The Commission has before it an application by the Health Services Union NSW ("HSU") for an award for Patient Transport Officers ("PTOs") employed in the New South Wales Health Service. The majority of PTOs are employed in HealthShare NSW. HealthShare is part of the NSW Ministry of Health ("the Ministry") and describes itself as "a statewide organisation established to provide high-quality shared services to support the delivery of patient care within the NSW Health system". PTOs are also employed in a number of Local Health Districts ("LHDs").
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Background
Prior to 2016, non-emergency patient transport ("NEPT") services in the NSW public health system were provided by paramedics and by PTOs employed in the NSW Ambulance Service ("the Green Fleet") as well as by PTOs employed in LHDs.
Green Fleet PTOs were employed under the terms of the Operational Ambulance Officers (State) Award ("the Ambulance Award"). That award, at subcll 15(b) and (c), provided that a paramedic, who was entitled to one paid crib break per shift, and who was directed to take the crib break "away from station", was entitled to be paid a "Meal Away From Station" allowance which, at the time of the previous proceedings before Commissioner Newall [1] was $28.80. PTOs were expressly excluded from payment of this allowance (subcl 15(b)(i)). However, the general practice was that Green Fleet PTOs returned to their base station to take their crib break.
LHD PTOs were employed under the terms of the Health Employees' Conditions of Employment (State) Award ("the Conditions Award"). Under cl 14 of that award, employees were entitled to an unpaid meal break of between 30 minutes and one hour. In addition, employees were entitled to a 20 minute paid morning or afternoon tea break (subcl 3(xiii)). There was no allowance paid to LHD PTOs for being required to take their unpaid meal break, which was generally 30 minutes, or their paid 20 minute tea break, away from their base but the practice was that these breaks were generally taken at a facility within their LHD.
In November 2008, a report issued by the Special Commission of Inquiry into Acute Care Services in NSW Public Hospitals conducted by Peter Garling SC ("the Garling Inquiry") contained the following recommendation [2] :
Recommendation 123: NSW Health is to ensure that there is provided, separately from the emergency transport service of NSW Ambulance, a non urgent transport service which is responsible for:
(a) The return transport of rural patients from metropolitan or rural referral hospitals to either their hospital of origin or their home depending upon their clinical condition;
(b) The transport of metropolitan patients between hospitals or from hospitals to aged care facilities; and
(c) Any other transport required to enable timely investigation and treatment of patients where their clinical condition necessitates access to specialised transport.
In 2012 the Ministry published a Reform Plan for NSW Ambulance. The Reform Plan noted the following [3] :
Despite the operation of NSW Ambulance's NEPT service, there are still cases where emergency ambulances are used to transport non-emergency patients.
In 2011/12 there were approximately 420,000 NEPTs undertaken by Local Health District Health Transport Units and NSW Ambulance, with approximately 104,000 of these being conducted using emergency ambulances.
This use of emergency ambulances to transport non urgent patients impacts the availability of red fleet transport for urgent and critical care, while also affecting patient flow through our emergency departments and hospitals.
The Reform Plan also contained a strategic direction for separating non-emergency patient transport from urgent medical retrieval patient services. Key components of this strategic direction, described as "Our Reforms", were as follows [4] :
* Enabling NSW Ambulance to focus solely on the delivery of safe, high quality and timely, urgent emergency transport services by:
- Establishing a separate NEPT service from the urgent, emergency services provided by NSW Ambulance
* Improving the coordination and efficiency of NEPT by overcoming the current situation where vehicles can be dispatched with single passengers when others are waiting for transportation to the same destination and other occasions where vehicles return empty when there are people waiting by:
- Implementing a centralised booking system which will manage all NEPT transport requests
* Improving responsiveness of NEPT services by:
- Engaging a range of providers including community, existing Ambulance green fleet, Local Health District transport services and private providers to provide existing and future NEPT services
A report dated 28 June 2013, which was commissioned by the Ministry and entitled "NEPT Reform - Business Case for the Implementation of a State-wide NEPT Business Model. FINAL REPORT" [5] by O'Connell Advisory, became known as the "O'Connell Report". Relevant extracts from the O'Connell Report are set out below:
Key Findings from the State-wide Business Case
Operating the Local Health District and the Ambulance Service Patient Transport Fleets side by side without common booking, scheduling and coordination of service delivery has led to considerable inefficiencies. After exploring three options, the preferred business model is a centralised booking service with two main Hubs supported by the Optima net system and a ward based online booking system OptimaWeb, and connection of fleet vehicles with Mobile Data Terminals. The fleet and staff are proposed to remain under current ownership and management structures within relevant LHDs and the ASNSW, with limited market testing to test potential benefits from use of private providers.
Major benefits include:
i. Improved scheduling, co-ordination and fleet management,
ii. Enhanced patient flow from hospitals and reduced delays for patients,
iii. Improved utilisation of existing NEPT fleets by an estimated 10% points from a low average of 27% Productive Utilisation.
Potential savings are summarised below and total c. $11.8m pa after a four year period of implementation and a 10-year NPV of c. $73.6m excluding redundancies.
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Previous reviews of the NEPT services in NSW, such as the Final Report of the Special Commission of Enquiry - Acute Care Services in NSW Public Hospitals (Volume 3) (Garling) - November 2008, and the Reform Plan for NSW Ambulance (O'Reilly) - December 2012 have recognised that the service needs to be improved and in particular that NEPT services being provided on emergency services should be reduced as these services impact on emergency response times. Similar services in Denmark, New Zealand and more locally in Victoria have demonstrated improvements in NEPT service provision. Previously the Review of Non-Emergency Patient Transport Report (EY) - 2009 has identified the following issues with the current NEPT service delivery:
i. Fragmented management structure.
Ii Varying procedures, practices and reporting.
iii. Sub optimal use of fleet.
iv. Vehicles not meeting patient needs.
v. Inappropriate use of ASNSW services over HTU fleets for NEPT activity and impact on EV Response Times, due to pricing disincentives.
vi. Inequality in the ability of patients to gain access to NEPT services.
vii Sub optimal wait times and drop off for scheduled appointments.
viii. Transport times are often not available (ETA).
ix. Lack of co-ordination across boundaries.
NEPT services are currently operated by the LHDs and ASNSW. The LHD Health Transport Unit (HTU) service is based on the previous Area Health Service boundaries and the services have not generally been restructured since the LHDs were developed. ASNSW have a designated Patient Transport Service (PTS) to provide Non-emergency services but some NEPT services are also provided by the Emergency ambulance fleet.
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An essential component to the success of a more efficient NEPT service is an improved Transport Booking & Scheduling System. OptimaNet is the booking system selected and currently being implemented and it can provide a single state-wide booking system which can schedule the NEPT fleets state wide. The booking service will triage all bookings to ensure services meet the clinical needs of the patient and are consistent with the operating guidelines of the NEPT service. Through comprehensive scheduling algorithms OptimaNet will schedule the most clinically appropriate and optimal vehicle available. This will aim to minimise Non-productive Driving time (dead legs) thus improving vehicle Productive Utilisation.
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An expected outcome of the OptimaNet implementation will be the ability to improve the overall Productive Utilisation of the NEPT fleets. Fleet Productive Utilisation is based on classifying the vehicle Operational Time into five categories being:
i. Productive Driving time
ii. Productive Pick up/Drop Off time,
iii. Productive Cleaning time
iv. Non-productive Driving time (dead legs), and
v. Non-productive Idle time
NEPT vehicle Productive Utilisation time is not currently routinely recorded. Small samples have been reviewed within three LHDs and ASNSW PTS; however the surveys did not classify Productive Pick up/Drop Off and Cleaning Time. After adjusting for Productive Pick up/Drop Off and Cleaning time (15% of Operational Time) it appears that Non-productive Time (dead legs and idle time) is approximately 50% of the Operational time. The goals of the OptimaNet system are to reduce the Non-productive Time by at least 10 percentage points and to improve the Productive Driving time by the same amount. Current Productive Driving time for the HTUs and PTS has been calculated as c. 27% (based on DD data and adjusted through sensitivity analysis).
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The estimated savings from a 10% point improvement (average of 1 additional trip per day (per MV)) in Productive Driving time is c. $8.9m (no CPI). The forecast transport savings of c. $8.9m do not include any potential savings from the Regional LHDs (Northern NSW, Mid North Coast, Far West, Western NSW, Murrumbidgee, & Southern NSW). However it does include the c. $5.7m savings at ASNSW expected to be transferred to the NEPT service. The ANSW savings of $5.7m is dependent on the timing of the transfer of EV NEPT 26,700 trips to the NEPT dedicated fleets.
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v. New business model benefits
The qualitative benefits expected from the development of the new business model include:
i. Improved utilisation of NEPT fleet and crews (HTU & PTS) by 10% points
ii. Reduced use of the ASNSW Emergency Fleet for NEPT by c. 26,700 trips
iii. Improved Response Times for NEPT and emergency services
iv. Access across all Districts to shared NEPT resources - Improved management of available resources
v. Reduced delays for patients and enhanced patient flow - Increased patient satisfaction and equity in access to NEPT services
vi. Significantly reduced NEPT service delivery costs
vii. Focus on patient flow and patient need
viii. Assist in achievement of NEAT targets for Emergency Departments (EDs).
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NEPT fleets have potentially the scope to improve their efficiencies by the 10% points or greater through:
i. Utilising the closest available vehicle for booking.
ii. Coordinating services across LHD boundaries.
iii. Improved planning for NEPT booking and services.
iv. Reduction in dead legs.
v. Improve management of the expected time for vehicles being Non-productive (Driving and/or Idle).
In or around late October 2015, the Ministry announced that it would transfer PTOs employed in the NSW Ambulance Green Fleet, as well as PTOs employed in a number of LHDs, to HealthShare. As part of the merger of the two NEPT fleets, the Ministry proposed that the previous practice of Green Fleet PTOs having their crib break at their base station would be discontinued. For LHD PTOs, the unpaid 30 minute meal break and the paid 20 minute tea break would be merged into one 30 minute paid crib break. The practice of taking breaks at a facility within the LHD would be discontinued. Crib breaks for all PTOs employed in HealthShare would be taken at a location determined on the basis of the most productive and efficient deployment of the fleet.
Initially, the HSU was opposed to the practice of PTOs being required to "crib away".
In dispute proceedings initiated by the Australian Paramedics Association before Commissioner Newall on 22 January 2016, the representative of the Ministry put the following [6] :
The main issue, I believe, that is of concern to the employees is where the crib break is taken, and we have addressed the award issues between the parties as to how the meal or crib break will be taken as the different fleets come together, and we have moved in to the idea of the paid crib break, rather than the unpaid meal break that the district fleet currently have, and we have proposed the award provisions that pretty well match what they have in the Ambulance Service. But the proposal, we have been very detailed with, as recently as this week, providing an exact arrangement that we propose to have, so that no party will be surprised; if we can't resolve it any other way and we end up in the Commission, that that is what we will be seeking to do, what we believe is a business imperative to have less wasted time on the job, travelling back to a base to have a meal break.
On 1 February 2016, the Ministry made Determination No.6 of 2016 pursuant to s 116A(1) of the Health Services Act 1997 (NSW) ("the Determination") [7] which determined the classifications, wages and conditions of employment for PTOs employed in NEPT in HealthShare. The Determination would ultimately be succeeded by the HealthShare NSW Patient Transport Officers' Salaries (State) Award which was made by Chief Commissioner Kite SC with the consent of the parties on 19 March 2018 with a date of effect of 1 July 2016 ("the HealthShare Award"). Neither the Determination nor the HealthShare Award contained an allowance for occasions when a PTO was required to crib away from base. The HSU remained opposed to the practice.
In March 2016, HealthShare published a document entitled "NEPT Strategy. Frequently Asked Questions - Crib breaks" [8] which contained the following:
1. Why is there a need to change the current arrangements for our crib breaks?
NEPT Reforms are part of the overall Reform Plan for NSW Ambulance which called for:
- establishing NEPT as a separate service from the urgent, emergency service provided by NSW Ambulance
- Implementing a centralised booking system which will manage all NEPT transport requests
- Engaging a range of providers including community, existing Ambulance green fleet, Local Health District transport services and private providers to provide existing and future NEPT services.
Improving the coordination and efficiency of NEPT services will ensure a stronger public sector model which will provide better:
- alignment of resources with patients, ensuring that patients are provided with the most appropriate level of care, including timeliness of service for transport;
- increase the availability of emergency ambulances for life saving and critical incidents;
- ensure a standardised and consistent approach to non-emergency patient transport, providing better value for money and, most importantly, ensuring the best possible patient care;
- improve patient flow, reduce waiting times and increase bed availability across the LHD.
2. When did HealthShare NSW confirm that this needed to change?
HealthShare NSW (NEPT) has clearly stated its intention to the Health Services Union and that all transport staff in NEPT receive a paid crib (or in longer shifts, 2 crib breaks) to be taken locally i.e. at the nearest suitable location. This is required to be standardised across the NEPT workforce.
Improving the coordination and efficiency of NEPT services will require improvement strategies occurring concurrently as opposed to a single strategy. Improvement strategies include not only dining locally but the standardisation of fleet, equipment and training; adjusting rosters to better match patient demand and needs; ensuring two employees on every stretcher enabled vehicle; and improvement to booking and scheduling of NEPT patients.
Dispute proceedings were initiated by the Ministry by way of a dispute notification filed 13 April 2016 with the Industrial Registrar pursuant to s 130 of the Industrial Relations Act 1996 (NSW) ("the Act"). The question, dispute or difficulty, the subject of the notification, was described in the following terms:
The location/s at which Patient Transport Officers and Drivers in Non-Emergency Patient Transport take their paid crib break.
The dispute was allocated to Commissioner Newall as File Number 2016/00113658. The matter has retained this File Number up to and including the present proceedings before this Full Bench. The dispute was initially listed for Compulsory Conference before Commissioner Newall on 28 April 2016.
The parties came before Commissioner Newall on a number of further occasions but the dispute remained unresolved. The position adopted by the HSU remained one of opposition to the proposal that PTOs be required to "crib away".
On 26 May 2016, following threatened industrial action by members of the HSU, Commissioner Newall issued a Certificate of Attempted Conciliation pursuant to section 135 of the Act and subsequently made dispute orders pursuant to sections 136 and 137 of the Act. However, on 30 May 2016, Commissioner Newall made a recommendation that there be no change to the crib arrangements until the matter came back before the Commission on 18 July 2016. According to Jennifer Van Cleef, who was, at the time she gave this evidence in August 2017, Director, Patient Support Services in HealthShare NSW, following the lifting of the Commissioner's recommendation on 18 July 2016, PTOs regularly took their paid crib break at the nearest NSW Health staff meal room, without being paid any allowance for doing so [9] .
On 14 June 2016, the HSU filed a document in the context of the ongoing dispute proceedings which, in effect, sought the making of an award entitled NSW Health Service Patient Transport Officers Crib Breaks (State) Award. The proposed award provided for allowances of $28.90 and $14.45 to be paid to PTOs who were directed to crib away. The $14.45 allowance was to apply to PTOs working 12 hour shifts for their second 30 minute crib break away from their base during the shift. PTOs working shifts of less than 12 hours took only one crib break during their shift and they were to be paid the $28.90 allowance when they were directed to crib away. The proposed award was to operate on and from 1 July 2016.
At the time the proposed award was filed, the corresponding allowances in the Ambulance Award were $28.20 and $14.10 respectively [10] . However, with effect from 1 July 2016, these amounts were increased to $28.80 and $14.40 respectively [11] . It is apparent the amounts claimed by the HSU in the proposed award were calculated in the anticipation that the allowances in the Ambulance Award would be increased by 2.5% with effect from 1 July 2016. In the event, those allowances were increased by a slightly lower percentage (2.1%). Hence the slight discrepancy between the amounts of the allowances in the Ambulance Award and those claimed in the HSU's proposed award for PTOs. [12]
As previously stated, Green Fleet PTOs, when they were covered by the Ambulance Award prior to their transfer to HealthShare, were expressly excluded from payment of the "Meal Away From Station Allowance" but the practice generally, at that time, was that those PTOs were not required to crib away from their station.
On 11 July 2016, Ms Van Cleef, by then State Manager, Non-Emergency Patient Transport in HealthShare NSW, made a written statement [13] for use in the award proceedings before Commissioner Newall which contained the following:
12. In June 2014, NSW Health established a centralised booking hub for non-emergency patient transport resulting in the non-emergency work undertaken by NSW Ambulance emergency fleet reducing from 15.7% in June 2014 to 2.61% in May 2016.
13. There nonetheless remained barriers to providing an efficient and effective non-emergency patient transport service including inconsistencies across vehicle types and limited flexibility in the use of staff and fleet across nine separate services.
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Operational Success of the Reforms
15. The centralised booking hub and scheduling system across the greater metropolitan area (referred to above) has facilitated the collection of performance information for NEPT.
16. Prior to the transition of the LHD Fleets to the centralised booking and scheduling system the data available was incomplete and unreliable. As such no comparative analysis is available for the time prior to the centralised booking and scheduling system.
17. Analysis has been undertaken on timeliness for the former NSW Ambulance NEPT workforce prior to transition, when dispatch was managed as part of Sydney Control Centre in NSW Ambulance. This analysis indicates that in July 2013, 31% of patients arrived within an hour of the requested time. Following transition to the centralised booking and scheduling arrangements, this time has consistently improved from 52% in December 2014 to 62% in May 2016.
18. Timeliness of service provided by NEPT is important to patient care and safety. Some examples of how timeliness affects patient care and safety include:
a. Additional overnight stays in hospital if patients are unable to be transported home. This also has an impact on the availability of hospital beds for patients requiring admission from the emergency department or for surgery;
b. Shortened dialysis treatment for patients whose transport to treatment is delayed; and
c. Increased length of stay for hospital in patients who are unable to have required diagnostic imaging or treatment as a consequence of a delay in transport.
19. Notwithstanding an increase in transported NEPT demand of approximately 13% from December 2014 to February 2016 there has been a significant reduction in the number of non-emergency transports undertaken by the NSW Ambulance Emergency Fleet across the Greater Metropolitan. In June 2014 this was 15.7% of all NEPT activity in May 2016 this is 2.61% of all NEPT activity.
