Applications for Variations to Crown Employees (Police Officers – 2017) Award and Paramedics and Control Centre Officers (State) Award [2021] NSWIRComm 1040

and Citizenship (2009) 179 FCR 581 O'Sullivan v Farrer (1989) 168 CLR 210 Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Industrial Relations Secretary of New South Wales [2021] NSWCA 64 Re Crown Employees (Administrative and Clerical Officers State) Award and other Awards (No 2) (1993) 52 IR 243 Re Crown Employees (Teachers) Award [1964] AR 463 Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (No 3) (2013) 240 IR 24; [2013] NSWIRComm 109 Re Operational Ambulance Officers (State) Award (2001) 113 IR 384; [2001] NSWIRComm 331 Re Pastoral Industry (State) Award (2000) 104 IR 168; [2000] NSWIRComm 27 Re Public Hospital Nurses (State) Award (No 4) (2003) 131 IR 17; [2003] NSWIRComm 442 Re: Application for a New Award for Patient Transport Officers [2017] NSWIRComm 1024 Secretary, NSW Ministry of Health v Health Services Union NSW [2018] NSWIRComm 1007 State Wage Case 2010 (2010) 201 IR 155; [2010] NSWIRComm 183 State Wage Case 2019 [2019] NSWIRComm 1065 Transport Industry - General Carriers Contract Determination (2016) 257 IR 294; [2016] NSWIRComm 3 Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290 Category: Principal judgment Parties: Police Association of New South Wales (Applicant in 2020/151448) Australian Paramedics Association (NSW) (Applicant in 2020/160506) Commissioner of Police (Respondent in 2020/151448) Health Secretary (Respondent in 2020/160506) Health Services Union NSW (Respondent in 2020/160506) Representation: Counsel: M Gibian SC with A Slevin (PANSW) M Latham (APA) I Taylor SC with M Easton and J McDonald (Commissioner of Police and Health Secretary) Solicitors: Crown Solicitor (Commissioner of Police and Health Secretary) Other: O Forsyth-Sells (HSU) File Number(s): 2020/151448 and 2020/160506 Publication restriction: No

Headnote [This headnote is not to be read as part of the decision] The Police Association of New South Wales ("PANSW") made an application pursuant to s 17 of the Industrial Relations Act 1996 (NSW) ("Act") to vary the Crown Employees (Police Officers - 2017) Award ("Police Award"), the effect of which would be to increase the salaries and salary-related allowances provided for in that award by 2.5% with effect from 1 July 2020 ("PANSW Application"). The Australian Paramedics Association (NSW) ("APA") made an application pursuant to s 17 of the Act seeking a variation to the Paramedics and Control Centre Officers (State) Award ("Paramedics Award"), the effect of which would be to increase the salaries and salary-related allowances provided for in that award by 2.5% with effect from 1 July 2020. In the alternative, the application sought a new award pursuant to s 10 of the Act, which would be to the same effect ("APA Application"). The Commissioner of Police and the Health Secretary (together, "the Crown") opposed the PANSW Application and the APA Application respectively. The Crown contended that there should be no increase awarded in these proceedings. Its position was that the Applications must be considered in the context of the Government's stated position that through "pausing" wages in the New South Wales public sector for the 2020-21 financial year, savings of approximately $3 billion will be realised in the next four years; these funds will be placed into a new "Infrastructure and Job Acceleration Fund" which will be used for "smaller, shovel-ready projects touching every corner of the state"; investment in these projects will have a greater stimulatory effect on the New South Wales economy than a pay increase to public sector employees; and, for this reason the Commission should decline to award any increases to salaries or salary-related allowances in respect of the Police Award and the Paramedics Award. Noting that these issues had been considered by the Commission in Application for Crown Employees (Public Sector - Salaries 2020) Award and Other Matters (No 2) [2020] NSWIRComm 1066 ("Public Sector Salaries No 2"), the Crown conceded that in light of the outcome in those proceedings it would be "open to the Commission to find that an increase of 0.3% would be appropriate to create equality across the public sector". Section 10 of the Act empowers the Commission to make awards "setting fair and reasonable conditions of employment for employees". The PANSW contended that the assessment of what constitutes fair and reasonable conditions of employment in a particular year must commence with the presumption that public sector employees receive a 2.5% increase each year, consistent with the Government's wages policy reflected in cl 6 of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW) ("Regulation"). The PANSW contended that an increase of 2.5% was warranted having regard to the Wage Fixing Principles, presenting a "multifactorial case" relying on each of the work value, productivity and efficiency, and special case sub-principles. The APA relied wholly on the special case sub-principle, contending that a 2.5% increase was justified having regard to the work of paramedics and control centre officers during the 2019-20 bushfires in New South Wales and in responding to the COVID-19 pandemic. The PANSW and the APA also contended that on economic grounds the Commission should award an increase of 2.5% due to the stimulatory effect, in the form of increased spending, that an increase in wages would have on the New South Wales economy. This was said to be greater than the investment in infrastructure proposed by the Government. In any event, they argued that the economy of New South Wales was in a sufficiently sound state to be able to fund both the claimed salary increases and an increase in infrastructure spending. The Commission held: (1) There is no presumption that the outcome in Public Sector Salaries No 2 will necessarily be applied to the Police Award and the Paramedics Award. That is, the Full Bench is not necessarily constrained by the outcome in Public Sector Salaries No 2. That matter was determined on the evidence presented to the Full Bench in those proceedings. The PANSW Application and the APA Application must be determined on the evidence adduced in these proceedings: [49]. (2) It would not be in the public interest to permit members of the PANSW and the APA to obtain a forensic advantage by having their respective Applications considered in isolation to the totality of the applications determined in Public Sector Salaries No 2. Further, such an approach would fail to give effect to the object contained in s 3(a) of the Act, namely the provision of a framework for the conduct of industrial relations that is fair and just: [56]. (3) No reason had been provided to depart from the approach taken by the Full Bench in Application for Crown Employees (Public Sector - Salaries 2020) Award and Other Matters [2020] NSWIRComm 1044 ("Public Sector Salaries No 1") and Public Sector Salaries No 2, on the question of whether there is a "presumptive outcome". There is no presumptive outcome in respect of the Applications. The employees do not come into these proceedings with an entitlement to a particular wage increase: [62]. (4) An argument that the sub-principles might operate in a manner analogous to costs savings, where the combined savings from a range of initiatives, which may not have affected all employees, might still be "pooled" into a fund to be used for salary increases from which they can all benefit, does not reflect a proper application of the Arbitrated Case Principles: [66]. (5) A party need not show that a 2.5% increase is warranted under the special case sub-principle or the work value sub-principle or the productivity and efficiency sub-principle. If the Commission is satisfied that the evidence justifies an increase under more than one sub-principle, the quantum of each such increase can be combined to form a total which can be awarded to the employees: [71]. (6) To adopt the "cumulative" approach urged by the PANSW it is necessary that the sections of the workforce that have seen an increase in their work value, or who have made a significant contribution to productivity and efficiency improvements, are sufficiently representative of the relevant workforce as a whole that the increases that flow from those elements might properly result in across-the-board salary increases: [73]. (7) The PANSW had discharged its onus of demonstrating that the PANSW Application attracts the special case sub-principle. This is on the same basis as was found to apply in Public Sector Salaries No 2: [79]. (8) In relation to the PANSW Application: (a) for the purposes of considering the work value and productivity and efficiency sub-principles, the relevant datum point is 1 July 2011: [84]; (b) changes introduced as a consequence of the Re-engineering process do not justify an across-the-board wage increase under the work value sub-principle, but can be considered in the context of the productivity and efficiency sub-principle: [108]; (c) the Active Armed Offender reforms attract the work value sub-principle: [110]; (d) the measures claimed by the PANSW to attract the productivity and efficiency sub-principle have either delivered productivity or efficiency improvements to the NSW Police Force, or have made a substantial contribution towards the attainment of the objectives of the NSW Police Force to become more efficient. While the evidence falls short of establishing a "significant contribution" by employees to each measure, a sufficient case has been made out to attract the productivity and efficiency sub-principle: [190]. (9) The APA has made out a case attracting the special case sub-principle: [221]. (10) The Commission should have regard to the likely changes in the value of money over the life of the award. That is clearly consistent with the authorities. However, the authorities do not support the proposition that the Commission ought not to have regard to movements in inflation since the last increase to salaries and salary-related allowances in the relevant award. That was the approach taken in Public Sector Salaries No 2 and no persuasive reason was offered as to why the Commission should approach these proceedings on any alternative basis: [289]-[290]. (11) The evidence demonstrates a need for restraint in the particular circumstances of the 2020-21 financial year, but that restraint does not preclude any increase being awarded: [296]. (12) The PANSW has established that the nature and extent of changes in the work of police officers since the datum point, reflected in findings as to the application of the work value and productivity and efficiency sub-principles, justifies an increase to the salaries and salary-related allowances contained in the Police Award. To that extent, the Police Award does not currently set fair and reasonable conditions of employment in that it does not currently reflect changes to the work value of police officers, or their contribution to productivity and efficiency improvements, since 1 July 2011: [299]. (13) While the evidence calls for restraint in the particular circumstances of the 2020-21 financial year, this should not preclude the Police Award being varied to ensure that its terms are, and remain during its term, fair and reasonable: [300]. (14) The combined effect of the bushfires and the COVID-19 pandemic attract the special case sub-principle in respect of the APA Application. An award to employees covered by the Paramedics Award is warranted: [304]. (15) It would not "create equality across the public sector", or otherwise be fair and reasonable, to deny employees covered by the Paramedics Award an increase to their salaries and salary-related allowances in the same percentage awarded in Public Sector Salaries No 2: [306]. (16) The special circumstances of the case warrant the award of an additional one-off payment to employees covered by the Paramedics Award: [307]. (17) There are exceptional circumstances within the meaning of cl 6.2 of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW), permitting the retrospective operation of any increases: [318]. The Commission ordered that: (1) The salaries and salary-related allowances in the Crown Employees (Police Officers - 2017) Award are to be increased by 1.75%, with such increase to take effect from the first full pay period on or after 1 July 2020: [319(1)]. (2) The salaries and salary-related allowances in the Paramedics and Control Centre Officers (State) Award are to be increased by 0.3%, with such increase to take effect from the first full pay period on or after 1 July 2020: [319(2)]. (3) Employees covered by the Paramedics and Control Centre Officers (State) Award are to receive a payment equal to the difference between $1,000 and 0.3% of their annual base salary under that Award at the rate immediately prior to the increase required by Order (2), such payment to be made within 28 days: [319(3)].

decision

1. On 21 May 2020 the Police Association of New South Wales ("PANSW") filed with the Office of the Industrial Registrar ("Registry") an application to vary the Crown Employees (Police Officers - 2017) Award ("Police Award"). The application was made pursuant to s 17 of the Industrial Relations Act 1996 (NSW) ("Act"). The application sought an increase of 2.5% to the salaries and salary-related allowances provided for in the Police Award.
2. On 29 May 2020 the Australian Paramedics Association (NSW) ("APA") filed an application with the Registry. The application sought a variation to the Paramedics and Control Centre Officers (State) Award ("Paramedics Award") pursuant to s 17 of the Act to increase by 2.5% the salaries and salary-related allowances provided for in that award. In the alternative, the application sought a new award pursuant to s 10 of the Act, which would be to the same effect.
3. For ease of reference, we will refer to these applications as the "PANSW Application" and "APA Application" respectively. Where appropriate, we will refer to them jointly as "the Applications".
4. Each of the Applications was premised on the basis that the increases sought would operate from 1 July 2020. The cases presented by the PANSW and the APA anticipated that the new rates would apply for one year.
5. On 30 July 2020 the Full Bench ordered that the proceedings resulting from the PANSW Application and the APA Application be joined.
6. The respondent to the PANSW Application is the Commissioner of Police. [1] The respondents to the APA Application are the Health Secretary [2] and the Health Services Union New South Wales ("HSU"). For convenience, when we are referring to them in their capacity as respondents to these proceedings we will refer to the Commissioner of Police and the Health Secretary, separately or jointly as appropriate, as "the Crown".
7. The Crown opposed the Applications. It contended that there should be no increase awarded in these proceedings. However, it conceded that in light of the decision of the Full Bench in Application for Crown Employees (Public Sector - Salaries 2020) Award and Other Matters (No 2) [2020] NSWIRComm 1066 ("Public Sector Salaries No 2") [3] it would be "open to the Commission to find that an increase of 0.3% would be appropriate to create equality across the public sector". [4]

