the Impacted Employees whose progression will be limited as a result of the classification structure changes to be enshrined in the 2023 Agreement.275 [153] Other benefits to the Richmond employees include incorporating annual leave loading into the base rate of pay (increasing the base rates of pay by another 1.58%) payable for all purposes, an additional uniform allotment and increase in the boot allowance and the introduction of new allowances of between $21.50 and $69.75 per week,276 payable to thirteen of Airbus’s employees covered by the EA, with approximately three of these thirteen employees receiving the $69.75 secondary trade allowance.277 [154] Several matters remain in dispute between the parties in relation to the terms to be included (or not) in the 2023 Agreement including whether three of the new allowances are paid for all purposes and the operation of the time in lieu provision.278 The parties have agreed that backpay back to 1 February 2023 will be payable to all employees but the parties do not agree on the quantum of any back payment- with the AWU proposing $2,500 gross and Airbus proposing $2,350 (gross).279 I have not taken the first two matters into account in determining an appropriate increase in this matter. As to the matter of backpay, given that the parties have not agreed on the quantum of any back payment, and consistent with the evidence280 and Airbus’s submissions in relation to matters that have not been agreed in negotiations,281 I have formed the view that I cannot take the proposed quantum of backpay proposed by either party into account when assessing the parties competing positions in these proceedings. Any additional benefits that will accrue to the employer under the enterprise agreement [155] I have considered all of the evidence regarding benefits that will accrue to Airbus under the 2023 Agreement. I accept that many of the benefits are non-financial, by way of the standardisation of terms and reduced payroll administration processes, and that in some cases (such as the change in classification structure and the rolling up of annual leave loading into wage rates) these benefits have come with corresponding costs.282 [156] I also consider that some benefits will accrue to the employer as a result of having a competitive enterprise agreement, in that it increases the likelihood of attracting new Richmond 275 Hutchings, reply at [21]-[23]. 276 Pegg at [44(a)]. 277 PN94 – PN107. 278 Pegg at [47(b)-(c)]. 279 Pegg at [57]. 280 Pegg at [57], Hutchings at [57](a). 281 PN 1066- 1080 282 Pegg at [45] -- 41 of 53 -- [2023] FWC 2996 42 employees; as well as maximising the retention of current employees283. [157] I also find that Airbus would receive benefits from a reduction in the rate of payment for weekend travel to single time and an amendment to the supplementary labour clause removing the requirement for Airbus to transition supplementary labour to permanent staff after a fixed period of time. [158] I find that the changes to the classification structure, which dispense with the distinction between AME3 and AME4 (with employees previously characterised as AME3 and AME4 being collectively classified as ‘Specialist Trade 2’ under the 2023 Agreement), result in those employees previously under AME3 being unable to progress to AME4. I find that, under the 2023 Agreement, AME3 employees and AME4 employees will perform the same or similar duties alongside one another and be paid at the AME3 rate,285 and that this will create savings for Airbus on future labour cost increases, in that Airbus will not have to pay AME3 employees who would otherwise progress to AME4 at the AME4 rate they would have previously progressed to.286 Financial situation of Airbus’s business, including cost pressures and the likely impact of any wage increases on its operations [159] There is no suggestion, nor any evidence before me, to the effect that either parties’ proposed increases would compromise the ongoing financial viability of Airbus. with those negotiations commencing in mid- 2024.290 I accept that the other two Airbus contracts, being responsible for % and % of 283 PN550-553 . 285 PN270 – PN282. 286 PN123, PN766 - PN769, PN1132 – PN1133. . 290 Pegg at [10]. -- 42 of 53 -- [2023] FWC 2996 43 Airbus’s revenue in 2022, will end in December 2023 and will likely end in 2026 respectively,291 making Richmond the dominant Airbus contract.292 291 Pegg at [11] – [14]. 