On 9 November 2016, the then President, Walton J, determined that the HSU's award application, including any special case aspect, would be determined by Commissioner Newall sitting alone rather than by a Full Bench. The matter proceeded to hearing before Commissioner Newall on 9 and 10 November 2016 and 25 January 2017. During the proceedings, Commissioner Newall heard evidence from a number of PTOs, including Neale Flynn, who stated that, based on his experience, "having cribs performed away could mean that at least one more transport in a day is possible" [14] .
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The Newall decision and subsequent appeal
In Commissioner Newall's decision of 11 May 2017 in Re: Application for a New Award for Patient Transport Officers [2017] NSWIRComm 1024, the Commissioner canvassed some of the history in the following extract from his decision:
5 The award is sought in the following context. In October 2015, the Minister for Health determined that the then-existing fleets providing non-emergency patient transport ('NEPT'), one fleet operated by NSW Ambulance and others operated by the Local Health Districts, would be combined into a single standardised NEPT fleet. As a consequence, those PTO's who had previously been engaged pursuant to the terms of the Operational Ambulance Officers (State) Award came instead under the control of HealthShare within the coverage of the Health Employees Conditions of Employment (State) Award. No evidence was able to be brought about how many actual employees were affected by this move, but it is accepted that 218 full-time equivalent ('FTE') PTO positions were brought from NSW Ambulance into the combined NEPT fleet.
6 That change was accompanied by a change in job allocation methods; all NEPT jobs undertaken by former Ambulance PTO's are now allocated by a centralised booking hub established by NSW Health.
7 HealthShare further determined that there was to be a change in the arrangement of crib breaks.
8 In the past the NEPT officers employed by NSW Ambulance returned to their home station for their paid crib breaks. NEPT officers employed by the Local Health Districts ('LHD's') officially did not return to their home station, but on the evidence they conducted their paid crib breaks at, if not always at their home station, a station within their own local area where they were known and knew the facilities. I observe that in the case of one NSW Ambulance station, Picton, a local agreement had been reached that NEPT officers would crib away from station, but that applied to a handful of officers in a particular and unusual geographic location. Otherwise, NSW Ambulance NEPT officers cribbed at station.
9 The Operational Ambulance Officers Award which, before the reconstitution of the fleet, applied to the ex-NSW Ambulance PTO's provided, at Clause 15(b), that an employee directed to have a meal away from his or her station was to be paid a crib/meal away from station allowance, but that that allowance was not to apply to crib breaks taken by NEPT Officers. That part of the clause which excluded NEPT officers must be seen in the light of the fact that, on the evidence, NEPT officers under the Operational Ambulance Officers Award (with the single minor exception noted above) did not crib away from base.
10 As I observe above, HealthShare has now decided that NEPT officers will not be automatically permitted to crib at their home station, but may instead be directed to crib away from their station. That decision has been put into effect.
11 The decision effects a significant change to the practice surrounding crib breaks. It means that former NSW Ambulance PTO's are at times required to crib away from base, when before they were able to crib at base. It also means that former LHD NEPT officers who previously cribbed at their home station or one nearby where they were known will now at times be required to crib away from their local area. On how many occasions this will occur to either category of officer is not clear, and will depend on operational requirements, but as a matter of fact it is occurring and will continue to occur.
12 This decision by HealthShare was vigorously disputed, particularly by the HSU, the applicant for the award in these proceedings, essentially on behalf of the former NSW Ambulance NEPT officers. Disputation about the decision and the way it was to be implemented persisted in various forms, including in proceedings before the Commission, from 2012 until the instant award application was made.
13 The change to crib practices to require officers to crib away from station where directed was expressly advanced by HealthShare as one taken in order to improve the employer's productivity and efficiency.
Part of Commissioner Newall's description of the past practice at [8] of his decision is not entirely accurate. Former LHD PTOs did not have a paid crib break as such. In practice, they took a 30 minute unpaid meal break and a 20 minute paid tea break during their shift. These breaks, which were generally taken at a facility within their LHD, were, upon transfer to HealthShare, condensed into one 30 minute paid crib break.
After canvassing the history of the industrial dispute, the impact of the Commission's "Wage Fixation Principles" and the effect of section 146C of the Act on the HSU's application, Commissioner Newall stated as follows:
43 The substantive elements of the case may be distilled to the following.
44 The employer has made a change to its arrangements for scheduling transportation of patients which, on the evidence of Ms Van Cleef, has resulted in significant efficiencies. As a part of that rearrangement PTO's are required to crib away from base, which ex-Ambulance PTO's had not been required to do before. That requirement extended to ex-LHD PTO's as well as ex-Ambulance PTO's, but the degree of change is greater in its effect on the ex-Ambulance PTO's who comprise about two-thirds of the new fleet.
45 That change itself is a contributor to the efficiencies which HealthShare has achieved.
46 On the evidence, particularly that of Mr Flynn, I accept that cribbing at home base provides certain specific benefits: access to dining, access to toilets and wash rooms, a safe and known place to relax, a place to have social interaction with workmates, and email and printing facilities. Some or all of those benefits are lost when crib is unable to be taken at one's base station, or taken at no fixed location, the degree depending on the location where crib is actually taken.
47 It is to be remembered that the crib break is 30 minutes. I am prepared on the evidence to accept that cribbing in an unknown location, or even a location which is known but is not the officers' own base, imposes significant disadvantages in the context of the purpose of a crib break, which is to be free of work responsibilities for a short time in order to rest, eat and drink, relieve oneself and deal with such short personal matters as checking emails and talking to workmates. There is a real likelihood, on the evidence, that part of the crib time will be lost in unfamiliar or crowded locations, and in locations where the PTO's are outsiders. I do not accept, as it was submitted by the respondent, that the difficulties arising from cribbing away from home station about which evidence was given were merely transitional.
48 In my view it is fair and reasonable that a person who is deprived of the ability to crib at base station, or in the case of the ex-LHD PTO's at a known nearby station, be compensated for that disadvantage. That is not to say that the existing award does not provide fair and reasonable conditions of employment. It means that in the face of the change that has been effected by the employer, a variation to the award is appropriate to maintain fair and reasonable conditions of employment. Terms and conditions of employment must be seen in their historical context; the change of a work practice or the removal of an entitlement can give rise to a need to make or vary awards to maintain fairness.
49 It is apparent from what is said in City of Sydney that changes in circumstances are properly to be considered in assessing whether an award furnishes fair and reasonable conditions of employment. That means that an award provision which was entirely fair may be rendered unfair in its application by changes to circumstances, including changes to, for example, work patterns. The same applies in the negative; an award may be rendered unfair in its particular application where it does not countenance something which formerly it had no need to countenance, but a change in circumstances renders it necessary to address if the award is to maintain fairness.
50 That is in my view the situation here. A change has been imposed on the work patterns of the employees proposed to be covered by the claimed award. It is a change which, I am satisfied on the evidence, reduces the amenity of their crib break on the occasions they are directed to crib away from base. Crib breaks have long been recognised as an amenity which ought not be encroached upon: In re Iron and Steel Workers (Australian Iron and Steel Limited) Conciliation Committee (1941) 40 AR 445 at 456-7. The provision of an allowance to compensate for loss of amenity of one kind or another in the workplace is a long-established feature of award-making: see for example In re Courtaulds (Australia) Limited Award (1955) 54 AR 250, and indeed the current provisions of the Operational Ambulance Officers (State) Award. The award here sought will, by providing an allowance where the amenity of the crib break is reduced, restore a proper and proportionate balance between the entitlements afforded employees and the interests of those employing them, to adopt the words of the Full Bench in City of Sydney.
51 The quantum of the allowance is in my view fair; it draws upon an allowance which the Commission has determined to be fair in analogous circumstances in a comparable award dealing with work of a similar or related nature.
52 I am also satisfied that the application, on the employer's evidence, meets the test of Principle 8.3, as it must do if the award is to be made. Productivity or efficiency improvements which have made a substantial contribution towards the attainment of the objectives of the employer in seeking to become more efficient have been achieved, and on the evidence employees have made a significant contribution to them. That must be so, as the efficiencies depend upon employees operating and participating in the new arrangements.
53 I am satisfied that s.146C does not prevent the award being made. There was no suggestion at all that the maximum cost impost that might possibly arise if the award were made would meet or exceed 2.5% of employee costs. The pay increase of 2.5% extended across Health from 1 July 2016 has not been extended to NEPT PTO's.
54 I propose to make the award in the terms sought…
Commissioner Newall made an order and award which had the effect that a crib away allowance of $28.90 was payable on and from the first pay period commencing on or after 11 May 2017. By its terms, the resultant award applied to PTOs employed in HealthShare as well as those who remained employed in LHDs.
On 19 May 2017, the Ministry filed an Application for Leave to Appeal and Appeal against the decision of Commissioner Newall. A stay of the Commissioner's order and the new award was also sought.
In support of its application for a stay, on 26 May 2017 the Ministry filed an affidavit sworn on 25 May by Ms Van Cleef. In that affidavit [15] , Ms Van Cleef deposed as follows:
3. There are currently 333.6 employees who are covered by the New Award.
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7. I have caused a review to be conducted of the records available in the Patient Transport Service and have been advised that the Patient Transport Officers and crews of the Drivers and Nurses have taken their crib break away from their base station for approximately 90% of shifts.
8. Using this 90% figure, I have estimated the cost of paying the new Crib Allowance to Patient Transport Officers for a one week period to be an 11.8% increase on the base wage rate…
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10. To countenance now stopping the practice of Patient Transport Officers taking their crib break away from their base (so as to avoid paying the new allowance) would severely compromise services to patients, patient flow in hospitals, hospital bed availability and NSW Ambulance emergency fleet response times.
On 26 May 2017, Chief Commissioner Kite SC granted a stay of Commissioner Newall's order and the new award.
On 10 August 2017, the Ministry filed a Notice of Motion in which it sought leave under s 191(2) of the Act to read an affidavit of Ms Van Cleef sworn on 10 August [16] on the hearing of the appeal. Annexed to that affidavit was a document which contained an estimate of the cost of the crib away allowance for the period 15 May to 23 July 2017, based on the actual experience of PTOs cribbing away during that period. The estimated cost of the allowance, as set out in that document was 5.53% of the total salary costs paid to PTOs for that period.
At the hearing of the appeal, Ms Van Cleef's affidavits of 25 May and 10 August 2017 were read without objection [17] .
In its decision of 7 February 2018 [18] , the Full Bench, as presently constituted, granted leave to appeal and upheld the appeal. The Full Bench stated:
32 At the outset, we note the Full Bench determined it was appropriate in the circumstances of this particular case to accept the additional evidence concerning employee-related costs set out in the affidavits sworn by Ms Van Cleef on 25 May and 10 August 2017. The appellant relied upon the evidence to inform the Commission as to the nature of the issues which were likely to remain outstanding if the appeal were to succeed. In that sense the evidence was relevant to the Full Bench proceeding to determine the matter or remitting it to the Commissioner.
33 It was appropriate also because the combined operation of s 146C and the Regulation requires the Commission to properly assess the impact of employee-related costs imposed by the award so as to avoid a "miscarriage of justice": CCH Australia Limited v Bowen (1998) 79 IR 206 at 211; Re Public Hospital Medical Physicists (State) Award (2008) 171 IR 45 at [6]. The evidence of Ms Van Cleef, although not definitive, supports the submission advanced below that there was a probability that the making of the award, absent identified employee related cost savings, would exceed the limitations imposed by the Regulation and therefore the Commission's power.
34 Section 146C compels the Commission when making or varying any award or order to give effect to any NSW Government policy that concerns the conditions of employment of public sector employees.
35 In Public Service Association and Professional Officers' Association Amalgamated of NSW v Director of Public Employment (2012) 87 ALJR 162; (2012) 293 ALR 450; (2012) 228 IR 316; [2012] HCA 58 the High Court stated at [43] per French CJ:
The second question relates to the constitutional character of a regulation of the kind referred to in s 146C. That question is shortly answered. A regulation of the kind referred to in s 146C declares a policy in the sense explained above and attaches legal consequences to it, including the Commission's duty to give effect to it. The policy becomes part of the body of law which the Commission is required to apply in the proceedings before it.
36 The requirement for the Commission to consider any NSW Government policy that concerns the conditions of employment of public sector employees has incorporated NSW Government Wages Policy into law. Under s 146C and the Regulation, it is mandatory that the Commission must require employee-related cost savings to be identified to fully offset any wage related increases above 2.5% per annum. It follows that cl 6(1)(a) of the Regulation imposes limits on the conferral of power on the Commission and operates to restrain the award making powers of the Commission.
37 The appellant and intervener submitted, correctly in our view, that in the light of s146C and cl 6(1)(a) of the Regulation, the Commissioner had no power to make the award sought by the respondent given:
(1) the effect of the statutory scheme;
(2) the potential increase in employee-related costs identified in the evidence of Ms Van Cleef in the hearing before the Commissioner;
(3) the absence of evidence upon which the Commissioner could make findings about the employee-related costs before and after the making of the proposed award;
(4) the (consequent) absence of such findings;
(5) the absence of a finding about the level of increase; and
(6) the identification of any necessary employee-related cost savings.
38 The restriction on the Commission's award making powers imposed cl 6(1) of the Regulation was canvassed by the Court of Appeal in Secretary of The Treasury v Public Service Association & Professional Officers' Association Amalgamated Union of NSW. Meagher JA said at [65]-[68]:
65 The Regulation was made under s 407 of the Industrial Relations Act 1996 (NSW). Section 146C(1) of that Act requires that when making or varying any award or order, the Commission "give effect to any policy on conditions of employment of public sector employees: (a) that is declared by the Regulations to be an aspect of government policy that is required to be given effect to by the Commission". The validity of that provision was upheld in Public Service Association v Director of Public Employment [2012] HCA 58; 87 ALJR 162.
66 The text of cl 6(1) makes clear that its purpose is to impose a limit on the exercise of the power of the Commission to make or vary an award that increases the remuneration or other conditions of employment of "public sector employees". That limit adopts as its reference point the costs to the employer of employing those employees and those costs are defined as "employee-related costs". They are costs to the employer related to the salary or other remuneration payable to the employee or to benefits, including superannuation, which may be payable to or in respect of the employee.
67 Those costs include costs that are not imposed directly on the employer by an award. The superannuation guarantee shortfall payable to the Commonwealth under s 16 of the Superannuation Guarantee (Administration) Act 1992 (Cth) is an example. The obligation to pay that charge is imposed by statute and the amount payable is calculated by reference to the salary or wage paid to the employee. It follows, all other matters remaining constant, that an increase in that salary or wage will result in an increase in that cost to the employer.
68 Clause 6(1)(a) permits the Commission to award increases in remuneration or other conditions of employment "that do not increase employee-related costs by more than 2.5% per annum". Clause 6(1)(b) permits it to award increases "that increase employee-related costs by more than 2.5% per annum" but only if sufficient "employee-related costs savings" (also a defined term) have been achieved to "fully offset the increased employee-related costs". To decide whether that limit will be exceeded it is necessary to determine the employee-related costs for the annual period before the commencement of the proposed award and the increases in those costs for the following period.
39 The error identified by Meagher JA concerned an increase in employee-related costs caused by an increase in the Superannuation Guarantee. In this matter, as we have noted, it is apparent there was no finding or assessment made concerning employee-related costs for the annual period before the commencement of the award nor the "best estimate" available at the time concerning projected increased costs.
40 The approach identified by Meagher JA in [68] above also has the practical effect of dividing a case into at least two stages to determine firstly, whether actual employee-related costs do not exceed the 2.5% cap and second, where they do exceed 2.5%, whether the excess component can be fully offset by "employee-related cost savings".
41 A similar approach was outlined by the Full Bench of the Commission in Operational Ambulance Officers (State) Award [2015] NSWIRComm 17 at [5]-[6] and earlier in Re Crown Employees (NSW Fire Brigade Retained Firefighting Staff) Award 2008 [2012] NSWIRComm 122 at [32] where agreement was reached to split the proceedings into "two stages".
42 The first stage of the proceedings in each of these cases concerned the merits of the application and the second, the identification of potential employee-related costs savings where any proposed remuneration increases would cause employee-related costs to increase by more than 2.5% per annum.
Conclusion
43 We have considered the grounds of appeal advanced by the appellant and in particular, the first three grounds relied upon. Given the restriction imposed by the application of s 146C and the Regulation, it is clear that the Commission does not have power "to make an award in the absence of probative evidence on which to be satisfied that the application does not involve an increase in employee-related costs more than 2.5% per annum" as pressed under Ground 1.
44 We observe in that respect that the appellant is in possession of the relevant information to allow the determination of these issues by the Commission if they cannot be agreed. It is true that the respondent can use the coercive powers of the Commission to require the production of that material but we would have an expectation that the appellant, and other public sector employers, would bring that information before the Commission to allow it to comply with its statutory mandates. We considered the costs and delays experienced in this case could have been significantly mitigated if that evidence had been brought before the Commissioner.
45 The issue of onus in award making, as the authorities recognise, differs from that in other forensic proceedings see for example Transport Industry - General Carriers Contract Determination [2016] NSWIRComm 3; 257 IR 294 at [34] - [35]. There is an evidentiary onus on an applicant to establish a case under s 10 of the Act. The onus in relation to the restriction on the operation of s 10 imposed by s 146C is in a different category. We consider even in contested matters such as the present, the onus falls on both the applicant and respondent to assist the Commission to establish the outer limits of employee-related costs having regard to any agreed or determined quantified cost savings available to offset any increase employee-related costs beyond the 2.5% cap. We do not regard that proposition as in any way inconsistent with the decision of the Full Bench in NSW Fire Brigade (Retained Firefighting Staff) Award 2008.
46 We grant leave to appeal and uphold the appeal. Given that finding, it is unnecessary to consider the remaining grounds advanced by the appellant.
47 The appellant proposed that the Full Bench might quash the award made by the Commissioner with no further order or in the alternative remit the matter to the Commissioner for hearing and determination in accordance with this decision. The Full Bench will remit the matter to Commissioner Newall to be dealt with according to law and this decision.
