Evidence of APESMA
14Professor John Buchanan is a professor of Work and Organisational Studies at the University of Sydney's School of Business and Director of the Workplace Research Centre (the "WRC"). In December 2013, the WRC was engaged by APESMA to prepare a short report drawing on Professor Buchanan's expertise that would assist the Commission in answering the following question:
"Should professional engineers in the RMS maintain their current award arrangements, i.e. an enterprise specific occupationally-based award?"
15Under the heading "Key insights from relevant labour market research - the concepts of 'occupational labour markets' and 'occupational coherence'", Professor Buchanan stated that it was generally recognised that there were three potential reference points for defining award coverage: industry, occupation or enterprise. Industry is defined by what a workplace makes or does, occupation is defined by the skills held by a worker and which they bring to and take away from any particular job. Enterprise refers to the organisational (and especially managerial and legal) arrangements associated with coordinating flows of funds, goods and services for particular ventures. The Australian Bureau of Statistics provides helpful definitions for each of these aspects of social and economic reality. Industry is defined by reference to what specific physical locations make or do (or the major source of value added produced by a business entity) (ABS 1993), occupation is defined by qualifications and skill (ABS 2009), and enterprise is defined on the basis of formal business structures and units of activity (ABS 2013: 10 - 13). Professor Buchanan observed that a useful academic account of these different categories was provided by Sayer and Walker (1992: Ch 3).
16Professor Buchanan observed that when it comes to how labour market standards are defined in practice, they are rarely defined on an industry or an occupation or an enterprise basis alone. Rather, the labour market standards prevailing in a particular situation usually refer - implicitly or explicitly - to a combination of all these matters. As such the issue is not whether one has an 'enterprise' basis for regulation or an 'occupation' basis for regulation. The critical question is how are industry, occupational and enterprise factors to be recognised and connected. In recent times, industrial relations policy has privileged what has been referred to as 'enterprise bargaining'. As a matter of practice, however, occupational considerations still shape the system of labour standards.
17Professor Buchanan stated:
"As Bray has noted about the situation at Federal level, of the 122 Modern Awards recently created 107 are industry based and 15 occupationally based (Bray 2011: 29)"
18Professor Buchanan observed that in recent years most focus has been on the 'enterprise' dimension of labour standards and their determination. It was important to appreciate, however, that occupational matters remain important. He proceeded to provide a summary of scholarly literature relevant to the Commission's deliberations which primarily concerned the origins and current status of occupation as a factor shaping the definition and management of labour.
19In observing that occupational regulation can take many forms, Professor Buchanan summarised David Marsden's seminal work, A theory of employment systems. Micro-foundations of Societal Diversity, Oxford University Press, Oxford (1999) as follows:
(1)The nature of the employment relationship means that skills are developed and used in the context of a limited number of employment systems. Following Marsden, these are commonly specified in terms of:
(a)how the demands of the job are defined i.e. primarily by the needs of production, or primarily by reference to the skills the worker brings to the job. This is commonly referred to as the difference between 'internal' and 'occupational' labour market arrangements (hereafter ILMs and OLMs);
(b)how the approach to specifying accountabilities for work performed are defined i.e. on the basis of what a worker does (e.g. very specific duty statement) or on the basis of what the worker is expected to achieve (e.g. once promoted to a certain level, they are expected to perform all tasks at that level). These can be referred to as 'task centred' or 'function centred' approaches to systems of work coordination.
(2)The dynamics of the employment relationship, therefore, commonly result in four employment rules, being:
(i) 'work post' rule, being task centred with enforcement criteria being requirements of production (ie production approach);
(ii)'competence rank rule', being function/procedure centred with enforcement criteria being production approach;
(iii)job territory/tools of trade rule, being task centred with enforcement criteria being recognised skills of workers (ie training approach); and
(iv)'qualification' rule, being function/procedure centred with enforcement criteria being training approach.
20It was noted that there had been a decline in classical ILMs and references to the best documentation of this was provided. It was also observed that OLMs have also been profoundly restructured. Professor Buchanan noted that there had been a major push in recent decades to undermine their coherence in the pursuit of ensuring greater 'flexibility' in how labour was defined and deployed. References to the most comprehensive documentation were provided in Standing (2009) and Marchington et al (2004). It was stated that in Australia these changes have been particularly acute since the 1980s. This has arisen in response to the need to ensure labour adjusts sufficiently to changing circumstances. For example, changes in labour supply (changing role of women, aging workforce and increasing levels of school retention), the changing role of Australia in the global economy, changing role of the public sector and changing employer-labour use strategies.