Legislation

1. Section 10 of the Act empowers the Commission to make awards "setting fair and reasonable conditions of employment for employees". Section 17 empowers the Commission to vary or rescind an award, provided that it may only do so after the nominal term of the award if it considers that it is not contrary to the public interest to do so: s 17(3)(d). The nominal term in each of the Police Award and Paramedics Award has expired.
2. Section 146(2) of the Act requires the Commission to take into account the public interest in the exercise of its functions. For that purpose, it must have regard to the objects of the Act, and the state of the economy of New South Wales and the likely effect of its decisions on that economy.
3. The term "public interest" is not defined in the Act. In O'Sullivan v Farrer (1989) 168 CLR 210 the majority observed (at 216): "Indeed, the expression 'in the public interest', when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only 'in so far as the subject matter and the scope and purpose of the statutory enactments may enable...given reasons to be [pronounced] definitely extraneous to any objects the legislature could have had in view': Water Conservation and Irrigation Commission (NSW) v Browning, per Dixon J. at p 505." (Footnote omitted)
4. This passage from O'Sullivan has been cited with approval by the Commission in a number of cases: see KU Children's Services (Other Than Teachers) (State) Award 1998 [2000] NSWIRComm 94 at [92]; Elura Mine Enterprise (Consent) Award 2001 [2003] NSWIRComm 218 at [140]; Kellogg (Aust) Pty Ltd v National Union of Workers, New South Wales [2003] NSWIRComm 167 at [64].
5. The objects of the Act are set out in s 3, which for present purposes relevantly provides as follows: 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, (b) to promote efficiency and productivity in the economy of the State, … (e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments, …
6. Under s 146C(1)(a), the Commission must, when making or varying any award or order, give effect to any policy on conditions of employment of public sector employees that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission. Such a policy is to be found in cl 6 of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW) ("Regulation"), which is relevantly 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. …

Wage Fixing Principles

1. To provide guidance as to the making or varying of awards the Commission has over the years developed Wage Fixing Principles, which were most recently re-affirmed by the Full Bench in State Wage Case 2019 [2019] NSWIRComm 1065 at Annexure A of Annexure 1. Those principles relevantly provide as follows: 1. Preamble 1.1 These principles have been developed to accommodate the changing nature of the jurisdiction of the Industrial Relations Commission of New South Wales (the "Commission") under the Industrial Relations Act 1996 ("the Act") in light of the creation of a national system of private sector employment regulation, relevantly established by the Industrial Relations (Commonwealth Powers) Act 2009, the Industrial Relations Amendment (Consequential Provisions) Act 2010, the Fair Work Act 2009 (Cth) and the Fair Work (State Referral and Consequential and Other Amendments) Act 2009 (Cth). 1.2 The four primary aims of these principles are: 1.2.1 to provide a framework under which wages and employment conditions in the government and local government sectors of New South Wales remain fair and reasonable in accordance with the requirements of the Act, and economically sustainable having regard to the obligation of the Commission to take into account the public interest and, in doing so, having regard to the objects of the Act and to the state of the economy of New South Wales and the likely effect of the Commission's decisions on that economy; 1.2.2 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; 1.2.3 to provide a framework in which all operative and non-operative awards within the Commission's jurisdiction are maintained up to date in respect of rates of pay and allowances; and 1.2.4 to protect the low paid. 1.3 Movements in wages and conditions must fall within the following principles. … 8. Arbitrated Case 8.1 General Any claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the Principles, will be processed as an Arbitrated Case by a Full Bench of the Commission unless otherwise allocated by the Chief Commissioner. In determining such an application, the Commission shall, subject to the relevant provisions of the Act, do so in accordance with the following criteria: 8.2 Work Value Considerations (a) Changes in work value may arise from changes in the nature of the work, skill and responsibility required or the conditions under which work is performed. Changes in work by themselves may not lead to a change in wage rates. The strict test for an alteration in wage rates is that the change in the nature of the work should constitute such a significant net addition to work requirements as to warrant the creation of a new classification or upgrading to a higher classification. (b) In addition to meeting the test in (a), a party making a work value application will need to justify any change to wage relativities that might result not only within the relevant internal award structure but also against any external classification to which that structure is related. There must be no likelihood of wage leapfrogging arising out of changes in relative position. (c) The foregoing circumstances are the only ones in which rates may be altered on the ground of work value and the altered rates may be applied only to employees whose work has changed in accordance with this Principle. (d) In applying the Work Value Changes Principle, the Commission will have regard to the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which work is performed. (e) Where new or changed work justifying a higher rate is performed only from time to time by persons covered by a particular classification, or where it is performed only by some of the persons covered by the classification, such new or changed work should be compensated by a special allowance which is payable only when the new or changed work is performed by a particular employee and not by increasing the rate for the classification as a whole. (f) The time from which work value changes in an award should be measured is the date of operation of the second structural efficiency adjustment allowable under the State Wage Case 1989 (1989) 30 IR 107 or the last work value inquiry or the date of a consent award where the parties have agreed pursuant to a consent award the wage increases reflect increases in work value, whichever is the later. (g) Care should be exercised to ensure that changes that were, or should have been, taken into account in any previous work value adjustments or in a structural efficiency exercise are not included in any work evaluation under this Principle. (h) Where the tests specified in (a) are met, an assessment will have to be made as to how that alteration should be measured in monetary terms. Such assessment will normally be based on the previous work requirements, the wage previously fixed for the work and the nature and extent of the change in work or the date of a consent award where the parties have agreed pursuant to a consent award that the wage increases reflect increases in work value. (i) The expression "the conditions under which the work is performed" relates to the environment in which the work is done. (j) The Commission will guard against contrived classifications and over-classification of jobs. (k) Any changes in the nature of the work, skill and responsibility required or the conditions under which the work is performed, taken into account in assessing an increase under any other Principle of these Principles, will not be taken into account under this Principle. (l) In arbitrating an application made under this Principle, the Commission is required to determine whether or not future State Wage Case general increases will apply to the award. 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. 8.4 Special Case Considerations 8.4.1 A claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the Principles, and which is not based on work value and/or productivity and efficiency pursuant to this Principle, will be processed as a special case in accordance with the principles laid down in Re Operational Ambulance Officers (State) Award [2001] NSWIRComm 331; (2001) 113 IR 384 and the cases referred to therein at [165]-[168]. 8.4.2 All special cases shall be tested against the public interest. (Emphasis in original)

Approach to the making or varying of awards

1. The approach that the Commission should adopt in making or varying awards has been considered by the Full Bench in numerous decisions. The principles which arise from those cases to which we have had particular regard are as follows: 1. Whether the conditions of employment in the award are fair and reasonable is a primary test for evaluating whether an award should be altered: Re Operational Ambulance Officers (State) Award (2001) 113 IR 384; [2001] NSWIRComm 331 at [164]. 2. Awards of the Commission are presumed to set fair and reasonable terms and conditions of employment: City of Sydney Wages/Salary Award 2014 (2014) 247 IR 386; [2014] NSWIRComm 49 at [12]. 3. The terms "fair" and "reasonable" in s 10 of the Act import a requirement that the conditions of employment set represent a proper and proportionate balance between the entitlements afforded employees and the interests of those employing them: City of Sydney Wages/Salary Award 2014 at [19]. 4. In a contested case, the onus falls on the applicant to make out a case for an alteration to an award: Re Pastoral Industry (State) Award (2000) 104 IR 168; [2000] NSWIRComm 27at [77]. 5. In a special case the applicant bears the onus of persuading the Commission that the application satisfies a dual test: that the terms of the award sought constitute fair and reasonable conditions of employment and that the matter in question has "special attributes" or is "out of the ordinary" so as to take the matter outside the restrictions which otherwise apply under the Wage Fixing Principles: Re Operational Ambulance Officers (State) Award at [166] and [168]; City of Sydney Wages/Salary Award at [16]. 6. The applicant must meet the ordinary onus to make out its case. In a special case the applicant does not bear a higher onus or standard of proof: Re Pastoral Industry (State) Award at [73]; Re Operational Ambulance Officers (State) Award at [165] and [168]. 7. The onus borne by a party was described by Kite AJ in Transport Industry - General Carriers Contract Determination (2016) 257 IR 294; [2016] NSWIRComm 3 in these terms: "34. It has long been recognized that Industrial Tribunals are in a different position to the general courts. The duty of the Commission is to make an award or determination which prescribes fair and reasonable rates and conditions. In doing so the Commission is not bound by the rules of evidence or to act in a formal manner but 'is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.' See s 163 (1)(c) of the Act. 35. The various authorities referring to the 'onus' born[e] by a party are to be understood in that context. There must be information before the Commission which allows it to be satisfied that the determination or award, if made, will provide just and reasonable rates and conditions. The assessment of the adequacy of that material will vary according to the nature of the case, including the degree of consent, before the Commission: see In re Butchers, Wholesale (Cumberland) Award 1971 AR 425 especially at 437- 440." (Emphasis in original) 1. The Commission should have regard to all factors relevant to the determination of the general claim including economic considerations and then make a global assessment of what is a fair and reasonable wage to be determined in the circumstances. In this context, the state of the economy, including fiscal considerations, will be taken into account in the overall assessment but will not be determinative of the Commission's decision: Crown Employees (Police Officers - 2009) Award (No 2) [2012] NSWIRComm 104 ("Police No 2") at [72], citing Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (2004) 133 IR 254; [2004] NSWIRComm 114 at [432], in which the Full Bench observed: "...The economic and financial position of the State and the effects of our decision on the New South Wales economy have played a significant role in our decision, but not a determinative one. It is our statutory duty to fix fair and reasonable rates of pay and conditions. In a matter, such as this one, where a compelling basis for increases in rates of pay has been demonstrated, then the Commission must give recognition to that conclusion even though it may temper the final result in recognition of economic considerations. The terms of s146 of the Act require no more than this, particularly in the light of the paramount requirements of s10 of the Act. …" 1. The Commission must attempt to fix rates which will be just and reasonable rates at the time when the award commences to operate and which, unless unforeseeable happenings occur, will continue to be just and reasonable during the term of the award: Re Crown Employees (Teachers) Award [1964] AR 463 at 482-483, cited with approval in Police No 2 at [78]. 2. In this regard, it is appropriate for the Commission to have regard to economic considerations, including the changing value of money over time, when deciding the amount of any increase which should be awarded. Matters which may be considered in that regard are the date on which the last wage increases for employees in question took effect, and changes in money values which have occurred since that time or are forecast during the term of the award to be made: Re Crown Employees (Administrative and Clerical Officers State) Award and other Awards (No 2) (1993) 52 IR 243, cited with approval in Re Operational Ambulance Officers (State) Award at [167]. See also Police No 2 at [121].

Factual context

1. The PANSW Application and APA Application arise from largely the same factual context as that which the Full Bench, as presently constituted, considered in Application for Crown Employees (Public Sector - Salaries 2020) Award and Other Matters [2020] NSWIRComm 1044 ("Public Sector Salaries No 1") and in Public Sector Salaries No 2. In the second decision the Full Bench observed: "63. To provide context, we reproduce the following passages from our Earlier Decision: '35. 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. …'" (Emphasis in original) … 66. It is apparent that the 2.5% cap was imposed by the Government as a wage restraint mechanism which has, with few exceptions, eliminated wage increases by way of work value and/or productivity and efficiency claims which had been a regular feature of public sector employment prior to the imposition of the cap. The rates of pay and work-related allowances in the awards the subject of the Joined Applications have, since 1 July 2011, been increased by 2.5% annually, almost invariably with the consent of the parties to those awards (apart from 2013 and 2014 when the increases were 2.27% due to the increase in the superannuation guarantee). 67. On 27 May 2020 the Honourable Gladys Berejiklian, the Premier of New South Wales, and the Honourable Dominic Perrottet, the Treasurer of New South Wales, issued a media release which contained the following statements: 'The NSW Government will pause pay rises for the next 12 months to protect public service jobs as unemployment spikes across NSW. … The new wages policy will be implemented by regulation and will apply prospectively. For workers with agreements already struck, the pay rise pause will apply for the first 12 months of their next agreement.' 68. On 29 May 2020 the Government made the Industrial Relations (Public Sector Conditions of Employment) Amendment (Temporary Wages Policy) Regulation 2020 (NSW). That regulation purported to amend the 2014 Regulation so as to give effect to the 'new wages policy' referred to in the media release of 27 May 2020. … 70. On 2 June 2020, the Legislative Council disallowed the Industrial Relations (Public Sector Conditions of Employment) Amendment (Temporary Wages Policy) Regulation 2020. …" (Emphasis in original)

Public Sector Salaries No 2

1. In Public Sector Salaries No 2 the Full Bench considered and determined applications relating to 41 awards of the Commission. It suffices to say that the applications broadly sought increases of 2.5% to the salaries and salary-related allowances provided by the relevant awards. The Full Bench awarded increases of only 0.3% from the first full pay period on or after 1 July 2020.
2. In its Closing Submissions in these proceedings the Crown identified a further 18 awards in respect of which the employer and union parties had agreed to adopt the outcome in Public Sector Salaries No 2. The Crown contended: "11. In those circumstances the only substantial issue is whether the Applicants in these proceedings can identify factors which sufficiently differentiate their applications from the applications in the 2020 Salaries Case (and indeed those other parts of the public sector workforce who have agreed to an increase of 0.3%) in a manner that justifies a different increase. To do so the Applicants must show, by reference to relevant Wage Fixing Principles, that the Commission is required to provide a differentiated outcome in order to maintain fair and reasonable conditions of employment. … 18. In light of those matters, in practical terms the only issue to be determined in these proceedings is whether either Applicant has made out a case that the relevant award would not be fair and reasonable without an increase greater than 0.3% due to factors which differentiate their case from that run by the Applicants in the 2020 Salaries Case. 19. While the Commission has taken further economic evidence, it is evidence largely to the same effect as the evidence that underpinned the conclusions of the Commission in the 2020 Salaries Case Decision. That evidence is summarised below. The evidence presented in these proceedings would not cause the Commission to depart from any of the key findings as to the economic evidence. 20. That is not to say that these proceedings fall to be determined on any basis other than the evidence led in these proceedings. Further, the Applicants have the onus to persuade the Commission that it should amend or vary the awards at all. However, since the economic evidence is substantially to the same effect, and these proceedings concern two further public sector groups of employees, the Commission can be expected to come to the same overall conclusion. 21. The only reason the Commission would not come to the same overall conclusion (and award a higher increase) would be if the Full Bench were satisfied that one or other application had differentiated itself by leading evidence that established a higher increase under the wage fixing principles. …" (Emphasis in original)

A presumptive increase?