48 We remain concerned that the employees whose conditions of employment are the subject of these proceedings have not had an increase in remuneration since 1 July 2015. With regard to the 2.5% increase that became available from 1 July 2016, the Full Bench directs the parties to confer and determine a time-table for an application to be made to flow that increase to NEPT PTO's at the earliest opportunity.
49 We also propose that the parties give active consideration to adopting a two-stage approach in relation to the second pay increase of 2.5% that may be applied to NEPT PTO's from 1 July 2017 and the award application.
50 We envisage the first stage of the proceedings should quantify all employee-related costs savings identified by the parties relevant to the application. The second stage would involve a further analysis to determine the cost of the allowance, the agreed or determined value of any offsetting employee-related cost savings and what combinations of pay increases and the determined (quantum) of an allowance as sought by the respondent could be accommodated so as not to cause employee-related costs to increase by more than 2.5% per annum.
51 It is clear that the additional evidence in relation to costs prepared by Ms Van Cleef and relied upon by the appellant in this appeal, together with any quantified cost savings identified need to be scrutinised. The proposed two-stage approach will test whether the requirements of cl 6(1)(a) of the Regulation have been satisfied, that is, there should be no increase in employee-related costs in excess of the 2.5% per annum limit as a result of the making or variation of an award, except where increases in excess of 2.5% are fully offset by employee-related cost savings.
52 Given the force of s 146C and the Regulation, it was incumbent upon the Commissioner to dismiss summarily the application for the award
Disposition of Appeal
53 Given the force of s 146C and the Regulation, it was incumbent upon the Commissioner to dismiss summarily the application for the award. The Full Bench makes the following orders:
(1) Leave to appeal is granted;
(2) The appeal is upheld;
(3) The orders of Newall C in Re: Application for a New Award for Patient Transport Officers [2017] NSWIRComm 1024 are quashed.
(4) The matter is remitted to Commissioner Newall to be dealt with according to law.
Following the resignation of Commissioner Newall from the Commission, the matter was reallocated to Commissioner Murphy.
[4]
Further conciliation
The parties engaged in an exchange of information. The HSU sought from the Ministry certain documents or information to be produced on the question of employee-related costs and savings. The Ministry produced two bundles of documents. Some of the documents were provided on a confidential basis [19] . The Commission made, by consent, an order pursuant to s 164A(1)(c) of the Act on 12 October 2018.
The parties proceeded into a conciliation phase by consent. The conciliation proceedings did not resolve any of the remaining issues between the parties. It was agreed that, in the circumstances, it was appropriate that the matter return to the Full Bench [20] for determination of the question, whether there were sufficient employee-related cost savings to fully offset the increase in employee-related costs flowing from the crib away allowance awarded by Commissioner Newall of $28.90 or, alternatively, some other amount.
[5]
The Regulation
Relevant parts of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW) ("the Regulation") are in the following terms:
6 Other policies
(1) The following policies are also declared, but are subject to compliance with the declared paramount policies:
(a) Public sector employees may be awarded increases in remuneration or other conditions of employment, but only if employee-related costs in respect of those employees are not increased by more than 2.5% per annum as a result of the increases awarded together with any new or increased superannuation employment benefits provided (or to be provided) to or in respect of the employees since their remuneration or other conditions of employment were last determined.
(b) Increases in remuneration or other conditions of employment can be awarded even if employee-related costs are increased by more than 2.5% per annum, but only if sufficient employee-related cost savings have been achieved to fully offset the increased employee-related costs beyond 2.5% per annum. For this purpose:
(i) whether relevant savings have been achieved is to be determined by agreement of the relevant parties or, in the absence of agreement, by the Commission, and
(ii) increases may be awarded before the relevant savings have been achieved, but are not payable until they are achieved, and
(iii) the full savings are not required to be awarded as increases in remuneration or other conditions of employment.
(c) For the purposes of achieving employee-related cost savings, existing conditions of employment of the kind but in excess of the guaranteed minimum conditions of employment may only be reduced with the agreement of the relevant parties in the proceedings.
(d) Awards and orders are to resolve all issues the subject of the proceedings (and not reserve leave for a matter to be dealt with at a later time or allow extra claims to be made during the term of the award or order). However, this does not prevent variations made with the agreement of the relevant parties.
(e) Changes to remuneration or other conditions of employment may only operate on or after the date the relevant parties finally agreed to the change (if the award or order is made or varied by consent) or the date of the Commission's decision (if the award or order is made or varied in arbitration proceedings).
(f) Policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments.
(2) Subclause (1) (e) does not apply if the relevant parties otherwise agree or there are exceptional circumstances.
(3) The relevant parties in relation to a matter requiring agreement under this clause are the employer and any other party to the proceedings that is an industrial organisation of employees with one or more members whose interests are directly affected by the matter.
……………………………
8 Meaning of employee-related costs
(1) For the purposes of this Regulation, employee-related costs are the costs to the employer of the employment of public sector employees, being costs related to the salary, wages, allowances and other remuneration payable to the employees and the superannuation and other personal employment benefits payable to or in respect of the employees.
…………………………….
9 Meaning of employee-related cost savings
(1) For the purposes of this Regulation, employee-related cost savings are savings:
(a) that are identified in the award or order of the Commission that relies on those savings, and
(b) that involve a significant contribution from public sector employees and generally involve direct changes to a relevant industrial instrument, work practices or other conditions of employment, and
(c) that are not existing savings (as defined in subclause (2)), and
(d) that are additional to whole of Government savings measures (such as efficiency dividends), and
(e) that are not achieved by a reduction in guaranteed minimum conditions of employment below the minimum level.
(2) Savings are existing savings if they are identified in a relevant industrial instrument made before the commencement of this Regulation (or in an agreement contemplated by such an industrial instrument) and are relied on by that industrial instrument, whether or not the savings have been achieved and whether or not they were or are achieved during the term of that industrial instrument.
[6]
Assessment of employee-related cost savings
In Secretary of The Treasury v Public Service Association & Professional Officers' Association Amalgamated Union of NSW (2014) 89 NSWLR 688 [2014] NSWCA 138 the Court of Appeal (Bathurst CJ; Beazley P; Meagher JA) stated (per Bathurst CJ at [39]-[42] with whom the other members of the Court agreed at [60] and [61] respectively):
39 …Clause 6(1)(b) permits awards which increase employee-related costs by more than 2.5% per annum if sufficient employee-related cost savings have been achieved to fully offset the increased employee-related costs. Importantly cl 6(1)(b)(ii) contemplates such savings may be achieved after the award was made. Thus, for example, the Commission can take into account cost savings involving direct changes to future work practices in calculating such cost savings (cl 9(1)(b)).
40 These matters suggest that what is to be taken into account is a comparison of employee-related costs on an annual basis both before and after the award.
41 I do not agree that the construction which I have placed on the clause means that cl 6(1)(b) of the Regulation is superfluous. The expression "employee-related cost savings" is defined to cover cost savings which are wider than savings to employee-related costs as defined in cl 8 of the Regulation. In particular, savings resulting from changes in work practices or other conditions of employment, referred to in cl 9(1)(b) of the Regulation, would not fall within the definition of employee-related costs.
42 Nor do I think that the construction to which I have referred is affected by the fact that it may be difficult to estimate such increases. The duty of the Commission is to make a finding on the material available to it, something that it is well equipped to do as a specialist tribunal. It is to be noted the Commission will be required to do a somewhat similar exercise in calculating employee-related cost savings.
The approach of the Court of Appeal to the assessment of employee-related cost savings was followed by a Full Bench of the Commission (Chief Commissioner Kite SC; Harrison DP; Commissioner Newall) in NSW Health Service Allied Health Assistants (State) Award [2018] NSWIRComm 1023. The Full Bench stated (at [59]-[77]):
59 As wage increases of 2.5% have already been awarded, the question becomes, can employee-related cost savings sufficient to permit the wage increases sought, or any wage increases, be demonstrated? And before that question can be answered, there is another before it - how is the Commission to assess the quantum of employee-related cost savings?
60 The answer to that preliminary question seems to us to lie in what was said in Secretary of the Treasury v PSA cited above:
Nor do I think that the construction to which I have referred is affected by the fact that it may be difficult to estimate such increases. The duty of the Commission is to make a finding on the material available to it, something that it is well equipped to do as a specialist tribunal. It is to be noted the Commission will be required to do a somewhat similar exercise in calculating employee-related cost savings. (at [42] per Bathurst CJ)
61 It seems to us clear that just as the Commission has a duty to estimate - and the use of the word 'estimate' is instructive, standing squarely against the proposition that a completely precise actuarial accounting of these costs is required - the quantum of employee-related costs, the Commission also has a duty to calculate, by estimation, that is doing the best it can as a tribunal with expertise in the field, the employee-related cost savings.
62 And that must be so on another basis as well. The Regulation cannot, in our view, have been drafted with the intent or effect that the quantification of employee-related costs savings is impossible. Rather, it must contemplate that such an assessment can be made, as it is necessary to do so in order to determine whether or not the regulation itself has been given effect or been breached.
63 Further, it would be in our view contrary to the Objects of the Act to conclude that, because it may be difficult to establish with absolute mathematical precision the quantum of employee-related cost savings, the effect of the Regulation is that no wage increase could be awarded in a case which warrants them being awarded.
64 That is the more so as it will almost always be solely within the capacity of the employer to provide data which might allow a determination of the quantum of cost savings to be made. It will be evident that an applicant Union will not possess, nor have access to, the relevant financial records. It cannot be the intended operation of the Act that where a work value case has, as here, been made out, no increase can be awarded because the Commission is not provided with the data that would allow the precise quantum of cost savings to be established on the evidence. Such an approach would permit a respondent employer to frustrate the provisions of the Act and the regulation by declining to produce data, not all of which might exist in compellable form. We do not, in saying this, suggest that that has been the approach of the respondent to these proceedings. As we said in Secretary, NSW Ministry of Health v Health Services Union NSW [2018] NSWIRComm 1007:
43 We observe in that respect that the appellant is in possession of the relevant information to allow the determination of these issues by the Commission if they cannot be agreed. It is true that the respondent can use the coercive powers of the Commission to require the production of that material but we would have an expectation that the appellant, and other public sector employers, would bring that information before the Commission to allow it to comply with its statutory mandates. We considered the costs and delays experienced in this case could have been significantly mitigated if that evidence had been brought before the Commissioner.
44 The issue of onus in award making, as the authorities recognise, differs from that in other forensic proceedings see for example Transport Industry - General Carriers Contract Determination [2016] NSWIRComm 3; 257 IR 294 at [34] - [35]. There is an evidentiary onus on an applicant to establish a case under s 10 of the Act. The onus in relation to the restriction on the operation of s 10 imposed by s 146C is in a different category. We consider even in contested matters such as the present, the onus falls on both the applicant and respondent to assist the Commission to establish the outer limits of employee-related costs having regard to any agreed or determined quantified cost savings available to offset any increase employee-related costs beyond the 2.5% cap. We do not regard that proposition as in any way inconsistent with the decision of the Full Bench in NSW Fire Brigade (Retained Firefighting Staff) Award 2008.
65 For the Commission to decline to engage in an assessment of the work value because of the difficulties in extracting and analysing the financial and budgetary data would mean that, in this case and cases like it, employees who demonstrably have, as we have found, increased the value of their work, with consequent benefits for the employer and the taxpayer, could not be financially rewarded. That would be inequitable and, as we say, contrary to the Objects of the Act.
66 A further consideration in this respect which reinforces what we have just said, is the approach to construction identified by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 20, 194 CLR 355. In an often cited passage from the decision of the plurality (McHugh, Gummow, Kirby and Hayne JJ) it was said at [69]-[70]:
[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute45. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.
[70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
67 The Objects of the Act are set out in s 3. Of particular relevance is s 3(a). It provides:
3 Objects
The objects of this Act are as follows:
(a) to provide a framework for the conduct of industrial relations that is fair and just,
68 The approach to the construction and application of cl 6(1) of the Regulation must as far as possible be consistent with the objects of the Act. We do not see how it may be regarded as "fair and just" to allow an employer to require employees to perform work at a higher level, so as to facilitate efficiencies and savings to the employer, and not provide compensation to the employees because of the difficulty of calculating "employee-related cost savings". There can be no doubt that the Objects section of the legislation is the "leading provision". To the extent possible the Commission should strive for a construction of the Regulation which is harmonious with that goal.
69 Our approach, then is that, as we say above, the Commission has a duty to assess, doing the best it may as a tribunal with expertise in the field, the quantum of any employee-related cost savings pertinent to a given application.
70 We observe that the Ministry approached the question of what constitutes "employee-related cost savings" on the basis that for an employee-related cost saving to be demonstrated, there must be a direct and calculable reduction in wage costs for the relevant group of employees. For example, Ms Szalay gave the following evidence:
Q. All right. Are we right in understanding then that when you use the term "employee‑related cost savings", you mean a reduction in the wage costs of the relevant group of employees?
A. Sufficient to fund an increase that you're proposing, yes.
Q. Well, leaving aside the sufficiency. What you understand by the term "employee‑related cost saving" when you use it in your statement is a reduction in the wage costs of the particular group of employees concerned?
A. Yes.
71 In our view, that approach misconstrues the Regulation. Nothing in the words of the Regulation has the effect that the cost savings must be shown to be directly in relation to the particular group of employees in relation to which an increase is sought. Further, on the authority of Secretary of the Treasury set out above, we do not agree that a precise dollar sum, identifiable on an accounting basis, is what is required.
72 Here we are well satisfied that the AHAs make a significant contribution to the efficient operation of the Health Services. On the evidence it is clear that they have increasingly undertaken work of a greater degree of complexity and responsibility, and by doing so have freed employees whose work attracts higher rates of pay to carry out more complex work more effectively. There is real value in that, and there is in our view necessarily a real cost saving in that. Indeed it is a function of the introduction of the Allied Health Framework expressly recognised in the Garling Report.
73 The requirements for "employee-related cost savings" are those set out in clause 9 of the Regulation, namely, savings that are identified in the award or order, which involve a significant contribution by public sector employees, are not existing savings, are in addition to whole of government savings and are not achieved by a reduction in guaranteed minimum conditions of employment. So long as the requirements in paragraphs (1)(a)-(e) are met, the Regulation does not otherwise limit the type of "savings" which are able to be counted. The Regulation could have, but does not, define "employee-related cost savings" as limited to reductions in employee-related costs. The Regulation does not have that effect.
74 The breadth of the term "employee-related cost savings" was considered by the Court of Appeal in Secretary of the Treasury v PSA. There, Bathurst CJ held (at [41]):
41 I do not agree that the construction which I have placed on the clause means that cl 6(1)(b) of the Regulation is superfluous. The expression "employee-related cost savings" is defined to cover cost savings which are wider than savings to employee-related costs as defined in cl 8 of the Regulation. In particular, savings resulting from changes in work practices or other conditions of employment, referred to in cl 9(1)(b) of the Regulation, would not fall within the definition of employee-related costs.
75 That is, the Court of Appeal expressly recognized that "employee-related cost savings" is a broader concept than reductions in wages or even other employment costs, and extends, for example, to savings arising from changes in work practices.
76 Further, we agree with the HSU submission that the Regulation could not effectively operate if the concept of "employee-related cost savings" was limited in the manner proposed by the Ministry. Essential to the concept and operation of the Regulation is the potential for increases in rates of pay and other conditions of employment to be achieved if offset by other savings: see, for example, Re Health Employees Conditions of Employment (State) Award (2011) 208 IR 201 at [49]. On the Ministry's approach it would in practical terms only be possible for employees to obtain an increase in rates of pay above 2.5% if the amount paid to the same employees were otherwise by some means reduced. That cannot be and is not the effect of the Regulation. It must be said that the approach here adopted by the Ministry appears to be inconsistent with the Government's own policy, the NSW Public Sector Wages Policy 2011. The Policy, consistent with the Regulation, contemplates that increases in rates of pay and other conditions above 2.5% can be awarded if sufficient employee-related cost savings are achieved.
77 Importantly, the Policy provides examples of employee-related cost savings, including measures which do not involve reductions in wages or direct employment costs. The examples include "changes to rostering arrangements to better reflect customer service", "increases in normal working hours that involve direct customer interaction", "reduction in the days of absence before a medical certificate is required", "requiring a minimum period of leave every 12 months to reduce leave liabilities", "limited access to 'top up' sick leave" and "reduction in the accrual of maximum rostered days off". The second reading speech to the Industrial Relations Amendment (Public Sector Conditions of Employment) Bill 2011 made it clear that the Regulation was intended to implement the Policy.
We intend to approach the issue of "employee-related cost savings" on a similar basis as did the Full Bench in Allied Health Assistants.
[7]
The Wage Fixing Principles
Also relevant to our consideration is Principle 8.3 of the Commission's Wage Fixing Principles [21] which is in the following terms:
8.3 Productivity and Efficiency Considerations
Productivity and efficiency measures that have delivered substantial costs savings and/or productivity or efficiency improvements or which have made a substantial contribution towards the attainment of the objectives of the employer (including departments and agencies of the Crown) in seeking to become more competitive and/or efficient, to which employees have made a significant contribution, may constitute the basis for increases to wages and salaries or improvements in employment conditions without the requirement to make out a special case, provided that such measures, savings or improvements have not already been taken into account in previous wage adjustments.
[8]
Proceedings before the Full Bench
The matter was listed for hearing before the Full Bench on 11 and 12 October 2018. The focus of the parties' evidence and submissions during the proceedings on those two days was the quantification of the employee-related cost of the $28.90 crib away allowance awarded by Commissioner Newall and the quantification of any employee-related cost savings that might be called in aid to offset the increase in employee-related costs.
[9]
Employee-related costs
In the proceedings before the Full Bench, the extent of disagreement between the parties as to the employee-related cost of the crib away allowance of $28.90 was not great.
As we have noted at [30], in her affidavit of 10 August 2017 Ms Van Cleef estimated the cost of a $28.90 crib away allowance to be equivalent to 5.53% of employee-related costs for PTOs.
However, in an affidavit sworn on 24 September 2018, Ms Van Cleef revised this estimate upward to 5.95% [22] of "Total Salary Costs paid to PTOs" ($26,193,869), or $1,557,999 for the period 24 June 2017 to 24 June 2018. Again, this estimate was based on the actual number of instances of PTOs cribbing away during that 12 month period. Ms Van Cleef also identified the cost of the agreed package of remuneration and conditions of employment which was contained in the Determination [23] as $669,454 per annum giving a yearly total of employee-related costs of $2,227,453.