21Professor Buchanan addressed the benefits of a flexible OLM, referring to Marsden (1986: 234 - 242). He noted that OLMs are a public good that delivered at least three major benefits.
(a)For employers they provide pools of skilled labour that can be drawn on under conditions of economic expansion.
(b)For employees they give transferable capability that is an asset of value to a variety of employers, thereby increasing their mobility and security in the labour market.
(c)For society they facilitate economic adjustment when workers are retrenched.
22Professor Buchanan noted that in recent times reports of skill shortages, especially concerning professional engineers have been widespread. He noted in a number of sectors initiatives have been undertaken to fragment occupations in an effort to get at least some partially competent labour that could be deployed. This development can be counter-productive, it was observed, smart in short run, but not so smart in the longer term. Contributing to the development and operation of clearly defined occupational labour markets could provide a major benefit to individual enterprises. Reference was made to a seminal study on this point conducted by a team of French scholars in the 1970s and 1980s (Maurice et al 1986).
23Professor Buchanan considered an occupational award and OLMs, noting there was little direct research on how awards contribute to the operation of OLMs. The research on OLMs in general, however, revealed that they need public support if they are to flourish. He observed while awards that take occupation as their primary reference point are not absolutely necessary for an occupation to flourish, such award arrangements would contribute to the array of factors supporting this public good. It was noted that it was difficult for public authorities to support occupational labour markets with interventions such as taxation incentives or programs of government expenditure. Professor Buchanan stated that the particular strength of the award system is that it can have primary reference to occupational factors, but vary them to take account of the needs of particular enterprises. The structure of the current award arrangement achieves this balance of maintaining occupational coherence but in a way that allows for the needs to this enterprise (RMS) to be acknowledged and managed appropriately.
24Under the heading "Implications for this case: factors to take into account in making a judgement call", Professor Buchanan observed that there is not one fixed answer to the question: should work be organised on an occupational or internal labour market basis, and if so, how? He stated the key issues to this are: (a) What is possible and (b) what is desirable. This was a matter that he and his colleagues at the Universities of Sydney and Melbourne have been examining actively over the past five years. Special attention has been given to the work in the agricultural, care, finance and engineering sectors (see Buchanan et al 2009, Buchanan et al 2010, Wheelahan et al 2011, Yu et al 2012, Yu et al 2013).
25The answer, Professor Buchanan posed, ultimately depended on balancing a range of factors. In this case, the key issues to note, he said, were:
(a)Functional, flexible occupational labour markets provide major benefits for employers, workers and society.
(b)The proposal under consideration from APESMA is for occupational coherence, not occupational closure.
(c)Supporting such coherence requires public support. Because occupational labour markets are a public good, without such support, there will be under-provision of labour of this nature.
(d)Erosion of OLMs is easily achieved but hard to rectify.
(e)The benefits of administrative elegance at an enterprise level need to be weighed against the longer term costs of weakening OLMs as a public good.
(f)Evidence of the gains of moving to an enterprise basis of operations is limited at best. At worst, this way of organising labour markets is more inefficient than well designed functionally flexible OLMs. This is a finding from international comparative studies on skills and economic performance conducted over the last 30 years. See for example, Maurice et al 1986, Prais 1994, Rubery et al 2003.
26Under the heading "Recommendation", Professor Buchanan stated:
"It remains unclear how great the immediate and longer term benefits would be of moving award regulation of professional engineering labour in the RMS onto an enterprise basis. The current award coverage arrangements embody a sensitivity to enterprise requirements while supporting occupational coherence that does not result in occupational closure. On balance the smallness of the gains do not appear to warrant the costs of weakening the public good benefits of a coherent occupational labour market in engineering supported by current arrangements."
