Opinion Number. 1070

Subject

FEDERAL SHIPBUILDING TRIBUNAL AWARD INCREASING PIECEWORK RATES PAYABLE BY CONTRACTORS: WHETHER COMMONWEALTH IS LIABLE TO MEET INCREASE: WHETHER TRIBUNAL HAS POWER TO GIVE AWARD RETROSPECTIVE EFFECT

Key Legislation

The Secretary, Ship Construction Branch, Prime Minister's Department

Date
Client
The Secretary, Ship Construction Branch, Prime Minister's Department

The Secretary, Ship Construction Branch, has forwarded me the following memorandum for advice:

The following matter in connection with the building of vessels for the Commonwealth is submitted for favour of opinion:

Men on piecework are remunerated at fixed rates, but they receive not less than the minimum wage fixed by Wages Boards or Arbitration Courts.

Messrs Walkers Ltd, of Maryborough, Queensland, are building two ships for the Commonwealth. The plating of the first ship was commenced about ten months ago, and is now almost finished. During the early stages of the work the Company made weekly advances to the pieceworkers, up to time and a half, based on the minimum wage, in anticipation of that amount being earned at the piecework rates. The men did not earn time and a half, however, and subsequent advances were on a lower scale, but not less than the minimum wage. The difference between the amounts advanced and the value of the work done was not recovered by the Company, and the men who were thus 'in debt' approached the Shipbuilding Tribunal and secured a decision increasing retrospectively the piecework rate for shell-plating that particular ship from 4d plus 35 per cent to 7 l/2d per square foot. The Chairman of the Tribunal in announcing the decision stated to the effect that it was considered the increased rate would enable the men to get out of 'debt' and leave a margin of profit.

Advice is desired on the general question of whether the Shipbuilding Tribunal has power to make retrospective the increases granted by it, and also as to whether this Department has any remedy in the specific case quoted, in view of the fact that the Company under its contract is entitled to pass the increased cost on to the Commonwealth.

Clause 6 (a) of the amending agreement between the Prime Minister and Walkers Ltd is as follows:

If any amount payable by the Contractors in respect of piecework labour employed in the construction trial and delivery of either of the said steamers is increased or has since the date of the Principal Agreement been increased by any judgment of the Federal Shipbuilding Tribunal the net total amount of such increase shall be reimbursed by the Commonwealth to the Contractors as an addition to the contract price fixed by clause 9 of the Principal Agreement.

The above clause appears to render the Commonwealth liable to the increases awarded by the Shipbuilding Tribunal if the award is within the powers of the Tribunal and on this point the question of the power of the Tribunal to make an award retrospective has been raised.

There is nothing in terms of the Shipbuilding Agreement to preclude the Tribunal from making a retrospective award as to piecework rates, and I am, therefore, of opinion that the Commonwealth is liable to pay the increased rates awarded.

[Vol. 17, p. 315]