292 Pegg at [15]. . -- 43 of 53 -- [2023] FWC 2996 44 [167] The AWU submitted that the 39.90% increase in Success Share payments paid by Airbus to its employees since 2020 indicated that its financial position, and the difficulties experienced by Airbus in generating profit under the Richmond Contract, were not as dire as the evidence had appeared to infer. For reasons I will return to at [176] - [181] and [188], I have not placed any weight on this submission due to the lack of evidence before me and the concession made by Mr Rundell on this point.307 307 PN974 - PN980. -- 44 of 53 -- [2023] FWC 2996 45 [168] The financial situation of Airbus is a significant factor in my consideration, with factors that both weigh in favour of, and against, the merits of both parties’ cases. Economic environment for both the business and employees [169] None of the parties led evidence addressing the economic environment of the Australian economy generally or the sector in which Airbus operates. Instead, the focus of the parties was largely on the effect of inflation on Airbus and employees and on cost of living impacts. Both parties presented cases that relied upon some forward estimates, current data and past data and previous pay increases and payments outside of the agreement in support of their arguments. [170] I accept that it is expected that inflation is likely to have peaked around the end of 2022 and is forecast to return to the top of the target range over coming years. The central forecast is for CPI inflation to decline to 4.25% by December 2023. The inflation forecast for June 2024 is 3.5%, and for June 2025 is 3%.308 [171] It was accepted by both parties to these proceedings that employees are facing the effects of higher than normal inflation. Inflationary pressures affect both Airbus and its employees alike. I accept that inflation and other economic factors have had adverse impacts on Airbus’s costs [172] The AWU proposed median percentage increases contained in paragraph [150] and [100] above exceed these forecast figures. Airbus proposed median increases more closely align with the forecast figures. [173] I consider it relevant to my consideration that the percentage wage increases given to Airbus’s employees exceeded inflation until 2021 and have been less than headline figures since 2021.310 The effect of this on employees was recognised by a one-off payment of $2,492 given to 98% of Airbus’s employees across Australia in 2022 including Richmond employees.311 This payment was provided on the basis that it was independent of any current or future salary negotiations.312 [174] I also consider it relevant to consider the real wage impacts of any increase to be awarded taking into account: (c) The effects of the Consumer Price Index (CPI) and the Wage Price Index (WPI) on the general value of wages paid;313 and, 308 Pegg at [70]- [73], Annexure RP-09. 309 310 Pegg at RP-07, PN1185. 311 Pegg at [63], PN166-176. 312 PN184 – PN189. 313 Rundell [5]-[11], Annexures 1 and 2. -- 45 of 53 -- [2023] FWC 2996 46 (d) The specific cost of living impacts experienced by the employees to whom those wages are paid depending on where they live.314 [175] The evidence of Mr Rundell considered the comparative effects of CPI and WPI and indicated that where the CPI rose by 6.0% in the 12 months before June 2023, the WPI rose 3.6% during the same period. Subtracting the CPI increase from the WPI increase illustrates that all ‘real wages’ nationally have declined by 3.6% during this relevant period.315 When broken down by city, the real wages of those residing in Sydney and Adelaide was said to have fallen by 3.2% - compared to a decrease of 2.6% for those in Brisbane, and 2.0% for those in Darwin.316 As I have set out at [108], Mr Rundell’s evidence contained concessions that defined the boundaries and limitations of the comparability of this data. [176] The AWU also led evidence from Numbeo regarding the cost of living in specific cities, in order to determine where any wage outcome sits within the spectrum of a ‘real wage’.317 Whilst that evidence had some deficiencies, Numbeo reports were relied on by both parties. It demonstrated that the costs of living in Sydney, including rental payments, are 10.4% higher than in Adelaide, 13.5% higher than Brisbane, and 24.1% higher than Darwin.318 The AWU argued that because employees living in Sydney are more exposed to increases in costs of living as a proportion of their income than employees in Adelaide, Brisbane, or Darwin, the AWU argued that the wage increases of Sydney employees need to be higher to compensate – resulting in an actual, as opposed to apparent or cosmetic, ‘real’ wage increase.319 [177] It was a common position between the parties that the historical context of increases under predecessor enterprise agreements was relevant.320 I accept that between 2016 and 2020 the real wages of Richmond employees were increasing. I further accept the evidence of the AWU, which was not challenged in cross-examination, that Airbus’s proposed increases would result in the following decreases in the employees’ real wages, relative to the position of employees in 2021, when accounting for the effects of CPI:321 (d) 8.73% in December 2023, (e) 6.82% in December 2024, and (f) 3.64% in December 2025.322 [178] This was juxtaposed with the impact of the AWU’s proposed wage increases, where it was said that the cumulative reduction in employees real wage would be:323 314 Rundell at [14]-[17], Annexures 3 and 4. 