Building Construction Employees and Builders' Labourers Federation of New South Wales v Minister for Industrial Relations and Anor

Industrial Relations Commission (NSW)|2017-09-18

Solicitors: M Jaloussis, McNally Jones Staff Lawyers (ASMOF and HSU) L Armstrong, Crown Solicitor (NSW Industrial Relations Secretary) File Number(s): 2017/00195799; 2017/00195859; 2017/00195878; 2017/00195990; 2017/00196033; 2017/00196044; 2017/00199899; 2017/00200305; 2017/00200337; 2017/00200420; 2017/00200473; 2017/00200543; 2017/00200709

DECISION

Before the Commission are the following matters: 1. An application by the Australian Salaried Medical Officers Federation ("ASMOF") to vary the Staff Specialists (State) Award to increase rates of pay and allowances by 2.5% with effect from 1 July 2017. 2. Applications by the Health Services Union, New South Wales ("HSU") to vary the following awards to increase rates of pay and/or allowances by 2.5% with effect from 1 July 2017: 1. Public Hospital Medical Officers Award 2. Public Hospitals (Professional and Associated Staff) Conditions of Employment (State) Award 3. Operational Ambulance Managers (State) Award 4. Hospital Scientists (State) Award 5. Public Hospital (Career Medical Officers) (State) Award. 1. Applications by the NSW Ministry of Health ("Ministry") for seven new awards which generally replicate terms and conditions of the current awards and which also seek to increase rates of pay and/or allowances by 2.5% with effect from 1 July 2017. In addition, the Ministry's proposed new awards do not seek to replicate clauses in the existing awards which deal with issue of "Redundancy - Managing Excess Employees", but do seek the inclusion of "No Extra Claims" clauses. The proposed new awards are the: 1. Public Hospital Medical Officers (State) Award 2017 2. Operational Ambulance Managers (State) Award 2017 3. Public Hospital Career Medical Officers (State) Award 2017 4. Public Hospitals (Professional and Associated Staff) Conditions of Employment (State) Award 2017 5. Public Hospital (Medical Superintendents) Award 2017 6. Hospital Scientists (State) Award 2017 7. Staff Specialists (State) Award 2017.

Issues in dispute

There is no dispute between the parties and the intervener as to the proposed increases in rates of pay and/or allowances of 2.5% effective from 1 July 2017.
Each of the existing awards contains a "No Extra Claims" clause. Whether the Commission determines to make new awards or to vary the existing awards, neither the HSU nor ASMOF (together "the Unions") opposes the inclusion of a "no extra claims" provision in the same terms as sought by the Ministry in its applications.
The real contest in the proceedings is as to whether the new or varied awards should contain the existing clauses dealing with the management of excess staff.
Clause 28 of the current Staff Specialists (State) Award provides: 28. Redundancy The provisions of Ministry of Health Policy Directive 2012_021, as amended from time to time, shall apply.
Clause 31 of the current Public Hospital Medical Officers Award provides: 31. Redundancy - Managing Excess Employees Employees shall be entitled to the provisions of Ministry of Health Policy Directive PD2012_021 Managing Excess Staff of the NSW Health Service, as amended from time to time.
Equivalent provisions are found in: clause 32 of the Public Hospitals (Professional and Associated Staff) Conditions of Employment (State) Award; clause 30 of the Operational Ambulance Managers (State) Award; clause 33 of the Hospital Scientists (State) Award; clause 25 of the Public Hospital (Career Medical Officers) (State) Award; and clause 14 of the Public Hospital (Medical Superintendents) Award. None of the seven new awards proposed to be made by the Ministry contains a like provision.