1. In Public Sector Salaries No 2 the Full Bench observed: "32. In the light of this authority, it is necessary to consider the approach urged on the Commission by the PSA, the NMA and the HSU. The premise underpinning the case advanced by those unions was stated as follows: [6] '10. Any assessment of what constitutes fair and reasonable conditions of employment in a particular year must commence with the presumption that public sector employees receive a 2.5% increase each year. …' 33. This presumption was said to arise for a number of reasons, including: (1) the policy underlying the 2014 Regulation was constructed on the basis that an appropriate balance is struck between the fiscal requirements of government and the maintenance of fair working conditions for employees by providing a 2.5% increase in remuneration or other conditions of employment each year; (2) the Commission will in future years be constrained from increasing remuneration or conditions of employment beyond 2.5%, at least without cost offsets. Consequently, an increase below 2.5% in any year will constitute a permanent cut to the remuneration of public sector employees which cannot be corrected or made good in future years regardless of the economic or merit considerations which may then arise; (3) the Commission is entitled, and required, to take into account as a public interest consideration the repeated statements by Government that public sector employees would be guaranteed a 2.5% increase each year: per Boland J in Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (No 3) (2013) 240 IR 24; [2013] NSWIRComm 109 at [99] to [102] and [170]; (4) cl 9 of the 2014 Regulation dictates that employee-related cost savings must be 'additional to whole of Government savings measures (such as efficiency dividends)'. The necessary consequence is that the payment of an increase of 2.5% per annum is intended to compensate employees not only with respect to the changing value of money over time, but also for contributions to 'whole of Government savings measures' such as efficiency dividends; and (5) the public interest considerations relevant to the applications go beyond economic considerations. These include a consideration of the objects of the Act. 34. The PSA, the NMA and the HSU submitted: '20. It is to be presumed these public interest considerations, going to fairness, justice, the promotion of efficiency and productivity, appropriate regulation of employment, cooperative workplace reform are all contemplated in the 2.5% wage increase provided for in the policy. These factors point to a strong presumption that whilst the Policy is in place public sector employees should receive a 2.5% per annum increase. The Commission should be reluctant to depart from that presumption." (Emphasis in original) 35. In our Earlier Decision we observed: '76. 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. 77. 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".' 36. A contention that a particular increase is to be presumed (or assumed, as it was otherwise submitted) runs very close to an argument that employees have a de facto entitlement to what had previously been claimed, essentially, as a de jure entitlement. The effect of our Earlier Decision was to make it clear that the employees do not come into these proceedings with an entitlement to a particular wage increase. As a result, we do not approach this decision from a position that there is a presumptive outcome."

A cumulative approach

1. The PANSW contended that its case satisfied the special case, work value and productivity and efficiency sub-principles. In its Final Submissions the PANSW submitted: "32. The Association's claim is brought pursuant to s 17 of the Act and, to the extent necessary, Principle 8, Arbitrated Case, of the Wage Fixing Principles. In particular, sub-principles 8.2 Work Value, 8.3 Productivity and Efficiency Considerations and 8.4 Special Case Consideration, are relied upon. Sub-principle 8.5.2 within the Wage Fixing Principles significantly provides that an Arbitrated Case may be made out on the basis of 'a cumulation of the factors referred to in this Principle'. This means that an aggregate salaries outcome under the Arbitrated Case principle may be obtained through a multi-factor case in which particular factors satisfy particular sub­principles, but it is not necessary for the whole of a case to satisfy any particular sub­principle." (Emphasis in original)
2. In a footnote to this passage the PANSW cited Police No 1, in which the Full Bench observed: "36. Even though the Association relied, in an overall sense, on the Arbitrated Case Principle, which is permissive of claims based both on work value and productivity and efficiency considerations, and, there is no doubt an overlap between factors relied upon in the work value and productivity elements of the Association's claims, we do not consider that approach to be particularly helpful. This is primarily because the respective elements of the Arbitrated Case Principle 'work value' and 'productivity and efficiency', must ultimately be determined as quite discreet [sic] matters. The satisfaction of the respective elements concern quite different factors, even though they may overlap to some degree. Nothing in Principle 8.5.2 alters this conclusion. The reference to 'a cumulation' in that sub-principle concerns, in our view, circumstances where more than one head of the considerations or criteria referred to in the Principle may be brought to account in determining an application in arbitrated proceedings. This cumulative approach may only properly occur, however, where the criteria for each such consideration (sought to be added to the overall arbitrated case) has been satisfied. … 77. The Arbitrated Case Principle provides that, in determining an application pursuant to the principle, the Commission is to have regard to particular criteria, namely: work value considerations (sub-principle 8.2), productivity and efficiency considerations (sub-principle 8.3) and special case considerations (sub-principle 8.4). Sub-principle 8.5.2 provides that there shall be no double counting, although an arbitrated case claim may rely upon an accumulation of such factors or criteria. We agree with the submission of the Association that 'this means that an aggregate salaries outcome under the Arbitrated Principle may be obtained through a multi-factor case in which particular factors satisfy particular sub-principles. It is not necessary for the whole of a case to satisfy any particular sub-principle'. (We would reiterate, however, that this does not remove an obligation to address each sub-principle as a discreet [sic] matter, so as to assess whether or not the claim may be sustained under that criteria [sic].)"

Special Case sub-principle

1. In making out its case under the special case sub-principle, the PANSW relied on the following passages from Public Sector Salaries No 2: "73. Given the regularity and consistency of public sector wage increases over the past nine years, it is reasonable to conclude that employees covered by the Relevant Awards held a legitimate expectation that their rates of pay would be increased by 2.5% from 1 July 2020. This is an expectation they could reasonably have held until late May 2020. … 75. While we have found - and reiterate - that any expectation held by the employees does not translate into an entitlement (however described), it is properly a matter to which we should have regard in considering the public interest. In the particular circumstances described above, we are satisfied that the Joined Applications fall within the special case principle."
2. The PANSW further relied on the following factors: 1. salaries for police officers have increased at the rate of 2.5% or more since 2011, as set out at [37] above; 2. evidence that people will tend to adjust their spending habits based on their actual and anticipated level of earnings; and 3. the representations made by the Commissioner of Police, through his delegates, to the PANSW in March 2020 regarding a 2.5% increase from 1 July 2020, as referred to at pars 68 and 69 of Ms Membreno's statement, reproduced at [38] above.
3. The Crown conceded that "the factors that gave rise to the application of the Special Case Principle in the particular manner identified in the 2020 Salaries Decision exist in the same way in these proceedings". [20]
4. We do not place particular weight on the representations said to have been made by the Commissioner of Police (through his delegates) to the PANSW as described by Ms Membreno. It is clear that while the Commissioner of Police may have sought approval from the Wages Policy Taskforce to offer particular increases, that approval had not at that stage been received. Further, there is no evidence of the representations having been made other than to officers of the PANSW.
5. We find that the PANSW has discharged its onus of demonstrating that the PANSW Application attracts the special case sub-principle. This is on the same basis as was found to apply in Public Sector Salaries No 2.

Approach to apply

1. In its Closing Submissions the Crown provided the following useful summary of authorities that have considered the work value sub-principle: "32. The following Work Value principles can be derived from the authorities: a. wage fixing principles require a stringent examination of whether there has been work value changes such as to justify the grant of wage increases (per Re Crown Employees (Public Sector - Salaries 2011) Award (No 3) [2011] NSWIRComm 104; (2011) 210 IR 458 at [35]); b. changes in work value may arise from changes in the nature of the work, skill and responsibility required or the conditions under which work is performed (per Police No 1 at [79]); c. changes in work by themselves may not lead to a change in wage rates (per Police No 1 at [79]); d. some changes in work merely reflect the evolving nature of the particular occupation where skills or responsibilities are lost and new ones gained without producing a net addition to work requirements. In many occupations, particularly professional occupations, change, and the requirement to cope with it by coming to terms with new methods and new technology, is an inherent and accepted characteristic of the employment and rarely will this evolutionary process attract extraordinary wage increases under the work value principle (per Re Public Hospitals Nurses (State) Award (No 4) (2003) 131 IR 17 at [18]); e. changes that justify an alteration in rates must be 'significant', meaning 'to a meaningful degree, not insignificant, not immaterial, not trivial' though not necessarily 'major' (per Police No 1 at [79]) ; f. changes in qualification requirements and qualifications form an important part of the assessment of changes in the nature of work and level of skill and responsibility required of the persons performing the work (per NSW Health Service Allied Health Assistants (State) Award [2015] NSWIRComm 30 at [17]); g. the Commission must carefully sift through the material that has been placed before it and separate out those changes which have occurred to the nature of the work, skill and responsibility of employees or to the environment in which the employees work and which have not previously been the subject of compensation (per Re Public Hospitals Nurses (State) Award (No 4) (2003) 131 IR 17 at [20]); h. increases to the volume of work, or to the frequency of specific tasks, do not meet the strict requirements of the work value principle (per Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (2004) 133 IR 254 at 289; [2004] NSWIRComm 114 at [89]); i. if an applicant seeks wage increases for all classifications under an award the applicant carries the onus of demonstrating work value change in respect of each classification (per Re Public Hospitals Nurses (State) Award (No 4) (2003) 131 IR 17 at [ 22]); and j. given the need to prove work value change in respect of each classification, generally the work value sub-principle has not resulted in across-the-board wage increases with limited exceptions." (Footnotes omitted)

Datum point

1. Clause 8.2(f) of the work value sub-principle provides: "(f) The time from which work value changes in an award should be measured is the date of operation of the second structural efficiency adjustment allowable under the State Wage Case 1989 (1989) 30 IR 107 or the last work value inquiry or the date of a consent award where the parties have agreed pursuant to a consent award the wage increases reflect increases in work value, whichever is the later."
2. Ms Membreno deposed that the last arbitrated adjustment to the salaries and salary-related allowances of police officers took effect on 1 July 2011 (as determined in Police No 2). The award made on that occasion provided for further increases from 1 July 2012 and 1 July 2013. All subsequent increases have been by consent. There is no evidence to suggest that those increases were related in any way to increases in work value.
3. The PANSW submitted that the datum point for the purposes of the work value sub-principle should, as a consequence, be 1 July 2011. The Crown did not appear to take issue with that contention. We accept 1 July 2011 as the relevant datum point.

Work value changes

1. The PANSW submitted that there were two grounds on which increases to salaries are justified on work value grounds: firstly, restructuring that has occurred in the NSW Police Force, and, secondly, the introduction of "Active Armed Offender" protocols in 2015. We will consider each in turn.

Re-engineering

1. The PANSW led evidence of a significant number of structural changes or reforms to the NSW Police Force since 2011. In so far as the work value sub-principle is concerned, however, the PANSW relied on changes that were introduced from 2017 under what was known within the NSW Police Force as "Re-engineering". [21]
2. In the November 2017 edition of the Police Monthly, Re-engineering was described in these terms: [22] "More police officers out on the street and having the flexibility to move those officers around are the cornerstones to a modern NSW Police Force being created by Commissioner Mick Fuller under re-engineering. Major changes are underway across the organisation and will lead to extra police officers working in frontline positions throughout NSW to actively prevent, disrupt and target crime. The local area command structure is being retired after 20 years, to be replaced with new frontline structures for metropolitan Sydney and regional NSW. In metropolitan Sydney, the 42 current local area commands are being condensed and consolidated down to 32 police area commands, each consisting of between 230 and 300 police officers and reporting through to the three metropolitan region commanders. The consultation process for regional NSW continues, but there will be a different structure to the city's police area commands in recognition of the different needs of police and the community in country NSW. … Re-engineering will increase the numbers of police working in frontline positions, in part by reducing more than 800 over-strength positions across the state, and also by increasing class numbers at the Police Academy from March next year. … Re-engineering will see changes to only a small percentage of all police officer positions across the organisation, as well as a number of administration staff. Placement strategies have now been finalised in close consultation with the Police Association of NSW and the Public Service Association and engagement with affected staff has commenced. The changes to the current LAC structure will result in a reduction in commissioned officer numbers, particularly at the newly created commands, but there will be no changes to overall police numbers. Excess commissioned officers will be placed into meaningful temporary duties to ensure their skills and expertise are utilised until permanent positions can be found. Some senior officers have already flagged that they'll retire soon so it's expected that natural attrition will reduce those excess numbers over time, allowing the recruitment of more constables. Consolidations will also see a reduction in some administration positions at affected commands. Where possible, options for redeploying affected staff elsewhere within the organisation will be considered before looking at other options."