27In cross-examination, Professor Buchanan said he was not provided with a copy of the proposed consolidated award. In preparing his report and witness statement, Professor Buchanan acknowledged that the issue was how the different elements of industry occupation and enterprise interrelated. He acknowledged that the principle of wage determination enterprise bargaining had been settled since 1991, but if what he is talking about is a system of labour standards, it is not just a system of wage determination that is of concern, it is also how to specify what the reference point is for setting publicly defined standards. His evidence was that Australia has kept a strong tradition of industry and occupation and occupational reference points. He agreed that an occupational focused award was closer to the OLM model, whereas on the other hand, an enterprise award was closer to the ILM model. His evidence was from an empirical point of view. The big issue was how the different principles or definitions of the three concepts connected. Professor Buchanan's evidence was that he was not saying that one should necessarily be privileged over the other.
28Professor Buchanan acknowledged that the Professional Engineers Award for RMS only applied to one enterprise. He observed that that was not unique. Professor Buchanan accepted that there are extensive mechanisms established by professional bodies for mutual recognition and deployment of skills for people who are professionally qualified as engineers and it was a component that the flexibility and mobility of that type of labour rested on the mutual recognition of those skills.
29Professor Buchanan accepted that the highest his report went in relation to dealing with the RMS consolidated award was to note that the current form of the award provided a distinct occupational category for engineers and that, as a general matter, was a good thing. His evidence was "it is a contributing factor to occupational labour markets as a public good".
30Professor Buchanan stated that he was not asked to take the objects of the Act into account in providing his report. He recollected that the objects usually contained an array of concerns which called on the Commission to balance in reaching a decision in the particular circumstances.
31Professor Buchanan was referred to the Object found in s 3(c) of the Act which requires the promotion of participation in industrial relations by employees and employers at an enterprise or workplace level, and was asked:
Q: So that a purist occupational labour market model would cut across that point?
Professor Buchanan answered:
A: No. I think you have got to deal with these concepts at different levels of abstraction. So in making sense of a labour market, you have got to work at initially the highest level of abstraction. What are the categories that one takes into account in making sense of a complex situation. At a lower level of abstraction, you have to note how those different categories cohere in any particular situation. So you can talk at a very high level of abstraction of matters. There is an abstract occupational labour market which has nothing to do with internal labour markets, but in conducting one's analysis of how labour market functions you always move from the highest level to a lower level of abstraction in conducting your analysis.
So it is not as if you are either or in or you are out. As I said all along the key issue is how do you reconcile or how do you connect the different forces at work which shape labour markets. There's an occupational dynamic, there's an industry dynamic, there's an enterprise dynamic.
At the highest level of abstraction, they have an independent effect. When you come to understand any particular situation, they interact. It is understanding how they interact that you need to balance when you are making your analysis of how things work.
When you are making a policy decision, you have to make a judgment about which ones do you give prominence to in the particular circumstances. But that's a judgment from a policy point of view; there is no science in that.
Q: So you haven't provided His Honour with any identification of what the ultimate difference in balance would be by reason of the replication of the existing terms and conditions under the Professional Engineers Award into a consolidated Award; have you?
A: That's - look, I have. I'm mindful of the context of this report. That's why I have in paragraph [24] where I said it's ultimately arranged - you have ultimately got to balance a range of factors. I have listed (a) to (f) there in paragraph 24.
...
You know, as I say, there isn't an absolute science on this point, but if you accept the reasoning that I have applied to that point there is a recognition in significant parts of the literature amongst highly respected researchers that there are significant public benefits of having occupational labour markets.
Returning to your point where you probed me earlier, occupational labour markets can function either with a high degree of support from an array of public policy initiatives or a weak degree of support from public policy initiatives. It is a judgment call if you are interested in keeping the benefits going, what role does the Commission play in doing that. That's why I have listed the factors there that I think it needs to take into account.
Q: You haven't identified in your report, how any particular provision of the proposed consolidated award would lead to a reduction in occupational coherence for engineers at RMS; have you?
A: No, this is why - well, the reference point for setting the the standard shifts. So the formal reference point for setting labour market standards as enforceable through this jurisdiction will be defined on an enterprise basis.
Now within that enterprise there would be recognition for particular occupational groups. That was also explained to me. My point is that if every enterprise goes down this route, which they have got to think about it in the longer term, you are in aggregate reducing the coherence in the way in which the engineering profession is recognised within the New South Wales award system. I do actually say that.