315 Rundell at [7]-[8]. 316 Rundell at [10]-[11]. 317 Rundell at [12]-[13]. 318 Rundell at [16], Annexure 4. 319 Rundell at [9]-[19]. 320 PN1037. 321 Rundell at [34]-[37(a)-(d), (f)], [39], Annexure 10. 322 Rundell at Annexure 10. 323 Rundell at [34]-[37(a)-(d), (i)], [40], Annexure 10. -- 46 of 53 -- [2023] FWC 2996 47 (d) 7.36% in December 2023, (e) 4.46% in December 2024, and (f) 0.74 % in December 2025324 [179] The AWU’s evidence suggests that the effects of CPI since Richmond employees last received a pay increase in August 2021 has resulted in an overall and actual decrease to their real wage of 11.48%.325 Evidence was led by Richmond employees that their current rates of pay are insufficient to maintain cost-of-living security.326 On the AWU’s evidence, the AWU’s proposed wage increases would see the decline in real wages that Richmond employees have experienced since August 2021 nearly corrected.327 [180] I have considered the evidence before me regarding the cost of living in Sydney compared to other Australian states and comparing the cost of living including rental costs and house price comparisons in Sydney and Hawkesbury City. Whilst Airbus could have led evidence in relation to where the Richmond employees live, it did not choose to do so and I place little weight on any submission to the effect that employees covered by the 2023 Agreement, live in the Richmond or Hawkesbury areas and therefore have a lower cost of living. Given this, I have focussed my consideration on the evidence regarding cost of living and inflation in Sydney and find that the cost of living for Richmond employees in Sydney is high, has been high in recent years and will likely remain above the RBA’s inflation target until at least June 2025. Similarly, significant inflationary pressures have affected the costs and profit of Airbus in recent years and will likely continue to do so. [181] I accept that Airbus has traditionally had a Success Share scheme in place, which operates outside of the agreement and that this has resulted in payments to Richmond employees since, at least, 2019. However, I do not consider that this scheme or any payments that might arise are a matter that should be given much, if any weight or relied upon to make any assumptions regarding the future economic situation of employees during the life of the agreement. I have reached this conclusion on the basis that minimal evidence was before the Commission as to the calculation of this bonus or the terms of the scheme,328 any payment is discretionary with no quantum guaranteed,329 and the scheme is not incorporated into the agreement to be voted on by employees330 and could be amended or eradicated at any time. [182] As to the weight to be given to the EPB or the special leave previously given to Airbus’s employees, I consider both matters were discretionary provisions by Airbus to the Richmond employees. The EPB was provided specifically outside of current or future salary negotiations 324 Rundell at [40], Annexure 9. 325 Rundell at [30]-[35], Annexures 8 and 9. 326 Curtain at [8], [14], Ellington at [20], [26]-[27], Sinclair at [9]. 327 Rundell at [40]-[41]. 328 PN974 - PN980. 329 PN191 – PN193. 330 Pegg at [60]-[62]. -- 47 of 53 -- [2023] FWC 2996 48 and was paid to all Airbus’s employees nationally.331 Further, the discretion to provide Richmond employees with special leave days was provided for in the 2019 Agreement.332 [183] I have concluded that the success share payments, EPB and leave were provided in circumstances where both the business and its employees were experiencing the impacts of high inflation and the disruption of COVID and natural disasters. Accordingly, I have considered them as part of the context of the economic environment for both Airbus and employees and given them the appropriate weight. [184] The economic environment is significant in my consideration of the question before me. There are various factors in the economic environment that weigh in favour of and against higher increases for Richmond employees. I have taken these into account and ascribed these factors the appropriate weight. Ultimately, on balance, these factors weigh in favour of higher increases being awarded. History of wage increases for the relevant employees [185] I have taken into account that wage increases received by Richmond employees have consisted of repeated increases of 2.5% in the 2017 