Australian Education Union v Department of Education and Children's Services

Evidence 12Mr S Crawford, who appeared for the AWU, read a statement of Mr John Smith, who commenced employment with the Department of Main Roads, in September 1988 as a road worker. Mr Smith stated that he injured his right shoulder at work on 24 August 2011. He was unfit for any work from the date of this injury until 4 February 2013, when he returned to work on light duties. 13On 16 January 2012, Mr Smith received a letter from QBE Insurance advising him that his weekly compensation payments would reduce to $424.50 per week. This was approximately $500.00 less than he had been receiving per week. He contacted the Human Resources Section of RMS to enquire why his income had decreased. He was advised that as more than 26 weeks after his injury had elapsed, his compensation payments automatically reduced. He was advised that he could apply, in writing, to access his sick leave to top-up his workers' compensation payments. 14Mr Smith stated that on 20 February 2012, he made an application to top-up his compensation payments. He commenced receiving compensation payments and sick leave payments from RMS from 17 March 2012 until his sick leave was exhausted, which "was around April 2012". He then started using his annual leave and long service leave to top-up his compensation payments. 15Mr Smith stated that his ability to top-up his compensation payments allowed him to keep meeting his mortgage repayments and other financial commitments. If he had only been receiving his compensation payments, he stated that he would have had to sell his house. He was seeing a psychologist during this period because of the stress he was suffering from not working and not being certain about his income into the future. He stated that the receipt of top-up payments had no effect on his recovery. Nor did the receipt of these payments discourage him from returning to work. They simply allowed him to meet his financial commitments. 16Mr B Docking of counsel, who was granted leave to appear on behalf of Unions NSW, and the Transport Workers' Union of Australia (NSW Branch), tendered copies of the following: (1)NSW Premier & Cabinet - M2011-10 NSW Public Sector Wages Policy 2011. (2)NSW Government Public Service Commission - Personal Handbook Version 12.4, which relevantly provided in clauses: 5-6.6.3 Payment for leave during the first 26 weeks BEFORE THE INSURER ACCEPTS LIABILITY When an employee sustains an injury or illness that may give rise to a claim for workers compensation and that employee is rendered unfit for work, available sick leave, followed (if requested by the employee) by recreation or extended leave to credit may be granted until the employee returns to work or until the claim is accepted by the insurer, whichever is the earlier. AFTER THE INSURER ACCEPTS LIABILITY If there is provisional acceptance of liability or the claim has been accepted by the insurer, leave granted pending determination of the claim is to be recredited and the period is to be recorded as workers compensation leave. Payment during the workers compensation leave is to be at the usual rate of pay to a maximum gross per week amount, or as advised by the WorkCover Authority from time to time. USE OF ACCRUED LEAVE FOR DIFFERENCE If the usual rate of pay exceeds the maximum compensation amount advised by WorkCover, the difference between the compensation payable and usual pay may be made up from accrued sick leave, recreation leave or extended leave, if the employee so desires. ... 5-6.6.4 Payment for leave after 26 weeks ... USE OF ACCRUED LEAVE FOR DIFFERENCE If the insurer continues to accept liability and accrued leave credits have not been exhausted, the injured employee may continue to be granted any accrued sick leave to make up the difference between compensation payable and usual salary. If they so elect, the injured employee may also continue to take accrued recreation or extended leave credits to make up the difference.