Q: Even if the engineering classifications, roles, functions, privileges, rights, responsibilities all remain the same?
A: Yes, but they are, if you like, they are traces within a different set of reference points and in terms of a judgment call, like I said there is no science on this point. Clearly currently RMS management doesn't have an anti-engineering culture. You do have a vulnerability if the current management changes and that's why we have awards that have certain types of coverage so that categories and reference points survive the immediate personnel. I have absolutely no doubt the current personnel are completely committed to an engineering culture, but if they all go, you are starting from a very different set of reference points. If a new set of managers come in and they don't have that engineering culture, their reference point will be, we have simply got an enterprise award here, we just want to have a common set of categories, that is a perfectly plausible and foreseeable set of circumstances.
Q: Any such application though by the employer to amend or vary the award in that way requires the Commission and agreement of either all the parties, including APESMA or this Commission --
A: Of course.
Q: --in arbitration, do you accept that? Would you accept that?
A: Of course.
Q: So that changing the classification structure as presently exists, whether it is in a consolidated award or a separate award, will ultimately involve the same process?
A: Yes. Like I say, even if you keep the current arrangements that is no guarantee that engineering will be preserved. It is a matter of, like I say, an on-balance call - sorry, an on-balance judgment about what helps in keeping, nurturing an occupational labour market.
It is like, if you like, an essential ingredient but it is neither a necessary nor sufficient condition for ensuring the overall health of an occupational labour market.
Q: So that is why in paragraph 25 your conclusion is that it remains unclear how great the immediate and longer term benefits will be of a moving award regulation professional engineering labour in the RMS ultimate enterprise basis--
A: Yes, that's right. From an empirical point of view, whilst there is a lot of policy ink being split on the benefits of moving to an enterprise based model the hard data on what the benefits of that are is very hard to find.
Q: The fact is at the moment RMS, so far as engineers are concerned, does have award regulation on an enterprise basis because it has a single award applying to the engineers working within its enterprise; do you accept that?
A: I do. But it is with reference to the occupation.
Q: You accept also that in a consolidated award where all the terms and conditions of the existing professional engineers are transposed across, that so far as engineers are concerned, that award still has a focus on the engineering occupation?
A: For those classifications, yes.
32Mr Erik Locke is a Director of Marketing and Policy for Professionals Australia (previously APESMA). Mr Locke gave evidence that he became an employee of APESMA in January 2013.
Before joining APESMA, he was an independent public policy consultant for approximately two years. During this period he was engaged by a number of organisations including the National Engineering Registration Board, Australian National Engineering Taskforce.
In his work as a consultant and since commencing work with APESMA, he has had extensive exposure to the engineering profession, and conducted social research with engineers. He has also researched procurement practices and their impact on the engineering profession, supply and demand.
33Whilst engaged by the Australian National Engineering Taskforce he was commissioned to write a report on revitalising the engineering profession and addressing skills shortages. The report, which was funded by the Commonwealth Department of Education, Employment and Workplace Relations was titled "Realising and Innovation Economy: A Practical Roadmap to Ease the Australian Engineering Skills Shortage". A copy of this report was annexed to Mr Locke's witness statement.
34In 2011 and 2012, the Senate Education Employment and Workplace Relations Reference Committee held an inquiry into the shortage of engineering and related employment skills.
35In 2013, Mr Locke prepared a submission for the National Commission of Audit. A copy of that submission was annexed.
36Mr Locke's observations regarding the engineering profession was that successive governments at a State level have attached value to certain public sector professions by increasing their wages, running awareness and recruitment campaigns and through the avenues provided by day-to-day public discourse. He gave as the examples, nursing and the teaching profession and said in his statement:
...
11. No such investment has been made in the engineering profession. [...] governments have outsourced much of their engineering capability to the private sector through the adoption of procurement models such as "design and construct" and public-private-partnerships. [...] Annexure 1 outlined what has evolved is a situation where governments have become uninformed purchasers of engineering services.
12. The undervaluing of engineers in the public sector is demonstrated, inter alia, by the fact that an experienced engineer working in a state public service earns an average remuneration significantly lower than their private sector counterparts.
...
14. The important role that engineers play in Australia should be a focus of government, and should be subject to similar public policy focuses as applied to other professions, for example, for science there has been the establishment of the Office of the Chief Scientist, and a similar office for architecture in the Office of the Government Architect [...]
