- Date:
- 21 July 2021
The Tribunal received the following submissions. Each party that made a submission requested that it be published in a de-identified form. Sections of the submissions that identify the submitting party have been redacted.
Submission 1
In response to your questions regarding the annual remuneration increase for executives, recently provided by (redacted), we submit the following response:
What level of adjustment to the values of the remuneration bands should the Tribunal consider?
(redacted) uses industry specific survey data as a guide for remuneration movements for our staff.
This data indicates that for the year May 2020 to April 2021 for same incumbent/same role, an average base remuneration increase range of 1.2% to 2.7% was applied to executives within the (redacted) Industry with job families that relate to (redacted).
We therefore consider a fair increase in the current environment for executives for the 2021/22 year would be 1.5% plus Superannuation changes.
Are there any other matters the Tribunal should consider when making the Determination, in addition to those listed in the VIRTIPS Act?
We note that the (redacted) sectors are currently experiencing employee turnover, particularly for highly experienced individuals, and labour markets in the sector are tight.
WE are concerned that to not provide this group an increase again this year, following a 0% increase last year and the cessation of performance reward payments in 2020, may lead to an increased risk of regrettable turnover.
Regards, (redacted)
Submission 2
Private & Confidential
Attention: Warren McCann
Victorian Independent Remuneration Tribunal
Suite 1, Ground Floor, 1 Treasury Place,
East Melbourne Victoria 3002
By email: enquiries@remunerationtribunal.vic.gov.au
Dear Mr McCann,
Remuneration bands for executives employed in prescribed public entities - annual adjustment
We refer to your email in relation to the above matter dated 21 June 2021.
(redacted) makes the following confidential submissions on behalf of its Executives and (redacted) itself- being a class of 'affected persons'.
Background
(redacted)
Submissions
What level of adjustment to the values of the remuneration bands should the Tribunal consider?
(redacted) considers it difficult to properly answer this question as it is still awaiting the results of the VPSC's Executive Classification Assessment which was conducting at the start of 2021. Without knowing what the landing is for the assessment (eg what is the baseline banding of (redacted) Executives) (redacted) can only make submissions based on the assumption the current remuneration bandings apply to its Executives.
(redacted) submits that the existing remuneration band and annual increases are generally below average for similar (redacted) companies for the reasons noted below, under the below relevant VPS Remuneration Principles:
Principle 1: Executive remuneration should be fair and reasonable
Executives in public entities should receive fair and reasonable recompense for performing their public duties.
(redacted) Comments:
(redacted) submits that generally the remuneration banding of (redacted) Executives is below market for the following factors:
- there was no increase in base REM last year due to a 0% Premier's annual increase;
- the bonus structure has been removed as of 1 July 2020; and
- increased work eg primarily due to implementing COVID safe measures - generally (redacted) executives substantially increased their workload (including influencing Government Policies in relation to COVID restrictions and rent relief) to ensure (redacted) continued to operate with heighted COVID safe measures through the Pandemic, whilst maintaining their business as usual work flow. It is worth mentioning that the Executive team perform at a high level and have a history to delivery. (redacted)
Principle 3: Executive remuneration should be competitive
Remuneration should be set at a competitive level for the relevant market and sector, so as to attract and retain talented people.
(redacted) Comments:
(redacted) notes its executives are specialist in their areas (with experience and knowledge from the commercial private sector), including property, legal, finance, operations, facilities management and business management and as discussed with the VPSC's Executive Classification assessor the remuneration banding of (redacted) executives should be fair and reasonable taking into consideration remuneration for executives in (redacted) in the private sector.
There is a material risk that if the above is not remedied there may be retention issues with Executives reverting to equivalent private sector roles due to non competitive bandings. One clear example of the non competitive remuneration structure is that due to VPS policy, the bonus structure was removed last year-which removes a key performance incentive for high performing Executives (most private sector equivalents still have this structure in place).
In fact, according to industry reports, some private sector areas including property, law and finance have experienced material increases in base remunerations and out of cycle bonuses paid to ‘make up’ for last year’s flat line. Based on this, (redacted) submits the annual increase to bandings should materially increase to be consistent with the general industry trends.
Please let me know if you have any questions with the above matter.
Yours faithfully,
(redacted)
Submission 3
Good afternoon,
I am responding to the request for submissions from interested and affected parties to inform the making of the Determination. My role is Director (redacted). My response to questions are as follows:
1. What level of adjustment to the values of the remuneration bands should the Tribunal consider?
Considering state government politicians have just received a 2.5 per cent pay rise my submission is that all executives should receive the same adjustment to their remuneration bands.
2. Are there any other matters the Tribunal should consider when making the Determination, in addition to those listed in the VIRTIPS Act?
This state is still recovering from a pandemic that the executives of state government agencies have continued to work through. Our work load has increased double and triple fold in certain circumstances. We have been required to continue delivering our accountabilities while we manage a large workforce that have had to relocate from offices to working from home, we are continually checking in on staff wellbeing, adapting an entire workforce to a new way of working, ensuring mental health and safety for all staff virtually while our departments continue to deliver valuable resources to the public of Victoria.