Relevant legislation and case law

Section 146C of the Industrial Relations Act 1996 (NSW) ("the Act") provides: 146C Commission to give effect to certain aspects of government policy on public sector employment (1) The Commission must, when making or varying any award or order, give effect to any policy on conditions of employment of public sector employees: (a) that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission, and (b) that applies to the matter to which the award or order relates. (2) Any such regulation may declare a policy by setting out the policy in the regulation or by adopting a policy set out in a relevant document referred to in the regulation. (3) An award or order of the Commission does not have effect to the extent that it is inconsistent with the obligation of the Commission under this section. (4) This section extends to appeals or references to the Full Bench of the Commission. (6) This section extends to proceedings that are pending in the Commission on the commencement of this section. A regulation made under this section extends to proceedings that are pending in the Commission on the commencement of the regulation, unless the regulation otherwise provides. (7) This section has effect despite section 10 or 146 or any other provision of this or any other Act. (8) In this section: "award or order" includes: (a) an award (as defined in the Dictionary) or an exemption from an award, and (b) a decision to approve an enterprise agreement under Part 2 of Chapter 2, and (c) the adoption under section 50 of the principles or provisions of a National decision or the making of a State decision under section 51, and (d) anything done in arbitration proceedings or proceedings for a dispute order under Chapter 3. "conditions of employment" --see Dictionary. "public sector employee" means a person who is employed in any capacity in: (a) the Public Service, the Teaching Service, the NSW Police Force, the NSW Health Service, the service of Parliament or any other service of the Crown, or (b) the service of any body (other than a council or other local authority) that is constituted by an Act and that is prescribed by the regulations for the purposes of this section.
Subsection 21(1)(c) of the Act relevantly provides: 21 Conditions to be provided in awards on application (1) The Commission must, on application, make an award setting any of the following conditions of employment: ………………… (c) employment protection provisions,
Section 24 of the Act provides: 24 Employment protection provisions Employment protection provisions in an award are to be provisions relating to the obligations and rights of an employer and an employee on the termination or proposed termination of employment of the employee.
Despite the directive to the Commission in sections 21 and 24 of the Act, subclause 6(1)(f) of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 ("the 2011 Regulation") was promulgated in the following terms: 6 Other policies (1) The following policies are also declared, but are subject to compliance with the declared paramount policies: …………………. (f) Policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments.
The clear intendment of subclause 6(1)(f) of the 2011 Regulation was that clauses of the type described at paragraphs [6]-[8] above were not to be incorporated into awards made by the Commission or other industrial instruments. So much was determined by the Commission, Boland J President, in Re Crown Employees (School Administrative and Support Staff) Award [2012] NSWIRComm 127 at [94]-[99] and upheld on appeal in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Department of Education and Communities (2013) 233 IR 345; 2013 NSWIRComm 320 at [27].