Active Armed Offender

1. In his statement Mr Knappick described the Active Armed Offender program in these terms: "49. In response to emerging crime trends and in consideration of world best practice, a training program called 'Active Armed Offender' ('AAO') was included in the mandatory training program from 2015 to 2017. All police officers and some civilian officers, for example Special Constables, were required to participate in this training program. 50. The AAO training program was designed to train police officers to respond to an armed offender who was actively engaged in killing or attempting to kill people and who a member of the police force reasonably suspects will continue to do so while having access to additional potential victims."
2. Sergeant Watt is an Operational Safety Instructor in Weapons and Tactics, Policy and Review, part of the Operational Safety and Skills Command. In his statement he deposed as follows: "12. I will comment first on the most significant cause of change in the nature of my work as both an OSI and an operational police officer - the introduction of Active Armed Offender training commencing in 2015. This is without doubt the most significant change in operational safety training and operational tactics in my entire career. Prior to 2015, the wider NSWPF did not have any training in relation to the response to an active armed offender, also known as an active shooter or active attacker, depending on the location. … 13. I was tasked with conducting research intended to identify what response strategies and specific tactics existed both in Australia and internationally. As a result of that research, it appeared the response package provided by the Advanced Law Enforcement Rapid Response Training (ALERRT) Center, based in San Marcos, Texas, was the most suitable available system. It had been adopted by the Federal Bureau of Investigation as the national standard for response in the United States, and ALERRT had trained a significant number of law enforcement agencies throughout the US and internationally. … ACTIVE ARMED OFFENDER - TRAINING THE TRAINERS 17. The training included how to respond to the use of improvised explosive devices, deal with being ambushed whilst in a vehicle, movement techniques for open environments whilst under fire, how to link up with other teams in a high stress, high threat environment without shooting each other, alternate low light techniques, provided protocols for post engagements priorities of work, and introduced both the concept and skills to triage significantly injured persons and apply life saving interventions based primarily around haemorrhage control. It also introduced the concept of moving past uncleared areas when there is a direct indication of the location of an offender with the view to limiting the number of injuries or deaths. As importantly, these techniques were specifically designed to be utilised effectively with less training time than is typically afforded to a specialist tactical police officer. 18. The tactics are designed to provide a significantly enhanced immediate intervention capability to prevent death and injury without having to train and equip all police to the standards expected of a tactical team. It also provides an instantly available response capability - when looking at an incident that typically lasts for 10-15 minutes, rapidity of response is a critical requirement. The benefit to the State of New South Wales is clear - all police are now capable of responding to an AAO incident in a fashion designed to limit death and injury caused by the offender, and enhances the chances of survival of any of those injured during the incident. … IMPACT OF AAO ON GENERAL POLICE 30. AAO training significantly increased the expectations placed on first response police across the state. The principle [sic] operational strategy of the NSWPF when responding to high-risk incidents was (and still is) one of containment and negotiation. This strategy hinges on effectively isolating the subject from any person he or she can harm and attempting to resolve the situation by negotiation. The deliberate resolution of such incidents by force was historically the exclusive domain of the TOU and TORS. Prior to AAO training, this was effectively the only strategy that first response police were trained to execute, contain and negotiate and to call for assistance. While first response police were trained that in exigent circumstances, they could resolve a high-risk incident by force, they were provided with no specific techniques or methods to do so. They were expected to improvise, but only in the direst of circumstances. 31. The training package for police consisted of four days - three of which were spent addressing tactics, medical skills, policy changes and conducting Simunition scenarios. The final day was spent conducting live fire training. Police were expected to pass the scenario-based assessment conducted on day three, and both a NSWPF designed scored sequence (which focused on close range defensive type sequences), and a modified version of the standard FBI qualification shoot on the range day. The modified FBI shoot focused on precision and distance. … 34. Essentially, over a period of four months (April to August 2015), the world shifted for police in NSW. In March, 2015, officers understood that they were expected to contain an [sic] high risk situation and wait for specialist police to resolve it. By September, police were expected [to] identify if a containment and negotiation strategy was appropriate, and if it was not, to aggressively enter a location, locate an armed offender and engage them in a potentially crowded environment. The most apt description I have yet heard for an AAO response is 'you are expecting the least trained and equipped police to respond to and resolve an incident that would challenge a well trained and equipped tactical team'. The expectation of most police prior to 2015 was if they were required to discharge their firearm, it would likely be at close range and in the defence of their own life. After 2015, they were expected to aggressively approach a potentially (and probably likely) better armed offender whose sole intention is to kill as many people as possible. Not only might that offender be better armed, they may be employing improvised explosive devices, and while rare, may be operating in concert with other offenders. Officers were instructed that once they had dealt with the offender, they must then attempt to save as many of the injured as possible without the immediate assistance of NSW Ambulance. … 38. As I have set out, the inception and refinement of Active Armed Offender training was a fundamental shift for the trainers who would be required to impart knowledge, assess and certify competency. At the trainers' level Active Armed Offender required a new and different mindset and approach to training. For officers undergoing the training it has meant a significantly increased level of responsibility, and has effectively reversed the policy of always containing a high risk incident and waiting for specialist resources - they are now expected to make critical decisions and intervene immediately when required, without recourse to contacting or waiting for higher ranking officers. NSWPF has benefited by having dramatically expanded the capacity and available pool of personnel to address the threat of an active armed offender, which may occur at any time and location within the state. Individual police benefit because they are now trained in methods of response, rather than being expected to improvise in the dangerous, fast changing environment that is an AAO incident. Police now have the means to respond if faced with the threat of an active armed offender - this alone is likely to result in increased confidence and performance. The Commissioner of Police, government and people of the state of NSW benefit from increased community safety and reduction of the fear of violent crime."

Conclusions - work value sub-principle

1. Having regard to the matters addressed at [91]-[93] above, on its own case the PANSW has not established how the Re-engineering process "has led to a significant net addition to the work requirements of each award classification in respect of which the increase is sought", as referred to in Re Public Hospital Nurses (State) Award (No 4) (see [70] and [81] above). To the extent that the PANSW relies on a "multifactorial case" we repeat the observations at [64]-[73] above.
2. We are not persuaded that changes introduced as a consequence of the Re-engineering process justify an across-the-board wage increase under the work value sub-principle. We will return to consider those changes, and evidence of other structural and organisational changes that have occurred since 2011, in the context of the productivity and efficiency sub-principle.
3. We agree with the PANSW that the Crown's submissions understate the significance of the Active Armed Offender reforms. We also do not consider that they properly reflect the environment in which, and in response to which, they were introduced.
4. We are persuaded that the Active Armed Offender reforms attract the work value sub-principle.

Approach to the sub-principle

1. In relation to the productivity and efficiency sub-principle, in Police No 1 the Full Bench observed: "513. 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."
2. In Re: Application for a New Award for Patient Transport Officers [2017] NSWIRComm 1024 Newall C observed: "27. The respondent submitted that the instant application could not be considered under Principle 8.3 because the quantum of the proposed allowance has not been calculated by reference to identified cost savings, but rather was set by reference to another award of the Commission. I do not see that the Principle requires that there be established a precise relationship between the benefit of an efficiency which will be or has been achieved and the level of an allowance. Indeed, it would be impossible to quantify in dollar terms 'the attainment of the objectives of the employer', which is, as I observe above, a discrete and separate kind of productivity and efficiency measure. Not all efficiencies are quantifiable in dollar terms. The Principle cannot and does not require a dollar-for-dollar balance of an efficiency or a contribution toward competitiveness and/or efficiency in order for an increase to be determined. 27. It must be remembered too that the employees are required to make a 'significant' or 'substantial' contribution to the attainment of the objectives of the employer. Taking 'significant' and 'substantial' to have their ordinary natural meaning, they each mean something less than the whole. Employees are not required to make the whole of any contribution to efficiency or to the achievement of the objectives of the employer that might give rise to a wage increase. That is another reason why a strict dollar-for-dollar assessment of any increase sought is not appropriate. … 29. The employer also advanced that a number of employees - between a third and a half - have not changed their practices, and put that that was fatal to any increase being contemplated. …But more, the Principle does not require that, in a group of employees on whose behalf an increase or improvement in conditions may be sought, each single one of the employees must have made a contribution to efficiency or achieving the employer's objectives. The test is, rather, whether the group of employees on whose behalf the benefit is sought have made that contribution."

Objectives of the NSW Police Force

1. The PANSW submitted: [32] "202. The fundamental objective of the NSW Police Force is clearly stated in s 6(1) of the Police Act 1990: 'The mission of the NSW Police Force is to work with the community to reduce violence, crime and fear'. In this connection, the Full Bench in Re Crown Employees (Police Officers - 2009) Award identified the objective of the Respondent for the purpose of subparagraph (b) of the above summary of principle as follows (at [515] - [516], emphasis added): '515 By reference to sub-paragraph (b) of the extract from the Association's submissions above, the relevant objective of the NSW Police Force for the purposes of the productivity and efficiency sub-principle is the prevention or driving down of crime. In other words, the objective to be taken into account for the purposes of the sub-principle is the reduction of crime. The NSW Police Force is a service-orientated agency and its productivity and efficiency, as we have earlier discussed, must, at least, be measured by reference to the service it provides to the public in respect of the detection and apprehension of criminals, the prevention of crime and the reduction in the incidence of crime. This is clear from the statutory provisions governing the NSW Police Force and how it measures its own performance. 516 In this case, the relevant objective could not be clearer for the subject period (from the datum point to the current date). The State Plan imposed upon the NSW Police Force crime reduction targets, which targets, in and of themselves, thereby became an objective for the purposes of the sub-principle.' 203. The fundamental statutory object articulated in s 6 of the Police Act has not changed since that decision. In the period since 2011, the Respondent has continued to use crime rates (and other clearly identifiable performance measures), as centrally indicative of its performance. … 206. The NSW Police Force is a service-orientated agency and its productivity and efficiency must be measured by reference to the service it provides to the public in respect of the detection and apprehension of criminals, the prevention of crime and the reduction in the incidence of crime. The objective to be taken into account for the purpose of the sub-principle is today, as it was in 2011, the reduction of crime." (Emphasis in original)
2. These submissions were not challenged by the Crown.

Measures on which reliance was placed by the PANSW

1. The measures on which the PANSW placed reliance for the purposes of attracting the productivity and efficiency sub-principle may be grouped into four categories: structural or organisational changes; policy and legislative reform; domestic violence reform; and, technological advancements. We will address each in turn.

Structural and organisational changes

1. Ms Membreno deposed to a number of changes to the organisational structure of the NSW Police Force which had occurred since the datum point of 1 July 2011. These included: 1. the creation of the Police Transport Command in 2012. Previously referred to as the Commuter Crime Unit, the number of officers working in the new Command doubled in three years. The Command works with other commands to provide an increased police presence on all commuter networks and deploys police in significant numbers to target crime hotspots; and 2. the establishment of the Traffic and Highway Patrol Command in 2011/2012, which saw all Highway Patrol resources throughout the State realigned under a single Command structure. The new Command was focused on road safety and traffic policing through intelligence-based and better coordinated police activities, aimed at reducing road trauma. The officers assigned to the Command largely remained physically located in their existing commands.
2. Ms Membreno further stated that in 2013 the NSW Police Force began a process of amalgamating Local Area Commands. The first "tranche" of this process occurred in 2014, which saw eight Sydney metropolitan commands integrated into four new commands. The second "tranche" of the process became known as "Re-engineering", which we have already considered.
3. In the February 2013 edition of the Police Monthly there was an article titled "LAC Amalgamations - What you need to know". That article stated in part: [33] "The NSW Government has announced a raft of changes that will provide additional capacity for the NSW Police Force in the coming years. … These operational initiatives, put forward by the NSW Police Force as part of the Ministerial Audit process, will see additional officers on the front line, boosting pro-active policing and our community response. No Local Area Command will lose authorised strength, service levels will be enhanced and no police stations will be closed as a result of the changes. … Stage One The first stage will see eight Sydney metropolitan commands integrated into four new commands by the end of 2013 with the integration process subject to a thorough evaluation. … The first and second stages are anticipated to return over 100 officer positions currently in management and support positions. Through the attendant reduction in the number of superintendent and inspector positions, a greater number of operational sergeant, constable and other positions will be created."