History of workers compensation top-up clauses 17It was common ground that the top-up sick leave provision in the current Award, which I have earlier set out in this decision, was not a unique provision and was found in various other public sector, transport and health sector Awards. Not all of the provisions were identical to those in the current Award. For example, some provisions do not expressly refer to "26 weeks" or to the "Workers Compensation Act 1987". 18The workers compensation top-up clauses apply in conjunction with the Workers Compensation Act 1987 ("WC Act"). This Act contains what may be described as "step down provisions" in weekly compensation benefits paid to an injured worker after a prescribed number of weeks of incapacity: see for example, s 37 of the WC Act. In short, the WC Act compensates injured employees at normal salary for up to 26 weeks. 19The Workers Compensation Scheme in New South Wales changed on 1 October 2012, with the introduction of the Workers Compensation Legislation (Amendment) Act 2012 ("WC Amendment Act"). 20The WC Amendment Act imposed a markedly different weekly benefit regime by replacing the provisions concerning weekly payments of compensation contained in Pt 3 of the WC Act. For the majority of workers, weekly payments are now to be paid at the rate of 95 per cent of the average weekly earnings up to 13 weeks: s 36 of the WC Amendment Act. 21From 14 weeks, injured workers are paid at 95 per cent or 80 per cent of their average weekly earnings, depending on whether they have a work capacity and are working: s 37 of the WC Amendment Act. 22In moving that the Bill be read a second time, the Hon M Baird, Treasurer and Minister for Industrial Relations, stated (see New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 19 June 2012 at 13015): The Workers Compensation Legislation Amendment Bill represents a fundamental shift towards properly meeting the needs of the most seriously injured workers in the scheme while strongly incentivising return to work for those workers who have the capacity to return to work. The Government is committed to ensuring that the income, support and treatment needs of seriously injured workers are met, and the bill will increase the weekly benefits paid to the most seriously injured workers while ensuring such workers have benefits until retirement if they cannot return to work. The Government is taking steps also to ensure insurers direct more resources to support injured workers to improve their return-to-work outcomes and will focus on reducing the costs of insurers, which also are impacting on the scheme. ... ... The Government released an issues paper entitled "NSW Workers Compensation Scheme" with its proposed reform based on seven principles. Firstly, enhance New South Wales workplace safety by preventing and reducing incidents and fatalities; secondly, contribute to economic and jobs growth, including for small businesses, by ensuring that premiums are comparable with other States and there are optimal insurance arrangements; thirdly, promote recovery and the health benefits of returning to work; fourthly, guarantee long-term medical and financial support for seriously injured workers; fifthly, support less seriously injured workers to recover and regain their financial independence; sixthly, reduce the high regulatory burden and make it simple for injured workers, employers and service providers to navigate the system; and seventhly, strongly discourage payments, treatments and services that do not contribute to recovery and return to work. The report of the joint select committee and these seven key principles have informed the Government's approach to reform the New South Wales workers compensation scheme. I refer now to the bill that seeks to amendment the provisions of the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998 with amendments ordered in 12 schedules. Firstly, in the area of weekly payments of compensation, the bill makes important changes to the current weekly payments provisions of the Workers Compensation Act. These changes aim to provide support to workers in the initial period following an injury, and encourage them to return to work once they are recovered. The changes implement recommendation 6 of the joint select committee report and are consistent with the recommendation of the report.

RMS's contentions 23RMS submitted that cl 6.5.2(b) of the existing Award was rendered obsolete by the changes introduced by the WC Amendment Act. 24Mr Prince submitted firstly, that if the workers compensation top-up clause was to remain in the Award, it will lead to a result where employees would receive the legislatively prescribed amount for 13 weeks, after which a lesser rate would apply, but then, 13 weeks later at 26 weeks, the employee could access the Award provisions to start topping up the workers compensation payments. 25Secondly, counsel submitted that the WC Act details the compensation for an employee on workers compensation. Industrial regulation in the form of an award made under the IR Act, which concerns the same subject matter as another Act (the WC Amendment Act) should be made in a way which was consistent with the legislation to ensure consistency in the law. 26Thirdly, Mr Prince submitted that workers compensation top-up provisions in awards, do not advance the intention and objects of the changes affected by the WC Amendment Act which seek to support recovery and encourage earlier return to work by employees who have been injured at work.

AWU and Unions NSW contention 27In summary, the AWU and Unions NSW, while acknowledging that the WC Amendment Act introduced new statutory step-down provisions in respect of weekly payments, contended nothing in these amendments abolished, or limited, top-up sick leave award provisions. 28Mr Docking submitted that no conflict existed between the WC Amendment Act and cl 6.5.2(b) of the Award. If sufficient sick leave was available, the statutory rate of weekly compensation payments payable pursuant to s 37 of the WC Amendment Act may still be topped up if an injured worker had no work capacity, or had a reduced capacity for more than 26 weeks.