and 2019 Agreements and the context of these increases including that they were more than CPI until 2021.333 I have also taken into account that in August 2019 employees received between 2.34% and 8.41% by reason of a change in classification structure and that an additional allowance was introduced for employees holding a particular maintenance licence. [186] I have also taken into account that the last wage increase received by Richmond Airbus’s employees was over two years ago, in August 2021 (by agreement between the AWU and Airbus for the reasons advanced in the evidence of Airbus) and was 2.5%.334 As outlined above at [154], I have not taken into account the quantum of any backpay arrangement when assessing the parties competing positions but I have factored into my consideration that it has been agreed that some amount of backpay will be paid by the AWU to the Richmond employees backdated to 1 February 2023. Productivity gains that have been achieved by employees since the last wage increase, or productivity consequences of a particular wage increase [187] It was the position of Airbus that it had not identified any productivity gains realised by Richmond employees since their last wage increase. [188] The AWU submitted that any wage increase determined by the Commission should acknowledge the improved productivity of the Richmond employees and provide adequate recognition of the contribution that Richmond Airbus’s employees make towards continued annual revenue and profit for Airbus.335 The AWU pointed to the 39.90% increase in the 331 Hutchings, reply at Annexure B, PN184 – PN189. 332 Hutchings, reply at [26]-[28], Pegg at RP-02, PN52. 333 Curtain at [7]. 334 Rundell at [30]-[31], Sinclair at [8]. 335 Rundell, reply at [17]-[20]. -- 48 of 53 -- [2023] FWC 2996 49 Success Share payments paid by Airbus to its employees nationally since 2020 as an indicator of productivity gains although Airbus evidence demonstrated that these payments were not based on the performance of Richmond employees alone or even the performance of the Australian Airbus’s business.336 Given the limited evidence before me and concessions from AWU witnesses under cross-examination in relation to productivity gains since the 2019 Agreement,337 I am unable to make a finding that there have been any productivity gains since the 2019 Agreement. [189] The AWU further submitted that, given the skill of the Richmond employees as aircraft maintenance engineers and significant demand for these skilled employees, especially those with extensive experience in the industry, a lower wage outcome would result in Richmond employees leaving for better pay, as I have set out at [122] above.338 It was said that the increase in vacancies further warranted higher increases in rates of pay in order to address what was described as a difficulty by Airbus in attracting and retaining staff.339 [190] Mr Ellington gave evidence to the effect that the continuing stagnation of Richmond Employees’ wages is detrimentally affecting morale,340 and Mr Curtain gave evidence that the AWU’s proposed increases would have a positive effect on morale at Richmond, as well as helping Airbus to attract and retain staff.341 [191] Airbus led evidence that the Richmond turnover rate is less than Airbus’s national average,342 that 33% of employees at Richmond have been there for 10 years or more, 50% for five years or more, and several with less than 5 years returned to Airbus after short periods and that any difficulties in recruiting staff were largely attributable to matters such as skills shortages, the location of Richmond and the funnelling of staff to the Block upgrade program.343 [192] I am obliged to consider the statutory objects including s 3(a) and (f) of the FW Act. Whilst there is some limited evidence before me to the effect that higher increases would, in the first instance, increase morale and aid in the attraction and retention of employees, I do not consider that I have sufficient evidence before me to conclude that either party’s proposed increase would have any particular productivity consequences. Similarly, there is limited evidence before me that lower or higher increases would promote productivity and economic growth. Neither party raised the matters of fair outcomes for working Australians, job security, and gender equality, and I consider them to be neutral or irrelevant for the purposes of my consideration. 336 Rundell, reply at [17]-[20]. 337 PN974 - PN980. 338 Roulstone at [11], Ellington [29]-[31]. 339 Ellington at [28]-[31], Sinclair at [12]-[13]. 340 Ellington at [33]-[35]. 341 Curtain at [15]. 