The appellant union sought prerogative relief in the Court of Appeal. In Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v State of New South Wales [2014] NSWCA 116; 242 IR 338 (PSA v NSW) the Court of Appeal (Bathurst CJ, Basten JA and Emmett JA) held that subclause 6(1)(f) of the 2011 Regulation was invalid. A summary of their reasoning follows. 1. Subclause 6(1)(f) of the 2011 Regulation operates to prohibit the inclusion in awards of provisions relating to the management of excess public sector employees. That is, the effect of the subclause is to take away the jurisdiction of the Commission to deal with issues relating to public sector employee redundancy (Bathurst CJ (with whom Emmett JA agreed) at [54]; Basten JA at [86]). 2. A policy that merely limited or defined what could be included in an award in dealing with termination of employment could be a "policy on conditions of employment" authorised by section 146C of the Act. However subclause 6(1)(f) of the 2011 Regulation does not do that. Rather, it prohibits the Commission from dealing with matters relating to public sector employee redundancy. Given its only effect is to exclude the power of the Commission to deal with an aspect of employment in its entirety, despite an obligation to do so contained in subsection 21(1)(c) of the Act, it cannot be said to be a "policy on conditions of employment" (Bathurst CJ at [66]; Basten JA at [111]-[113]). 3. Section 146C of the Act only authorises regulations as to "any policy on conditions of employment". It follows that subclause 6(1)(f) of the 2011 Regulation is ultra vires and invalid (Bathurst CJ at [61] and [65]; Basten JA at [100]-[101] and [112]-[113]).
After the decision in PSA v NSW was handed down by the Court of Appeal, Parliament passed the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 (NSW) ("the Budget Measures Act"). That legislation amended Schedule 4 - Savings, transitional and other provisions of the Act by the insertion of the following item: 5.1 Industrial Relations Act 1996 No 17 Schedule 4 Savings, transitional and other provisions Insert at the end of the Schedule with appropriate Part and clause numbering: Part 17 Provisions relating to Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 59 Re-making of regulation (1) Subschedule 5.2 to the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 sets out the terms of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014. (2) On and from the commencement of Subschedule 5.2 to that Act: (a) the regulation set out in the subschedule is taken to be and has effect as a regulation validly made under section 146C of the Industrial Relations Act 1996, (b) Part 2 of the Subordinate Legislation Act 1989 does not apply to the regulation set out in the subschedule (but applies to any amendment or repeal of the regulation), (c) the regulation set out in the subschedule is taken, for the purposes of section 10 of the Subordinate Legislation Act 1989, to have been published on the commencement of the subschedule, (d) sections 39, 40 and 41 of the Interpretation Act 1987 do not apply to the regulation set out in the subschedule (but apply to any amendment or repeal of the regulation), (e) section 146C (6) of the Industrial Relations Act 1996 applies to the regulation set out in the subschedule, and accordingly the regulation applies to proceedings that are pending in the Commission on the commencement of the subschedule (except as otherwise provided in the regulation).
As noted in item 59(1) of Schedule 4 of the Act, subschedule 5.2 of the Budget Measures Act set out the terms of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 ("the 2014 Regulation") which, relevantly, provides: 5.2 Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 1 Name of Regulation This Regulation is the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014. 2 Commencement This Regulation commences on the day on which Schedule 5.2 to the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 commences. 3 Definition In this Regulation: the Act means the Industrial Relations Act 1996. 4 Declarations under section 146C The matters set out in this Regulation are declared, for the purposes of section 146C of the Act, to be aspects of government policy that are to be given effect to by the Industrial Relations Commission when making or varying awards or orders. 5 Paramount policies The following paramount policies are declared: (a) Public sector employees are entitled to the guaranteed minimum conditions of employment (being the conditions set out in clause 7). (b) Equal remuneration for men and women doing work of equal or comparable value. 6 Other policies (1) The following policies are also declared, but are subject to compliance with the declared paramount policies: ………………… (f) Policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments.
It is noted that subclause 6(1)(f) of the 2014 Regulation is in identical terms to the equivalent provision in the 2011 Regulation.