Policy and legislative reform

1. The PANSW drew the Commission's attention to three particular developments under the heading of "Policy/Legislative Reform". One was the adoption in 2013 by the Police Prosecutions Command of a new "Practice Management Model". In his statement Senior Constable Lee described that reform in these terms: "13. … In 2013, the PPC introduced the Practice Management Model (PMM). The PPM [sic] revolutionised the way in which Police Prosecutors operated. Rather than a prosecutor receiving the brief of evidence the morning of the hearing, the prosecutor was now required to actively interact with a designated command and assume the role of a brief handler. The prosecutor became a resource to be utilised by the command for on the spot general advice, or where appropriate, more considered legal advice. A conduit between legal representatives and the command concerning representations and, an advocate for the reduction in the number of police attending court… 14. The purpose of introducing the PPM [sic] was an increase in service delivery to the field by assigning a police prosecutor to a specific command and then implementing the PMM to quality assure briefs, build relationships with officers at that command and follow defended matters to finality. 15. In terms of efficiency and effectiveness, the prosecutors [sic] involvement with the matter from inception to finalisation, colloquially referred to as a 'cradle to grave' prosecution, increased the quality assurance checking and compliance of the brief. Efficiencies were and continue to be achieved by the now existing ability of the prosecutor to commence discussions with legal representatives earlier in the process. This lead [sic] to the avoidance of matters inappropriately running to hearing and delays on the day of hearing occurring due to negotiations. Prosecutors were able to get timely instruction from Crime Managers and Officers in Charge regarding backup charges. Rostering was positively affected due to the negotiated finalisation of matters and/or withdrawal of matters without the need for a hearing date. With matters being resolved early where possible, the court diary saw a positive reduction in its backlog and operational Police were able to remain on the beat protecting and serving the community rather than being rostered on a court shift. 16. In terms of changes to day to day work practices, this was the most profound change to the way prosecutors operated that the command had experienced. … 17. From a staffing perspective, 64 brief handler positions were absorbed into Police Prosecutions Command as prosecutors took on the brief handler role. This meant an expansion of the role of the prosecutor and the development of the 'cradle to grave' concept. Existing brief handlers whose role was absorbed by the command were offered the opportunity to train as prosecutors thus enabling an expansion of the training unit, an update of the prosecutor education program, the introduction of differing training platforms being both online and face to face and an increased trainee supervisory role for senior prosecutors in the field."

Domestic violence reform

1. The evidence led by the PANSW suggested that domestic violence "is the number-one volume crime type that NSW police deal with". [53] Sergeant Henderson-Smith estimated that it accounts for up to 40% of the work performed by frontline general duties police officers.
2. The PANSW identified two primary reforms relating to the policing of domestic violence which it said attracted the productivity and efficiency sub-principle. The first was described as "Domestic Violence Evidence in Chief" ("DVEC"), which followed the enactment of the Criminal Procedure Amendment (Domestic Violence Complainants) Act 2014 (NSW), which received assent on 28 November 2014. That Act inserted a new s 76A into the Criminal Procedure Act 1986 (NSW), which allowed for evidence for the prosecution to be given in the form of a recorded statement instead of a written statement, if the offence is a domestic violence offence, subject to certain conditions being met.
3. Combined with new technology, known as MobiPol, which is discussed in greater detail below, DVEC enabled police officers to obtain in the field electronic (audio-visual) statements in respect of domestic violence incidents. A large number of the police witnesses called by the PANSW described DVEC and their experiences with it. As the evidence was broadly consistent, it is necessary only to refer to a sample of that evidence.
4. In her statement Sergeant Gorrie deposed: "24. Another recent development in the DV space is the introduction of the Domestic Violence Evidence in Chief reforms. These reforms facilitate the audio and visual recording of the statement of a DV victim at the scene. With the introduction of DVEC in recent years, this has assisted Police to capture evidence not previously able to be captured. There are some associated administrative tasks that can take some time (for example, uploading the video to the View IMS system, and copying to cd [sic] for service on the accused person, is time consuming and extends the time to process the charges). Police are then required to provide a synopsis to prosecutors to be included in the brief of evidence in order to provide the evidence in the DVEC, adding to the time taken to complete briefs of evidence. 25. The benefit, however, in taking a DVEC statement is that it takes considerably less time to obtain as opposed to a handwritten statement in a notebook and then a typewritten statement, which is traditionally how we have obtained the evidence. A DVEC statement generally takes ten to fifteen minutes on average, where a typewritten can take up to an hour or more. This saves time in the evidence gathering stage of the process for the investigation, allowing the investigating officer to continue the investigation and resultant arrest of the offender in a timely manner. This means that, should the outcome result in charges, victim protection is in place quicker. The time benefits are also apparent within the Court setting, with the statement being presented in Court rather than the victim rehashing their evidence on the stand. The DVEC statement stands as their evidence in chief. Not only is that a benefit for the victim, who may find it distressing to relive the events in question, it also provides the Court the ability to see the real reactions of the victim immediately after the incident, without the passage of time to dull the impact of the violence presented at the time of the offence. It gives the Court incredible insight into how the offence has affected the person subjected to it, a clear indication of the injuries and the pain experienced in their untreated form on a real person rather than in a photograph."

Technological advancements

1. The PANSW adduced evidence demonstrating that the work of police officers is constantly evolving to respond to or take advantage of the ever-increasing prevalence of technology such as smartphones and similar devices, and social media. The evidence suggested that while the use of new technology had enabled the NSW Police Force to achieve better outcomes and productivity and efficiency improvements, it had also increased the workload and responsibilities of police officers.
2. An example of this can be seen in the statement of Sergeant Watson, who deposed: "11.3 …This increase in technology in the community, and the potential for important evidence to be contained on those devices, has meant the requirement of Police to be diligent and seize and examine those devices has, over time, resulted in a dramatic increase in the work demands of police when investigating almost any offence. 11.4 The advancement and proliferation of smart devices in homes and within the community, and the increased information stored about people operating in their daily lives, has increased direct evidence towards offences, and the tracking and monitoring of individuals most certainly has had an impact on disrupting criminals and how they go about their business, achieving better outcomes in criminal investigations."
3. Sergeant Webb stated: "16. Mobile phones from 2011 would typically hold 2-8GB of data, which predominantly could be obtained in a relatively straight forward process that will take around 1-2 hours. Modern smartphones can typically store 64-256GB of data and are purposefully built with encryption and strong security to protect this data. The methods to obtain this data are esoteric and non-trivial in difficulty as they are derived from exploits or vulnerabilities discovered. The practicality of this situation is that an examiner is required to manipulate the phone to boot in a special way. The precise way to do so varies, and forms part of the specialised knowledge garnered by the examiner. 17. As each phone manufacturer has developed their own Operating System, as well as their own methods of security, the tools needed to extract data have become technologically mature and complex. Operators of the tools needed to access this information have had to expand their capability and knowledge of how to deal with a wide variety of phones and techniques. …This acquired and nuanced knowledge was not necessary in the Mobile Forensics field in 2011. This has required staff within the [Digital Forensic Unit] to pursue tertiary studies and professional accreditation to maintain currency in this emerging discipline. … 26. Given that modern smartphones are capable of holding data measured in multiple terabytes, this process can be very time consuming, and require the investigator to possess a moderate understanding of technology to interpret the data. Investigators are now required to understand the concepts of GPS locations, Bluetooth connections, Location Services tracking, timeframes for recovering deleted data, current social media applications, and importantly how these concepts fit into the electronic evidence concerning the criminal investigation." (Sic)

Achievement of objectives

1. The PANSW adduced a significant amount of evidence which it submitted "overwhelmingly establishes the NSW Police Force has substantially achieved its objectives over the period since 2011". [62] While there was some demur in the Crown's Closing Submissions, it was not a submission strenuously advanced. On the evidence, we accept the PANSW's submissions in this regard.
2. However, the Crown correctly submitted that meeting objectives does not necessarily equate to an increase in productivity and efficiency. Some credit for the attainment by the NSW Police Force of its objectives may be attributable to the increase in police numbers from 15,806 as at 30 June 2011 to 17,295 as at 30 June 2020, to which Mr Knappick deposed in his statement.
3. At the same time, the Crown led little evidence challenging the evidence summarised above as to the productivity and efficiency enhancements delivered through structural, policy/legislative, domestic violence and technological reforms or changes. At its highest, the Crown's case in this regard is limited to Mr Knappick's evidence. He deposed that some of the reforms undertaken by the NSW Police Force, which are not identified, "have resulted in increased costs". [63] He further stated, in a passage which was admitted into evidence over the objection of the PANSW but subject to the weight to be attributed to it: "66. The introduction of new technology and work practices are inherent in all professional workplaces and particularly in respect of the NSWPF. There are various technological advancements cited in PANSW's evidence, such as, the introduction of MobiPol, Body Worn Video and Random Drug Testing. The introduction of these procedures and equipment in addition to other technological advances are designed to assist officers in meeting the objectives of the NSWPF by improving officers' access to information, reducing the number of incidents and escalation of violence, reducing officer injuries and improving community safety."
4. Even taken at its highest, this passage is not inconsistent with the productivity and efficiency enhancements which the PANSW and its witnesses say arose from the various measures identified in their evidence, as summarised above.
5. It is difficult on the evidence to conclude definitively whether and to what extent any particular measure delivered productivity or efficiency improvements in the NSW Police Force. Cumulatively, though, the evidence supports the proposition that the various measures relied on by the PANSW have to varying degrees enhanced the productivity and efficiency of the police force as a whole.

Employee contribution

1. While the demonstration of productivity or efficiency improvements, or the enhancement of the employer's efficiency, is necessary to attract the sub-principle, it is not of itself enough to warrant an increase under the sub-principle. It must be shown that the measures on which reliance is placed are those "to which employees have made a significant contribution".
2. The sub-principle does not require a party to demonstrate that every employee has made a contribution to every measure which is relied on. At the same time, when the claim before the Commission is for an across-the-board increase to the salaries and salary-related allowances paid under the Police Award, it must at least be shown that employees have made a substantial contribution to each measure.
3. Relying on Police No 1, the PANSW submitted that a significant contribution may be found by an intensification of work that had previously been done. It further submitted: [64] "225. In the result, the various restructures, technological advancements and policy reforms (some supported by legislative reform) from 2011 onwards, described in the Applicant's Tender Bundle and otherwise described by the police who give evidence in the Association's case, have materially impacted on the day to day work of police officers, (by them adopting, amongst other things, a range of new equipment, information systems and other technologies), and have contributed to better police performance, productivity and efficiency. … 315. The Full Bench would be well satisfied that each of the structural, policy/legislative, and technology/equipment reforms identified in the Associations [sic] case have to varying degrees enhanced the productivity and efficiency of the police force as a whole. For the reasons outlined above, by their work in adopting those measures in their day to day work the members of the NSW Police Force have substantially contributed to the NSW Police Force's success in the period since 2011, such that an increase in salary and salary related allowances is warranted under sub-principle 8.3 of the Wage Setting Principles (to the extent they have any ongoing relevance in the face of the Conditions of Employment Regulation."
4. At the outset, we observe that a "significant contribution" is not to be found through employees simply "adopting" changes that might be introduced in the workplace. Something more is required.

Conclusion - productivity and efficiency sub-principle

1. As already stated, we are persuaded that the measures identified by the PANSW have either delivered productivity or efficiency improvements to the NSW Police Force, or have made a substantial contribution towards the attainment of the objectives of the NSW Police Force to become more efficient. While the evidence falls short of establishing a "significant contribution" by employees to every measure on which reliance was placed, for the reasons set out above at [171]-[176] and [185]-[186] above we find that a sufficient case has been made out to attract the productivity and efficiency sub-principle.

COVID-19

1. It is convenient at this point to address the case presented by the PANSW as to the regard we should have to the impact of COVID-19 on the work of police officers, and the extent to which it should influence our determination in these proceedings. A number of the PANSW's witnesses gave evidence in this regard.
2. For example, Senior Constable Piffarelli stated: "19. During my 10 years in the Police force, I have seen an increase in responsibilities and requirements for frontline Police. Police are called the universal problem solvers because of their ability to make a bad situation or system work. When the Covid 19 pandemic hit our state, Police were at the literal front line ensuring that the public were kept safe and those that were flaunting the rules were held accountable. Our officers also lacked appropriate PPE at the beginning of the pandemic and had to make do with reusing masks and other equipment. Police in Orange also had to check on covid positive individuals and even at one point, put themselves into harms way to track down a member of the public who was believed to be covid positive and not self-isolating. The danger that front line police faced wasn't just for them, but for their family as well. Officers were not sure if they would be transmitting the disease to their family when they arrived home from work. Despite this, officers still turned up for work and went about their duty. If it wasn't for the Police response, the infection rate and the death toll would have been a lot higher. The officers on the frontline were forced to learn new laws and powers and enforce them with minimal training and minimal time. …" (Sic)
3. Sergeant Allwood stated: "22. The COVID-19 Pandemic has made me learn new skills and take risks that I couldn't control. I have learnt how to check a person's temperature at work. I actively monitored infected COVID-19 people who were in home ordered quarantine. I door knocked and spoke with them and monitored their health and if they had stayed home. The questions asked were different from normal policing duty, mainly asking health and travel related questions. I would estimate that our first response workload increased 30% at least during the peak of the Health Ministers directions to the public. During this period I was highly concerned that I would bring the virus home to my family, because I was exposed at work." (Sic)

Wage Fixing Principles - APA Application

1. The APA "primarily sought to establish its case under the special case principle". [67] On the application of the Wage Fixing Principles it described the question for determination by the Commission as follows: [68] "Has the applicant discharged its onus to establish facts demonstrating special circumstances that render the conditions of employment in the current award no longer fair and reasonable such that the conditions should be varied?"
2. To establish a special case, the APA relied principally on the impact on paramedics and control centre officers ("PCCOs") of the widespread bushfires in NSW in 2019 and 2020, and the COVID-19 pandemic.