342 Pegg, reply at [6]-[8] 343 Melverton at [8]-[11] -- 49 of 53 -- [2023] FWC 2996 50 Wage increases of competitors, in the sector and wage increases generally [193] I consider that it is relevant to compare the wage rates and increases at Richmond to other Airbus sites nationally, as well as those operated by Sikorsky. However, I accept the evidence of Ms Dawson344 and Mr Kwok345 that there are challenges to the direct comparability of the other Airbus sites, arising from matters such as different contracts, the remoteness of their respective locations, and the operation and duration of different agreements. I have considered the evidence of Ms Dawson346 and Mr Hutchings347 with respect to the wages paid to Richmond employees and other Airbus’s employees. I accept Ms Dawson's evidence that the remoteness of some locations would render a comparison with their wage rates less appropriate and her evidence that Richmond, Brisbane and Adelaide Airbus sites could not be considered remote.348 I consider it to be significant that Ms Dawson conceded during cross-examination that, due to the number of employees employed in each classification under the agreements, only nine Richmond employees are better off under the 2023 Agreement than the Airbus Brisbane employees.349 [194] The parties agreed that Sikorsky was an appropriate comparator given that it is a competitor with Airbus in the maintenance of Defence aircraft and an operator of similar sites.350 I accept that a perfect comparison of the 2023 Agreement against Sikorsky Agreements may be difficult due to differences in classifications and locations between Airbus Richmond and Sikorsky.351 I also acknowledge that Sikorsky wage rates and any increases payable to these employees need to be viewed with some caution as I am not privy to the financial or commercial position of Sikorsky or any other matter, such as bargaining, that may have affected any wages payable to Sikorsky employees. I accept that the 2023 Agreement classification changes may obscure more direct comparisons that would otherwise be possible against Sikorsky agreements. [195] The Department of Employment and Workplace Relations (DEWR) figures establish that in the June quarter of 2023, private manufacturing sector annualised wages under enterprise agreements increased by an average of 4.1%.352 DEWR data establishes that the average increase across all sectors is 3.8% across all enterprise agreements for that same period nationally, and in New South Wales, an average of 3.7%. Airbus submitted that the median of Airbus’s proposed increase (at least for the first operative year) of 4.01% exceeded the national average and the state average, and otherwise came close to the average across all private sector manufacturing increases.353 344 Dawson at [19], [20]. 345 Kwok, reply at [6]-[10]. 346 Dawson at Annexure AD-01. 347 Hutchings at Annexure B. 348 Dawson at [14](d). 349 PN357 - PN388. 350 Pegg at [73]-[74], Hutchings at [13], PN1122. 351 Pegg at [73]-[74], PN1122 352 Rundell, reply at Annexure D, page 20. 353 PN1123 – PN1125. -- 50 of 53 -- [2023] FWC 2996 51 [196] Accordingly, I accept that the majority of Richmond employees (when accounting for employee numbers across the classifications in the 2023 Agreement and the resulting outlier increases attributable to the apprentice structuring) are lower-paid than their Airbus Brisbane counterparts.354 Given the difficulties in directly comparing the pay of Richmond employees with Sikorsky employees, I do not make any findings with respect to the Sikorsky comparison. I also note the commentary of Commissioner Hampton, as he then was, in Cobham, which provides that although comparing outcomes in is a relevant consideration, ‘care needs to be taken to avoid some form of superficial comparative increase justice’. 355 Good faith bargaining [197] The AWU contended that the Commission should have regard to the bargaining conduct of the parties leading up to the filing of this application. The AWU’s case was that Airbus’s conduct fell below the threshold of ‘reasonable’ as per Vice President Watson’s consideration of the Curragh Case in Viva. The AWU submitted that the Commission should exercise its discretion to consider, within its assessment of the merits of the case and having regard to s 275 of the FW Act, that this conduct contributed to the delayed resolution of the bargaining negotiations and, accordingly, resulted in a detrimental financial effect to the Richmond employees. [198] As I have set out at [92] to [97] above, Airbus opposed the AWU’s submission on this issue. Airbus contended that the Commission’s task was only to determine the dispute subject to the express parameters as agreed between the parties. Airbus put that were the Commission to take into account a matter outside of those parameters this may, in effect, render a punitive outcome in circumstances where the ability for parties to engage in robust industrial