Submissions

In support of its applications, the Ministry submitted as follows: 13. The Court of Appeal ultimately found that clause 6(1)(f) was invalid. Sub-schedule 5.2 to the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 effectively cured this invalidity… 14. Whilst it might be argued that s.146C only operates when the Commission's award-making powers are engaged, and that s.146C(1) does not operate upon existing award conditions, the Ministry's applications engage s.146C and therefore require the Commission to give effect to clause 6(1)(f) of the Regulation. 15. As such, it is not open for the Commission to dismiss the Ministry's applications if the effect of dismissing the applications is that policies regarding the management of excess public sector employees are incorporated into industrial instruments. 16. In order to give effect to s. 146C the Commission must grant the Ministry's applications and make or vary the relevant awards so that the terms of Ministry of Health Policy Directive 2012_021 are no longer incorporated.
In support of the Ministry's applications for new awards, the Secretary put the proposition that, by virtue of subsection 146C(3) of the Act, the existing award provisions dealing with managing excess employees are ineffective. The Secretary then submitted as follows: 9. In summary, the awards that the HSU and ASMOF seek to vary do not contain valid and effective clauses regarding the application of the Managing Excess Staff Policy. 10. In these circumstances, it would be appropriate to order new awards which do not contain the invalid and ineffective clauses regarding the Managing Excess Staff Policy. Although the clauses that refer to that policy are of no effect, it is appropriate to remove the clauses rather than to vary the awards in a manner that permits the references to the Managing Excess Staff Policy to remain. By removing the invalid clauses from the awards, the potential for confusion and uncertainty in the application and interpretation of the awards is substantially reduced. 11. Regardless of whether or not the clauses referring to the Managing Excess Staff Policy are invalid, when considering the applications made by the HSU and ASMOF for variation of the awards, the Commission is still required to give effect to s. 146C of the Act and cl. 6(1)(f) of the Regulations and should either: (a) require the awards to be varied so as to exclude provisions that incorporate the Managing Excess Staff Policy; or (b) refuse the variation applications and grant the applications for new awards that exclude these provisions. 12. If an application is brought for variation of an award, the Commission is required to consider the award as a whole when determining whether the requirements of s. 146C have been satisfied. 13. Section 146C does not limit the responsibility of the Commission, when seeking to comply with s. 146C, to the strict confines of the matters raised in the variation application. Rather, s. 146C states that the Commission "when making or varying any award or order", must give effect to any declared policy. It does not limit the Commission's consideration of the extent of compliance with declared policy to the variations which are requested by the applicant for the variations. This is consistent with the Commission's power to make or vary an award on its own initiative: ss. 11(1)(a), 17(2). 14. In summary, if the Commission is satisfied that the clauses incorporating the Managing Excess Staff Policies that are contained in the current awards are inconsistent with cl. 6(1)(f), the Commission should not exercise its power to vary the awards unless it excludes those clauses from the awards as varied. Alternatively, the Commission should decline to grant the variation applications and instead should make new awards which do not contain clauses that are inconsistent with cl. 6(1)(f).
In opposing the Ministry's application for the making of new awards, the Unions made the following submissions: Is the Commission required to apply the Regulation in the current proceedings? 13. The Commission is required, by s 146C of the Act, to give effect of a declared policy on conditions of employment of public sector employees only "when making or varying any award or order": Public Service Association and Professional Officers' Association Amalgamated Union of NSW v New South Wales [2014] NSWCA 116; (2014) 242 IR 338 at [110]. Section 146C does not require the Commission to conduct a general review of awards for the purposes of determining whether award provisions made in the past gave effect to such a policy. 14. The union applications presently before the Commission do no more than seek to increase rates of pay by 2.5% and do not seek to incorporate into the awards any policy "regarding the management of excess employees". There is no dispute that the variations seeking increases in rates of pay by 2.5% give effect to the policy set out in clause 6(1)(a) of the Regulation and are otherwise consistent with the Regulation. Determination of the union applications does not require the Commission to review or remake existing provisions of an ongoing award. To the extent that the Industrial Relations Secretary submits to the contrary, this submission could not be accepted. 15. Nor is the Commission required to accede to the applications for the making of new awards by the Ministry. In circumstances in which the practical effect of the union applications is agreed to by the Ministry, it is open to the Commission to vary the awards as sought by the unions and to dismiss the Ministry's applications for new awards. That is the appropriate procedural course in circumstances in which the Ministry seeks to alter award provisions made on its own application in 2016. 