Bushfires

1. The APA's evidence included affidavits from a number of PCCOs who described their experiences during and in responding to the bushfire crisis. Without in any way wishing to detract from the obvious effort that has gone into preparing those affidavits, we find it convenient to adopt the summary of that evidence contained in the APA's Written Outline of Closing Submissions, as follows: "32. In relation to the Bushfires, the Applicant's evidence establishes that: a. All Paramedics across NSW were required to familiarise themselves with a state-wide disaster response plan and local bushfire plans. b. All Paramedics with the rank of Station Officer and above were given extra powers and responsibilities under the Emergency Services Act. c. There was a large increase in respiratory cases and Paramedics improved their skills in this area in response. d. Paramedics underwent a long period of sustained readiness to respond to the bushfires, taking a significant toll on their mental health and fatigue levels. e. Control Centre Officers worked under increased workloads and increased stress. f. Control Centre Officers made significant improvements in their capacity to coordinate with other emergency response agencies and to use advanced communication and geolocation techniques to respond to difficult cases. g. Control Centre Officers took on increased responsibility in providing logistical support to stranded communities and hospitals. h. Due to the scale of the disaster, Paramedics increasingly performed duties that were high-risk and/or normally performed by Special Operation Team (SOT) Paramedics, and thereby increased their experience and capabilities in responding to bushfires and other emergencies. i. SOT and other specialist Paramedics had significantly increased deployments to dangerous bushfire emergencies and as a result have increased their capacity respond to future emergencies, including COVID. j. Paramedics, particularly in lower level management, increased their interoperability capacity with other emergency response agencies." (Footnotes omitted)
2. In his statement, Mr Ipsen described his experiences during the bushfires in these terms: "6. This summer has put me repeatedly in the most dangerous, difficult situations I have been in during my entire career. I was working as a Special Operations Paramedic and on occasion as a Special Operations Team Leader. I was deployed all across the state and have seen SOT and non-SOT Paramedics do incredible things to protect their communities. … 20. We are trained to deal with high-risk environments, but to go into these completely uncontrolled encironment [sic] when your life is at risk is extremely psychologically impactful. The psychological strain was intensified over the protracted bushfire season. I believe it is even worse for non-SOT paramedics, who are compelled to go into increasingly dangerous environments to save lives without training. It can be incredibly traumatic to reflect on the risks that were faced in a situation even if they did not eventuate. 21. You can train as much as you like, but without operational experience you cannot put it into context. We now have an unprecedented level of operational context. Many real-world safety and retrieval lessons were learned. As an organisation we are more equipped for the future. There have been significant Incident Management Team improvements, especially regarding interoperability with other agencies. Many of the frontline managers, myself included, received a huge amount of invaluable experience working with IMTs, rapidly delivering information between NSWA executive and their own staff. These hard fought lessons definietley [sic] had a positive impact on the entire organisation's capacity to respond to the next state-wide crisis, COVID-19."

COVID-19

1. The evidence led by the APA as to the impact of the COVID-19 pandemic on PCCOs is again conveniently and well summarised in the APA's Closing Submissions, as follows: "38. In relation to COVID, the Applicant's evidence establishes that: a. Paramedics have faced unique risks of COVID infection, even amongst the health workforce, due to their role as first responders to triple-zero calls in uncontrolled environments (as opposed to e.g. the hospital environment). The low number of Paramedic transmissions in NSW illustrates the rapidity and effectiveness with which new skills and protocols were incorporated into everyday practice. b. Every Paramedic in NSW has operated under a completely new 'Pandemic Protocol' in relation to every single triple-zero call they respond to. The Pandemic Protocol has required Paramedics to learn and implement new or adapted skills and procedures with respect to every single patient they treat and transport. The Pandemic Protocol requires significant changes to the performance of the following clinical skills with respect to all patients: i. Intranasal Administration ii. Nebulised Medication Administration iii. Endotracheal Administration iv. Oral/Sublingual Administration v. Oxygen Administration vi. Inhaled Medications vii. Intravenous Administration viii. Inspiratory Assistance ix. Bag-Valve-Mask ventilation x. Airway Adjuncts xi. Suction xii. Airway Management xiii. Compressions xiv. Defibrillation xv. Asthma and Salbutamol Metered Dose Inhalers xvi. Verification of Death. The Pandemic Protocol requires significant changes to the following clinical skills with respect to patients with suspected or confirmed positive for COVID: xvii. 2nd and 3rd Stage Labour xviii. Management of Deceased Bodies c. The clinical procedures that have required change due to the Pandemic Protocol include some of the most clinically advanced and complicated emergency procedures that Paramedics perform. In particular, the clinical procedures associated with resuscitation and securing a patient's airway, have been further adapted and complicated due to the risks associated with aerosolization. d. Specialist Paramedics and Control Centre Officers have taken on additional and unique responsibilities and skills, including an entirely new, intensive 5 day training course to equip Intensive Care Paramedics with a new set of clinical skills to address COVID. e. Paramedics have been very effective in adapting to new PPE protocols, despite many changes to protocol during the course of the pandemic, challenges in PPE supply, and the constant discomfort and difficulty of working with PPE donned. f. PCCOs have been required to keep up with a constant stream of new highly important safety and clinical information in relation to every aspect of work including commencement of shift, completion of shift, cleaning of vehicles and equipment, decontamination practices, communication and logistical protocols with hospitals and other health agencies, monitoring of own symptoms, reporting of potential exposure incidents. g. Frontline PCCOs have contributed innovative solutions to the challenges posed by the pandemic that have been adopted across the organisation. h. Significant changes to practice, including the 'Four at the Door' questionnaire required for every triple-zero response the requirement to don PPE, and new transport protocols, have created difficulties in communicating with patients and building positive rapport, who are generally already more anxious than pre-pandemic. i. In addition to the existing high risk of injury, PCCOs now carry the risk of possible infection to their home and their social lives, causing significant stress and changes in out-of-work behaviour. j. There are new requirements to follow uniform and other personal item decontamination protocols, including showering at work. k. There is a significant mental strain on Paramedics associated with the constant need to maintain a high level of suspicion in relation to every patient, maintain new and onerous standards and procedures, constantly expose oneself to risk, constantly worry about the risk of infecting colleagues, family and friends, and the increased level of anxiety amongst patients. Scientific research indicates that the mental health impact of the pandemic on health workers will be significant, with up to half likely to experience significant levels of psychological distress during the pandemic, with a substantial minority going on to develop chronic health problems as a result." (Emphasis in original, footnotes omitted)

The parties' submissions

1. Reflective of Assistant Commissioner Elliott's evidence, the Crown submitted: "62. In light of the findings in the 2020 Salaries Case Decision under the Special Case principle, the APA's claim must necessarily be that circumstances for PCCOs are a different kind of special to other public sector workers whose work has been disrupted by COVID-19. … 68. In reality the basis of the APA's claim for a 2.5% increase is indistinguishable from the cases advanced by the applicant unions in the 2020 Salaries Decision, particularly the cases advanced by the HSU [and] the Australian Salaried Medical Officers Federation ('ASMOF'). 69. There is no dispute that COVID-19 and other emergencies have caused changes to how PCCOs perform their work, particularly concerning infection control measures. However, the fundamental work of PCCOs has not changed even though some protocols and procedures have been altered. PCCOs prior to COVID-19 approached patients on the basis that they may be infectious, and various policies and procedures existed which required infection controls and the use of PPE. 70. Particular risks have always arisen in attending uncontrolled premises, although it is acknowledged that during COVID-19 those risks are heightened. The evidence is that: a. protocols for attending different premises have been revised in light of COVID, such as the 'four at the door' clinical questionnaire, PPE and the like; and b. some paramedics are more anxious about COVID-related risks and the introduction of COVID-related protocols. 71. However, the fundamental work of attending 'uncontrolled' environments is not new, nor is not particularly unique to PCCOs compared to other emergency service workers. 72. The evidence itself is put in broad anecdote-like terms and when properly viewed is evidence of 'learning and applying new procedures, use of new technologies and implementation of additional infection control protocols' (per the HSU's claim in the 2020 Salaries Decision Case summarised by the Full Bench at 56]). 73. The APA's Closing Submissions list a range of procedures that have altered because of COVID-19. These procedures necessarily recognise the possibility that a patient, or deceased person, is infectious - the most obvious procedures being resuscitation, securing airways, verification of death and the like. The APA's evidence does not properly establish how these altered procedures, with their altered infection controls, are so materially different to what they had to do before (noting that the need to deal with the risk that patients may be infectious is not new), nor so materially different to the circumstances of other health workers and other emergency services workers, that they constitute a special case. 74. Further, the APA case appears to rest in large part on an extraordinary year, namely work that, other than COVID-19, in the past to seek to justify an ongoing increase. There is nothing contradictory in submitting that the work done by PCCOs in respect of drought, bushfires and COVID-19 deserves to be publicly applauded, and the conclusion that it does not justify an ongoing increase in rates of pay which will continue well beyond the current year." (Emphasis in original, footnote omitted)

Conclusions regarding special case sub-principle - APA Application

1. We do not accept the Crown's submissions to the effect that COVID-19 did not result in, or has not resulted in, a material change to the work practices and risks - both physical and psychological - for PCCOs. These submissions are inconsistent with the largely uncontroverted evidence of the PCCOs from whom the APA led evidence.
2. We are satisfied that the evidence supports the submissions of the APA reproduced at [211]-[212] above, having regard in particular to the extracts from the evidence reproduced at [204] and [206] above. We are persuaded that the APA has made out a case attracting the special case sub-principle. Moreover, the evidence discloses considerations beyond those which were found to exist in Public Sector Salaries No 2.

Economic considerations

1. As noted above, s 146(2)(b) of the Act requires that when exercising its functions the Commission must have regard to "the state of the economy of New South Wales and the likely effect of its decisions on that economy". A significant proportion of the evidence adduced by the parties, and the greater part of the hearing, was directed towards the economic implications of the Commission awarding, or not awarding, the increases sought in the Applications.
2. At [32] above we set out the principles distilled from previous decisions of the Commission which will guide the exercise of our discretion in these proceedings. These include the approach to be taken to economic considerations as required by s 146(2)(b).

Preliminary observations

1. Before turning to address the economic evidence led by the parties and the submissions derived from it, we make the following preliminary observations.
2. First, the evidence and submissions reflected the largely binary options that the Commission was invited to consider. That is, on the part of the PANSW and the APA, the benefits of awarding a 2.5% increase to the relevant employees which was said to outweigh the costs of doing so, and on the part of the Crown, the benefits to be gained from awarding no increase at all, with the funds "saved" being otherwise applied in measures that would have a greater benefit in repairing the damage to the State's economy caused by the COVID-19 pandemic.
3. We will turn to consider the detail of the parties' cases below. In the meantime, we observe that the result of any cost/benefit analysis (using that term in its broadest sense) that is required will depend upon the nature and quantum of any award that the Commission considers is necessary to set fair and reasonable conditions of employment, that will remain so for the term of the award. This in turn will depend on the evidence that has been provided for the Commission's consideration.
4. Second, the requirement in s 146(2)(b) has generally been regarded by the Commission as a curb on its award-making powers. In Police No 2 the Full Bench observed: "70. When taking into account the public interest, the Commission must also, for that purpose, have regard to 'the state of the economy of New South Wales and the likely effect of its decisions on that economy'. Whilst that requirement (which is found under s 146(2)(b) of the Act) might not always operate in favour of restraint, the long history of jurisprudence in this Commission and its predecessors would indicate that the provision more often operates as the limitation or restraint in the award making function (particularly in relation to wage fixing) and, in that respect, may, to some extent, be seen as a juxtaposition of the provisions of s 10 of the Act. 71. There is a long line of cases in this Commission considering the reconciliation of those provisions. We consider that the observations of the Full Bench in Re Public Hospital Nurses (State) Award (No 4) [2003] NSWIRComm 442; (2003) 131 IR 17 at [233] ('Public Hospital Nurses (No 4') amply set out the relevant principles: As the HAC contended, the Commission is required, pursuant to s 146(2) of the Act, to take into account the public interest in the exercise of its functions and, for that purpose, must have regard, inter alia, to the state of the economy of New South Wales and the likely effects of its decisions on that economy. Hence, even though wage increases may be justifiable under the work value principle, if to grant them were to have an adverse impact on the economy, a case may exist for restraint. The onus of demonstrating the need for restraint would fall on those opposing the increase because unless it can be convincingly demonstrated that real harm will be done to the economy by the granting of any increase, the employees concerned are entitled to receive remuneration commensurate with the value of their work. 72. It follows from this authority that the submission of the Commissioner to the effect that the Commission should have regard to all factors relevant to the determination of the general claim including economic and, more specifically, fiscal considerations and then make a global assessment of what is a fair and reasonable wage to be determined in the circumstances, should be accepted. In this context, the state of the economy, including fiscal considerations (see Crown Employees (2004) at [471]) will be taken into account in the overall assessment but will not be determinative of the Commission's decision: Crown Employees (2004) at [432]. 73. The quantification of any salary or wage adjustment warranted, in accordance with the aforementioned statutory requirements and applicable principle, should not be undertaken by means of a 'mathematical exercise' and will include a 'value judgment' in order to determine appropriate increases in all the circumstances: Crown Employees (1993) at 340 and Crown Employees (Teachers & Ors) [1991] NSWIRComm 14 at 69. The assessment of an appropriate wage adjustment involves, in those circumstances, a matter of 'broad judgment based on a range of relevant circumstances': Transport Workers' Union of Australia v Qantas Airways Limited [2012] FWAFB6612 at [94]."