The HSU, in its written submissions filed on 15 August 2018, used Ms Van Cleef's earlier estimate of 5.53% and a figure of $22,555,936 being HealthShare's "Funded/Budgeted charges for Patient Transport Officers… for FY2016/2017" which appeared in a HealthShare document marked "Confidential" and entitled "Statewide Pricing Guide 2017/18". The resulting annual cost of the $28.90 crib away allowance of $1,247,343 was said by the HSU to represent "what should be the high watermark for employee related costs". However, as will be seen later in these reasons, the HSU ultimately accepted the Ministry's quantification of the employee-related cost arising from the $28.90 crib away allowance being $2,227,453.
Adopting a conservative approach, the Full Bench is prepared to accept the Ministry's estimate of $1,557,999 (in preference to the HSU's "highwater mark") as representing the annual increase in employee-related costs which needs to be fully offset by employee-related cost savings arising from the practice of PTOs cribbing away, if the allowance of $28.90 is to be awarded. We do not agree that the amount of $669,454, which was the cost associated with the Determination, should be taken into account as employee-related costs as those costs do not represent an increase in employee-related costs attributable to the awarding of the crib away allowance.
We note that the Ministry has not sought to argue before the Full Bench that no allowance at all should be awarded or that the $28.90 allowance awarded by Commissioner Newall was not a "fair and reasonable" condition of employment for PTOs. The Ministry's attack on the $28.90 allowance has focussed on the proposition that it runs afoul of the Regulation because sufficient employee-related cost savings have not been achieved to fully offset the increase in employee-related costs that would flow from an allowance of this amount.
[10]
Case for the HSU
The case for the HSU relied, to some extent, on the O'Connell Report. The O'Connell Report preceded the decision of the Ministry to merge the NSW Ambulance and LHD NEPT fleets and to transfer their operation and the PTOs to HealthShare, as described in that part of the decision of Commissioner Newall set out at [23] above.
According to the submission of the HSU, the O'Connell Report sets out anticipated savings of not less than $11.8m per year from 2017. The union's submissions continued as follows (footnotes omitted):
46. The O'Connell report reform anticipated a 26,700 reduced utilisation of NSW Ambulance. This is associated with an anticipated savings of $5.7m.
47. The O'Connell Report focused on the problem of driving 'dead legs', or 'non-productive driving time' it stands to reason that introducing a system of 'cribbing away' from base is facilitative of a reduction in the 'dead legs'. There is also some suggestion in the report that the 10% reduction target is a conservative goal.
48. The O'Connell Report bases its assessment of savings on a 10% reduction in non-productive driving time, the report emphasises that a greater level of savings can be achieved, and that a "higher productive utilisation target should be established between 6 and 12 months after the Optima system has been implemented." The Optima System (part of the Booking Hub) is understood to have been established in June 2014, therefor the updated target should have been made by June 2015 at the latest.
49. The report includes an additional savings of $1.5m if the fleet achieves 42.5% productive utilisation. It was recommended that this be assessed after 12 months of the OptimaNet being implemented.
50. The O'Connell report provided 3 Options for the Booking Hub System. Option 1 was no change. Option 3 provided a Net Savings of either $1,134,367 including notional rent or $819,875 excluding notional rent. It appears that the notional rent should be included for the purpose of assessing Employee-Related Costs Savings under the regulation.
51. The Report also provided 3 Options to address Transport Costs. Again Option 1 was no change. Option 3 was implemented. It was predicated on the merger of the 'green fleet' and certain portions of the 'LHD fleet' into HealthShare, this went ahead on 19 October 2015.
52. An example of the savings resulting from option 3 was the reduced reliance of the emergency fleet for non-emergency work. This saving was estimated at $5.7m. This was a direct saving from the integration of non-emergency transport into HealthShare. The Report identifies other savings associated with transport which totalled $8.8m.
53. In the case of the Hub and the Transport Costs a simple way of comparing the costs of the reform is to compare the cost of option 1 with option 3. Option 1 being 'as is' and option 3 being the reform pursued. This yields savings as follows:
a. Hub: $6,888,854 - $5,754,488 = $1,134,366,
b. Transport: $43,993,032 - $35,111,339 = $8,881,693,
c. Total savings: $10,016,059.
54. The implementation table indicates that 100% of the year to year savings would be realised between 19-24 months of implementation. The realised year on year savings relevantly include a 100% realisation by 2017 of $8.9m.
55. The Full Bench now has before it sufficient evidence of employee-related savings for the Commission to make an estimate that it can have confidence in.
56. The Report also identified several sources of savings that are not quantified. They include;
a. Improved Ambulance Emergency Response Time of at least 6.73% at the 90th percentile,
b. The introduction of billing to Department of Veterans Affairs patients,
c. Internal efficiencies,
d. Integration of additional LHDs,
e. Improve timeliness of responses, and related;
i. Reduction in overnight stays,
ii. Shortened dialysis treatment (presumably waiting times),
iii. Shorter hospital stays,
f. Demand driven efficiency improvements.
Final Assessment for s146C
57. The HSU submits that the Commission can be satisfied that in the 12 months June 2017 - July 2018 the employee related costs of the allowance were not more than $1.25million and employee related savings were not less than $8.9 million.
58. Consequently, the Full Bench can be satisfied that the Award sought is not precluded by s 146C.
In addition, the HSU relied upon a document produced by the Ministry entitled "PTS Activity & Performance July 14 - June 15" and similar documents for the subsequent three financial years (or part thereof for July 2017 - April 2018), which became Exhibit 8 in the proceedings. Exhibit 8 demonstrated the following:
The total number of non-emergency transports performed rose from 9,789 (July 2014) to 18,656 (April 2018) peaking at 20,276 (November 2017).
Over that same period, the number of non-emergency transports performed by the NSW Ambulance emergency fleet dropped from 1,635 (July 2014) to 107 (April 2018).
Based on these statistics, Counsel for the HSU submitted:
"That paints for you early on the picture that we contend is the correct picture of what is happening with the work here, and that is that the merged fleet is doing a lot more work. It's doing it and one of the consequences of it doing that work is that the red fleet is doing a lot less non-emergency work, it is being freed up to do other work. Those figures show you that."
The O'Connell Report, which was published in June 2013, contained an estimate of the average cost to NSW Ambulance of providing a non-emergency transport by the Green Fleet of $200 per transport as opposed to $507 per transport when provided by the emergency fleet. Using the $307 per transport difference, the HSU calculated the savings achieved by the shift of non-emergency transports from the emergency service fleet to PTOs as $2.6 million in the first year rising to $3.2 million in the second year and $3.7 million in the third year.
Using calculations based on data provided by the Ministry, the HSU submitted that the number of patient transports performed per PTO crew per day rose from 6 (2015) to 6.57 (2016) to 7.82 (2017). Based on a price per transport of $208, this represented an increase in revenue from a 2015 baseline, of $3,665,584 in 2016 and $8,866,208 in 2017.
With respect to the reduction in instances of patients being delayed overnight in hospital, from 1083 (FY2015/16) to 18 (FY2017/18), based on an overnight stay cost of $1,921 [24] , the HSU calculated annual savings in the order of $2,045,865.
[11]
Case for the Ministry
Ms Van Cleef gave evidence that, using data from the Computer Aided Dispatch (CAD) System, HealthShare was able to determine the time (in minutes) a crew spent travelling to a crib break, as well as the time (in minutes) from finishing the crib break to arrival at the next job. Data was extracted from the CAD system for a 12 month period before the change in practice (1 August 2015 to 31 July 2016). During that period only former LHD employees cribbed away from base and former NSW Ambulance employees cribbed at base.
Data was also extracted from CAD for the period 1 August 2016 to 31 July 2017 and 1 August 2017 to 31 July 2018. During these two periods, both former NSW Ambulance employees and former LHD employees, that is all PTOs employed by HealthShare, cribbed away from base.
According to Ms Van Cleef the CAD data demonstrated the following [25] :
1. For the 12 months following the change of practice (1 August 2016 to 31 July 2017) there was an overall average saving of 10.94 minutes and for 1 August 2017 to 31 July 2018 the time saved was 8.74 minutes per crew per shift.
2. There was minimal change in the performance for PTOs who were formerly LHD employees, presumably because they were already cribbing away from base. However the improvement in former Ambulance crews was an overall average of 24.6 minutes per crew per shift for the period 1 August 2016 to 31 July 2017 and 24 minutes for the period 1 August 2017 to 31 July 2018.
Ms Van Cleef also gave evidence about a number of operational and structural changes in HealthShare that have contributed to operational efficiency but have not involved a significant contribution from employees [26] . These included the introduction of a centralised booking hub; implementation of CAD Planning and Optimisation Engine/System; introduction of a centralised employment model including work locations; vehicle and staffing enhancements; enhanced software and equipment; and engagement of private providers and taxi services.
Annexed to Ms Van Cleef's witness statement was a document entitled "NSW Ambulance Year in Review 2015/16" [27] . That document contained the following:
TOTAL NSW AMBULANCE RESPONSES
The average daily number of ambulance responses decreased by 1.3 per cent over the past year. The primary factor contributing to this decreased total activity is due to the transfer of responsibility for a major part of the Non-Emergency (P5, 6, 7) activity to Health Share in May 2014. Total Activity in 2015/16, NSW Ambulance provided 1,115,635 total responses (both emergency and nonemergency) compared to 1,127,545 total responses in 2014/15. On average, there were 3,048 responses per day which is the equivalent to an average of one response every 28.34 seconds…
……………………………………………….
NSW NON EMERGENCY RESPONSES
Across NSW during 2015/16, NSW Ambulance provided 152,037 non-emergency responses compared with 176,949 in 2014/15. In 2015/16 there were 417 nonemergency responses per day, compared with 485 in 2014/15, a decrease of -14.1 per cent. This decreased non-emergency activity is primarily due to the transfer of responsibility for a major part of the Non-Emergency (P5, 6, 7) activity to Health Share in May 2014…
With respect to the O'Connell Report, Ms Van Cleef stated:
58. The O'Connell Report was a business case detailing potential estimated benefits (based on information available at the time) for an integrated PTS model. The 'Integrated PTS model' was one where transport bookings were performed from a centralised booking system with an enhanced computer scheduling function. The 'Integrated PTS model' considered as part of the O'Connell Report did not extend to a centralised fleet/staffing model.
59. The estimated savings described in the O'Connell Report were based on what can now be understood as unsafe assumptions and unreliable activity and performance data.
60. Some of the limitations of the assumptions were expressly outlined in the
report, including:
• NEPT vehicle Productive Utilisation time was not routinely recorded, and only small samples were reviewed within three LHDs and NSW Ambulance Service PTS (O'Connell Report, p.9);
• Operating performance indicators were not monitored and managed in each of the NEPT services and there was limited use of measuring ongoing productivity (O'Connell Report, p.25); and
• The business case savings were based on estimated current costs. The level of management scrutiny over the NEPT services varied between fleet managers. The report mentions the possibility that there were material errors in the due diligence data. (O'Connell Report, p.56).
61. In addition to the absence of reliable data, the O'Connell Report did not appear to consider the day of week or time of day when PTS functions may need to be performed. For example, the O'Connell Report does not factor in, for example, that certain 'jobs' need to be performed within certain time frames, or at a particular time. For example, jobs relating to transporting to an appointment require the transport to be done at a time around where the appointment is scheduled. The O'Connell Report appears to outline an analysis based on efficiency without the necessary consideration of other quality type data such as timeliness of service.
62. The business case modelled in the O'Connell Report assumed the establishment of a Centralised Booking Hub, and that the various fleets would remain unmerged. Upon rollout of the Centralised Booking Hub, it became apparent that additional staffing resources were required, and these costs had not been factored into the O'Connell Report. Further, the O'Connell report did not factor in, for example, costs associated with staff and fleet transitioning to HealthShare, or enhanced staffing conditions associated with a centralised staffing model as the O'Connell Report assumed the various fleets would remain unmerged.
63. The O'Connell report outlined 'potential' estimated 'savings'. The current available data does not verify or support that 'savings' have been realised as estimated in the report. Further, if any savings or improvements have occurred because of changes considered in the O'Connell Report, none were due to changed cribbing away arrangements, as this was not considered by the report.
64. I refer to the HSU's outline of submissions dated 15 August 2018, at paragraph 43 and the anticipated savings of $11.8M pa from 2017 (ie after a four year period of implementation) referred to therein. I am unable to determine how the $11.8M has been calculated...
65. Either way, these estimated annual savings appear to have included $0.8M attributable to efficiencies associated with the establishment of the Centralised Booking Hub, and $8.9M in savings due to improvements in Ambulance response times (being $5.7M of the $8.9M) and a 10% point improvement in 'productive utilisation' (being the remaining $3.2M). Page 45 of the O'Connell Report also appears to show, that if the $5.7M Ambulance savings are not included, and there is only a 5% point improvement in 'productive utilisation', then the 'savings' are $1.1M pa (instead of $8.9M pa).
Ms Van Cleef disputed that other estimated savings in the O'Connell Report, such as a "10% improvement in Productive Driving Time of 1 additional trip per day per motor vehicle at an estimated saving of $8.9M", have materialised. [28]
Ms Van Cleef also disputed the O'Connell Report's estimated improvement in the emergency response times for NSW Ambulance and the estimated saving of $5.7m. [29]
With respect to the reduction in the number of inpatient overnight delays due to the unavailability of patient transport services, Ms Van Cleef stated that the significant reduction from December 2014 to July 2016 (the period prior to transition) was "likely to be due to a number of factors including enhanced staffing, taxi supplementation and perhaps the implementation of the Centralised Booking Hub and the Logis Planning and Optimisation CAD function". [30]
Warren Clarke, Deputy Director, Finance, HealthShare NSW, also gave evidence in the proceedings. Attached to Mr Clarke's witness statement [31] was a document (annexure WC-4) which demonstrated the difference in time taken by PTOs travelling from their last patient drop off to their crib break and from their crib break to their next patient pick up, both before and after the introduction of the practice of cribbing away from base. This document disclosed the following:
For the period 1 August 2015 to 31 July 2016 (prior to the introduction of cribbing away), for ex-Green Fleet PTOs the average time travelling to the break was 35.27 minutes; the average time travelling from the break was 30.08 minutes; the total average time taken was 65.35 minutes.
For ex-LHD PTOs the corresponding average times were 17.76 minutes; 16.82 minutes; and 34.58 minutes (total).
For the combined fleet the average times were 25.35 minutes; 22.57 minutes; and 47.92 minutes (total).
For the period 1 August 2016 to 31 July 2017 (after the introduction of cribbing away) the times for the ex-Green Fleet PTOs were 16.08 minutes; 24.68 minutes; and 40.76 minutes (total). This represented an average reduction in the time spent travelling to and from the crib break of 24.60 minutes (approximately) from the 2015/2016 average times.
For the ex-LHD PTOs the corresponding average times were 13.53 minutes; 22.01 minutes; 35.54 minutes (total). This represented an average increase in the time spent travelling to and from the crib break of 0.96 minutes from the 2015/2016 average times.
For the combined fleet the average times were 14.23 minutes; 22.74 minutes; and 36.97 minutes (total). This represented an average reduction in the time spent travelling to and from the crib break of 10.94 minutes from the 2015/2016 average times.
For the period 1 August 2017 to 31 July 2018 the times for the ex-Green Fleet PTOs were 16.04 minutes; 25.29 minutes; and 41.33 minutes (total). This represented an average reduction in the time spent travelling to and from the crib break of 24.02 minutes from the 2015/2016 average times.
For the ex-LHD PTOs the corresponding average times were 14.69 minutes; 24.17 minutes; 38.86 minutes (total). This represented an average increase in the time spent travelling to and from the crib break of 4.27 minutes (approximately) from the 2015/2016 average times.
For the combined fleet the average times were 14.87 minutes; 24.32 minutes; and 39.19 minutes (total). This represented an average reduction in the time spent travelling to and from the crib break of 8.74 minutes (approximately) from the 2015/2016 average times.
Mr Clarke calculated the dollar value of the 10.94 minutes reduction in travelling time as $6.77 and of the 8.74 minutes reduction in travelling time as $5.41.
Written submissions filed on behalf of the Ministry contained the following (footnotes omitted):
11. The HSU presses the claim originally made before Commissioner Newall for an allowance payable upon each instance that PTOs are directed to crib away from their base.
12. Originally the allowance was sought to "maintain the practice of cribbing at base and provide an allowance where it fails to occur". The rationale was to impose an allowance that was disproportionate to any gain to the employer, the intended result being "the organisation not conducting itself in a way that would incur the penalty".
13. The claim pressed now relies on the allowance being funded by employee-related cost savings.
14. The HSU submissions do not address the requirements of the State Wage Case principles, instead submitting that the current proceedings do not "involve revisiting the questions of merit which were not upset on appeal"
The Evidence
15. The Respondent's evidence indicates:
a. Following consultation and negotiations with the HSU a number of agreed improvements in conditions and/or wages for PTOs were the subject of a Determination…;
b. The total annual cost of these enhanced wages and conditions paid under Determination No 6 of 2016 is $669,454…;
c. The cost of the proposed allowance in the 2018 financial year would be $1,557,999…;
d. This equates to 5.95% of the total salary cost for PTOs employed at HealthShare and 10.46% of the total base salaries for the same employees…;
e. For the 12 months after employees could be directed to crib away from base there was an overall average saving of 10.94 minutes per incident per PTO, and in the next 12 months an average saving of 8.74 minutes per incident per PTO…;
f. The dollar value of the productivity savings associated with cribbing away from base is $6.77 per instance in the first 12 months and $5.41 per instance in the second 12 months of operation…;
g. In recent years there have been a number of operational and structural changes in HealthShare that have contributed to operational efficiency but have not involved a significant contribution from employees…, including:
i. a centralised booking hub facilitated by a CAD (Computer Aided Dispatch) system was introduced in approximately May 2014…;
ii. implementation of CAD Planning and Optimisation Engine (Logis IDS) System…;
iii. centralised work locations…;
iv. vehicle and staff enhancements…;
v. enhanced software and equipment…; and
vi. engagement of private providers and taxi services…; and
h. Many of these changes have come at significant cost... HealthShare has made an additional investment of $43M that allow PTOs to be more productive...