16. Contrary to the Ministry's submissions, dismissing its applications for the making of new awards would not have the effect that "policies regarding the management of excess public sector employees are incorporated into industrial instruments." The impugned clauses are already contained within the relevant awards which were all made in July 2016 on application of the Ministry itself. The Commission should simply dismiss the Ministry's applications. Is the Commission required to give effect to clause 6(1)(f) of the Regulation? 17. If the Commission is required to determine whether the relevant award terms were made in a manner consistent with the requirements of s 146C, or otherwise decides it should, the HSU and ASMOF submit that s 146C does not require the relevant award clauses be removed. 18. The obligation imposed by s 146C(1) is that the Commission must give effect to a policy when making or varying an award. The type of policy to which the Commission must give effect is limited as follows: (a) the policy must be a policy "on conditions of employment for public sector employees"; (b) the policy must have been declared by "the regulations" to be an aspect of government policy that is required to be given effect to by the Commission; and (c) the policy must apply to the matter to which the award or order relates.
The Unions' submissions canvassed the decisions of the Commission, referred to in paragraph [13] above, which have considered this issue, and the judgments of the Court of Appeal in PSA v NSW, then continued: 23. Thus, central to the reasoning of the members of the Court of Appeal was the conclusion that the text of clause 6(1)(f) did not fit within the expression "a policy on conditions of employment." As a result, the Commission was not required to give effect to clause 6(1)(f) by s 146C(1) of the Act. 24. The regulation was remade in 2014. Unusually, this did not occur by promulgation of a new regulation by the Governor. Rather, Schedule 5 to the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 repealed the 2011 Regulation and enacted in Subschedule 5.2 text entitled the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014. Clause 6(1)(f) remained in identical terms to the 2011 Regulation. 25. There may be a question as to whether the new Regulation is required to be given effect to by the Commission at all. Section 146C(1)(a) refers to a policy declared by "the regulations". Section 20 of the Interpretation Act 1987 defines the word "regulation" to mean "a regulation made under the Act in which that word occurs." On one view, the 2014 Regulation was not made under the Act at all. It was legislated as part of the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014. 26. However, schedule 5 to the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 inserted text in the Schedule 4 of the Act of a savings and transitional nature. Clause 59 of Schedule 4 to the Act now provides as follows: (a) the regulation set out in the subschedule is taken to be and has effect as a regulation validly made under section 146C of the Industrial Relations Act 1996, 27. On its face the 2014 Regulation is deemed to be a regulation for the purposes of the Act. Notwithstanding that provision, however, the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 did not amend s 146C or the definitions of "conditions of employment" or "industrial matter", nor did it amend the requirements otherwise imposed upon the Commission by ss 21 and 24 of the Act in relation to the making of awards. The submission that subschedule 5.2 of the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 "cured this invalidity" does not address the nature of the obligation in fact imposed by s 146C. 28. Section 146C continues to require the Commission to give effect to a policy only if it falls within the description of being a "policy on conditions of employment". The Court of Appeal has found that a provision which purports to deny the Commission the ability to deal with an aspect of employment entirely is not a "policy on conditions of employment". In particular, the Court of Appeal found that the text of clause 6(1)(f) of the 2011 Regulation does not contain a "policy on conditions of employment" for the purposes of s 146C of the Act. As has been noted, the 2014 Regulation is in the same terms. 29. A regulation which contains a policy which does not answer the description of being a "policy on conditions of employment" does not engage the obligation of the Commission under s 146C(1). As clause 6(1)(f) does not answer that description, clause 6(1)(f) does not enliven the obligation of the Commission under s 146C to give effect to the policy contained in that subclause. The Commission is not, as contended by the Ministry and the Industrial Relations Secretary, required to remove the relevant award clauses which refer to the policy of Managing Excess Staff by s 146C of the Act or constrained from making new awards containing such a provision.
In reply to the submissions of the Unions, the Ministry discussed the propositions distilled from the Court of Appeal judgments in PSA v NSW and submitted: 4. In revisiting these propositions in light of parliament "re-making" the regulation in clause 59 of Schedule 4 of the Industrial Relations Act 1996 via the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 the Commission can see: a. the validity of the 2014 Regulation depends on the construction of s.146C and/or the construction of Schedule 4, Clause 59; b. the 2014 Regulation would be ultra vires if it is beyond the scope or operation of s.146C or beyond the scope or operation of Schedule 4, clause 59; c. the requirement or limitation previously found in s.146C (ie that the relevant policy must be a policy on conditions of employment) does not apply if the scope of schedule 4, clause 59 is wider; d. clause 59(2) of Schedule 4 requires that the 2014 Regulation "is taken to be and has effect as a regulation validly made under section 146C" thus the confines of Schedule 4, clause 59 are not traversed; e. even if the only effect of clause 6(1)(f) was to exclude the power of the Commission to deal with an aspect of employment in its entirety, it is within the confines determined by parliament. 5. In any event, in making the 2014 Regulation via Schedule 5.2 of the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014, Parliament can only be understood to have intended the Regulation to be valid and effective. That is, in the often-cited authorities Courts have examined whether particular subordinate legislation, made by a body/person other than the parliament, was properly made within the power vested by Parliament. To the extent that Parliament made the 2014 Regulation by statute, there does not need to be any further inquiry into whether Parliament acted within power.
