Application for Crown Employees (Public Sector – Salaries 2020) Award and Other Matters [2020] NSWIRComm 1044

Thiess v Collector of Customs and Others (2014) 250 CLR 664; [2014] HCA 12 Texts Cited: Industrial Relations Amendment (Public Sector Conditions of Employment) Bill 2011 Category: Procedural and other rulings Parties: Applicants:

Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales

Australian Salaried Medical Officers' Federation (New South Wales)

Chief Commissioner of the Independent Commission Against Corruption

Australian Salaried Medical Officers' Federation (New South Wales)

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch

Australian Education Union New South Wales Teachers Federation Branch

New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union Representation: M Gibian SC with A Slevin of Counsel (PSA, NMA, HSU, AWU)

I Taylor SC with M Easton of Counsel (Employer Respondents)

Crown Solicitor (Employer Respondents) File Number(s): 2020/79899, 2020/141023, 2020/141054, 2020/141076, 2020/142592, 2020/143576, 2020/143834, 2020/143934, 2020/144112, 2020/144177, 2020/145080, 2020/145086, 2020/145184, 2020/145362, 2020/161502, 2020/161507, 2020/161511, 2020/161538, 2020/161544, 2020/161549, 2020/161557, 2020/161564, 2020/161568, 2020/161582, 2020/162841, 2020/162844, 2020/162849, 2020/162860, 2020/162861, 2020/163005, 2020/163048, 2020/163121, 2020/163146, 2020/163179, 2020/163193, 2020/163207, 2020/163241, 2020/163257, 2020/163272, 2020/163286, 2020/163927, 2020/168263, 2020/170775 Publication restriction: No

Judgment

1. These proceedings concern 43 applications before the Commission, in which the Commission is asked to make new awards, or to vary existing awards. In each case the application calls on the Commission to confer on employees covered by the existing or proposed awards an increase of 2.5% to their salary and salary-related allowances to take effect from the first pay period on or after 1 July 2020.
2. The proceedings were commenced on 9 March 2020, when the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales ("PSA") filed an application in the Commission for the making of a new award to be known as "Crown Employees (Public Sector - Salaries 2020) Award". Those proceedings were assigned matter number 2020/79899.
3. On 12 May 2020 the PSA filed applications in the Commission for the making of the following further awards: 1. Service NSW (Salaries and Conditions) Employees Award 2020 (matter 2020/142592); 2. Crown Employees (SAS Trustee Corporation) Award 2020 (matter 2020/143834); 3. Local Land Services Award 2020 (matter 2020/143934); 4. Crown Employees NSW Department of Communities and Justice (Community Living Award) 2020 (matter 2020/144112); 5. Crown Employees (NSW Department of Communities and Justice) Residential Centre Support Services Staff Award 2020 (matter 2020/144177); 6. Independent Commission Against Corruption Award 2020 (matter 2020/145080); 7. Landcom Award 2020 (2020/145086); 8. Crown Employees (Audit Office) Award 2020 (matter 2020/145184); and 9. Crown Employees (Independent Pricing and Regulatory Tribunal) Award 2020 (matter 2020/145362)
4. We will refer to the applications referred to at [2]-[3] as the "PSA Applications". The new award sought in each of the PSA Applications would replace the award currently applying to the relevant employees; would have a nominal term of three years commencing on 1 July 2020; and, would provide for employees to receive a 2.5% increase to their salaries and salary-related allowances in each year of the nominal term, as adjusted in 2021 and 2022 for anticipated increases in the rate of compulsory superannuation contributions.
5. On 11 May 2020 the New South Wales Nurses and Midwives' Association ("NMA") filed in the Commission applications to vary the following awards: 1. Crown Employees (NSW Police (Nurses')) Award 2019 (matter 2020/141023); 2. Public Health System Nurses' and Midwives' (State) Award 2019 (matter 2020/141054); 3. Crown Employees Nurses' (State) Award 2019 (matter 2020/141076); and 4. what was described in the application as the "Nurses' (Department of Communities and Justice Services - Ageing, Disability and Home Care) (State) Award 2019" (matter 2020/141076). We note that the correct title of the relevant award is in fact the Nurses' (Department of Family and Community Services - Ageing, Disability and Home Care) (State) Award 2019. For present purposes this is not relevant. ("NMA Applications")