...
15. State Governments can take the lead by increasing their overall engineering capacity in both policy and program areas, and by bringing the pay of their engineers into line with the private sector. [...]
...
16. Given the importance of engineers, providing career paths and enhancing the status of the profession in the public sector is a good investment. Providing a clear career path, definitions, support and protecting the integrity of the public sector engineering workforce is vital if the workforce is to remain engaged and growing.
17. An effective professional engineers' award and salary structure would contribute to that goal. Importantly, an occupational award promotes the accurate classification and market remuneration of engineers. Industrial instruments should protect and retain clearly articulated classification structures for engineers, rather than third party "job value points" based systems used by many organisations. Those "job value points" systems fail to recognise the depth of technical skill and experience that engineers require. They also fail to take into account the severe supply and demand forces that currently affect the engineering workforce when indicating suitable remuneration levels.
18. A dedicated award also acknowledges professional engineers as a distinct group of significant employees. This is not only a symbolic but a practical recognition that engineering is a profession and an important one. That recognition is valued by the profession and, conversely, any move away from a separate award is likely to be regarded as symptomatic of de-professionalisation and the undervaluing of engineers.
37In cross-examination, Mr Locke conceded that he was not a person who was independent of APESMA. He acknowledged that the construction stage of the mining boom involved a creation of infrastructure for the purpose of developing and exploiting minerals, which was likely to require engineers, particularly civil engineers. Mr Locke accepted that the demand for engineers has fluctuated from time to time, depending on the state and structure of the economy. His evidence was that it also fluctuated between jurisdictions. Western Australia had seen high demand for engineers and in the years to come, there will be an increased demand in both New South Wales and Victoria for civil engineers. Mr Locke acknowledged that he was not a qualified engineers and that his role with APESMA included advancing benefits for its members.
38The evidence from engineers employed by RMS and called by the union (Mr Millie, Mr Stalder, Mr Kenny and Mr Nash) was largely similar, although Mr Nash's understanding of the industrial ramifications of a consolidated award was different to the other witnesses. The common issues that emerged from their evidence were as follows:
(a)In November 2013, the long restructure process in RMS, which involved the demerging of Country West Road Services to form Regional Maintenance Delivery (RMD) South West, under the new Asset Maintenance Division, concluded. The stated aim of the restructure was to introduce effectiveness and efficiency in the planning and delivery of RMS works by transferring more development work to the RMD unit, to allow the asset planning unit to focus more on planning the next 5 year program.
(b)Professional engineers are a special, different and important group of employees within RMS because they are highly trained through a minimum 4 year engineering degree.
(c)They have technical knowledge and skills to manage 5000 bridge structures and many thousands of kilometres of roads that are travelled over by 420,000 trucks in NSW per day.
(d)Engineers must ensure that Regional Bridge Maintenance is competitive, focused on the delivery of its primary functions and continually improving its performance by implementing commercial systems and promoting innovation in the workplace; ensure that Regional Bridge Maintenance delivers its services with a high level of workplace health and safety and environmental management in accordance RMS policies; and ensure continuous improvement and quality management principles and legislative and statutory requirements.
(e)Engineers are also required to have the knowledge to ensure that the regional delivery section contributes fully to the achievement of government and RMS objectives by providing strong leadership, aligning sections strategies, plans, processes, priorities and values to the RMS blueprint.
(f)Customer service is the new focus for RMS. The risks for RMS and the community if the engineering profession declines within RMS is that the transport network will deteriorate into an unserviceable condition that is unable to meet current and future vehicle needs. Bridges and culverts may collapse, or load, or speed limits may be applied, or long detours implemented.
(g)Engineers assist RMS in dealing with the impact of legislative requirements and changes including, for example, the introduction of the Workplace Health and Safety Act 2011; Civil Liability Act 2002; Heritage Act 1977' Protection of the Environment Operations Act 1997; and Waste Avoidance and Resource Recovery Act 2001.
(h)There is a shortage of professional engineers in Australia. This shortage is currently impacting on RMS. RMS is experiencing difficulties in filling vacant professional engineering positions.
(i)RMS is employing non-engineers in traditionally engineering roles.