In a further response to the Unions' submissions, the Secretary made the following submissions: It is appropriate for the Commission to review the inclusion of provisions in the awards regarding the management of excess employees 2. At paragraphs 13 and 14 of the HSU/ASMOF Submissions, they contend that there is no obligation on the Commission to conduct a review of provisions in the existing awards that are not the subject of the variation application. 3. However, to neglect to conduct such a review would be to disregard the Commission's mandatory obligation to give effect to s 146C in circumstances where it has been drawn to the Commission's attention that provisions in the existing awards are likely to be invalid and ineffective as they incorporate references to the Managing Excess Staff Policy. 4. The Commission must therefore determine, having regard to the requirements of s 146C of the Act and cl 6(1)(f) of the Regulations, whether it is appropriate to either vary the awards in the manner contended by the HSU and ASMOF, or make new awards which omit reference to the Managing Excess Staff Policy as requested by the Ministry. For the reasons explained in the submissions filed in chief by the Ministry and the Industrial Relations Secretary, the latter course ought to be adopted. Clause 59(2) of Schedule 4 to the Act deems the policy stated in cl 6(1)(f) of the Regulations to be one to which the Commission must give effect under s 146C 5. In paragraphs 28 and 29 of the HSU/ASMOF Submissions, it is contended that cl 6(1)(f) of the Regulations is not a policy which answers the description of being a "policy on conditions of employment" and that cl 6(1)(f) therefore does not enliven the obligation of the Commission under s 146C to give effect to the policy contained in that subclause. 6. The principal difficulty with this submission is that it fails to give effect to the deeming provision contained in cl 59 of Sch. 4 to the Act, which was intended to overcome the decision of the Court of Appeal in Public Service Association and Professional Officers' Association Amalgamated Union (NSW) v New South Wales (PSA v NSW). 7. As explained in the HSU/ASMOF Submissions, in PSA v NSW, the Court of Appeal determined that cl 6(1)(f) was not a regulation prescribing a "policy on conditions of employment". The Court therefore determined that cl 6(1)(f) was "not one permitted or required by s 146C of the Act", and the regulation was "ultra vires and invalid".
The Secretary's submission set out subclauses 59(2)(a) and (e) of Schedule 4 to the Act (see paragraph [15] above) and continued: 9. The "regulation set out in the subschedule" is the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (referred to in these submissions as the Regulations): see cl 59(1) of Sch. 4 to the Act. Clause 59 of Sch. 4 commenced on 24 June 2014, two and a half months after the Court of Appeal's decision in PSA v NSW was handed down on 10 April 2014. 10. The only conceivable purpose of cl 59 of Sch. 4 is to "re-make" the regulation made in 2011, and by that process validate what had been declared invalid by the Court of Appeal. By stating that the Regulations are "validly made under section 146C", cl 59(2)(a) has the effect of deeming the policies set out in the Regulations, including cl 6(1)(f), to be policies that have validly been made under the power to declare regulations granted by s 146C such that the Commission is required to give effect to those policies. 11. As stated above, the principal basis upon which the Court of Appeal held cl 6(1)(f) to be invalid was that it was not a "policy on conditions of employment". Clause 59(2)(a) has the effect of curing the source of invalidity, thereby deeming that cl 6(1)(f) and the other policies in the Regulations are policies that satisfy the requirements set out in s 146C. That is, the policy contained within cl 6(1)(f) is deemed to be a "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", regardless of whether or not it in fact satisfies that description. …………………. 13. The legislative power of the New South Wales Parliament is plenary. The requirement that laws enacted by the New South Wales Parliament be "for the peace, welfare and good government" of the State are not words of limitation upon that power. 14. Clause 59(2)(a), being set out in a Schedule to the Act, is part of the Act. Moreover, the Regulations were re-made by the passage of Subschedule 5.2 to the State Revenue and Other Legislation Amendment (Budget Measures) Act 2014 (NSW), by direct (and not delegated) exercise of the New South Wales Parliament's powers to pass legislation. 15. The deeming provision contained in cl 59(2)(a) is therefore the opposite to a "Henry VIII" clause, where the legislature delegates its power to make legislation by permitting regulations to be made that are inconsistent with a statute. Rather, cl 59(2)(a) is a conventional exercise of state legislative power by which the New South Wales Parliament has itself prescribed that the policies set out in the Regulation are the policies to which the Commission is required to give effect under s 146C of the Act.