The O'Connell Report
16. The HSU relies almost exclusively on the O'Connell Report. The O'Connell Report was published three years before the merger of the fleets. The HSU submits that "in absence of evidence to the contrary the Commission is entitled, for the purpose of 'estimating' the savings, to rely on those anticipated savings [described in the O'Connell Report]" - this submission must be rejected and the Full Bench would fall into error to rely on the O'Connell Report as permitting the making of the Allowance, given the material now filed by the Respondent.
17. Recognising that the HSU's submissions were filed prior to the receipt of the Respondent's evidence, the Commission must reject the HSU's submissions that rely on the O'Connell Report.
18. The O'Connell Report is unreliable insofar as:
a. the O'Connell report did not extend to a centralised fleet/staffing model…;
b. The estimated savings described in the O'Connell Report were based on unsafe assumptions and unreliable activity and performance data…;
c. The 'potential' savings outlined in the report have not been realised…;
d. The bulk of the 'savings' identified were referrable to increased emergency response times in the Ambulance Service… and those improvements in response times have not occurred…; and
19. The posited improvements in 'productive driving time' have not occurred… and in fact the average time taken to perform a PTS job has increased since 2014… Most importantly, the O'Connell Report does not suggest that any of the efficiencies or cost savings were due to cribbing away from base, or any other relevant contribution from PTOs, as the report did not identify any specific contributions from PTOs that would give rise to those efficiencies. It would therefore be unsafe and inappropriate to rely upon any of the potential cost savings identified in the O'Connell Report as evidence of employee related cost savings that are capable of offsetting the increased employment costs resulting from the proposed allowance, as they were not demonstrated to result from "a significant contribution from public sector employees".
State Wage Case Principles
20. Both the wage regulations and the SWC Principles apply.
21. In the original proceedings Commissioner Newall accepted that the SWC Principles were satisfied. The Respondent took issue with Commissioner Newall's approach and findings, however the Full Bench disposed of the appeal without needing to address these grounds of appeal. It is therefore necessary for the present Full Bench to consider for itself the application of Principle 8.3 of the SWC Principles.
22. Principle 8.3 is in the following terms:
Productivity Considerations. Productivity and efficiency measures that have delivered substantial costs savings and/or productivity or efficiency improvements or which have made a substantial contribution towards the attainment of the objectives of the employer (including departments and agencies of the Crown) in seeking to become more competitive and/or efficient, to which employees have made a significant contribution, may constitute the basis for increases to wages and salaries or improvements in employment conditions without the requirement to make out a special case, provided that such measures, savings or improvements have not already been taken into account in previous wage adjustments.
23. This principle was introduced in 2010. The Full Bench described the rationale for the new principle as follows:
Proposed Principle 8 - Arbitrated Case, addresses those claims for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the Principles. Such claims are to be processed as an Arbitrated Case by a Full Bench of the Commission unless otherwise allocated by the President. Claims under this proposed Principle may be made on the basis of a change in work value, productivity and efficiency improvements and on the basis of a special case. Whilst the DPE accepted that claims based on productivity and efficiency improvements were already permissible under the existing Special Case Principle, we think it is important to make it clear just what the criteria are for such claims and to ensure that claims brought on that basis do not need to be made out as a special case (such claims being treated in a similar manner to work value claims).
24. In 2012 in Crown Employees (Police Officers - 2009) Award a Full Bench found:
The sub-principle does not itself require a party to meet the requirements of either work value or special case components of the Arbitrated Case Principle.
The Association provided what is described as a summary of the requirements of the sub-principle. This was uncontentious and, in our view, broadly encapsulates the operating conditions for the sub-principle. That submission was as follows:
(a) The case must be based upon "productivity and efficiency measures". "Measure" in that context presumably has its relevant ordinary meaning, namely "an action or procedure intended as a means to an end".
(b) The relevant measures must have either delivered substantial cost[s] savings and/or productivity or efficiency improvements or made a substantial contribution towards the attainment of the objectives of the employer (including departments and agencies of the Crown) in seeking to become more competitive and/or efficient. The latter alternative appears to recognise that Government departments and agencies providing services to the public may have their productivity and efficiency measured by reference to their service objectives, rather than just by reference to notions of cost and profit which would apply to a private sector business.
(c) Employees must have made a significant contribution to the requisite productivity and efficiency measures. The required nature of this contribution, which is not elaborated upon further, is likely to reflect the approach taken in Re Crown Employees (Administrative and Clerical Officers) Award (No 2) at 378-380 and the cases which followed it.
25. Commissioner Newall:
a. found that Principle 8.3 does not require a precise relationship between the benefit of an efficiency and the level of an allowance…;
b. awarded an allowance without any relationship between the benefit of the efficiencies said to be the basis for the allowance, and the level of the allowance…;
c. awarded an allowance to the whole of the combined fleet despite only those transitioning out of the ambulance service bearing what was found to be "significant disadvantages"…; and
d. took the words 'significant' and 'substantial' in Principle 8 to mean "something less than the whole"… and consequently did not require the HSU to establish any connection between productivity and efficiency measures and the quantum of the allowance.
26. Despite State Decisions being recognised in s.51 of the IR Act, the precise terms of the SWC Principles themselves do not have the force of statute. The Full Bench can nonetheless apply ordinary interpretation principles and conclude that the ordinary meaning of Principle 8.3 requires proportionality between the productivity and efficiency measures that constitute the "basis for increases to wages and salaries or improvements in employment conditions" and the increases granted.
27. Even if one accepts that the proportionality does not need to be precise, there must nonetheless be a close relationship between the efficiency gains to the employer and the increase gained by employees.
28. In the context of the SWC Principles the Full Bench can readily identify Principle 8.3 to be an exception to the rule. The aims of the Principles include "to provide a framework that accommodates the interests of employers and employees and their representatives and ensures consistency of approach, certainty and predictability as to the principles that are to operate in respect of the fixation of wages and the setting of employment conditions" (1.2.2).
29. Clearly Principle 8.3 is intended to allow increases above 2.5% so long as the basis for the larger increase is funded by gains in productivity and/or efficiency.
30. The evidence before Commissioner Newall indicates that the HSU set the level of the allowance claimed ($28.90) on the basis that:
a. it would operate as a "penalty" or disincentive for the employer to give any PTO a direction to crib away from base; and
b. it reflected the level of allowance that had been set in the Operational Ambulance Officers (State) Award introduced in 2008 in Bluescope proceedings (albeit for paramedics - although the allowance is slightly different to what has existed for Paramedics - and not for PTOs and at a time before the constraints introduced by s.146C and the Wages Policy were not in place).
31. By the proper application of Principle 8.3 the quantum of an allowance awarded on the basis of productivity or efficiency arising from a change in practice must reflect the actual productivity or efficiency improvement.
32. In the present matter, and now armed with experience-based data, the only available conclusion for the Commission is that the gains in productivity or efficiency said to be the basis of the allowance are of the magnitude of 8 to 11 minutes ($5-$6) for each instance.
33. These figures, being averages across the combined fleet, take into account the fact that not all employees changed their practise.
…………………………………….
36. In NSW Health Service Allied Health Assistants (State) Award [2018] NSWIRComm 1023 ("Allied Health Assistants") the Full Bench:
a. found that there was a change in work value to satisfy the work value criteria…;
b. noted that the assessment to be made is one of employee related costs in the year in which the award is made…;
c. accepted that the cost of the proposed work-value increase was $1.39M…;
d. considered whether there were sufficient employee related cost savings to permit the wage increases sought…;
e. found that the duty of the Commission is to assess, doing the best it may as a tribunal with expertise in the field, the quantum of any employee related costs savings…, noting that the estimate does not require mathematical precision… or the identification of a precise dollar sum…;
f. rejected the employer's submission that employee related cost savings must be limited to a direct and calculable reduction in wage costs…;
g. noted that the only limits on employee related cost savings are in sub-clauses 9(1)(a)-(e);
h. found the following kinds of savings were employee related cost savings:
i. AHAs undertaking work that frees up higher paid workers to carry out more complex work…;
ii. a reduction in tea break times…;
iii the removal of cash allowance…
iv a reduction in hospital stays and reduction in rates of readmission…; and
v. a reduction in patient costs...
37. In Allied Health Assistants the Full Bench found that the Regulation did not require any connection between the proposed wage increases and the employee-related cost savings relied upon to fund the increases… Obviously in that matter the wage increases arose from changes in work value.
38. Applying the same rationale to the present matter, where the proposed allowance is based on gains and efficiency of productivity (per SWC Principle 8.3), the Respondent concedes that the Full Bench will be drawn to the same conclusion, ie that the Regulation does not require a direct connection between the increased employee related costs awarded by the allowance and the employee-related cost savings relied upon to fund it.
Net employee-related cost savings(?)
39. The Full Bench in the Allied Health Assistants did not appear to consider whether the savings identified above should be net of the costs incurred in achieving the savings, perhaps except for applying only the net cost savings when factoring only the wage differential between AHAs and AHPs…
40. In the present matter the question squarely arises for determination. The employer has incurred significant costs (being costs that are not employee related costs) in order to gain efficiencies and savings, including:
a. implementation of Software and IT equipment including CAD Planning and Optimisation Engine (Logis IDS) System ($1M);
b. centralised work locations ($3.3M);
c. vehicle enhancements ($4.4M); other investments ($3.5M); and
d. engagement of private providers and taxi services ($27M).
41. To the extent that "the employees themselves, by means of cost offsets equal to the increases that may be granted, must pay for any increases over 2.5%", the 'payment' is by way of employee related cost savings achieved.
42. Understood this way, the value of employee related cost savings can only include the net value of any employee related cost savings.
43. The Respondent accepts that in relation to the direction to crib locally the net employee-related cost saving is no different to the raw saving described above (ie 8 to 11 minutes / $5-$6 for each instance) because the employer could not be understood to have relevantly expended any additional funds to achieve that cost saving.
44. However to the extent that other employee-related cost savings are relied upon by the HSU, the Full Bench must look at those claimed savings net of the cost of achieving the savings.
Conclusion
45. It is difficult to be more precise at this point in the proceedings because the HSU's case to date relies upon (flawed) 'projected' savings of approximately $10M. There are more than $10M of additional costs incurred by HealthShare identified above that may or may not negate any actual employee-related cost savings once the claimed savings are more precisely nominated by the HSU.
46. The Respondent submits that under SWC Principles the only additional increase available must be proportionate to the gains in productivity or efficiency relied upon to support the allowance. Given that the identifiable gains in productivity or efficiency across the combined fleet is significantly less than the value of the claimed allowance, the application does not conform to current State Wage Principles and cannot be granted in its current form.
47. The Respondent further submits that the identifiable employee related cost savings are insufficient to fully offset the increased employee-related costs of the allowance sought as required by cl. 6(1)(b) of the under the Regulations.
[12]
Case for the HSU in reply
In reply, the HSU submitted as follows (footnotes omitted):
5. Two issues remain to be resolved in the proceedings:
a. Whether, before making the award, the Commission must reconsider whether the SWC principles have been met; and
b. Whether s146C prevents the award being made.
6. In relation to the first issue, if the Commission decides that it must reconsider the SWC principles, the Commission will then need to consider whether the application meets those principles.
7. As to the second issue, the Commission must consider:
a. The extent of the employee-related costs associated with the award;
b. The extent of the employee-related cost savings.
c. Whether non employee-related costs should be considered into the determination of the net value of employee related costs savings.
d. Whether there are sufficient employee-related cost savings have been achieved to fully offset the employee related costs.
8. If there are sufficient employee-related cost savings to offset the employee-related costs then s146C will not prevent the award being made.
SWC principles
9. The HSU submits that it is not, as baldly suggested by the Respondent's Outline of Submission at [21], now necessary for the Commission as currently constituted to consider for itself the application
10. The HSU relies upon its earlier submissions to the effect that the task before the Commission is to deal with what remained following the appeal. Commissioner Newall dealt with the SWC principles in the decision at first instance at [17] to [33] and found at [52] that the application met the test in Principle 8.3 of the SWC principles.
11. That finding was not disturbed on appeal and, in its appeal decision, the Full Bench at [47] remitted a specific matter to be determined - the application of s146C to the application. At [50] the Full Bench identified the purpose of the remitter, which was to quantify the employee-related costs, analyse the value of any offsetting employee-related cost savings, and determine what combinations of wage increases and allowance could be accommodated so as not to cause employee-related costs to increase more than 2.5% per annum.
12. The Appeal Bench did not envisage a revisiting of the findings concerning the SWC principles.
13. The HSU submits in the alternative that the application is permitted by principle 8.3.
Section 146C
Employee-Related Costs
14. The HSU accepts that the integration of the fleets involved consultation and arising from that Determination 6 of 2016 was made following that consultation. The HSU also accepts that the Determination resulted in increased employee-related costs. The HSU accepts that the crib allowance sought will give rise to further employee-related costs.
15. The HSU does not accept any suggestion that there was agreement, or 'an agreed package', that meant the Determination was sufficient to compensate employees for the entirety of the changes that were introduced. The history of the proceedings, and the contemporaneous correspondence, clearly identify an ongoing dispute about the introduction of the changes. That dispute centred around the proposed adjustments to meal break practices.
16. The Respondent has filed evidence of the quantum of the employee-related costs associated with and the Determination. It has also filed material on a revised assessment of the cost of the proposed Award.
17. The Respondent asserts that those costs are:
a. Costs associated with the Determination $669,454.
b. Costs associated with the crib allowance $1,577,999.
18. The HSU does not challenge those figures. They represent annual employee-related costs of $2,247,453.
19. For current purposes the HSU does accept that the employee related costs relevant to the Commission's consideration include the costs associated with the Determination and the calculated cost of providing the crib allowance. Those costs are in excess of 2.5% and will have to be offset by employee-related cost savings.
Employee-Related Cost Savings
20. In the Appeal decision in this matter the Full Bench said at [44]:
The issue of onus in award making, as the authorities recognise, differs from that in other forensic proceedings see for example Transport Industry - General Carriers Contract Determination [2016] NSWIRComm 3; 257 IR 294 at [34]-[35]. There is an evidentiary onus on an applicant to establish a case under s 10 of the Act. The onus in relation to the restriction on the operation of s 10 imposed by s 146C is in a different category. We consider even in contested matters such as the present, the onus falls on both the applicant and respondent to assist the Commission to establish the outer limits of employee-related costs having regard to any agreed or determined quantified cost savings available to offset any increase employee-related costs beyond the 2.5% cap....
21. Further, the Full Bench in NSW Health Service Allied Health Assistants (State) Award [2018] NSWIRComm 1023 (the Health Assistants' case) at [64] made the following observation:
That is the more so as it will almost always be solely within the capacity of the employer to provide data which might allow a determination of the quantum of cost savings to be made. It will be evident that an applicant Union will not possess, nor have access to, the relevant financial records. It cannot be the intended operation of the Act that where a work value case has, as here, been made out, no increase can be awarded because the Commission is not provided with the data that would allow the precise quantum of cost savings to be established on the evidence. Such an approach would permit a respondent employer to frustrate the provisions of the Act and the regulation by declining to produce data, not all of which might exist in compellable form....
22. There has been no agreed quantified employee-related cost savings. During conciliation the HSU sought from the Respondent documents to assist in assessing those savings. The Respondent provided some documents and the HSU has relied on those documents in its evidence in this proceeding and in submitting that the employee-related cost savings were well in excess of the employee-related costs associated with the award sought.
23. The Respondent has now filed new material. That further material fails to quantify the annual employee-related costs savings relevant to the proceeding. Rather, the Respondent asserts that the material it provided was inaccurate in assessing those savings. The Respondent does not provide a figure to identify annual employee-related cost saving at all. It provides a single figure relevant to the issue which it describes as a 'raw' saving of 8 to 11 minutes per incident which is directly associated with cribbing away and is said to be worth $5.00 - $6.00 per instance. No attempt is made to identify an annual figure in that regard.
24. The Respondent submits that it is difficult for it to be precise about the savings because the HSU has not precisely nominated the employee-related costs savings. This submission runs contrary to the Full Bench authority that assistance is to be provided by both parties when considering the impact of s146C. By merely cavilling with its earlier assertions on cost savings the Respondent has failed to provide any assistance to the Commission to establish the outer limits of employee-related costs. It does so in circumstances where it is within its capacity to provide data which might allow a determination of the quantum of cost savings to be made. The Union does not possess, nor have access to, the relevant financial records.
25. The approach taken by the employer leaves the Commission to make an assessment of the relevant employee-related costs savings as best it can on the material available.
26. The HSU continues to rely upon the categories of savings identified in its initial submissions. The Respondent has attempted to discredit either the relevance or the quantum of those savings.
27. The HSU submits that there have been employee-related cost savings associated with the integration to the fleets that are in excess of the employee related costs. Those costs savings include the saving identified by Mr Flynn associated with PTO's taking an additional job per day at a price up to $300 per job and the savings identified in the O'Connell report including:
a. Improved utilisation of NEPT fleet and crews;
b. Reduced use of the ASNSW Emergency Fleet for NEPT;
c. Improved Response Times for NEPT and emergency services;
d. Access across all Districts to shared NEPT resources - Improved management of available resources;
e. Reduced delays for patients and enhanced patient flow - Increased patient satisfaction and equity in access to NEPT services;
f. Significantly reduced NEPT service delivery costs;
g. Focus on patient flow and patient need;
h. Assist in achievement of NEAT targets for Emergency Departments (EDs).
28. The O'Connell Report also identified other sources of savings. They include;
a. Improved Ambulance Emergency Response Time,
b. The introduction of billing to Department of Veterans Affairs patients,
c. Internal efficiencies,
d. Integration of additional LHDs,
e. Improved timeliness of responses, and related;
i. Reduction in overnight stays,
ii. Shortened dialysis treatment,
iii. Shorter hospital stays,
f. Demand driven efficiency improvements.
29. The Respondent's approach is merely to quibble with the estimates and methodology of the O'Connell Report, acknowledging that those figure and assessments were necessarily estimates in a business case. It fails to provide the Commission with an account of realised savings. It would (be) expected that the Respondent is in a position to provide such an account.