Threshold Question

1. On 15 May 2020 the PSA filed an outline of submissions in matter 2020/79899. In short, the PSA contended that: 1. the Commission is required to award increases of 2.5% per annum. It has no discretion to award any lesser amount. This was said to be the consequence of s 146C of the Industrial Relations Act 1996 (NSW) combined with cl 6(1) of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW) ("2014 Regulation"); and 2. in the alternative, if the Commission retains a discretion, there is no basis on which it would depart from either the assumption underlying the 2014 Regulation that salaries or conditions of employment will increase by 2.5% per annum, or the invariable practice of the Commission since 2011 of increasing salaries of relevant public sector employees by 2.5% per annum.
2. Submissions to the same effect were filed by the NMA on 29 May 2020 in support of the NMA Applications and by the HSU on 12 June 2020 in support of the HSU Applications.
3. If the contention referred to at [15(1)] above is accepted by the Commission this will largely dispose of each of the Joined Applications. For this reason, at a directions hearing before the Chief Commissioner on 10 June 2020 the contention came to be described as the "Threshold Question". We will adopt the same terminology.
4. The directions made by the Chief Commissioner on 10 June 2020 included the following: "1. All of the matters listed in Order 1 of the Orders made on 10 June 2020 are listed for hearing on 18, 24 and 25 June 2020. 2. On the first day of the hearing referred to in Direction 1 (i.e. 18 June 2020), the Full Bench will hear from the parties on the 'Threshold Question', the terms of which will be provided in writing to the Commission by the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (PSA) by 4pm on 12 June 2020."
5. On 16 June 2020 the Registry received an email from the PSA which contained the following: "The parties have conferred and wish to put the following question for the Full Bench to consider on Thursday 18 June 2020: Q. Does the Government policy declared in clause 6(1)(a) of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 require the Commission to ensure that public sector employees be awarded increases in remuneration or other conditions of employment of 2.5% per annum?" (Italics in original)

Hearing of the Threshold Question

1. At the hearing of the Threshold Question on 18 June 2020 Mr M Gibian SC appeared with Mr A Slevin of counsel for the PSA, the NMA and the HSU. Mr Gibian also mentioned the matter for the Australian Workers' Union, New South Wales ("AWU"). [6] Mr A Holland appeared for ASMOF. Ms A Hioe appeared for the Independent Education Union of Australia NSW/ACT ("IEU"). [7]
2. Unions NSW, represented by Ms A Leverington, intervened in the proceedings, in accordance with its rights under s 167 of the Industrial Relations Act. Ms Leverington applied for and obtained leave to intervene on the Threshold Question for the Australian Services Union of NSW ("ASU"), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch ("AMWU"), the Fire Brigade Employees' Union of New South Wales ("FBEU") and the New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union "(USU").
3. Mr S Crawshaw SC of counsel appeared for the Australian Education Union New South Wales Teachers Federation Branch ("Teachers Federation"). He applied for and obtained leave for the Teachers Federation to intervene on the Threshold Question. [8]
4. The PSA, the NMA and the HSU relied on the submissions referred to at [15]-[16] above. They also relied on an Outline of Submissions in Reply filed for the three unions collectively on 16 June 2020. The PSA, the NMA and the HSU tendered a limited amount of evidence which was said to provide relevant context to the enactment of s 146C of the Industrial Relations Act and the making of the 2014 Regulation.
5. ASMOF and the remaining union participants - respondents and interveners - supported the submissions of the PSA, the NMA and the HSU. Neither ASMOF or any of the remaining union participants made additional or alternative submissions.
6. For ease of reference, we will refer to the submissions referred to at [23] above, as supplemented by Mr Gibian in oral submissions at the hearing, as the "Union Submissions". We will refer to the PSA, the NMA, the HSU, ASMOF, the IEU, Unions NSW, the ASU, the AMWU, the FBEU, the USU and the Teachers Federation collectively as "the Unions".
7. The Employers relied on a written outline of submissions that was filed with the Commission on 4 June 2020, supplemented by Mr Taylor in oral submissions.