Our deliverable have increased dramatically by state government injecting billions of dollars into the construction economy to create jobs. The has resulted in a huge increase in the amount of recruitment, procurement and construction activity to our workloads compared to steady growth over previous years. The increase in pressure to deliver everything immediately to demonstrate that this government is still delivering during this pandemic and election cycle is also a huge burden on executives.
Executives also have our own lives and families to try and take care of at the same time. We have children studying from home, elderly relatives locked down and suffering isolation, and an increasing public mental health issue across all age groups.
Executives did not receive an adjustment to remuneration last year and now that super contribution is rising to 10% within fixed renumeration contracts with no bonus scheme, our take home pay is further reduced. When you compare the cost of living rising to our take home pay reducing, we are substantially worse off with an extensive amount of additional responsibility and accountability in this last 12 months. At this stage there is no incentive to continue working in state government if your efforts and sacrifices when called upon are not recognised or acknowledged by government.
Looking forward to a favourable adjustment for all state government executives.
Regards
(redacted)
Submission 5
Dear Tribunal Secretariat,
Please accept this submission on behalf of (redacted)
Thank you for your consideration.
Kind regards
(redacted)
What level of adjustment to the values of the remuneration bands should the Tribunal consider?
(redacted) utilises remuneration data from (redacted) to benchmark remuneration of its executives and the broader organisation against a market of our peers.
Utilising this database, (redacted) is able to benchmark individual roles in a market of our peers (generally within (redacted) which is where our talent tends to flow from/to).
This data indicates that individual ‘year on year’ increases over the past 12 months for comparable executives has averaged 1.2% – 3% uplift to fixed remuneration packages.
This increase does not include the 0.5% SGC uplift to total remuneration packages from 1 July 2021.
As a minimum, (redacted) anticipates that executive remuneration would be increased in line with the whole of government position of 1.5% particularly given a zero percent increase for FY20 to executive remuneration packages. However, there are other considerations specific to (redacted):
- The talent market for (redacted) executives is very competitive due the specialised nature and the significant growth of (redacted) in Melbourne amplified by talent supply constraints due to border closures.
- The prolonged (and still un‐concluded) review of remuneration of (redacted) executives has created significant employment uncertainty since 2018 which is resulting in growing turnover (averaging 20% typically, <10%) and increasing targeting of (redacted) professionals by competitors.
We strongly encourage the tribunal to consider the extremely challenging talent market in (redacted) that has put upward pressure on remuneration in the talent market and creates a challenging environment for talent attraction and retention for (redacted).
Are there any other matters the Tribunal should consider when making the Determination, in addition to those listed in the VIRTIPS Act?
The highly competitive talent market for (redacted) professionals notes above is further exacerbated by FY2020/21 being a very strong (redacted) year for (redacted). This will have been experienced across the (redacted) industry and likely to put upward pressure on fixed remuneration.
Submission 4
12 July 2021
Mr Warren McCann, Chair
Victorian Independent Remuneration Tribunal
Suite 1, Ground Floor, 1 Treasury Place
Melbourne Victoria 3002
Dear Mr McCann,
SUBJECT: SUBMISSION TO THE VICTORIAN INDEPENDENT REMUNERATION TRIBUNAL FOR EXECUTIVES EMPLOYED IN PRESCRIBED PUBLIC ENTITIES.
I am writing to make a submission to the Victorian Independent Remuneration Tribunal (VIRTIPS) on behalf of (redacted). (redacted) are seeking for the maximum possible increase be paid to the Chief Executive Officer (redacted) and the Executive Officers (redacted) effective from 1 July 2021.
(redacted) are listed as a prescribed public entities in the Victorian Independent Remuneration Tribunal and Improving Parliamentary Standards {Prescribed Public Entities) Regulations 2019 (Vic).
The Chief Executive Officer (redacted) and the Executive Officers (redacted) are responsible to lead the (redacted) in a significant role in delivering the ambitious state-wide reforms outlined in (redacted). These roles also lead key activities aligned to key areas of focus as specified in the Ministerial Statement of Expectations (redacted).
All Ministerial staff and the Minister (redacted) have received pay increases in the last 18 months. Our staff members have received a 3% increase in 2020-2021 and another pay increase is planned for them in 2021-2022.
Executive Officers were the only ones across the public sector not to receive an increase in 2020.
(redacted) have recently become aware that the scheduled work value assessment by the VPSC, which may have provided (redacted) executives a pay increase to a fair and equitable level with their peers in (redacted), will not occur as a result of intervention by (redacted).
(redacted) Our executives have shown great commitment and loyalty to their work in relatively low paid positions and, given the current uncertainty of their (redacted) and workforce, have to manage much more complex situations and stakeholder relationships.
Our executives are critical to the delivery of our business plans and statutory requirements and have such a depth of knowledge and strong relationships with key stakeholders that the loss of any of them will significantly impair our ability to deliver the next twelve months of work. The engagement of these executives is critical (redacted) and, as compensation is an important factor in employee satisfaction, we believe that an increase of 2% would be well deserved and received as a validation of their value.
Yours sincerely
(redacted)