Kiama council has agreed to sweeping staff pay upgrades despite the disastrous effects of COVID-19 lockdown, which have resulted in a projected operating deficit of $2.78 million for the tourism-reliant town.
A pay dispute between the council and unions was resolved on Thursday, with consent orders signed off in the Industrial Relations Commission.
The decision allows council to shelve for the year problematic aspects of the relevant staff award.
But in the process, it awarded pay upgrades to vastly more staff than would otherwise have received them.
The Mercury understands 194 of council's 299 eligible staff will receive salary grade step increases for 2020/2021.
This dispute arose after council CEO Jane Stroud told staff council was withholding this year's performance bonuses and salary increases due to "our financial position and my concern over the inequality of the current system".
"We know this as our culture survey has clearly communicated staff's unhappiness with the existing system
According to the published tribunal decision, council's representative, Adam Dansie, later conceded the council did not have a right to unilaterally decide to deny employees the opportunity to progress through the salary range.
In submissions regarding council's financial position, Mr Dansie revealed a significant operating deficit would likely be made worse by the COVID-19 pandemic, revenue reduction and staff-related costs.
"Council is experiencing serious economic adversity due to the effects of the COVID-19 pandemic ... Kiama's proximity to the south of Sydney makes it an attractive destination for many day-trippers and weekenders. However, due to the COVID-19 pandemic, NSW was in lockdown for several months in 2021, which has had a serious and detrimental impact on the local economy and on Council's revenue streams. The Council is projecting an operating deficit of $2.78 million for the 2021/2022 financial year."
By consent, council agreed to keep skill-based progression for grades 1-3. Meantime, eligible employees on grades 4-8 are to receive a one-step salary increase while grades 9 and over will get two days' extra annual leave.
Mr Dansie submitted the orders would result in up to 87 per cent of 4-8 graded employees receiving a salary grade step increase, when only 25 per cent would receive an increase under the existing protocol.
In a written statement regarding the tribunal outcome, Ms Stroud said council's salary system was more than 20 years old, "and no longer serves the best interests of Council or our staff".
"We know this as our culture survey has clearly communicated staff's unhappiness with the existing system. The process of developing a new salary system that matches our other reforms, such as our Long Term Financial Plan is a lengthy one, but it's worthwhile doing, since employee costs are our business' single largest expense, totalling $893,000."
"There is much work still to be done on the policies and procedures that surround this system including clear rules, decisions and requirements, to make our workplace and its industrial instruments fairer for all staff. It is important to get it right for both our staff and our community, who underwrite our operations."
"We do have a lot of work to do, like most councils, to work through the financial hit we've been dealt by COVID-19. Of course, I would have preferred not to add to the operational deficit, but finding a resolution to the dispute, moving on with business and arriving at a decision that meets the award, delivers savings through annual leave and ultimately provides a fairer outcome for staff is a positive step."
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