30. Adopting the approach of the Full Bench in the Health Assistants' case quoted above, it cannot be the intended operation of the Act that where the case for an allowance has, as here, been made out, no increase can be awarded because the Commission is not provided with the data that would allow the precise quantum of cost savings to be established on the evidence. Such an approach would permit a respondent employer to frustrate the provisions of the Act and the regulation by declining to produce data.
31. Consequently, the Commission is left to take a similar approach to that taken in the Health Assistants' case and is duty bound to make an estimate of the employee related cost savings on the material that is available. And, as the Full Bench said in that case, those estimates do not have to be precise dollar sums.
Non employee-related costs
32. The Respondent, having failed to quantify the employee-related cost savings, submits that those savings, whatever they may be, must be net of the costs incurred in achieving the savings. The Respondent then asserts that costs of $43 million associated with non employeerelated matters such as the implementation of software, centralised work locations, vehicle enhancements, other investments and engagement of private providers and taxi services must be taken into account.
33. The approach asks of taking into account non-employee related costs runs contrary to the Regulation which expressly identifies employee-related costs as the cost factor to be considered. The HSU submits that the Commission should not countenance this approach.
Conclusion
34. The material available to the Commission allows some assessment of the employee-related cost savings to be made. That assessment will necessarily be an estimate but that should not stop the Commission from being satisfied that the requirements of the regulation are met.
35. The HSU submits that by taking this same approach, which accords with the approach taken in the Health Assistants' case the Commission can be comfortably satisfied on the material available to it that the employee-related costs associated with the award are offset by employee-related cost savings and s146C is no impediment to making the award
At the conclusion of proceedings on 12 October 2018 the Full Bench reserved its decision.
[13]
Further proceedings
At the request of the Full Bench, the parties appeared before the Commission on 12 November 2018. The following exchange occurred:
"KITE CC: As we have been deliberating on this matter, a matter of concern has developed as to the state of the evidence of cost savings. It is an issue that we took up with counsel in the course of submissions. The starting point for the Commission at first instance is that Commissioner Newall found that there was a disability warranting an allowance by reason of a change in work practice. We then come to measure what that allowance should be and what that cost saving might be from the change in work practice to finance the allowance.
The evidence, summed up in exhibit 12 Annexure WC‑4, suggests that there is a miniscule saving for former ambulance PTOs and the costs in respect of those working in the local health districts.
That leaves us with a dilemma. It is insufficient to finance the allowance at the level suggested by the Commissioner or anything of moment and we have a statutory duty to set just and reasonable conditions of employment. So there seemed to us to be two possibilities. One is to revisit the evidence or invite the parties to revisit the evidence of the savings by modelling the costs I have [ad]verted to, the former work practices and identify the true savings.
In other words, run models that suggest employees return to their base to crib or crib within their local health district that existed before and see what the cost impact would be. Alternatively, we consider making an award that causes a reversion of that practice. That would then require a similar exercise because no doubt that award would need to be costed and the costs would be the change in work practice.
What we have in mind is to direct the parties to confer about the issues to see whether any common ground can be found about the savings or the way forward and then list the matter again before the Full Bench to deal with the matter. Is there anything from either counsel?
SLEVIN: Not from our side.
EASTON: If I could have some clarification. The second possibility that contemplated an order that would have the effect of requiring or allowing ex‑green fleet PTOs to return to base for their crib.
KITE CC: And for LHD PTOs to return to their district for their crib which, as I understand it, is the former practice. In other words, the award condition would complement former practices. At the moment what is suggested by the evidence is that there is really no savings in this change in practice but there is a disability which flows from it and that can't be just and reasonable.
EASTON: There are savings but not as much as contemplated.
KITE CC: There is really nothing of moment and there's certainly not enough to offset the disability found to exist by the Commission. If there is not much efficiency to be gained, then we can eliminate the disability by removing it from the former work practice. Our suspicion is that is more efficiency than has been identified to date.
That is why we suggested the parties confer about the alternatives to see if there is a way forward in identifying the savings. The modelling seems to us to be the best course because it doesn't require a change in practice, it simply requires computer models to run as if the changes in practice have occurred and what impact that would have on operation. Effectively both scenarios, as we put them, will require. It might be slightly different maths but the exercise is going to be similar."
The proceedings continued on 11 December 2018 and 5 February and 5 March 2019. On the last day of the hearing, the parties provided the Full Bench with further written submissions.
In addition, Counsel for the Ministry provided the Commission with two documents, Exhibits 13 and 14, which purported to demonstrate that, based on data from February to October 2016, if only former Green Fleet crews returned to base for their crib break, the average additional drive time per crew per shift would be 8.77 minutes. If all crews returned to base for their crib break, the average additional drive time per crew per shift would be 21.58 minutes. The Ministry quantified the notional cost of the additional 8.77 minutes as $4.10 per PTO from 1 July 2017 and $4.20 per PTO from 1 July 2018. The Ministry quantified the notional cost of the additional 21.58 minutes as $9.83 per PTO from 1 July 2017 and $10.08 per PTO from 1 July 2018.
The submissions of the Ministry were as follows (footnotes omitted):
Outline of the respondent's submissions
Background
1. In October 2018 the Full Bench received further evidence and submissions on the HSU's application for an allowance of $28.90.
2. The HSU's case was and is that the allowance sought is fully funded by Employee Related Cost Savings.
3. The Ministry provided extensive evidence of the Employee Related Costs Savings resulting from the change in crib arrangements, including attachment WC-4 to the statement of Mr Warren Clarke (Exhibit 12) which measured the difference in travelling time to and from breaks. Attachment WC-4:
a. was based on actual data/experience across 99,030 crew incidents over 36 months;
b. measured the average travel time taken to a break and the average travel time taken enroute to the next pickup in the first 12 months after the change in crib arrangements;
c. compared the average travel time in that period to the 12 month period immediately prior to the change in crib break arrangements and found that across the combined fleet there was an average difference of 10.94 minutes per crew per incident in the first twelve months;
d. measured the performance in the second 12-month period after the change in crib arrangements and found that across the combined fleet there was an average difference of 8.74 minutes per crew per incident in the second twelve months; and
e. distinguished between ex-Green Fleet PTOs and ex-LHD PTOs.
New modelling
4. In November 2018 the Full Bench reconvened the proceedings and asked the Ministry to consider modelling the effect of employees returning to their base to crib or crib within their Local Health District.
5. At around this time the Ministry, in response to complaints from the HSU about the utility of the Ministry's figures, invited further consultation and dialogue about data collection and modelling. The HSU were specifically invited to nominate better information or data for the Ministry to collect so as to more accurately measure employee related savings. The HSU has not proffered any such information or alternative methodology.
6. The Ministry obtained and produced new modelling as requested by the Commission.
7. This modelling:
a. is based on 2016 data/parameters;
b. assumes that each ex-green fleet PTO is allowed to return to their base for a crib break;
c. models a weighted average change (increase) in travel time across all health districts;
d. indicates that across the fleet , and assuming that only ex-green fleet PTOs return to a base, that the additional travel time per incident would be 8.77 minutes; and
e. indicates that if all crews returned to base then the additional travel time would be 21.58 minutes per incident.
Options presently available to the Commission
8. The parties are not in agreement as to which specific option the Commission can or should adopt. Following further consultation between the parties, three prominent options have emerged:
a. OPTION 1: that the Employee Related Cost Savings achieved by the change in crib arrangements, on modelled data provided by the Ministry, is 8.77 minutes; OR
b. OPTION 2: that the Employee Related Cost Savings achieved by the change in crib arrangements, on modelled data provided by the Ministry, is 21.58 minutes; OR
c. OPTION 3: that Employee Related Cost Savings achieved by the change in crib arrangements fully fund the allowance as originally sought and awarded by Commissioner Newall.
9. At least two alternatives have been raised in the course of the proceedings:
a. the Commission make an award that requires PTOs to crib at a base but does not include an allowance if they do not crib at a base;
b. the Commission awards an allowance that is only partially funded by employee related cost savings (and consequently reduces the amount that can be awarded as a general increase in wages).
10. Neither of these alternative options are supported by the parties. Both parties are of the view that any amount that is awarded should be fully funded by employee related cost savings.
11. The Ministry's view is that 8.77 minutes per crib break per crew is the ceiling of employee related cost savings and that Options 2 and 3 are outside of the statutory limits of the Commission's jurisdiction (per s.146C).
OPTION 1: 8.77 minutes
12. The Ministry's modelling indicates that if ex-green fleet PTOs return to a base to crib then across the fleet the additional travel time per crew per crib break would increase by 8.77 minutes.
13. The evidence provided by the Ministry in 2018, being measured data from actual experience over 36 months, produced an almost identical figure. The 2018 data showed that, as a result of the change in crib arrangements from August 2016, actual travel time was on average 10.94 minutes less per crew per shift in the first 12 months and 8.74 minutes less per crew per shift in the second 12 months.
14. For the purpose of comparison, it is convenient to use the modelled figure of 8.77 minutes (cf 8.74 mins) because this figure can be more readily compared to the modelled 21.58 minute figure explored in Option 2 below.
15. The Ministry's view is that the Employee Related Cost Saving of up to 8.77 is available to be applied.
16. The Ministry has prepared further calculations to covert this modelled figure of 8.77 into a monetary allowance. By the Ministry's calculation this saving can fund an allowance of 0.15 hours pay per incident.
17. On the award hourly rates for each financial year the allowance available is as follows:
Year Weekly Rate Hourly Rate Available allowance
(per incident)
Trainee PTO 993.20 26.10 3.92
(1 July 17)
PTO (from 1 1037.50 27.30 4.10
July 2017)
Trainee PTO 1018.00 26.80 4.02
(1 July 18)
PTO (from 1 1063.40 28.00 4.20
July 2018)
[14]
The Ministry's calculations indicate that to apply an allowance of $3.98 over 35,255 crew shifts in FY18 would cost $234,319, being 1.57% of the total base costs for the fleet and 0.89% of total employee related costs of the fleet.
19. If the Commission accepts that the Employee Related Cost Saving is 8.77 minutes then, on the evidence before the Commission in the Ministry's calculations, the allowance would increase the amount paid to PTOs by 0.89% of the total employee costs over the financial year, but would be fully funded by Employee Related Cost Savings.
20. The increase would also conform with State Wage Case principles because it would be awarded on the basis of employee contribution to productivity or efficiency improvements.
OPTION 2: 21.58 minutes
21. The Ministry also modelled the additional time it would take PTOs to return to a base for each crib break, assuming that all crews return to a base - which is broader than the practice that existed prior to commencing the crib away practice. By this modelling the additional time was calculated by modelling to be 21.58 minutes per crew per shift.
22. By the Ministry's calculation, a saving of 21.58 minutes per crew per shift funds an allowance of 0.36 hours pay per incident.
23. On the award hourly rates for each financial year the allowance available is as follows:
Year Weekly Rate Hourly Rate Available allowance
(per incident)
Trainee PTO 993.20 26.10 9.40
(1 July 17)
PTO (from 1 1037.50 27.30 9.83
July 2017)
Trainee PTO 1018.00 26.80 9.65
(1 July 18)
PTO (from 1 1063.40 28.00 10.08
July 2017 [2018])
[15]
The Ministry's calculations indicate that to apply an allowance of $9.78 over 35,255 crew shifts in FY18 would cost $542,708, being 3.64% of the total base costs for the fleet and 2.07% of total employee related costs of the fleet.
25. If the Commission accepts that the Employee Related Cost Saving is 21.58 minutes then, on the evidence before the Commission in the Ministry's calculations, the allowance would increase the amount paid to PTOs by 2.07% over the financial year, but would be fully funded by Employee Related Cost Savings.
26. If the Commission accepts that the Employee Related Cost Saving is 21.58 minutes then the increase would also conform with State Wage Case principles because it would be awarded on the basis of employee contribution to productivity or efficiency improvements.
$28.90
27. The HSU still presses their application for the original allowance as awarded ($28.90) and claim that such an allowance is fully funded by Employee Related Cost Savings.
28. The Ministry does not hold this view.
29. This aspect of the dispute has been fully ventilated and the Commission has not invited further submissions.
Operative Date
30. If the Commission is satisfied that there are sufficient Employee Related Cost Saving to fully fund an allowance then:
a. The operative date for the allowance should be 1 July 2017, being shortly after the date of Commissioner Newall's decision; and following the expiry of the existing award covering Healthshare Patient Transport Officers (HealthShare NSW Patient Transport Officers Salaries (State) Award);
b. The Commission is also able to make an award that provides for 2.5%pa wage increase(s) throughout the term of the award, with effect from the first full pay period on or after 1 July 2017, as this date is not earlier than the notification of the industrial dispute giving rise to the award application;
c. The allowance should be treated as an expense related allowance and shall be adjusted on 1 July each year in line with increases in the Consumer Price Index for Sydney during the preceding year (March quarter figures); and
d. By this methodology the allowance should increase by 2.1% from 1 July 2018.
Alternative Award proposal
31. As referred to above, neither party supports the option raised by the Commission in November 2018, being the option of the Commission making an award that requires PTOs to crib at a base but does not include an allowance if they do not crib at a base.
32. The present award does not specify where a crib break must be taken and none of the present fleet have relevantly had the benefit of such an award provision. That is, neither the ex-Green Fleet PTOs nor the ex-LHD Fleet PTOs had the benefit of an award provision that specified where crib breaks could be taken.
33. If the Commission were to make an award provision of this kind then the Commission can see from the Ministry's figures that:
a. If the Commission finds that allowing the ex-Green Fleet to return to base to crib will cause an additional 8.77 minutes in travel time per crew per crib, then the cost of that additional travel time is 0.89% of total employee related costs and 1.57% of total base costs;
b. If the Commission finds that allowing the whole fleet to return to base to crib will cause an additional 21.58 minutes in travel time per crew per crib, then the cost of that additional travel time 2.07% of total employee related costs and 3.64% of total base costs.
The submissions relied upon by the HSU were as follows (footnotes omitted):
1. The HSU seeks the payment of an allowance of $28.90. The allowance is to compensate employees whose work practices have changed. The changes arise from a restructure of non-emergency patient transport. The restructure saw the consolidation of non-emergency transport so that all transport officers now work at the direction of NSW Health. The HSU submits that the allowance is fully funded by employee related cost savings arising from the restructure as so can be paid in full.
2. The HSU Reply Submissions filed 8 October 2018 set out the type of savings associated with the merger. Since then the Ministry has provided further figures which identify an increase in one component of those savings.
3. The new figures produced by the Ministry are the product of modelling which purports to show the savings associated with an increase in driving time which is directly attributable to cribbing away from base is greater than the Ministry previously contended. Cribbing away from base is one of the changes introduced as part of the restructure. Those figures identify savings of 8.77 minute or 21.58 minutes per shift.
Commission must estimate
4. The HSU, and the Commission, have only been given a table asserting that the saving is 8.77 minutes or 21.58 minutes depending on what approach is taken to the expression "returning to base". They are said to have arisen from calculations associated with modelling done based on data from 2016. The HSU has accepted those calculations on faith and consider them a saving additional to the savings relied on by the HSU. They stand in place of the 8.74 minutes of savings the Ministry conceded at hearing.
5. The modelling must be based on assumptions. The HSU identified one assumption when the figure of an 8.77 minute saving was provided. It was the assumption that all new starters should be regarded as if they had joined the LHD fleet. Other assumptions are not disclosed. There are no doubt other assumptions built in to the process of modelling. These cannot be interrogated.
6. There are some concerning issues on the face of the calculations. The data is from February to October 2016. This period straddles the change in cribbing practice. If this modelling was produced at that time, why was it not forthcoming until this late stage? If it was produced contemporaneously to the Commission's request it is unclear to the HSU why the time period was relied on.
7. The modelling (for 8.77 minutes in particular) purports to show the Commission what would be the costs if there was a restoration of previous practice. Since that modelling occurred there have been changes to the work environment including a reduction in the number of stations.
8. There is an obligation on the parties to assist the Commission in estimating employeerelated cost savings, a respondent employer has a duty to provide the information in its control which will allow an estimation of employee related cost savings. The new modelling does not remedy the Respondent's failure to adequately provide assistance. They have instead focused on maintaining a definition of employee-related costs savings. The evidence produced by the HSU that deals with savings that is not contradicted with evidence, should receive a beneficial inference.
9. One of the reasons that the employer has failed to provide that assistance is that they have failed to accept the meaning of employee related cost savings and has put items that fall comfortably within the Allied Health formulation into a category of 'nonsaving benefits.' Having done so they have not engaged further with the items.
10. This is put in its proper context when one considers the 'significant degree of efficiency being obtained by the change in crib practice' relied on at first instance.
11. The Commission is in a largely unchanged position from the last hearing and must make the sort of estimate referred to by the Court of Appeal in PSA vs (State of NSW) [2014] NSWCA 116 While the Commission cannot have confidence in the robustness of the calculation, it is available for the process of estimation and should be used.
12. The shortcomings of this additional data, further explored below when comparing the 21 minute and 8 minute methodology, supports the view that the Commission must look more broadly than the narrow approach of travel time savings to a more holistic approach to employee related savings consistent with the Allied Health approach.
21 minutes instead of 8 minutes
13. The employer first advanced calculations of an 8.77 minute saving. The HSU requested that the employer revise an assumption that we believed was flawed. Having done so they arrived at a second saving figure of 21.58 minutes. For the Commission to determine which of these savings to prefer, that assumption must be assessed.
14. The 8.77 minutes is based on all former LHD PTOs returning to a location in their LHD. The ministry purports that this is based on 'a return to previous practice.' The ministry conceives the former practice as:
a. LHD employed PTOs take a crib break at the nearest NSW Health facility.
b. Greenfleet PTOs return to their home station.
15. This approach is flawed. It is based on a false assumption about the previous practice of LHD PTOs. Many LHD PTOs returned to their starting location (often the major hospital in the district) and would have a dedicated meal room. It is not based in evidence it is based in assertion.