The legislative context

1. To comprehend the arguments made by the parties, it is necessary to understand the legislative context in which each of the Joined Applications is made. The Industrial Relations Act relevantly provides as follows: 10 Commission may make awards The Commission may make an award in accordance with this Act setting fair and reasonable conditions of employment for employees. … 17 Variation or rescission of award (1) The Commission may vary or rescind an award. … 146 General functions of Commission (1) The Commission has the following functions - (a) setting remuneration and other conditions of employment, (b) resolving industrial disputes, (c) hearing and determining other industrial matters, (d) inquiring into, and reporting on, any industrial or other matter referred to it by the Minister, (e) functions conferred on it by this or any other Act or law. (2) The Commission must take into account the public interest in the exercise of its functions and, for that purpose, must have regard to - (a) the objects of this Act, and (b) the state of the economy of New South Wales and the likely effect of its decisions on that economy. … 146C Commission to give effect to certain aspects of government policy on public sector employment (1) The Commission must, when making or varying any award or order, 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, and (b) that applies to the matter to which the award or order relates. (2) Any such regulation may declare a policy by setting out the policy in the regulation or by adopting a policy set out in a relevant document referred to in the regulation. (3) An award or order of the Commission does not have effect to the extent that it is inconsistent with the obligation of the Commission under this section. … (7) This section has effect despite section 10 or 146 or any other provision of this or any other Act. …
2. The 2014 Regulation relevantly provides as follows: 4 Declarations under section 146C The matters set out in this Regulation are declared, for the purposes of section 146C of the Act, to be aspects of government policy that are to be given effect to by the Industrial Relations Commission when making or varying awards or orders. 5 Paramount policies The following paramount policies are declared - (a) Public sector employees are entitled to the guaranteed minimum conditions of employment (being the conditions set out in clause 7). (b) Equal remuneration for men and women doing work of equal or comparable value. ... 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. …

Principles of construction

1. The answer to the Threshold Question lies in the construction of cl 6(1)(a) of the 2014 Regulation and more particularly in determining the meaning to be given to the words "may be awarded increases in remuneration or other conditions of employment". The Employers contended that the clause confers a discretion on the Commission to award an increase of up to 2.5%, or indeed no increase at all. It does no more than impose a cap or a limit on the Commission's jurisdiction. The Unions disputed that the Commission has any discretion. They contended that the clause requires the Commission to award increases of 2.5% per annum.
2. The principles of statutory construction are well known. They were summarised by the Full Bench of the Commission in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales and Department of Education and Communities (2013) 233 IR 345; [2013] NSWIRComm 32 as follows: "24. There are three recent High Court authorities which provide guidance as to the correct approach to statutory interpretation, namely, Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Thelander [2012] HCA 56; (2012) 293 ALR 412, Australian Education Union v Department of Education and Children's Services [2012] HCA 3; (2012) 285 ALR 27 and Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32. Key principles, relevant to the present proceedings, can be distilled from these authorities: (1) The legal meaning of a provision of a statute is to be ascertained by processes of statutory construction: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J. Thus, the fundamental object of statutory construction is to ascertain legislative intention: Certain Lloyd's Underwriters at [88] per Kiefel J. However, the use of the metaphor 'legislative intention' must not mislead. This expression must be understood as the intention that the courts will impute to the legislature by a process of construction: Certain Lloyd's Underwriters at [88] per Kiefel J. The duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J (applying Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; (1998) 72 ALJR 841; (1998) 153 ALR 490 at [78] per McHugh, Gummow, Kirby and Hayne JJ); (2) Ordinarily, the legal meaning of a provision of a statute will correspond with the grammatical meaning, but not always: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J and at [68] per Crennan and Bell JJ (applying Project Blue Sky at [78] per McHugh, Gummow, Kirby and Hayne JJ). [Nonetheless], the process of statutory construction must begin with a textual analysis of the words of a provision - that is, a consideration of the ordinary and grammatical meaning of the words: Australian Education Union at [26] per French CJ, Hayne, Kiefel and Bell JJ; Barclay at [41] per French CJ, Crennan, Gummow and Hayne JJ; Certain Lloyd's Underwriters at [23] per French CJ and Hayne J. Although that initial step may involve the construction of the words of a provision in question when read in the context of the statute as a whole: Certain Lloyd's Underwriters at [88] per Kiefel J. Thus, the legal meaning is ascertained by reference to the language of the statute viewed as a whole: Certain Lloyd's Underwriters at [26] per French CJ and Hayne J and [88] per Kiefel J. The purpose of the statute resides in its text and structure: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J; (3) Context may also be considered 'in a broader sense as including the general purpose and policy of the legislation, in particular the mischief to which the statute is directed and which the legislature intended to remedy': Certain Lloyd's Underwriters at [88] per Kiefel J; (4) The context and purpose of a provision are important to its proper construction. Legal meaning may be ascertained by reference to general purpose, consistency and fairness: Certain Lloyd's Underwriters at [24] per French CJ and Hayne J; (5) The determination of the purpose of a statute or a particular statutory provision may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, if appropriate, reference to extrinsic materials: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J. Whilst consideration of extrinsic materials should not displace the clear meaning of the text of a provision, the purpose of a provision may be elucidated by appropriate reference to them: Certain Lloyd's Underwriters at [70] per Crennan and Bell JJ; (6) It is conceivable that the context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with their literal or grammatical meaning: Certain Lloyd's Underwriters at [68] per Crennan and Bell JJ quoting Project Blue Sky at [78] per McHugh, Gummow, Kirby and Hayne JJ; (7) Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted: Certain Lloyd's Underwriters at [25] - [26] per French CJ and Hayne J and [70] per Crennan and Bell JJ. In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose: Australian Education Union at [27] - [28] per French CJ, Hayne, Kiefel and Bell JJ."