Consideration 29The issue for determination is whether the Commission should include, in the proposed Award, a provision that permits an employee who sustains an injury or illness that may give rise to a claim for workers compensation, the right to access accrued sick leave to be used to make up the difference between any compensation payable and the employee's usual salary (workers compensation top-up). 30The current Award includes a provision at cl 6.5.2(b) which enables an employee if he or she is absent from work for more than 26 weeks, and has sufficient sick leave available, to use that sick leave to top up the difference between any workers compensation payments and the employee's ordinary rate of weekly wage, less any shift leave loadings or other penalties. This is not a unique type of award provision made under the IR Act: see for example, Public Hospital Career Medical Officers (State) Award; Crown Employees (Public Service Conditions of Employment) Award 2009 and Crown Employees (Public Service Conditions of Employment) Award 2009 and Transport Service of New South Wales Salaries and Conditions of Employment Award 2011, all of which contain workers compensation top-up clauses. 31The WC Act contains what I have described as "step-down" provisions in weekly compensation benefits paid to an injured worker after a prescribed number of weeks of incapacity (26 weeks): see s 37 of the WC Act. 32The WC Amendment Act made provision for new "step-down" provisions in the amount of weekly statutory compensation benefits paid to an injured worker and different prescribed periods of incapacity before a step-down. 33Section 36 now provides that for the majority of workers weekly payments to be paid at the rate of 95 per cent of the average weekly earnings up to 13 weeks. Section 37 provides that from 14 weeks, weekly payments are paid at either 95 per cent or 80 per cent of the employee's average weekly earnings, depending on whether the employee has capacity for no current work, or a current work capacity that has enabled the employee to return to work for more than 15 hours per week, or less than 15 hours per week. 34It is immediately obvious that the WC Amendment Act deals with a different issue to the top-up provisions found in the Award. So much was conceded by RMS who did not contend that there was a conflict between the IR Act, which is facilitative and permissive and the relevant parts of the WC Amendment Act, to which I have just referred. 35It is clear that the WC Amendment Act introduced a new statutory step-down provision in respect of weekly payments of statutory compensation and different prescribed periods of incapacity. However, I can find nothing in these amendments which abolish or limit top-up sick leave award provisions. 36In my view, the workers compensation top-up award provisions continue to serve a beneficial purpose and have a role of maintaining or protecting the income paid to an injured worker by topping up the statutory weekly compensation rate using the injured worker's sick leave entitlement. 37I therefore reject the contention that cl 6.5.2(b) of the Award is rendered obsolete by the amending legislation. In my view, there is no conflict between the amending legislation and cl 6.5.2(b) of the Award. If sufficient sick leave is available, the statutory rate of weekly compensation payments payable under s 37 may still be topped up if an injured worker has no work capacity, or a reduced capacity for more than 26 weeks. 38If the legislature wished to abolish or limit such award provisions, it would have been a simple matter to expressly legislate for that to occur. It has not done so. 39Section 50 of the WC Act recognises a distinction between and the existence of "any wages for sick leave under any Act (Commonwealth or State), award or industrial agreement under any such Act or contract of employment" and on the other hand "compensation" which is defined to mean weekly payments of compensation: see Pt 3, Div 2 Weekly compensation by way of income support. 40In Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales and Department of Education and Communities [2013] NSWIRComm 32, the Full Bench (at 26) stated "legislative history is a factor relevant to the consideration of the context of a provision". In the present matter, the history of the step-down provisions in the WC Amendment Act are therefore relevant. 41Boland J, President, in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v NSW Department of Education and Communities [2012] NSWIRComm 96, considered the purposes of the Regulation and stated at [70] - [73]: [70] In order to determine the purpose of 146C and the Regulation made under that section, it is necessary to consider the policy referred to in those statutory provisions. That policy is the "NSW Public Sector Wages Policy 2011". [71] The Wages Policy is essentially aimed at containing public sector labour costs by imposing a ceiling on employee related cost increases of 2.5 per cent per annum. Any increases agreed to or awarded by the Commission beyond 2.5 per cent must be offset through "employee related cost savings". [72] The focus of the Wages Policy is at the agency level and is primarily concerned with collective outcomes rather than individual arrangements and the Policy operates in the context of ongoing employer/employee relationships. For example: (a) employee related cost savings are savings "that involve a significant contribution from public sector employees and generally involve direct changes to a relevant industrial instrument, work practices or other conditions of employment" (5.2.2); (b) "Remuneration and other conditions of employment must be negotiated concurrently and, where possible, contained in a single, comprehensive industrial instrument" (6.1.5); (c) all awards and agreements shall contain a no extra claims clause whereby: The parties agree that, during the term of this [award/agreement], there will be no extra wage claims, claims for improved conditions of employment or demands made with respect to the employees covered by the [award/agreement] and, further, that no proceedings, claims or demands concerning wages or conditions of employment with respect to those employees will be instituted before the Industrial Relations Commission or any other industrial tribunal (6.1.6); [73] Paragraphs 7.1 and 7.2 of the Wages Policy sets out measures from which employee related cost savings may arise (7.1) and examples of employee related cost savings (7.2). All of the matters referred to are in the context of how employees may contribute to increased productivity and efficiency through changes essentially to working conditions and conditions of employment: 7.1. As a guide, measures from which employee related cost savings may arise include: 7.1.1. where they result in direct changes to the provisions of an industrial instrument or to working conditions including changes to staffing levels, human resource policies, rostering arrangements, workforce composition, work intensity or job redesign, provided they lead to savings 7.1.2. changes to conditions of employment which increase employee productivity and which will be realised as a cost saving 7.1.3. the expansion of the scope of work public sector employees perform in ways that enhance their productivity and realise savings 7.1.4. the agreed implementation or modification of workforce management policies which result in better utilisation of staff. 7.2. Examples of employee related cost savings include: 7.2.1. changes to rostering arrangements to better reflect customer service 7.2.2. increases to normal working hours that involve direct customer interaction 7.2.3. reduction in the days of absence allowable before a medical certificate is required 7.2.4. requiring a minimum period of leave every 12 months to reduce leave liabilities 7.2.5. limiting access to 'top up' sick leave 7.2.6. reduced accrual of leave during unpaid sick leave 7.2.7. limiting access to transferred employees compensation payments 7.2.8. call backs within 4 hour periods not to attract additional payment 7.2.9. higher duties allowances only paid after a minimum of 5 days acting 7.2.10. reduction in the accrual of maximum rostered days off 42The legislature had before the enactment of the WC Amendment Act, identified the existence of sick leave top-up award provisions in the NSW Public Sector Wages Policy 2011, June 2011, NSW Premier & Cabinet (Wages Policy 2011). 43The Commission is therefore entitled to take into account, in interpreting the WC Act and the WC Amendment Act, that the amendments did not intend to abolish or limit top-up award provisions. 44The Wages Policy 2011 at 7.2.5, as referred to by Boland P in the above judgment, recognised the existence of top-up sick leave award provisions. The Policy relevantly states: 7.2. Examples of employee related cost savings include: ... 7.2.5. limiting access to 'top up' sick leave 45Despite the acknowledgement of the existence of top-up sick leave, the legislature in the WC Amendment Act, which received assent on 27 June 2012, did not deal with such award provisions expressly, or, in my view, by necessary implication. 46Although the NSW Government Public Service Commission - Personal Handbook relates to conditions of employment in the NSW Public Service and not the public sector, it provides at s 5-6.6.3 under Payment for leave during the first 26 weeks as follows: Use of accrued leave for difference If the usual rate of pay exceeds the maximum compensation amount advised by WorkCover, the difference between the compensation payable and usual pay may be made up from accrued sick leave, recreation leave or extended leave, if the employee so desires. If the employee elects not to take accrued leave credits to make up the difference between compensation and usual pay, then payment is to be limited to the maximum compensation rate and records are to be noted accordingly. 47Section 5-6.6.4 Payment for leave after 26 weeks relevantly provides: Use of accrued leave for difference If the insurer continues to accept liability and accrued leave credits have not been exhausted, the injured employee may continue to be granted any accrued sick leave to make up the difference between compensation payable and usual salary. If they so elect, the injured employee may also continue to take accrued recreation or extended leave credits to make up the difference. 48RMS contended that the workers compensation top-up provisions do not advance the intention and objects of the changes affected by the WC Amendment Act. The essence of Mr Prince's submission was that the legislation was designed to strongly incentivise return to work for those workers who have the capacity to return to work after being injured during the course of their employment. 49The interpretation and determination of the purpose of the Statute or a particular statutory provision was recently considered by the Full Bench in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales and Department of Education v Communities (at [24]). In that case, the Full Bench referred to three decisions of the High Court of Australia, namely, Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Thelander [2012] HCA 56; (2012) 293 ALR 214; Australian Education Union v Department of Education and Children's Services [2012] HCA 3; (2012) 285 ALR 27; Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 22 IR 445, which considered the principles of statutory construction. 50The principles distilled by the Full Bench from these authorities were: (1) The legal meaning of a provision of a statute is to be ascertained by processes of statutory construction: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J. Thus, the fundamental object of statutory construction is to ascertain legislative intention: Certain Lloyd's Underwriters at [88] per Kiefel J. However, the use of the metaphor 'legislative intention' must not mislead. This expression must be understood as the intention that the courts will impute to the legislature by a process of construction: Certain Lloyd's Underwriters at [88] per Kiefel J. The duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J (applying Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; (1998) 72 ALJR 841; (1998) 153 ALR 490 at [78] per McHugh, Gummow, Kirby and Hayne JJ); (2) Ordinarily, the legal meaning of a provision of a statute will correspond with the grammatical meaning, but not always: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J and at [68] per Crennan and Bell JJ (applying Project Blue Sky at [78] per McHugh, Gummow, Kirby and Hayne JJ). Nontheless, the process of statutory construction