Overview of the economic evidence

1. There was a large volume of economic evidence led by the parties. We have already itemised the statements and affidavits that were read by the parties, but for ease of reference we observe: 1. the PANSW read two statements of Dr Andrew Charlton, a director of AlphaBeta Advisors Pty Ltd, dated 1 July 2020 and 3 September 2020. These statements attached, respectively, two reports prepared by Dr Charlton and Angela Jackson of Equity Economics dated June 2020 and September 2020; 2. the APA read four affidavits of Dr Richard Denniss, the Chief Economist for The Australia Institute, affirmed on 3 July 2020, 12 August 2020, 4 September 2020 and 24 September 2020. These affidavits attached, respectively, reports prepared by Dr Denniss and David Richardson of The Australia Institute dated July 2020, August 2020, and two dated September 2020; 3. the Crown read: 1. two affidavits by San Midha, Deputy Secretary for the Policy & Budget Group of New South Wales Treasury, affirmed 26 August 2020 and 17 September 2020. Annexed to Mr Midha's first affidavit was a report he had prepared for the proceedings; 2. three affidavits by Stephen Walters, Chief Economist for the New South Wales Treasury, affirmed 29 July 2020, 30 July 2020 and 17 September 2020. Annexed to Mr Walters' first affidavit was a report he had prepared for the proceedings; and 3. three affidavits by Greg Houston, a founding partner at HoustonKemp. Two affidavits were affirmed on 29 July 2020. They were prepared in connection with, respectively, the PANSW Application and APA Application. They each attached a report that had been prepared by Mr Houston in respect of, separately, the PANSW Application and the APA Application. The third affidavit was affirmed on 17 September 2020.
2. The statements and affidavits to which we have referred annexed a large volume of documents in addition to the reports that we have identified. These documents included, but were not limited to, reference material used in the preparation of the reports. Separate to the statements and affidavits, each party also tendered a significant number of documents containing additional information regarding the state of the economy (both national and NSW) and the potential impact on that economy of a determination by the Commission to award either no increase or a 2.5% increase. We do not propose to itemise all of this evidence.

The state of the economy

1. There was little controversy between the parties that COVID-19 has caused significant harm to the NSW and national economies, although there may have been room to debate the precise economic consequences of the pandemic. It is not necessary to traverse those nuances.
2. The Crown tendered into evidence a document which was said to have been created in the process of preparing the Federal Budget for 2020-21. The document is titled "Statement 2: Economic Outlook" ("Economic Outlook"), [77] and is stated on its first page to "present the economic forecasts that underlie the Budget estimates". Under the heading "Overview", in passages with which Dr Charlton largely agreed, the Economic Outlook states: [78] "The COVID-19 pandemic represents the greatest challenge for the global economy since the Great Depression. … The economic effects of the COVID-19 pandemic have already been severe. The spread of the virus and the restrictions implemented to contain it led to historic falls in economic activity and employment globally over the first half of 2020. Economic activity has contracted in almost every economy around the world. … … In line with international experience, the Australian economy is currently in recession as a result of the COVID-19 pandemic; its first in almost 30 years. Real GDP contracted by 7.0 per cent in the June quarter 2020, the largest quarterly fall on record, after a modest fall of 0.3 per cent in the March quarter 2020. There were sharp falls in most components of economic activity over the first half of 2020, as uncertainty about the health and economic outlook increased precautionary behaviour, and travel restrictions and other containment measures affected the ability of consumers and businesses to undertake their usual activities. The effects on the labour market were severe, with around 10 per cent of the labour force losing their job or being stood down on zero hours during the peak of the restrictions in April. As a result, the effective unemployment rate peaked at around 15 per cent in that initial phase of the crisis… … The first tranches of the Government's economic support were effective in mitigating the most severe economic effects of the COVID-19 pandemic. The JobKeeper Payment kept a large share of those workers stood down connected to their employer, while the significant support to incomes continues to support household and business balance sheets. Australia's economic and health outcomes compare favourably with those of most other countries. … There were positive signs in the second half of the June quarter 2020 that a rebound in activity was underway, consistent with the staged easing of containment measures in most parts of the country. Measures of business and consumer confidence had picked up from record lows and measures of consumer spending were recovering. There had also been a noticeable improvement in the labour market, with the effective unemployment rate in July around 5 percentage points lower than its peak in April, accompanied by a significant recovery in average hours worked. … The challenges for the Australian economy from the virus remain significant. Further outbreaks of the virus are likely until a vaccine is developed and widely available. There is also substantial uncertainty surrounding the global and domestic outlook. This stems largely from uncertainty around the spread of the virus and the success of health interventions. Any substantial outbreaks that affect the confidence of households to spend and businesses to invest and employ people remain a key risk to the recovery. There is also significant uncertainty around the timing and efficacy of vaccines and other medical treatments. An earlier-than-expected vaccine poses the most significant upside risk to the outlook. Further, the extent of any longer-lasting economic effects from the COVID-19 pandemic, both domestically and globally, are difficult to predict. There is a risk that the substantial dislocation that has occurred in the labour market could result in persistently higher unemployment than forecast. …"

Matters agreed

1. In addition to a broad consensus on the impact which the COVID-19 pandemic has had on the NSW economy, there was no significant controversy about the following matters: 1. the salaries and salary-related allowances in both the Police Award and the Paramedics Award were increased by 2.5% with effect from 1 July 2019. If regard is had to that increase, and assuming that there is no further increase from 1 July 2020, there will be no reduction in the real wages of the employees over the period 1 July 2019 to 30 June 2021; 2. an increase in public sector wages would have a stimulatory effect on the economy, as would spending money on infrastructure; 3. interest rates are low and are likely to remain so for an extended period; and 4. it would be possible for the NSW Government to fund both its planned infrastructure spending and the increases to salaries and salary-related allowances sought in the Applications by taking on higher debt.

Stimulating the economy

1. As we observed in the summary of the factual context to these proceedings, the Government proposed a one year "pause" in increases to the salaries of public sector employees. This pause was expected to provide estimated net savings in the General Government sector of $3 billion across the four year period starting from 2020-21. Those funds would be applied towards the Infrastructure and Job Acceleration Fund, which would provide stimulus spending in the form of investment in "smaller, shovel-ready projects touching every corner of the state".
2. The Crown submitted: [82] "151. The Respondents in the 2020 Salaries Case submitted and the Respondents in these proceedings submit, that through pausing wage increases across the whole of public sector (for the 2020-21 financial year, or for those who are entitled under a current instrument to a wage increase in that year and possibly later years, in the 12 months following the last increase,) savings of approximately $3 billion will be realised over the next four years; these savings will offset expenditure from a new Infrastructure and Job Acceleration Fund which will provide a greater stimulatory effect on the New South Wales economy than a pay increase to public sector employees and critically, will ensure that the Government's ongoing cost-base is not increased at time when Government revenue has been slashed due to the impact of the pandemic. … 156. The NSW Government's focus for stimulus includes direct job creation through labour-intensive construction projects, leveraging the private sector and non-government sectors to create jobs, and other programs which seek to directly support employment across all sectors. 157. The Government's decision, as announced on 31 May 2020, is to fund shovel-ready capital initiatives with high economic stimulus potential. The aim is to reduce the extent of job losses commencing late 2020, minimise the structural impact of the COVID-19 on the state's economy and support a return to a sustainable growth trajectory." (Emphasis in original, footnotes omitted)
3. As the PANSW submitted: [83] "71. …The gist of the criticism [of Dr Charlton's reports] was that the Government's proposed infrastructure spending represents a better way to stimulate an economy weakened by the pandemic than allocating funds to annual wage increases…"
4. There was significant debate in the proceedings as to the relative stimulatory benefits of a wage increase as opposed to an investment in infrastructure. The question as to which measure would provide the greater stimulus to the economy in the current climate, and indeed, whether a choice between the two options needed to be made, occupied a large part of the economic evidence.

Fiscal considerations

1. In its Closing Submissions, under the heading "Fiscal Responsibility", the Crown submitted: "174. As observed above, the impact of the coronavirus has caused significant revenues and expenditure pressures and will result in a weakening of the NSW's [sic] financial metrics, including the outlook for the State's operating position and debt levels. 175. Through the Fiscal Responsibility Act 2012, the State has a legislated objective to maintain its triple-A credit rating, and to maintain expense growth lower than long-term revenue growth. Rating agencies view a combination of strong operating position, sustainable levels of debt, and commitment to fiscal discipline to be in line with a triple-A rating. 176. The potential consequences of the State having to borrow money to pay for its current expenditure, in an environment where revenues are lower are outlined in paragraph 101 above. Two significant consequences are a downgrade in credit rating, resulting in higher borrowing costs through higher interest rates; and a breach of the Fiscal Responsibility Act. Both consequences have now come to pass. 177. While the Applicant Unions will no doubt continue to argue that the worst is over, that New South Wales has plenty of money available and that the State can readily afford to pay the increases they seek, the very reason the State is in a relatively healthy position (compared to other States and the rest of the world) is due to its commitment to fiscal discipline. This includes, limiting growth in the State's ongoing operating expenses. 178. Adherence to fiscal discipline means that the Government cannot spend on infrastructure to repair the labour market and stimulate the economy as well as give the public sector a wage increase (particularly in circumstances where there is no need to do so to maintain the real value of wages), no matter how much it may like to do so and no matter how much it may wish to acknowledge the efforts of police officers and PCCOs over the period of last summer's bushfires and the COVID-19 pandemic. In the circumstances the Respondents submit that it would be contrary to the public interest for the Commission to award any adjustments to the salaries and salary related allowances provided by the subject awards beyond that awarded in the 2020 Salaries Case Decision." (Footnotes omitted)
2. To the extent that the PANSW and the APA urged the Commission to consider the fiscal implications of the Applications having regard only to their anticipated first year cost, outside of the public sector-wide context in which the Applications were made, we repeat the observations at [45]-[57] above. We do not consider that such an approach would be just or appropriate.

Maintenance of wages

1. In Public Sector Salaries No 2, the Full Bench determined to award an increase of 0.3% in order to maintain the real value of employees' earnings (at [157]-[158]). In doing so: 1. the Full Bench accepted the evidence of witnesses in those proceedings that trimmed mean inflation was the better measure by which to assess any movements in the value of employees' salaries (at [98]); 2. determined (at [107]) that: "…it is appropriate to have regard to the developments since the Relevant Awards were last made or varied. The consideration of the changing value of money over time includes changes which have occurred since the employees last received a salary increase and those which are forecast during the term of the award to be made or varied. This entails the Commission taking into account the wage increases awarded to employees with effect from 1 July 2019 in determining whether the Applicants have discharged the onus they bear to justify any change to the current salaries and salary-related allowances." 1. had regard to movements in trimmed mean inflation since the salaries and salary-related allowances in the relevant awards had been increased (in each case, 1 July 2019), and took into account the quantum of that increase (at [108]-[111]).
2. Having noted in its Final Submissions the approach taken in Public Sector Salaries No 2, the PANSW contended: "51. ... Whilst it is accepted changes in the value of money since the last wage increase was awarded may be relevant, it is submitted that caution should be exercised in mechanically applying inflation measures over that period in the present case. …"
3. The PANSW relied on the decision of Boland J in Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (No 3) (2013) 240 IR 24; [2013] NSWIRComm 109 in support of the submission that the Commission should not take into account the increases to the salaries and salary-related allowances in the Police Award, which were awarded on 1 July 2019, and that the changing value of money should be considered prospectively over the term of the award (1 July 2020 to 30 June 2021). The PANSW drew our attention to the following passages from the decision: "153. The approach taken by the Full Bench in Police Officers (No 2) when deciding the amount of increase that should be awarded was to have regard, prospectively, to the changing value of money over time. In that respect, the Full Bench stated at [121]: [121] Given the conclusion that we shall reach later in this decision that the ultimate award made in this matter will operate for a period of three years, and, further, given that any additional salary adjustments (over the interim award) arising from the general claim will operate from 1 July 2011, then, having regard to the approach adopted in Police Award (No 1) at [545], the Commission will have regard to, for the first year of the award, the inflation rates operating in the period 1 July 2010 to 1 July 2012 and, for the balance of the period of operation of the award, to inflation forecasts corresponding to each successive actual year of the operation of the award; namely, in the second year, the financial year 2012-2013 and for the third year, the financial year 2013-2014. 154. In Police Officers (No 2) the rates of inflation to which the Full Bench had regard in fixing the increases in wages for the three years 2011, 2012 and 2013 were 3.1 per cent (having regard to the whole of the period from the last salary adjustment in 1 July 2010 through to the end of the financial year to 2011), 2.5 per cent and 2.5 per cent respectively."