Union Submissions

1. The Unions submitted that the construction of cl 6(1)(a) advanced by the Employers "is to ignore the context and purposes of the Regulation". [9] Significant emphasis was placed on the need to interpret the provision in the context in which it was made, and not in a purely abstract and literal manner. The Unions drew the Commission's attention to SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 361; [2017] HCA 34 at [14] and [35]-[40], Taylor v Owners - Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9 at [65]-[66] and Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69] and [78].
2. The PSA, the NMA and the HSU led evidence which was said to provide historical context to the 2014 Regulation. In their Outline of Submissions in Reply those unions described that evidence, and its significance, as follows: "18. The context of the enactment of s 146C and the making of the initial Regulation in 2011 is critical in understanding the nature of the 'policy' to which the Commission is required to give effect. The NSW Government first introduced a wages policy in 2007 which was contained in Premier's Memorandum M2007-12. The 2007 Premier's Memorandum recorded as follows: … It is intended to maintain real wages by allowing for increases of 2.5 per cent per annum. Additional increases are available where employee-related cost savings are achieved. Since wage agreements are set in a forward looking manner, forecasts for inflation need to be utilised to maintain the real value of wages. The Reserve Bank of Australia (RBA) has an agreement with the Federal Government to maintain CPI increases within a range of 2-3 per cent. That is, on average, the CPI will increase by 2.5 per cent. While increases in the CPI may exceed, or be less than 2.5 per cent in the short-term, the RBA actively pursues monetary policy to achieve the target range. Therefore, in multi-year wage agreements, a 2.5 per cent Sydney CPI inflation rate is the best available forecast. This is also NSW Treasury's medium- term inflation parameter as published in the Budget papers. 19. In 2011, the Industrial Relations Amendment (Public Sector Conditions of Employment) Act 2011 was enacted amending the Act by inserting s 146C. At the same time the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 ('the 2011 Regulation') was made. At or around the same time the NSW Government issued the 2011 Wages Policy ('the Wages Policy'). The 2011 Regulation was designed to ensure that the Commission applied the fundamental tenets of the Wages Policy and to continue key aspects of the 2007 Wages Policy, but to require the Commission to comply with the policy. 20. As set out in the earlier submissions filed on behalf of the PSA, NSWNMA and the HSU, in parliamentary debates associated with the introduction of s 146C and the making of the 2011 Regulation, the relevant Minister asserted repeatedly and unequivocally that the Regulation would 'ensure that wage increases of 2.5 per cent are available each year to our hard-working public sector employees'. Furthermore, the Wages Policy expressly indicated that the policy was designed to maintain the real value of public sector wages in line with the mid-point of the Reserve Bank's target range for inflation. Those aspects of the statutory history and the underlying policy are ignored by the Industrial Relations Secretary. 21. There are additional statements made in Parliament which make clear the object and purpose of the Regulation. On 2 June 2011, for example, Mr Greg Smith in a speech to the Legislative Assembly stated (New South Wales Parliamentary Debates (Hansard), Legislative Assembly, 2 June 2011, p 2145): We will provide 2.5 percent wage rises across the public service, and rises above that level will have to be offset by productivity gains… 22. On 3 August 2011, the responsible Minister, the Hon. Greg Pearce stated, in a speech to the Legislative Council in relation to the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 (New South Wales Parliamentary Debates (Hansard), Legislative Council, 3 August 2011, p 3483): Despite the scaremongering from the Opposition, our policy is more transparent than Labour's 2007 policy by clearly guaranteeing the 2.5 per cent increase and minimum conditions. It allows unions, as representatives of the workforce, the flexibility to decide what they determine to be conditions of employment they are willing to put on the negotiating table for increases above the guaranteed 2.5 per cent. If they are happy with the 2.5 per cent increases and their current conditions of employment then nothing changes. 23. It could not have been more clearly stated that the government's policy was that a wage increase of 2.5% would be guaranteed for public sector employees under the Regulation: Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (No 3) (2013) 240 IR 24 at [84]. That guarantee is consistent with the underlying policy of the Regulation, namely, that real wages and fiscal responsibility would be maintained by providing for increases in remuneration each year by reference to the mid-point of the Reserve Bank's target range for inflation. 24. The 2011 Regulation was repealed by Schedule 5 to the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 and replaced by the text contained in sub-schedule 5.2 of the Budget Measure Act which is referred to as the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014. The Regulation continues the purpose and structure of the 2011 Regulation other than to address, in clause 6(1)(a), the relevance of changes in superannuation entitlements to the constraint on the Commission's jurisdiction. Interpretation of the Regulation 25. The interpretation proposed by the Industrial Relations Secretary and other employers is inconsistent with the scheme created by the Regulation and would produce an incoherent and unfair result which would not have been intended by the legislature or the drafters of the Regulation." (Emphasis in original)