negotiations is to be properly preserved. Airbus pointed to the remedies available under the FW Act for a party’s failure to engage in good faith bargaining and relied on Schweppes by analogy as supportive of the proposition that protected industrial action was irrelevant to determining a dispute. Airbus submitted that it was not agreed that the negotiating conduct of the parties should form part of the Commission’s consideration. Airbus submitted that, in any event, this matter could not be guided by the authority in Viva to the point put by the AWU because the parties in Viva had agreed to the dispute being arbitrated by reference to s.275 of the FW Act itself - as opposed to within the confines of an agreed question by the parties. [199] I consider that Airbus’s submission on the Viva point is correct– that is to say, the Commission’s primary and sole appropriate objective in the determination of this dispute is to, by agreement and having regard to ss 3, 171, 577, and 578, resolve the question that has been put before it, and not to determine the dispute as a whole by reference to section 275 of the FW Act. To consider the conduct of the parties during bargaining, without the agreement of the parties, may risk producing a punitive result, which would not be a valid discharge of the Commission’s power to arbitrate a dispute ‘as agreed’ by the relevant bargaining representatives and forming the basis for this application.356 I do not consider that the conduct of the parties in this matter is otherwise relevant to assessing the merits of the parties’ respective positions. 354 Dawson at [19], [20], PN357 – PN388. 355 Cobham at [114]. 356 FW Act s.240(4). -- 51 of 53 -- [2023] FWC 2996 52 [200] On a final matter, I have considered the various proposals advanced by the parties against the backdrop of Airbus’s two previous offers having been voted down by employees and the consequential disruption and contractual performance markdown caused to Airbus by industrial action. The Commission is obliged, pursuant to s.577, to perform its functions and exercise its powers in a manner that promotes harmonious and cooperative workplace relations. I consider that the parties having no settled agreement outcome has obviously negatively impacted harmonious and cooperative workplace relations. The decision in this matter has considered the matter’s merits as well as the interests and positions of both Airbus and Richmond employees. Accordingly, it is intended that this decision will represent a step for the parties on the path towards harmonious and cooperative workplace relations. [201] I have reached my conclusions in this matter having regard to all of the issues raised by the parties, including the entire agreed package of significant benefits under the agreement, the financial situation of Airbus, economic environment for Airbus and its employees, previous wages outcomes, wages and wage increases within Airbus, its competitors and across Australia, productivity gains and endeavouring to balance the interests of employees and employers. DETERMINATION [202] Having regard to the relevant statutory considerations, the parties respective cases and all of the circumstances of the case, I have concluded that a fair and just wages outcome, that promotes harmonious and cooperative workplace relations, having regard to the equity, good conscience and merits of the case, which balances the interests of the employer and employees who will be covered by the enterprise agreement, is as follows: (a) the amount of the first wage increase that will apply to the rates of pay from the first full pay period after any decision made by the Commission in this matter is an increase of 4% plus a $1,000 increase to wage rates per year. (b) the amount of the second wage increase that will apply to the rates of pay from the first full pay period after 1 February 2024 is an increase of 3.1% plus a $1,000 increase to wage rates per year. (c) the amount of the third wage increase that will apply to the rates of pay from the first full pay period after 1 February 2025 is an increase of 2.85% plus a $1,000 increase to wage rates per year. [203] Consistent with the agreement between the parties, this outcome will now be incorporated into the terms of the proposed agreement which will then be put to a vote of employees to be covered by the enterprise agreement in accordance with the provisions of the FW Act. -- 52 of 53 -- [2023] FWC 2996 53 DEPUTY PRESIDENT Printed by authority of the Commonwealth Government Printer Appearances: D. Fuller of Counsel instructed by J. Wilde of MinterEllison for the Applicant S. Doumit for the Respondent. Hearing details: Sydney 12 October 2023 Printed by authority of the Commonwealth Government Printer <PR768317> -- 53 of 53 --