(j)The RMS Professional Engineers Award highlights the importance of the engineering profession within RMS, preserves engineer-specific conditions, pay and classifications, protects the definition of a "professional engineer" in a legal document, provides the opportunity to negotiate more engineer-specific conditions and pay rates in the future when state governments' wage policy changes, and ensures award negotiations are focused on issues for professional engineers.
(k)A consolidated award does not offer long term guarantees for professional engineers' conditions, classification structure and pay scale; means that as a minority group, there is a significant risk that engineers' concerns will be ignored in negotiations affecting thousands of employees and five other unions; offers no benefits for professional engineers, and will allow RMS to keep engineers' conditions and wages strictly in that line with those of other employees at RMS.
(l)Examples were provided of the consequences of a shortage of engineering expertise in the RMS. These included the Gungahlin Drive Bridge falsework collapse; engineering roles in the project development branch being filled with environmental scientists and planners; and the relocation of a Telstra cable at an estimated cost of $1 million.
(m)RMS has been an engineering organisation where traditionally engineers have been leaders of the various other occupations. Specialist engineers or Specialist status is not available to other occupational groups. The Specialist Engineer provisions provide the capacity to recognise technical specialists performing above their position description and helps to mitigate the risk of losing technical expertise. RMS has traditionally been a needs-to-be-an-engineering organisation.
(i)The (Professional) Engineers Award has real symbolic value in that engineers are recognised and are important to the organisation. Consolidating the engineers' award to a generic award signals to engineers that the organisation is devaluing engineering.
(ii)Professional engineers generally have two career paths in RMS: a generalist path which flows through into management roles, or a technical specialisation. RMS also recognises some engineers through payment of a specialist engineering skill, by way of a specialist engineers allowance.
(iii)The engineering shortage is not as extreme as at the peak of the mining boom, although it still persists.
(iv)The consolidated award will contribute to a lack of professional identity for engineers in RMS. There will be less loyalty than has been shown in the past by engineers, many of whom have devoted their careers to public service. But it's very difficult to quantify the risks of the decline of professional engineering in RMS.
39During cross-examination, each of these witnesses was taken to a petition, distributed by APESMA, dated May and June 2012. The petition read as follows:
"We, the underside professional engineers employed RMS express our concern about RMS' treatment of its professional engineering workforce in recent Award negotiations. RMS has indicated its intention to abolish the RMS Professional Engineers Award, the instrument that sets out the specific pay and conditions for engineers, and move engineers onto an RMS-wide generic "white collar staff" award. RMS has verbally agreed to retain the Professional Engineers Classification Structure, but without any guaranteed protection. We call on RMS to recognise the importance of engineering to the organisation via the following action:
(1) Agree to protect and retain the RMS Professional Engineers Award, and guarantee its continued existence beyond 2013; and
(2) Provide guaranteed protection for RMS professional engineers classification structure to ensure its continued existence beyond 2013.
Abolishing the RMS Professional Engineers Award offers no benefit for RMS or its engineering workforce. RMS will lose substantial flexibility in the management of the professional engineers. RMS professional engineers are concerned at their diminished profile for the engineering profession at RMS and the potential to lose engineering-specific employment conditions. Strategies such as the abolition of the RMS Professional Engineers Award, which indicate a lack of understanding of or even disregard for the role of engineers, will result in more young and experienced engineers leaving RMS and greater stress for those remaining.
As an engineering organisation, the technical excellence of RMS's professional engineers is the core driver of its success. Professional engineers are RMS's most important and indispensable resource for the safe, efficient and cost-effective delivery of major programs, projects and management of assets. During an acute professional engineering skill shortage, which is currently the subject of a Senate inquiry, RMS must recognise and reward its professional engineering workforce to retain unique analytical skills, knowledge and expertise, not to jeopardise our employment conditions. In this environment, it is critical that RMS take positive action to protect the RMS Professional Engineers Award and Classification Structure, and we seek your assistance with this as a matter of urgency."