Employers' submissions

1. The Employers' Outline of Submissions contended as follows: 9. …The policy expressed in clause 6(1) of the Regulation does not require a 2.5% increase. It provides that there not be an increase in employee-related costs of more than 2.5%. It sets a cap. It says nothing to constrain the Commission's discretion as to whether to award an increase of less than 2.5%, or no increase at all. … 13. The word 'may' when used in an Act to confer a power indicates that the power may be exercised or not, at discretion (in this case, subject to a cap). 14. No contrary intention is apparent arising from the text. The word 'may' in clause 6(1)(a) is clearly permissive, not mandatory. Read in context '… may be awarded increases …, but only if … are not increased by more than 2.5%' the word clearly conveys that the Commission retains a discretion to award an increase (or not), as long as the outcome is not more than 2.5%. 3. This view is confirmed by the phrase 'can be' in clause 6(1)(b). If clauses 6(1)(a) or 6(1)(b) were intended to refer to a mandated 2.5% increase then the drafters would have used the word 'must' rather than 'may', and the phrase 'must be' rather than 'can be'. It is also confirmed by the reference to the date of the Commission's decision in 6(1)(e), since if the PSA was right and clause 6(1) mandated annual 2.5% increases there would be little purpose for such a provision." (Emphasis in original, footnote omitted)
2. The Employers disputed that the Unions could properly invoke the context in which the 2014 Regulation was made so as to allow cl 6(1)(a) to be read other than in accordance with its ordinary and grammatical meaning. They referred the Commission to Taylor v Attorney-General (Cth) (2019) 93 ALJR 1044; [2019] HCA 30 at [87]; Thiess v Collector of Customs and Others (2014) 250 CLR 664; [2014] HCA 12 at [22]; Baini v The Queen (2012) 246 CLR 469; [2012] HCA 59 at [14] and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 at [47].
3. The Employers further challenged the assertion in the Union Submissions that the effect of s 146C of the Industrial Relations Act was to displace entirely ss 10 and 146. Rather, s 146C does no more than qualify those provisions. The Employers contended that nothing in Public Service Association and Professional Officers' Association Amalgamated [Union] of New South Wales v Director of Public Employment (2012) 250 CLR 343; [2012] HCA 58 ("Director of Public Employment"), on which the Unions relied, gave rise to a different view.