16. The 21.58 is based on an assumption that all PTOs return to their starting location.
17. The HSU prefers the rational of all PTOs returning to base. There are several reasons why this course should be adopted. They include:
a. From the moment the fleets merged the intention was to align the meal break arrangements with those of the former NSW Ambulance PTOs. What remained of that was a dispute about where those meals should be taken. It is not appropriate to attempt to return to a time before the merger for comparison purposes.
b. The Commission at first instance has determined that in the absence of an allowance it is fair and reasonable workers to have access to a home break room.
c. There was never an entitlement for LHD PTOs to a crib break. If one were to compare a reversion to previous practice in the way suggested by the employer describe it would require the operation of the Meal Breaks clause in the Health Employees Conditions of Employment (State) Award. That would include:
i. A thirty-minute to one hour meal break (presumably equivalent to the Crib Break),
ii. A twenty-minute tea break,
iii. Extension of shift overtime 20-minute break and associated paid meal,
iv. A more strict break window,
v. A 10 hours shift likely requiring two meal breaks.
d. The HSU disputes that the 'meal away' practice to that emerged in certain LHDs was ever permissible under the Conditions Award. To the extent it was a practice in certain places it was maintained by mere acquiescence or inadvertence.
18. The number 8.77, as far as we can tell, relies on an assumption that staff employed since the merger should have nominated to them the 'LHD' approach. This approach is consistent with the approach taken in the attachment to Exhibit 12, WC4. To unpack that point:
a. You can assume there are three classes of employees. LHD, Greenfleet, New Starters. The employer has given the model the following assumptions:
i. LHD: return to the nearest available NSW Health facility,
ii. Greenfleet: return to the starting location of their shift,
iii. New Staff: follow the rule for LHD Staff.
b. From this we see from the moment of the merger number of employees who are LHD and Greenfleet remain the same. The adding of New Staff into the LHD 'rule' has the effect of diluting the impact of proportionally greater efficiency improvements made by Greenfleet.
c. The employer at hearing on remitter advanced evidence that there was 'negative' efficiency among some LHD PTOs applying the above approach. By adding New Staff into this category, the weighting issue can have dramatic impact.
19. In this way also, the claim that 8.77 minutes arises from a return to previous practice is misleading. It does not represent what it purports to represent. The approach in reaching 21.58 is not affected by the same issues, 21.58 represents what would be the practice 'but for' the disputation.
20. The Commission has already observed that 8.74 minutes was 'nothing of moment.' It must follow that 8.77 minutes is indistinguishable from 8.74 and is not sufficient for an allowance that is fair and reasonable. This is a difficulty that only exists under the employer's approach.
An Allowance of $28.90
21. It might be advanced that the HSU has had the opportunity to raise concerns with the modelling and can have little to complain about. To that we say that we have engaged to the extent possible so as to provide the greatest assistance to the Commission possible. To us, however, the modelling is a black box. We have asked it a question - what if PTOs were required to crib at base again? It has given an answer. How it was arrived at, we do not know.
22. The HSU position is that the litigation over the allowance has now taken 3 years and, due to the impact of s146C, has been complex. That complexity favours the employer in circumstances where it is the party with access to the necessary data to establish with any precision the employee related cost savings associated with the restructure it implemented. The Commission's expectation was that the Ministry would co operate in providing that data. It failed to do so at hearing and when given the opportunity to provide further data it provided modelling that is so lacking in detail the Ministry cannot be said to have co-operated. This does not mean that the HSU's case should fail. Rather it means that the Commission's satisfaction as to the employee related cost savings associated with the restructure will need to be based on making assumptions from other material available to it. This holistic approach is available given the lack of specific material provided by the Ministry.
23. The HSU contends that the restructure was said to be part of a process of achieving greater productivity and efficiency. The types of efficiencies that have been achieved by the restructure were identified in the HSU's earlier submissions and include:
a. Improved utilisation of NEPT fleet and crews,
b. Reduced reliance on the ASNSW Emergency Fleet for NEPT work,
c. Improved Response time for NEPT and emergency services,
d. Access across all Districts to shared NEPT resources - Improved management of available resources,
e. Reduced delays for patients and enhanced patient flow,
f. Reduction in NEPT service delivery costs,
g. Improved Ambulance response time,
h. The introduction DVA billing,
i. Internal efficiencies,
j. Integration of additional LHDs over the life of the reform,
k. Reduction of overnight says,
l. Faster turnaround for dialysis patients,
m. Demand driven efficiency improvements, and
n. Savings associated with travel time to meal breaks.
24. These matters are sufficient to meet the requirements of s146C and permit the Commission to make a fair and reasonable allowance of $28.90
How should the allowance change over time?
25. It is appropriate, should the Commission award an allowance, that guidance should be given to how the allowance should change over time. Further, the Commission should consider whether the allowance should increase over the life of the Award.
26. The annual movement of allowances should be determined consistently with Wage Fixation Principles most recently updated in the State Wage Case (2018), and, in particular, principle 5.
27. Principle 5 sets out two classes of allowance:
a. allowances which constitute a reimbursement of expenses incurred, and,
b. allowances which relate to work or conditions.
28. This allowance is properly considered an allowance which relates to work conditions. This should be self-evident; that said, there are several indicators that support this view:
a. Commissioner Newall formulated this allowance as one that Compensates for 'loss of amenity.'
b. The quantum of the allowance was not formulated as the cost of purchasing a meal away from base. Indeed, the employer put weight at hearing that they had dealt with the issue of food transportation with the provision of a container and freezer brick. The formulation of the allowance was never based on any assessment of any cost incurred.
c. A reading of the consideration of Newall C, in particular his consideration of what the amenity of a crib break is.
d. The approach to the awarding of a compensatory allowance (principle 5.4) is distinct from the arbitrated case approach that was undertaken in these proceedings and is required for an allowance
29. The nature of the allowance being established, the State Wage Case provides guidance as to the relevant increase. Being an award subject to Public Sector Wages Policy, principle 5.2 (b) applies. The allowance should increase by 2.5%.
30. The 146C considerations have been approached by the parties considering an allowance commencing from the first full pay period on or after July 2017. It is appropriate then that the value of the allowance increase on the first full pay period on or after July 2018 by 2.5%.
31. The annual changes in the allowance are neutral to the considerations of 146C.
Final Disposition
32. The Commission should award an allowance that is fair and reasonable to the extent that it is fully funded by employee related costs savings. There is then no barrier to corresponding 2.5% wage increases consistent with the respective State Wage Cases to be passed on to PTOs. The Commission in its orders should make clear provision for this.
[16]
Consideration
There are some unusual features about this case. At the time when the HSU was vehemently opposed to the proposal that PTOs be directed to crib away from base, the Ministry was proclaiming that the practice of cribbing away was "a business imperative to have less wasted time on the job, travelling back to a base to have a meal break" [32] . Further, the Ministry was telling PTOs directly that it was necessary to "change the current arrangements for our crib breaks" so as to assist in the achievement of the following:
"Improving the coordination and efficiency of NEPT services will ensure a stronger public sector model which will provide better:
- alignment of resources with patients, ensuring that patients are provided with the most appropriate level of care, including timeliness of service for transport;
- increase the availability of emergency ambulances for life-saving and critical incidents;
- ensure a standardised and consistent approach to non-emergency patient transport, providing better value for money and, most importantly, ensuring the best possible patient care;
- improve patient flow, reduce waiting times and increase bed availability across the LHD" [33] .
Indeed, as at 26 May 2017, almost a year after cribbing away had been imposed on PTOs, the Chief Commissioner was told by Ms Van Cleef, during the proceedings for a stay, that to "countenance now stopping the practice of Patient Transport Officers taking their crib break away from their base (so as to avoid paying the new allowance) would severely compromise services to patients, patient flow in hospitals, hospital bed availability and NSW Ambulance emergency fleet response times" [34] .
However, when it came to measure the productivity and efficiency improvements which have been achieved by this "business imperative", according to the Ministry, the gains were minimal, amounting to an average reduction in the time spent travelling to and from a crib break of 8.77 minutes per PTO per shift across the HealthShare NEPT fleet.
Such an unusual and unexpected outcome strongly suggests that a degree of care is needed when examining the data produced by the Ministry which is said to quantify the employee-related cost savings which have been achieved by the practice of PTOs cribbing away from base. Indeed, the data set out in annexure WC-4 to Mr Clarke's statement suggested that, during the second year (1 August 2017 - 31 July 2018) after the direction to PTOs to crib away was introduced, ex-LHD PTOs were actually spending, on average, 4.27 minutes longer travelling to and from their crib breaks than they had been previously. Such an odd result sounds a note of caution given that a productivity initiative which was presumably intended to improve the efficiency of the NEPT operation has apparently had, at least for ex-LHD PTOs, the reverse effect.
[17]
Employee-related costs
As set out at [44], the Ministry's estimate of the cost of the $28.90 crib away allowance awarded by Commissioner Newall was $1,557,999 or 5.95% of total salary costs for the period 24 June 2017 to 24 June 2018. Added to this figure was the amount of $699,454 which was said to be the cost of the agreed package of remuneration and conditions of employment which were contained in the Determination, giving a total annual figure for employee-related costs of $2,227,453.
Ultimately, the HSU accepted this figure as representing the employee-related costs which would need to be offset by employee-related cost savings if the $28.90 crib away allowance awarded by Commissioner Newall is to be allowed to stand [35] . However, as we have indicated at [46] above, the Full Bench adopts the figure of $1,557,999 as the relevant amount of employee-related costs which flow from the $28.90 allowance awarded by Commissioner Newall.
During proceedings before Commissioner Newall on 9 November 2016, evidence was given by James Fox, Industrial Organiser of the HSU, to the effect that the $28.90 amount of the crib away allowance was "set at one hour's pay to replicate what appears in the operational ambulance officers State award, for the identical arrangement." Commissioner Newall noted in his decision of 11 May 2017 [36] that "the allowance to be paid is in effect an allowance based on the relevant hourly rate of pay".
We are unable to find such an hourly rate of pay for any relevant classification in either the HealthShare Award or the Ambulance Award. The hourly rate for a PTO covered by the HealthShare Award was, at the time of Commissioner Newall's decision on 11 May 2017, $26.64 (approximately) based on a weekly rate of pay of $1012.20, the same as the hourly/weekly rate for the classification of PTO Year 2 in the Ambulance Award. The hourly rate for a Paramedic Year 2 in the Ambulance Award was, at that time, $35.59 (approximately) based on a weekly rate of pay of $1,352.30. The PTO weekly rate of $1012.20 was approximately 75% of the weekly rate of $1,352.30 of the Paramedic Year 2 under the Ambulance Award.
The claim by the HSU, which was awarded by Commissioner Newall, was for a crib away allowance of $28.90. However, at the time of Commissioner Newall's decision (and from 1 July 2016), the "Meal Away From Station Allowance" paid to employees covered by the Ambulance Award (other than PTOs) was $28.80, not $28.90 as was awarded by Commissioner Newall. This slight discrepancy may be explained in that, at the time the HSU filed its award application (14 June 2016), the amount of the relevant allowance in the Ambulance Award was $28.20. It appears that, in anticipation of a 2.5% increase to rates in the Ambulance Award from 1 July 2016, which was the operative date the HSU was seeking for the crib away allowance to be paid to PTOs, the amount of $28.90 was chosen (ie $28.20 x 1.025 = $28.90).
This discrepancy will ultimately have no impact on the outcome of this matter, given that we have determined to adopt a different approach to the setting of the crib away allowance from that adopted by Commissioner Newall, but still drawing from the "Meal Away From Station Allowance" in the Ambulance Award as an appropriate source for the crib away allowance for PTOs which we intend to award.
We think that, consistent with s 10 of the Act and the Commission's obligation to set fair and reasonable conditions of employment for employees, the appropriate level for the crib away allowance for PTOs should bear the same proportion to the allowance paid to Paramedics in similar circumstances, as the PTO rate of pay bears to the rate of pay for a Paramedic Year 2. As at 1 July 2017, the agreed operative date of the allowance we intend to award, the rate of pay for a Paramedic Year 2 under the Ambulance Award was $1,386.10. We have selected the rate for a Paramedic Year 2 because it is the "thereafter" rate for a Paramedic who does not progress to a higher classification such as Paramedic Specialist. As such, it is the most appropriate comparator rate of pay in the Ambulance Award for PTOs.
We intend, with the consent of the parties, to increase the current weekly rate of pay for PTOs by 2.5% with effect from 1 July 2017 bringing that rate up to $1,037.50, which will maintain the ratio of 75% of the Paramedic Year 2 rate. With effect from 1 July 2017, the agreed operative date of any allowance we determine to award, the relevant allowance in the Ambulance Award was $29.40. We propose to award a crib away allowance for PTOs which is calculated at approximately 75% of that amount, which is $22.00. Based on the Ministry's figure of 53,910 instances of cribbing away during 2017/18, this represents an employee-related cost of the allowance of $1,186,020 for that year. We note that this amount of employee-related costs is approximately 76% of the amount of $1,557,999 calculated by the Ministry for the $28.90 allowance awarded by Commissioner Newall [37] .
However, we remain acutely aware that, pursuant to the Regulation, a crib away allowance of $22.00 may only be awarded if the employee-related costs of $1,186,020 that are generated by the allowance are fully offset by employee-related cost savings.
[18]
Employee-related cost savings
The Full Bench has approached the task of measuring employee-related cost savings by only considering those savings which flow directly from the implementation of the practice of PTOs cribbing away from base.
[19]
Time taken travelling to and from crib breaks
The Ministry has conceded that, on average, there has been a reduction in the time PTO crews spend travelling to and from their crib break. The Ministry has also conceded that this reduction in time spent travelling to and from crib breaks represents an employee-related cost saving which can be offset against the employee-related cost of an allowance, even though there is no money directly saved by directing PTOs to crib away. The advantage comes in using their time more efficiently.
When the matter resumed on 5 March 2019 Counsel for the Ministry made the following submission:
"The paper that the HSU filed, it's called a HSU options paper, is a document that started at the Ministry, and then is almost agreed between the parties, and the points of disagreement are so minor that I don't know that I need to step you through them, and they represent by and large what the parties agree is the disagreement between us, that is essentially what the options are for the Commission to determine, and there seems to be three key landing points, and it's a matter of the Commission making a finding as to which of those landing points.
It was of course available to the Commission to reject all three landing points and come to a different one, but we have spent some time trying to narrow down the differences between us, so that there are at least laid out for all to see, and by and large, they are in that issues paper, essentially being the original allowance as sought and awarded by Newell C, or by using the Ministry's modelled figures as opposed to last year's evidence of actual figures, two essential options based on a saving of almost nine minutes, and a saving of 21 minutes so the short version of the dispute between the parties now is, we come to the commission advancing our different views as to which landing point the Commission can land on …"
(Emphasis added)
The "three landing points" referred to by Counsel were essentially the three options set out in the Ministry submissions [38] , being the allowance awarded by Commissioner Newall, an allowance based on a saving of 8.77 minutes or an allowance based on a saving of 21.58 minutes.
In essence the submission invited the Commission to focus on the material put before the Full Bench on 5 March 2019 as representing a narrowing of the differences between the parties. The Ministry did not invite the Commission to disregard totally the evidence and submissions earlier presented. Rather that could be used in the weighing of the new material to facilitate the correct assessment.
In support of its submission the Ministry tendered two documents which became Exhibits 13 and 14. Those exhibits contained calculations, broken down by geographical area, of the modelled impact on travel times depending on whether only ex-Green Fleet or all crews returned to base to crib. The approach differed from the earlier evidence in, for example, annexure WC-4 to Mr Clarke's statement, which measured the savings in travel time by not returning to base to crib. The two measures are a mirror image of each other in the sense that the time saved in not returning to base equates to what would otherwise be the additional time taken to return to base.
Exhibits 13 and 14 were based on data from February to October 2016. The Exhibits propounded that the average additional time to travel back to base for crib breaks, if that practice were to be reinstated, or, expressed alternatively, the time saved by cribbing away, was 8.77 minutes, assuming only ex-Green Fleet crews returned to base, or 21.58 minutes, assuming all crews returned to base.
Counsel explained that Exhibit 13 required an amendment to the title of column 6 so as to read "Additional drive time per shift (mins) for non-NSWA crews to travel to crib" (original emphasis).
Again, unfortunately, it must be observed that this material needs to be treated with some caution. That can be illustrated in a number of ways.
First, the amendment to Exhibit 13 referred to at [94] leads to the conclusion that the ex-LHD crews were taking longer to get to their crib than if they returned to their base. That seems implausible given they are being directed to the nearest efficient crib location. One would assume, if they returned to their base, they would be taking more time, not less, to reach their crib point. Exhibit 13 suggests, however, that on a weighted average basis the ex-LHD Fleet are taking an additional 4.17 minutes to travel to the most efficient crib point. That oddity may perhaps have been explained by a significant reduction in travel time to their first job after the crib. Exhibit 13, however, shows a marginal reduction (in the order of 30 seconds) in that travel time for most regions and an increase for two. Thus, the additional travel time to crib is not offset by the saving (if any) in travel time to the next job. All that is counterintuitive. It is however consistent with WC-4 as discussed at [77].
The conundrum is deepened when a comparison with Exhibit 14 is undertaken. Exhibit 13 concludes that, on the assumption that only ex-Green Fleet crews returned to base to crib, there would be additional driving time on average across the combined fleet of 8.77 minutes. Again that is consistent with WC-4 which found time saved by cribbing away to be 8.74 minutes. It also propounds that there is a net increase in travel time for ex-LHD PTOs cribbing away.
Exhibit 14, which assumes all crews return to base, propounds there would be, on average for the combined fleet, additional travel time of 21.58 minutes. That figure suggests that, far from increasing the travel time of ex-LHD crews by requiring them to crib away, the result is a substantial reduction in their travel time on "dead legs". In other words the figure of 21.58 minutes implies that returning ex-LHD crews to base for their crib adds substantially to the fleet's "dead" travel time. It contradicts completely the proposition in Exhibit 13, discussed in [96], that cribbing away leads to a net increase in travel time for this cohort.
Second, the modelling showed that, in each of the eight regions surveyed, the average change in drive time per shift travelling from their crib at base to the first job after the break was precisely, and we emphasise precisely, the same for the ex-Green Fleet crews when only they returned to base, as it was for all crews when they all returned to base for their crib break. Again, this outcome, which Counsel for the Ministry was unable to satisfactorily explain, is counterintuitive and, for the ex-Green Fleet PTOs, contrary to the data contained in annexure WC-4 to Mr Clarke's statement [39] and Exhibit 13.