must begin with a textual analysis of the words of a provision - that is, a consideration of the ordinary and grammatical meaning of the words: Australian Education Union at [26] per French CJ, Hayne, Kiefel and Bell JJ; Barclay at [41] per French CJ, Crennan, Gummow and Hayne JJ; Certain Lloyd's Underwriters at [23] per French CJ and Hayne J. Although that initial step may involve the construction of the words of a provision in question when read in the context of the statute as a whole: Certain Lloyd's Underwriters at [88] per Kiefel J. Thus, the legal meaning is ascertained by reference to the language of the statute viewed as a whole: Certain Lloyd's Underwriters at [26] per French CJ and Hayne J and [88] per Kiefel J. The purpose of the statute resides in its text and structure: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J; (3) Context may also be considered "in a broader sense as including the general purpose and policy of the legislation, in particular the mischief to which the statute is directed and which the legislature intended to remedy.": Certain Lloyd's Underwriters at [88] per Kiefel J; (4) The context and purpose of a provision are important to its proper construction. Legal meaning may be ascertained by reference to general purpose, consistency and fairness: Certain Lloyd's Underwriters at [24] per French CJ and Hayne J; (5) The determination of the purpose of a statute or a particular statutory provision may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, if appropriate, reference to extrinsic materials: Certain Lloyd's Underwriters at [25] per French CJ and Hayne J. Whilst consideration of extrinsic materials should not displace the clear meaning of the text of a provision, the purpose of a provision may be elucidated by appropriate reference to them: Certain Lloyd's Underwriters at [70] per Crennan and Bell JJ; (6) It is conceivable that the context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with their literal or grammatical meaning: Certain Lloyd's Underwriters at [68] per Crennan and Bell JJ quoting Project Blue Sky at [78] per McHugh, Gummow, Kirby and Hayne JJ; (7) Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted: Certain Lloyd's Underwriters at [25] - [26] per French CJ and Hayne J and [70] per Crennan and Bell JJ. In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose: Australian Education Union at [27] - [28] per French CJ, Hayne, Kiefel and Bell JJ. 51I have earlier set out relevant extracts from the Second Reading Speech. In my view, the Second Reading Speech does not support RMS's contention that, having top-up provisions in the Award, would discourage a return to work after being injured during the course of employment. There is no express reference to top-up award provisions in the Second Reading Speech, nor does it appear to be covered by inference or implication. 52There was no evidence tendered before me by RMS that demonstrated that the availability of top-up sick leave award provisions discouraged an early return to work by those workers who had suffered an injury during the course of their employment. 53In my opinion, top-up sick leave provisions contribute to ensuring that income, support and treatment needs of injured workers are met. 54Mr Smith's evidence suggested that his accrued sick leave only amounted to a few weeks. This, of course, will vary from employee to employee. However, I am not persuaded that the use of such a provision is a disincentive to an injured worker returning to work. 55The Second Reading Speech makes reference to the fact that the Government released an issues paper entitled "NSW Workers Compensation Scheme" with its proposed reform based on seven principles, to which I have already referred. I note the seventh principle was to "strongly discouraging payments, treatments and services that do not contribute to recovery and return to work". To my mind, top-up workers compensation provisions are not in conflict with this principle and may well accelerate a return to work. 56The second document referred to in the Second Reading Speech was the Joint Select Committee on NSW Workers Compensation Scheme that was established on 2 May 2012. It published its Report on 13 June 2012. 57Mr Docking submitted that research undertaken by his client revealed that top-up sick leave award provisions were not mentioned in either document. 58As was observed by the Full Bench in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v NSW Department of Education and Communities at [24] - [26], it is impermissible to search for what those who promoted or passed the legislation may have had in their minds when it was enacted. 59I am not persuaded that the intention of the new workers compensation regime under the WC Act and the WC Amendment Act is inconsistent with the existing award provision in cl 6.5.2(b) and that to continue to have the top-up award provision under the new regime, would be contrary to the intention of that regime. 60I am satisfied, after careful consideration of the material relied upon by the parties, that the existing top-up provision in the Award provides a beneficial condition that an injured worker can only access if he or she has an existing entitlement to sick leave. It is therefore not an additional or new cost to RMS. I determine the making of an award with a top-up provision would be in accordance with the requirements of the IR Act and its obligations to set fair and reasonable conditions of employment, as required by s 10 of the IR Act. 61Both Unions NSW and the AWU proposed a form of words for the top-up workers compensation clause. 62In these circumstances, in light of the conclusion that I have reached, which is that a top-up provision similar to that contained in the current Award should be included in the new Award, I direct the parties to confer with the view of endeavouring to agree on the terms of the top-up provision. These discussions are to occur within seven days of the date of this decision. 63I will hear the parties at 10.00am on Tuesday 17 December 2013 to determine the terms of an appropriate top-up provision in the Award. 64In light of the parties' consent to the balance of the proposed Award, I intend to make the Award when the parties are next before me.

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: 06 December 2013