Consideration

1. Both the Unions and the Employers referred us to the decision of Boland P in Re Crown Employees Wages Staff (Rates of Pay) Award 2011 & Ors (No 3) (2013) 240 IR 24; [2013] NSWIRComm 109 ("Re Crown Employees"). The matter for determination in that case was described by his Honour in these terms: "1. This decision concerns the amount of increase that may properly be awarded by the Commission in salaries and allowances in public sector awards from 1 July 2013 to apply for a period of 12 months. The matter arises because the Secretary of the Treasury ('the Secretary'), on economic and fiscal grounds, opposes any increase to award rates of pay beyond 2.27 per cent, whereas public sector unions claim the increase should be 2.5 per cent in accordance with what they contend is available to be awarded under s 146C of the Industrial Relations Act 1996 ('the Act') and the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 ('the Regulation')."
2. His Honour summarised the submissions of the parties as follows: "32. There were two principal limbs to the PSA's opposition to the Secretary's position: (1) It is not open to the Commission to award increases of less [than] 2.5% on the basis of economic or fiscal considerations. The policy to which the Commission is required to give effect dictates that 'fiscal restraint' and 'fiscal discipline' is to be maintained by ensuring the Commission awards increases that increase employee-related costs by 2.5% each year. (2) In any event, if the Commission retains a discretion, no basis has been established by the Secretary of the Treasury upon which the Commission would award increases in salaries of less than 2.5% this year. 33. As to the first limb, the PSA's submissions may be summarised as follows: (1) Section 146C of the IR Act limits the jurisdiction of the Commission to make or vary awards it otherwise possesses under sections 10 or 17 of the Act. The Commission is no longer able, so far as public sector employees are concerned, to set fair and reasonable conditions of employment for those employees. (2) The explicit purpose of s 146C and the Regulation is to deprive the Commission of the 'broad-ranging discretion' it previously possessed to fix wages and conditions of employment insofar as public sector employees are concerned. (3) The stated rationale for the Government's Wages Policy as reflected in the Regulation policy is to provide for maintenance of the real value of public sector salaries over the medium term by linking wage increases to the Reserve Bank target range for inflation. (4) The Wages Policy does not purport to ensure that the real value of wages is maintained every year. Nor does it permit increases in salaries based upon improvements in productivity or changes in work value except where the stringent requirements for savings in 'employee-related costs' to be realised for the purpose of clause 8 of the Regulation are met. Rather, the Government has determined that 'fiscal sustainability' and 'fair working conditions' will be achieved 'over the cycle' by linking increases in employee-related costs that can be awarded by the Commission to the midpoint of the Reserve Bank target range for inflation. (5) The policy enunciated in the Regulation is that there will be guaranteed increases of 2.5% per annum. Because it is required to give effect to that policy, it is not open to the Commission to discount salary increases in a particular year having regard to the type of economic and fiscal considerations now relied upon by the Secretary. The policy required to be given effect to by the Commission has determined that the asserted need for 'fiscal discipline' and 'fiscal restraint' is met by ensuring the Commission awards increases in wages of 2.5% per annum. (6) The reliance by the Secretary upon the requirement otherwise imposed upon the Commission by s 146(2) of the Act to have regard to the public interest, including the state of the economy of New South Wales and the likely effect of its decisions on that economy is misplaced. Section 146C expressly excludes the application of s10 and s 146 of the Act. (7) It is not open to the Commission to award an increase in salaries and allowances of less than 2.5% on grounds that it is necessary to achieve 'fiscal restraint' or as a result of economic considerations. The policy to which the Commission is required to give effect by s 146C dictates that 'fiscal restraint' and fair wages are to be achieved by ensuring the Commission awards increases in remuneration or other conditions of employment that increase employee-related costs by 2.5% each year. … 45. The Secretary's submission in reply may be summarised as follows: (1) The Commission does in fact maintain a discretion to award increases in remuneration or other conditions of employment that increase employee related costs by less than 2.5%: Re Crown Employees Wages Staff (Rates of Pay) Award 2011 & Ors [2013] NSWIRComm 53 at [10] and [41]; Re Crown Employees (Public Sector - Salaries 2011) Award (No 3) [2011] NSWIRComm 104 at [34]; The Public Service Association and Professional Officers' Association Amalgamated of NSW v Director of Public Employment [2012] HCA 58; 293 ALR 450 at [17]. …"