Further, there are other inconsistencies in the material presented by the Ministry relating to the calculation of the cost associated with the crib away allowance and the cost saving, in terms of reduced travel time, which has been achieved by the practice of cribbing away.
The Ministry submits that the calculations in WC-4 provide corroboration of the calculations in Exhibit 13. The Ministry submits that the two methods of calculation, which it submitted were completely different, produce consistent results of a saving in the order of 8.7 minutes. The calculations in WC-4 utilise a weighted average methodology. By the 2018 financial year the ex-Green Fleet "crews" represent only about 13% of the total number of "crews", whereas in the 2016 financial year it was in the order of 43%. Given that the calculations in Exhibit 13 and WC-4 suggest that the only significant saving of travel time is attributable to the ex-Green Fleet, the weighted average saving is significantly reduced from 24.02 minutes to 8.74 minutes.
The table in WC-4 also suggests a dramatic reduction in ex-Green Fleet "crews" in the same period. The table indicates there were 12,907 ex-Green Fleet "crews" in the 2016 year and only 4,638 in the 2018 year. The evidence of Ms Van Cleef was that, at the time of merger in October 2015, there were 218 Green Fleet and 100.79 LHD Full Time Equivalent ("FTE") PTO positions transitioned [40] . Thus approximately 68% of the PTOs were ex-Green Fleet. Later in her evidence Ms Van Cleef observed that the composition of the workforce had varied over time [41] . In July 2017 and July 2018 there were 162.8 and 145 FTE ex-Green Fleet PTOs respectively. At the same dates there were 137.6 and 197.4 ex-LHD "PTOs, Drivers and new employees". Even allowing for the inclusion of Drivers, who are not encompassed in the HSU claim and whose numbers are not disclosed, and new employees, the ex-Green Fleet PTOs represent in excess of 42% of the relevant staff in 2018.
There is a substantial difference between 13% and 42%. Adopting the lower figure and the suggestion that there is no net saving in ex-LHD PTOs cribbing away, both of which propositions underpin the Ministry's preferred calculation, has a dramatic impact on the weighted average calculation. We are not satisfied that approach is correct.
In adopting a cautious approach to this material, the Full Bench prefers the Ministry's estimate of 21.58 minutes saved on average by requiring PTOs to crib away, over the alternate estimate of 8.77 minutes. The reasons for adopting the higher estimate of time saved are:
1. Despite some shifting of position by the Ministry, it is clear that the practice of cribbing away has had some impact on ex-LHD PTOs, as well as their ex-Green Fleet colleagues, if perhaps to a lesser extent. So much was found to be the case by Commissioner Newall at [8], [11] and [44]-[48] of his decision [42] . Nothing has been put before the Full Bench that would warrant disturbing that part of the Commissioner's decision;
2. It, therefore, makes more sense to prefer the modelling based on the assumption that all crews return to base over modelling based only on the ex-Green Fleet crews returning to base, as the latter assumes that there has been no impact at all on ex-LHD PTOs being required to crib away, which is clearly not the case; and
3. The higher estimate, whilst still conservative, is more in line with the Ministry's stated purposes in wanting to introduce cribbing away in the first place [43] .
Despite some misgivings as to the mathematical basis for it, we are also prepared to adopt the Ministry's calculation of $9.78 being the cost saved by PTOs travelling to and from their crib break away from base, as opposed to cribbing at base, resulting in employee-related cost savings for 2017/2018 of $542,708 which can be offset against the employee-related cost of an allowance for the disability of cribbing away from base.
[20]
Reduction in overnight hospital delays
The Ministry has resisted the HSU's claim that the practice of PTOs cribbing away has resulted in employee-related cost savings due to the reduction in patients staying overnight in hospitals because of the unavailability of NEPT services, referred to in the evidence as "Inpatient Overnight Delays". This is despite the fact that PTOs were told, in March 2016, that there was a "need to change the current arrangements for our crib breaks" in order to, amongst other things, "improve patient flow, reduce waiting times and increase bed availability across the LHD" [44] .
Based on the cost of an overnight stay in hospital of $1,921, the figure that was nominated as the cost in the 2013 O'Connell Report and not disputed by the Ministry, the HSU calculated annual savings due to the reduction of overnight hospital delays as being in the order of $2,045,865.
Statistics produced by the Ministry demonstrated that inpatient overnight delays due to the unavailability of patient transport services reduced from a high of 184 in February 2013 to between 0 and 2 from April 2017 through to July 2018. However, the most dramatic reduction was from 137 in April 2016 to 15 in July 2016, which coincided with the implementation of PTOs cribbing away from base. The figure for May was 88 dropping to 58 in June and then to 15 in July 2016.
Ms Van Cleef expressed the view that the reduction in inpatient overnight delays between December 2014 and July 2016 was "likely to be due to a number of factors including enhanced staffing, taxi supplementation and perhaps the implementation of the Centralised Booking Hub and the Logis Planning and Optimisation CAD function". Ms Van Cleef did not attribute any of the reduction to the practice of PTOs cribbing away. That seems odd given what PTOs were being told in March 2016 [45] and given the evidence which Ms Van Cleef gave before the Commission in May 2017 to the effect that to "countenance now stopping the practice of Patient Transport Officers taking their crib break away from their base… would severely compromise services to patients, patient flow in hospitals, hospital bed availability…" [46] .
Further, the reference to taxi supplementation as a contributing factor is difficult to comprehend, given that figures produced by Mr Clarke [47] disclosed that the amount spent on the "Taxi Program" in 2015/16, when the monthly average for overnight delays was 98, was more than was spent in 2016/17 when the monthly average for overnight delays was 16. If taxi supplementation had been a factor in reducing overnight delays, it would have been expected that the amount spent on the "Taxi Program" would have increased as the number of overnight delays reduced but that's not what happened.
Overnight delays dropped from 58 in June 2016 to 0-2 during January to July 2018. This represents a reduction of at least 56 per month or 672 per year. Based on the figure of $1,921 per overnight stay, the resultant saving is $1,290,912. We accept that this is due to a range of factors including the change in work by PTOs. In the absence of any more precise assistance from the Ministry, we are prepared to attribute 25% of this amount to the practice of PTOs cribbing away which results in an annual employee-related cost saving of $322,728.
In making this estimate, we observe that the actual amount of employee-related cost savings resulting from the reduction in inpatient overnight delays, which can be attributed to PTOs cribbing away from base, is likely to be much higher given that the cost per overnight stay in hospital of $1,921 was based on a figure in the 2013 O'Connell Report and is likely to have increased in subsequent years. However, for abundant caution, we have chosen to adopt a conservative approach to the quantification of this employee-related cost saving.
[21]
Reduction in NSW Ambulance non-emergency responses
During the 12 month period before the change to the PTO cribbing arrangements (July 2015 - June 2016) the number of non-emergency responses provided by NSW Ambulance was 152,073 [48] or a monthly average of 12,670. The total number of responses provided by NSW Ambulance that financial year was 1,115,635, thus non-emergency responses made up approximately 13.6% of the total. It is not clear from the evidence how many of these non-emergency responses were performed by emergency ambulance crews as opposed to PTOs in the Green Fleet, information which presumably is in the possession of the Ministry.
Supplementary documentation provided to the Commission by the Ministry after the last day of the hearing, showed that the number of non-emergency responses by NSW Ambulance in 2016/2017, the first full financial year after the transfer of the Green fleet from NSW Ambulance to HealthShare, was 136,302, a reduction of 15,771 or 10.4%. For 2017/2018 the number was 101,871, a further reduction of 34,431 or 25.3%. Comparing 2015/2016 with 2017/2018, the total reduction in non-emergency responses by NSW Ambulance was 50,202 or 33%. It is reasonable to attribute this decreased non-emergency activity primarily to the transfer of responsibility for a major part of non-emergency activity to HealthShare as was stated in the "NSW Ambulance Year in Review 2015/16" [49] .
Documents provided by the Ministry to the HSU and tendered into evidence as Exhibit 8 revealed that "NSW Ambulance PTS Activity (P5-7) in Greater Metro (Excluding New England)" totalled 5,425 for 2015/2016. For 2016/2017, the first twelve months after the crib away arrangements were implemented for PTOs, the total number was 3,199, a reduction of 2,226 or 41%.
Exhibit 8 also revealed that for the period of July 2017 to April 2018 the total "NSW Ambulance PTS Activity (P5-7) in Greater Metro (Excluding New England)" was 1,602 or 1,922 if extrapolated out for the full 2017/2018 financial year. This represents a reduction from the 2015/2016 number (5,425) of 3,503 or 65%.
The downward trend in the number of non-emergency activities performed by NSW Ambulance, as shown in Exhibit 8, is broadly consistent with but more acute than the trend which is evident from the figures set out at [113]-[114].
Not all non-emergency responses by NSW Ambulance involve the transport of a non-emergency patient in an emergency ambulance vehicle. However, to the extent that the reduction in the number of such transports can be attributed to HealthShare PTOs performing that work at a lower cost, the consequence is that employee-related cost savings are achieved. That this is so is entirely consistent with the representations made by HealthShare to its PTOs in March 2016 as to the "need to change the current arrangements for our crib breaks" in order to, amongst other things, "increase the availability of emergency ambulances for life saving and critical incidents" [50] .
Adopting a conservative approach, we are prepared to assume that, of the estimated reduction of 50,202 non-emergency responses provided by NSW Ambulance from 2015/2016 to 2017/2018, only 5% or 2,510 were non-emergency transports performed by PTOs, rather than by paramedics, as a result of the implementation of the practice of cribbing away for PTOs in July 2016. We regard these assumptions as conservative and consistent with the information given to PTOs by the HealthShare in March 2016 and with the evidence given by Ms Van Cleef before the Commission in May 2017 to the effect that to "countenance now stopping the practice of Patient Transport Officers taking their crib break away from their base… would severely compromise… NSW Ambulance emergency fleet response times" [51] .
In the O'Connell Report it was estimated that the average cost per NEPT service provided by a NSW Ambulance emergency vehicle and crew was $507 as opposed to $200 per service provided by the PTO fleet, a difference of $307 per service. The O'Connell Report did state that "ASNSW have indicated that this value could not be saved if NEPT services were ceased being provided within the emergency fleet, due to the very high level of fixed costs associated with operating the 24/7 EV service".
The O'Connell Report estimated that a transfer of 26,700 patient trips from the NSW Ambulance emergency fleet to the dedicated NEPT fleets would generate savings of between "c.$3.8m to $5.7m". Taking the lower figure of $3.8m, this represents a saving of approximately $142 per patient trip. This figure must be regarded as conservative given that it was calculated on 2012 estimates and monetary values.
Assuming that a reduction of 2,510 non-emergency responses by NSW Ambulance from 2015/2016 to 2017/2018 occurred as a result of HealthShare PTOs cribbing away, and that the saving per service is $142, this represents an employee-related cost saving of $356,420 for 2017/2018, the first period for which the allowance will be payable and employee-related costs will be generated as a result.
[22]
Total employee-related cost savings
By aggregating the estimated employee-related cost savings for time taken travelling to and from crib breaks ($9.78 per instance of cribbing away or $542,708 per annum), the reduction in overnight hospital delays ($322,728 per annum) and the reduction in NSW Ambulance non-emergency responses ($356,420 per annum), the total amount of employee-related cost savings attributable to these three factors alone is approximately $1,221,856 for 2017/2018 and likely to be more in subsequent financial years. This more than offsets the employee-related costs of $1,186,020 set out at [85] above, which do not begin to accrue until 2017/2018. We note that the employee-related cost savings, which we have identified above, began to accrue in 2016/2017, a year for which no allowance will be payable.
We find that the requirements of subclause 6(1) of the Regulation have been satisfied in that the employee-related costs associated with a crib away allowance of $22.00 have been fully offset by employee-related cost savings which have involved a significant contribution from PTOs employed in HealthShare. That contribution is by way of a change in work practice from cribbing at base for ex-Green Fleet PTOs, or cribbing at a facility within their LHD for ex-LHD PTOs, to cribbing away for in excess of 80% of shifts worked in 2017/2018. In reaching this conclusion, we have found it unnecessary to attempt to quantify the employee-related cost savings which have resulted from other efficiency measures relied upon by the HSU and set out at paragraph 23 of its written submissions [52] .
We are also satisfied that the award of a $22.00 crib away allowance is permitted by Principle 8.3 of the Commission's Wage Fixing Principles. The quantum of the allowance is commensurate with the increase in productivity and efficiency which has been achieved by PTOs cribbing away and which was seen by the Ministry as a "business imperative to have less wasted time on the job travelling back to base to have a meal break" and as necessary for improving the coordination and efficiency of NEPT services to ensure a stronger public sector model for the provision of the productivity and efficiency gains referred to at [74].
The parties are in agreement that a second allowance should be awarded for PTOs who would be entitled to a second crib break when working 12 hour shifts. Given that it is common ground that PTOs do not presently work 12 hour shifts, we doubt the utility of awarding a second allowance. Nevertheless, as it is the common position of the parties, we are prepared to award a second crib away allowance of $11, which bears the same proportion (approximately) as the second "Crib Away From Station Allowance" provided for in subclause 15(c)(ii) of the Ambulance Award, bears to the first allowance provided for in subclause 15(c)(i). No issue of employee-related costs arises as a result of this aspect of our decision as no PTO presently works 12 hour shifts and, consequently, no second crib away allowance will be payable to anyone.
[23]
Operative date
Both parties agree that the operative date of any allowance awarded should be 1 July 2017. In accepting an operative date of 1 July 2017, we again note that the employee-related cost savings from the practice of PTOs cribbing away began accruing from mid-2016.
We are not attracted to the concept of a new and separate award dealing with the specific issue of crib breaks as was awarded by Commissioner Newall. We propose to give effect to this decision by making orders varying the HealthShare Award.
The parties also agree that the Commission should award an increase of 2.5% to the rates of pay for HealthShare PTOs from 1 July 2017 with further increases of 2.5% from 1 July 2018 and 1 July 2019.
[24]
How should the allowance change over time?
The Ministry submits that the allowance should be treated as an expense related allowance and adjusted on 1 July each year in line with the increase in the Consumer Price Index for Sydney during the preceding year (March quarter figures). By this methodology, the allowance should increase by 2.1% from 1 July 2018.
The HSU argues that the allowance is properly considered an allowance which relates to work or conditions. It should be adjusted in accordance with Principle 5.2(b) of the Wage Fixing Principles by 2.5% from 1 July 2018.
An examination of the history of movement of the allowances provided for in subclause 15(c) of the Ambulance Award discloses no consistent pattern of increases in the amount of these allowances in line with increases in the Consumer Price Index, either total or for Sydney. In any case, regardless of the origin of the allowances we have determined to award, we are of the view that these allowances are more properly considered as work-related disability allowances which should move in line with wage movements. It, therefore, follows that these allowances will be increased by 2.5% from 1 July 2018 with a further 2.5% increase from 1 July 2019.
In the event any issue arises in relation to the minutes of the Award we delegate to Commissioner Murphy the powers of the Full Bench to resolve those issues.
[25]
Orders
We make the following orders:
1. The HealthShare NSW Patient Transport Officers' Salaries (State) Award is varied with effect from the beginning of the first full pay period to commence on or after 1 July 2017 to include an allowance of $22.00 for each occasion when a Trainee Patient Transport Officer or a Patient Transport Officer is required to take their 30 minute paid crib break away from the location where he or she commenced their shift, and to include an allowance of $11.00 where such employee working a 12 hour shift is required to take their second 30 minute crib break away from their starting location.
2. The allowances referred to in order (1) are to be increased by 2.5% from the beginning of the first full pay period to commence on or after 1 July 2018 and a further increase of 2.5% from the beginning of the first full pay period to commence on or after 1 July 2019.
3. The rates of pay for Trainee Patient Transport Officers and Patient Transport Officers contained in the HealthShare NSW Patient Transport Officers' Salaries (State) Award are to be increased by 2.5% with effect from the beginning of the first full pay period to commence on or after 1 July 2017, by a further 2.5% with effect from the beginning of the first full pay period to commence on or after 1 July 2018 and a further 2.5% with effect from the beginning of the first full pay period to commence on or after 1 July 2019.
4. The Health Services Union NSW is to file in the Registry and serve on the Ministry within 14 days of the date of this decision short minutes of order and a draft award document to give effect to orders (1)-(3).
Chief Commissioner Kite SC
Commissioner Stanton
Commissioner Murphy
Exhibit 11, Attachment JVC-5A, Attachment JVC 5 p 49
Operational Ambulance Officers (State) Award
History and origin of the allowances in the Ambulance Award was canvassed with the parties on 16 April 2019
Exhibit 11, Attachment JVC-5A, pars 12-13 and 15-19
Exhibit 1, par 47
Exhibit 11, Attachment JVC-5C
Exhibit 11, Attachment JVC-5D,
Secretary, NSW Ministry of Health v Health Services Union NSW [2018] NSWIRComm 1007 at [18] - [20]
Secretary, NSW Ministry of Health v Health Services Union NSW [2018] NSWIRComm 1007
Exhibit 10 pars 5 and 6
Exhibit 10 par 11
State Wage Case 2018 [2018] NSWIRComm 1063
Exhibit 11, pars 18 - 22
See [12]
Exhibit 10, Attachment JF-R3 "National Hospital Cost Data Collection Cost Report: Round 20 Financial Year 2015-16" p 17 Table 4
Exhibit 11, par 30
Exhibit 11, par 34
Exhibit 11, Attachment JVC-5H
Exhibit 11, par 66
Exhibit 11, par 72
Exhibit 11, par 65
Exhibit 12
See [11]
See [13]
See [28]
See paragraphs 17-19 at [67]
At [4]
See [44]
At [72], par 8
see [64]
Exhibit 11, JVC-5A par 14
Exhibit 11, par 87
See [23]-[25]
See [11]-[13]
See [13]
See [13]
See [28]
Exhibit 12, Annexure WC-5
See [59]
See [59]
See [13]
At [28]
See [73]
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Decision last updated: 23 September 2019
Legislation Cited (4)
Industrial Relations (Public Sector Conditions of Employment) Regulation 2014(NSW)