40Mr Millie recalled signing the petition. His evidence was that he had been told by APESMA that the consolidation of the Professional Engineer's Award into one award meant that was no guaranteed protection of professional engineers classification structure. He said he had not made his own enquiries in respect of the legal effect of a consolidated award. He accepted that the fear of young and experienced engineers leaving RMS had come from what he had been told by the union. Similarly, his evidence was that he didn't have any independent experience of RMS behaving in an aggressive manner to abolish the Professional Engineers Award. His view was based on what he had been told by APESMA. Mr Millie acknowledged that he had read in RMS witness statements that the Consolidated Award would maintain all existing conditions for professional engineers as found in their award. He said that he had not been told that the Consolidated Award could be varied except by the consent of all parties to the award or alternatively, by arbitration in the Commission.
41Mr Stalder agreed that during the period of his employment he had seen changes at the RTA and then RMS from an organisational perspective. The latest change, he acknowledged, was a move by RMS to customer focus which included a move from regional autonomous management to a process whereby central units have a more active role in projects. He also agreed that there had been a rise in the role of the environmental scientist. He accepted that the role of engineers is always changing, notwithstanding that there was a standalone Professional Engineers Award in place. He acknowledged that matters of professional reputation and the quality of an engineer's work was much more important to the professional status of an engineer than the particular legal form by which they were paid. His evidence was that some of the changes, for example, that regional managers were no longer called engineers, signalled a devaluing of engineers within RMS. He said that the threat of being part of the Consolidated Award would "water down the relative importance of engineers within the organisation, while by itself it may not be as seen as a big deal, but it has the gradual eradication of devaluing engineers coming into a generic award". Mr Stalder recalled seeing a petition although he could not specifically recall signing it. The petition included his name and signature. In re-examination, Mr Stalder said:
"I think the reason why I feel [the Professional Engineers Award] is important is because it is symbolic and I think the legal form of it is probably a matter of concern personally to me as an engineer, but more the symbolism of having an engineers' award within RMS; it says engineers are valued as a professional body"
42During cross-examination, Mr Kenny's evidence was that he thought it was very positive that engineers had their own award, and that he would like to see that continued because it showed, without being precious, that the organisation valued what engineers did. Engineers were a significant group, and different from other groups, which had been recognised by RMS. Mr Kenny did not appreciate that if a consolidated award was made, APESMA had the ability to refuse to consent to a variation, and in such circumstances any disagreement could be determined by this Commission.
43During cross-examination, Mr Nash gave the following evidence:
Q: Has it ever explained to you that an industrial award of this Commission can only be varied by the consent of all of the parties or alternatively, by an arbitration by the Commission?
A: That wasn't my understanding.
Q: That was not your understanding? What is your understanding?
A: That the current industrial legislation didn't require the agreement of all parties involved.
Q: But a majority could make changes binding?
A: I don't know the exact details but I was under the impression that it wasn't a requirement for all parties to agree.
Q: Did you obtain that impression from discussions with Ms Rose?
A: Yes and discussions with other people.
Q: Do you remember which other people you spoke to?
A: It would be other people within APESMA.
44Mr Nash's evidence was that if engineers became part of the Consolidated Award it would lessen their voice as had occurred in areas such as State Rail and with Main Roads Queensland. This is what gave rise to his fear of a consolidated award, although he agreed he had not examined State Rail's industrial instrument or the award covering engineers in Main Roads Queensland.
45Mr Nash accepted that the ability to veto changes to variations to the Consolidated Award would give APESMA a powerful bargaining position. Mr Nash said that his fear was about the future once a consolidated award was made, in that the engineers may be overwhelmed by the numbers of other people covered by the Consolidated Award.
46Mr Nash acknowledged that he was the first engineer to sign the petition and that he had provided some feedback to Ms Rose about its content. Mr Nash's evidence was that at the time he signed the petition, he was unaware that APESMA could ask the Commission not to make any changes to the engineers' classification structure, even if it was included in a consolidated award. This was one of the reasons that he thought a consolidated award represented the least security to maintaining the engineer's classification structure. He said that engineers had been concerned about a diminished profile since the mid-1990s, notwithstanding their standalone award.