Conclusions

1. We do not accept that the effect of s 146C(7) of the Industrial Relations Act is to subordinate ss 10 and 146 to the extent that, within the constraints of the 2014 Regulation, the Commission is not permitted to make its own assessment of the public interest or of the economic consequences of its decision.
2. We do not consider that cl 6(1)(a) of the 2014 Regulation is "capable of a range of potential meanings" so as to require resort to the extrinsic material on which the Unions relied. To rely on that extrinsic material to adopt the construction of the clause urged by the Unions would "displace the clear meaning of the text of a provision". The interpretation of cl 6(1)(a) pressed by the Unions would not involve a harmonious construction of the Industrial Relations Act and the 2014 Regulation in so far as they confer and constrain the Commission's award-making powers
3. Further, to the extent regard is had to the extrinsic material, it supports the conclusion reached by Boland P in Re Crown Employees as follows: "67. …In doing so, the Minister responsible for the Industrial Relations Amendment (Public Sector Conditions of Employment) Bill 2011, which introduced s 146C into the Act, made it clear that the very purpose of the bill was to remove what he described as the Commission's 'broad-ranging discretion when it comes to wage fixing.' This was 'the mischief to which the statute is directed and which the legislature intended to remedy.'"
4. There is no basis on which cl 6(1)(a) should be construed other than in accordance with its ordinary and grammatical meaning.
5. The Commission cannot award more than 2.5% (subject to cl 6(1)(b) of the 2014 Regulation), but it is open to it to award increases in remuneration of 2.5% or less. Within that "narrow scope", as it was described by Boland P in Re Crown Employees, the Commission is bound to apply the provisions of both ss 10 and 146(2) of the Industrial Relations Act. There is nothing in s 146C or the 2014 Regulation that would make it inconsistent for the Commission to apply those provisions.
6. In answer to the question: Does the Government policy declared in clause 6(1)(a) of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 require the Commission to ensure that public sector employees be awarded increases in remuneration or other conditions of employment of 2.5% per annum? The answer is "No".

Endnotes

1. By s 50 of the Government Sector Employment Act 2013 (NSW) the Industrial Relations Secretary is, for the purposes of any proceedings relating to Public Service employees held before a competent tribunal having jurisdiction to deal with industrial matters, taken to be the employer of Public Service employees
2. By s 116(3) of the Health Services Act 1997 (NSW) the Health Secretary may, subject to this and any other Act or law, exercise on behalf of the Government of New South Wales the employer functions of the Government in relation to the staff employed in the NSW Health Service.
3. By s 85 of the Police Act 1990 (NSW) the Commissioner of Police is to be the employer of non-executive officers for the purposes of any proceedings relating to non-executive officers held before a competent tribunal having jurisdiction to deal with industrial matters.
4. By s 104(9) of the Independent Commission Against Corruption Act 1988 (NSW) the Chief Commissioner of ICAC is, for the purposes of any proceedings relating to staff employed under s 104 held before a competent tribunal having jurisdiction to deal with such matters, taken to be the employer of the staff.
5. By s 33E of the Public Finance and Audit Act 1983 (NSW) the Auditor-General is, for the purposes of any proceedings relating to members of staff of the Audit Office held before a competent tribunal having jurisdiction to deal with industrial matters, taken to be the employer of the staff.
6. The AWU is a respondent to matters 2020/79899 and 2020/143934
7. The IEU is a respondent to matter 2020/163286
8. An application by the Teachers Federation to intervene generally in the proceedings was adjourned for later determination.
9. Outline of Submissions in reply at par 12
10. Tcpt, 18 June 2020, p 42(18)
11. (1971) 127 CLR 106 at 133-134
12. Tcpt, 18 June 2020, p 39(24-41) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 June 2020