Consideration

In its decision in PSA v NSW, the Court of Appeal held that subclause 6(1)(f) of the 2011 Regulation was invalid because it purported to prohibit the Commission from dealing with matters relating to the management of excess public sector employees. As such the subclause was not a "policy on conditions of employment of public sector employees". Because of the invalidity, the Commission was not obliged to give effect to it pursuant to section 146C of the Act. Therefore, the award clauses which the Ministry now seeks to have deleted from the awards were not prohibited by section 146C.
The Government responded to the Court of Appeal decision by enacting Schedule 5 to the Budget Measures Act which amended Schedule 4 to the Act and made the 2014 Regulation. Therefore, the starting point for consideration of this matter must be the effect of Part 17, clause 59 of Schedule 4 to the Act, which was inserted by the Budget Measures Act.
The clear intendment of this legislation is to overcome the decision of the Court of Appeal in PSA v NSW by remaking the 2011 Regulation as the 2014 Regulation, on the basis that the 2014 Regulation is "is taken to be and has effect as a regulation validly made" under section 146C of the Act.
It is not within the remit of this Commission to declare a statute of the New South Wales Parliament ultra vires or invalid on the basis that it exceeds the lawmaking authority of the legislature. Even if it were, it is difficult to see how the Budget Measures Act, to the extent that this statute amended Schedule 4 to the Act by the insertion of Part 17, clause 59, could be held to be invalid.
Section 5 of the Constitution Act 1902 (NSW) provides the legislature with the "power to make laws for the peace, welfare, and good government of New South Wales in all cases whatsoever". This power is plenary in nature (see Building Construction Employees and Builders' Labourers Federation of New South Wales v Minister for Industrial Relations and Anor (1986) 7 NSWLR 372 per Kirby P at 395-398).
On its face subclause 59(2)(a) of Schedule 4 to the Act provides that the 2014 Regulation "is taken to be and has effect as a regulation validly made under section 146C of the Industrial Relations Act 1996". The only invalidity in the 2011 Regulation which was identified by the Court of Appeal was subclause 6(1)(f), which was held not to be a "policy on conditions of employment of public sector employees" as contemplated by the directive to the Commission in section 146C.
The legislature has now declared that the 2014 Regulation, subclause 6(1)(f) of which is in identical terms as the "invalid" subclause 6(1)(f) of the 2011 Regulation, "is taken to be and has effect as a regulation validly made under section 146C of the Industrial Relations Act 1996" (emphasis added). It follows that subclause 6(1)(f) must now be regarded as having effect as if it were a "policy on conditions of employment of public sector employees" as contemplated by the terms of section 146C.
The clear effect of subclause 6(1)(f), as held by the Court of Appeal, is summarised at subparagraph [14(1)] above. As no question of invalidity now arises the result must follow that policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments. To the extent that the submissions of the Unions put a contrary proposition, those submissions must be rejected.
The Unions also submitted that, in dealing with their applications for award variations, the Commission is not obligated to conduct a general review of those awards to examine whether or not any current award provisions, such as those the subject of these proceedings, fall foul of the 2014 Regulation. Although this may be correct there is much to be said about the duty of the Commission to ensure its awards are consistent with the legislation. It is not a matter we must finally determine.
The Ministry has exercised its undoubted right to make applications for new awards to replace current awards which are all past their nominal term. Those applications for new awards incorporate the variations to the current awards sought by the Unions, include "no extra claims" clauses in a form accepted by the Unions and, in addition, squarely raise the issue of the clauses dealing with managing excess staff in the current awards. The Ministry's applications invoke the directive to the Commission in section 146C of the Act to give effect to the policy contained in subclause 6(1)(f) of the 2014 Regulation which, in very clear terms, prohibits the incorporation of such provisions into industrial instruments.
The Commission has an obligation under the Act to hear and determine the applications for new awards filed by the Ministry. Those applications cannot simply be ignored, which we consider would be the necessary outcome of the Unions' submission.
The Commission is satisfied that each of the new awards proposed by the Ministry meets the statutory and other requirements for awards of this Commission. Apart from the issue regarding the non-replication of the provisions dealing with managing excess employees, nothing to the contrary was put by the two Unions.
The Full Bench determines that each of the applications for a new award filed by the Ministry is granted and makes an award in terms of Schedule 1 to each of those applications. The Unions' applications for variations are refused.

Orders

The Commission orders that; 1. The Unions' applications for variation of the awards are dismissed. 2. There shall be new awards in the terms of Schedule 1 to each of the Ministry's applications

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: 26 October 2017

Industrial Relations (Public Sector Conditions of Employment) Regulation 2011(NSW)cl 6(1)(f)

State Revenue and Other Legislation Amendment (Budget Measures) Act 2014(NSW)

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