HSU Submissions

1. It is necessary to address the submissions of the HSU. In its Closing Submissions the HSU contended: "3. …The Full Bench [in Public Sector Salaries No 2] determined that 0.3% would be the most appropriate pay rise to ensure the effective class of employees didn't see a real loss in the value of their wages to the 2021 financial year that would have occurred if the Commission awarded 0%. 4. Applying this same calculation to the current proceedings, the updated figures would result in the correct wage rises for paramedics and police officers to be, in fact, 0% as the predicted value of real wages in 2021 has been increased and there is no longer a need to offset for the previously forecasted [sic] reduction. 5. This necessarily means the decision before the Full Bench is one of the following: a. The Full Bench applies out of date economic forecasts to ensure paramedics and police officers have access to the same 0.3% award as the remainder of the public sector. b. The Full Bench would be consistent in their reasoning, applying the updated forecast, and award paramedics and police officers with 0%. c. The Full Bench finds that this class of public sectors [sic] workers has a special set of circumstances and applies a wholly unique decision, separate from the Salaries Case. … 13. It is to be assumed that the economic evidence will weigh heavily on the decision before the Commission in these proceedings as they did in the Salaries Case. 14. It will likely be concluded by the Commission that the use of the funds that the NSW Treasury seeks to recover from the freezing of public sector wages is best used in other projects which will have a more stimulatory and/or multiplying effect. … 26. The Commission's decision in the Salaries Case will likely apply in this matter as well, and the only remaining questions is [sic] whether the Commission will apply the updated fiscal forecasts and award 0%, or find some form of judicial logic to award these proceedings with the same 0.3% as the Salaries Case. In any event, either conclusion is unfair and unreasonable in the best of times and is certainly cruel after the events of 2020." (Footnotes omitted)
2. With respect, the submissions misapprehend the task of the Commission in these proceedings. As we have already stated at [45]-[49], while we have endeavoured to apply our discretion in this manner consistent with the principles enunciated, and approach taken, in Public Sector Salaries No 2, we are not bound to blindly apply the outcome in that case to either of the Applications. They fall to be determined on the cases presented by the parties.

Economic considerations - conclusions

1. Consistent with the finding of the Full Bench in Public Sector Salaries No 2 at [15] we are satisfied that the evidence demonstrates a need for restraint in the particular circumstances of the 2020-21 financial year. That restraint does not, however, preclude any increase being awarded.
2. To the extent that the Commission is persuaded that a case has been made out for an increase in rates of pay or another award, we have had regard to the following considerations in particular: 1. the consensus between the parties that the Crown could fund both its planned investment in infrastructure through the Infrastructure and Job Acceleration Fund and the increases sought in the Applications through additional funding; 2. without detracting from our observations at [45]-[57] above, the absence of any relevant contest that, if considered in isolation, increases in the amount sought in the Applications would have only a marginal impact on the State's economic position; and 3. an increase in the salaries and salary-related allowances in the Police Award and the Paramedics Award would have a stimulatory effect on the economy (even if, in turn, it might only be considered to be marginal and there may be other stimulus measures which have greater effect).

Determination

1. To succeed on the Applications, the onus is on the PANSW and the APA to demonstrate that the terms of the Police Award and the Paramedics Award respectively are not fair and reasonable, and that they will not be so for the duration of the award (until 30 June 2021) unless salaries and salary-related allowances are increased by 2.5% with effect from 1 July 2020. The PANSW and the APA have each only partly discharged their onus.

PANSW Application

1. The PANSW has established that the nature and extent of changes in the work of police officers since the datum point, reflected in our findings as to the application of the work value and productivity and efficiency sub-principles, justifies an increase to the salaries and salary-related allowances contained in the Police Award. To that extent, the Police Award does not currently set fair and reasonable conditions of employment in that it does not reflect changes to the work value of police officers, or their contribution to productivity and efficiency improvements, since 1 July 2011.
2. While the evidence calls for restraint in the particular circumstances of the 2020-21 financial year, this should not preclude the Police Award being varied to ensure that its terms are, and remain during its term, fair and reasonable. As observed by the Full Bench in Public Sector Salaries No 2 at [42]: "There is nothing remarkable in the proposition that the Commission would be loath to permit employees to be paid at a rate less than the value of their work, and that cogent reasons would be needed to justify why it was in the public interest that such an outcome should result."
3. We do not accept that an increase of 2.5% is justified on the evidence or that it would, in all of the circumstances, be in the public interest. We have decided to award an increase of 1.75%.
4. In making this determination we have taken into account the Crown's submissions that it would be open to the Commission to find that an increase of 0.3%, as awarded in Public Sector Salaries No 2, would be appropriate to create equality across the public sector (see [7] above).

APA Application

1. The APA submitted: "83. … i. The Applicant has discharged its onus to establish special circumstances that render the existing conditions of the Award no longer fair and reasonable, on the basis of the transformations to PCCO work as a result of the bushfires and particularly COVID. These changed circumstances and changes to work, justify the wage increases sought."
2. We accept that the combined effect of the bushfires and the COVID-19 pandemic attract the special case sub-principle. We are not persuaded that the evidence justifies an increase of 2.5% to the salaries and salary-related allowances in the Paramedics Award, but an award to PCCOs is warranted. In determining the quantum of any award we have again had regard to the need to exercise restraint in the particular circumstances of the 2020-21 financial year.
3. We recognise that the world has not seen the end of the pandemic, and that PCCOs will continue to confront the changes and challenges posed by COVID-19, to which we have referred, for an indefinite period. Assistant Commissioner Elliott deposed under cross-examination: [94] "Q. Just in relation to COVID, I think we would all agree, wouldn't we, with Dr Morgan that COVID doesn't seem to be going anywhere fast, would you agree with that? A. It's not going away anywhere fast, no. Q. The fact that it is still here and is continuing to be here, means that the sorts of efforts that you talk about, ambulance officers having taken, will continue to need to be taken, is that correct? A. That's correct. Q. I think too you fairly state at paragraph 20 that there has been ongoing stress felt by New South Wales Ambulance staff from the COVID crisis? A. I did. Q. You also pointed out at paragraph 21 that ambulance has introduced significant practice changes since onset of the pandemic. When you talk about significant practice changes, what does that mean within the ambulance service? A. There's, there's a heightened requirement for such thing as personal protective equipment and in particular, about observing a heightened level to ensure their safety and reduce or minimise the other chance of exposure. Q. Would it be fair to say in broad that it's been an extraordinary conjunction of events but the ambulance service and its staff has risen to the occasion, would that be a fair summation of your evidence? A. Yes, it is. Q. It would also be a fair summation of your evidence too, wouldn't it, that significant lessons have been learnt by the ambulance service in how to deal with these sorts of events? A. Yes it is ongoing learning, that's correct. Q. When you talk about ongoing learning, you're also talking about how that experience will carry forward into the future, aren't you? A. Yes."

Effective date of increases

1. Clause 6.1(e) of the Regulation provides as follows: (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).
2. However, this clause does not apply "if the relevant parties otherwise agree or there are exceptional circumstances": cl 6.2.
3. In Maan v Minister for Immigration and Citizenship (2009) 179 FCR 581, Branson J observed: "51. Although the expression 'exceptional circumstances' is not defined in the Regulations it has been the subject of consideration in numerous cases. Assistance in interpreting the expression can be found in comments of Lord Bingham of Cornhill CJ in R v Kelly (Edward) [2000] 1 QB 198 at 208 as follows: We must construe 'exceptional' as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered. …"
4. This passage from Maan was cited with approval by the Full Bench in Re Crown Employees (Public Sector - Salaries 2011) Award (No 3) at [48].
5. In Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290 Campbell JA, with whom Handley AJA and Tobias JA agreed, observed: "66 Another question of construction concerned 'exceptional circumstances' in rule 31.18(4). In San v Rumble (No 2) (2007) NSWCA 259 at [59]-[69], I gave consideration to the expression 'exceptional circumstances' in a different statutory context to the present. Without repeating that discussion in full, I shall state such of the conclusions as seem to me applicable in the construction of rule 31.18(4). (a) Exceptional circumstances are out of the ordinary course or unusual, or special, or uncommon. They need not be unique, or unprecedented, or very rare, but they cannot be circumstances that are regularly, routinely or normally encountered: R v Kelly (Edward) [2000] 1 QB 198 (at 208). (b) Exceptional circumstances can exist not only by reference to quantitative matters concerning relative frequency of occurrence, but also by reference to qualitative factors: R v Buckland [2000] 1 WLR 1262; [2000] 1 All ER 907 (at 1268; 912-913). (c) Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors, or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional: Ho v Professional Services Review Committee No 295 [2007] FCA 388 (at [26]). (d) In deciding whether circumstances are exceptional within the meaning of a particular statutory provision, one must keep in mind the rationale of that particular statutory provision: R v Buckland (at 1268; 912-913). (e) Beyond these general guidelines, whether exceptional circumstances exist depends upon a careful consideration of the facts of the individual case: Awa v Independent News Auckland [1996] 2 NZLR 184 (at 186)."

Orders

1. The Commission orders that: 1. there be a 1.75% increase to the salaries and salary-related allowances in the Crown Employees (Police Officers - 2017) Award, with such increase to take effect from the first full pay period on or after 1 July 2020; 2. there be a 0.3% increase to the salaries and salary-related allowances in the Paramedics and Control Centre Officers (State) Award, with such increase to take effect from the first full pay period on or after 1 July 2020; and 3. employees covered by the Paramedics and Control Centre Officers (State) Award receive a payment equal to the difference between $1,000 and 0.3% of their annual base salary under that Award at the rate immediately prior to the increase required by Order (2), such payment to be made within 28 days.
2. The Commission directs that: 1. the PANSW prepare short minutes of order in matter 2020/151448 to give effect to the Commission's Order at [319(1)] above; 2. the PANSW confer with the Commissioner of Police as to the content of the proposed short minutes of order; 3. the APA prepare short minutes of order in matter 2020/160506 to give effect to the Commission's Order at [319(2)] above; 4. the APA confer with the Health Secretary and the HSU as to the content of the proposed short minutes of order; and 5. no later than 4.00pm on Friday, 28 May 2021 the PANSW and the APA each file with the Registry of the Commission the short minutes of order they propose, together with a document identifying: 1. those proposed short minutes of order which are agreed by the relevant parties; and 2. those proposed short minutes of order which are not agreed by the relevant parties, and stating the basis of the disagreement between the relevant parties.

Endnotes

1. 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.
2. By s 116(3) of the Health Services Act 1997 (NSW) the Health Secretary may, subject to that 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. To assist with comprehension, we observe that this decision was variously referred to by the parties in their submissions as the "Public Sector Salaries case" (APA), the "Salaries Case" (HSU) and the "2020 Salaries Case Decision" (Crown)
4. Crown's Closing Submissions at par 9
5. PANSW Final Submissions at par 24 fn 32
6. ibid. at par 26
7. APA Written Outline of Closing Submissions
8. PANSW Final Reply Submissions
9. Affidavit, San Midha, 26 August 2020, Tab C(1)
10. Exhibit Crown 5, Tab C(12) at p 132
11. Exhibits PA41 and PA42
12. Exhibit PA43, Tab1 at p 2
13. Exhibit PA42
14. PANSW Final Submissions at par 101
15. Tcpt, 13 November 2020, p 321(28-38). We observe that one of the documents in evidence was a report prepared by Dr Denniss and David Richardson of The Australia Institute dated July 2020, which was premised on an assumption that the median base annual income for the workforce covered by the Paramedics Award was $75,726.56 and that the median paramedic will receive an additional 15% on top of base income for penalties and overtime (a total of $87,085.54). In light of the findings we have made, it is not necessary to explore whether there is a meaningful difference between "average" and "median" incomes under the Paramedics Award.
16. APA Written Outline of Closing Submissions at par 51
17. Crown's Closing Submissions at par 153
18. APA Written Outline of Closing Submissions at par 19
19. Tcpt, 18 December 2020, p 419 (23-24)
20. Crown's Closing Submissions
21. The other restructuring projects or changes about which evidence was led were relied on by the PANSW in support of its claim under the productivity and efficiency sub principle, to which we will return.

Amendments 03 May 2021 - Correction of typographical error in headnote. 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: 03 May 2021