47The evidence of Ms Buchanan and Ms Rose, who are both permanent full-time employees of APESMA, was also largely similar. Ms Buchanan's evidence was that professional employees covered by a 2005 EPA who were employed by Rail Corporation of NSW, Rail Infrastructure Corporation and the State Rail Authority, contained classification structures specific to professional engineers. When the RailCorp EPA 2005 was certified, the parties had an undertaking given to the Australian Industrial Relations Commission that the classification structure would be rationalised and a new classification structure developed and implemented during the life of the agreement. This occurred, however, RailCorp's structure was simplified and flattened and did not provide classifications that were specific to professional engineers. Professional engineers employed at RailCorp who were members of APESMA were particularly dissatisfied with the classification structure that had been negotiated.
48Ms Buchanan said that the general classification structure, which was developed through the use of the Mercer Job Evaluation System, resulted in the devaluing of the professional engineer positions against other occupations incorporated within the proposed rationalised classification structure. Ms Buchanan's evidence was that RailCorp had effectively reset the salaries of professional engineers with no obvious consideration of market rates of pay for the profession. Ultimately, members of all unions took a vote and the majority of employees voted in favour of accepting the new classification structure. Ms Buchanan said that APESMA members, were advertent by the rest of the workforce, and were effectively forced into the new RailCorp classification structure. This resulted in some professional engineers leaving RailCorp. Approximately 12 months after the classification structure had been implemented, and as a result of a loss of engineers, senior engineering management took action to retain their professional engineers. Briefs were forwarded to Treasury for approval to put in place retention bonuses for those professional engineers who were identified as "critical" to the functioning of RailCorp. Retention bonuses were approved for key engineering personnel, which appeared to partly address the inferior remuneration offered by RailCorp compared to external private sector organisations.
49Ms Buchanan's evidence was that RailCorp also had great difficulty recruiting engineers as permanent employees at this time.
50These changes all occurred in the context of a global engineering skills shortage during a time where high demand was driving up private sector salaries for rail engineers, especially signal engineers. The award changes were not the only reason for RailCorp's difficulty in retaining engineers, however Ms Buchanan observed they exacerbated the problem.
51Ms Rose who is employed by APESMA as a Senior Industrial Officer, set out the history of industrial instruments applying to professional engineers. Professional engineers who were originally employed by the Department of Main Roads were employed under an engineer-specific federal instrument since what Ms Rose described as a landmark 1961 decision of the Commonwealth Conciliation and Arbitration Commission. In that case, the Association of Professional Engineers, Australia (a predecessor to APESMA), successfully mounted a work value case and created the first occupational award for engineers. Ms Rose observed that the case itself ran for two and a half years with 182 sitting days and two High Court challenges. She said that the decision significantly elevated the pay and position of professional engineers in Australia by removing professional engineers' pay from a level of non-professionals to a rate appropriate for professional employees. This award was subsequently replaced by agreements and/or awards over the years.
52As a result of the Public Sector Employment Legislation Amendment Act 2006 (No.2), employees of the then RTA were deemed to be employees of the Government Service of NSW. In February 2008, the RTA and APESMA agreed to negotiate an award in the NSW jurisdiction to replace the Federal instruments. The NSW Industrial Relations Commission assisted the parties in reaching an agreement and in February 2009 made the Professional Engineers (Roads and Traffic Authority Division of the Government Service of New South Wales - Salaries) Award 2008. This Award has been renegotiated in 2011, 2012 and 2013.
53Ms Rose detailed that through enterprise bargaining, APESMA and the RTA had negotiated a number of specific provisions for professional engineers which it is unnecessary to repeat in this judgment. Ms Rose's evidence was that as the strong wages growth for professional engineers in the private sector continues, RMS will be increasingly less attractive as an employer for professional engineers. By maintaining engineers in their separate award, RMS has a greater opportunity to provide engineer-specific employment conditions, allowances or pay increases that do not have to be flowed onto other groups of employees.
54Ms Rose annexed a copy of the current award to her statement. She referred to the announcement by RMS to merge six instruments into a single award and set out the unions affected.
55Ms Rose said that since RMS made clear its intention to abolish the Professional Engineers Award in early 2012, she has spoken to and met with and corresponded with hundreds of RMS professional engineers. She said that APESMA members had made clear that they do not want to lose the Professional Engineers Award and that they believe they will be disadvantaged if they are placed under the RMS consolidated staff award. Over a three and half week period in June 2012, APESMA members at RMS collected the signatures of 610 professional engineers on a petition to Mr Peter Duncan, RMS Chief Executive, expressing their opposition to the loss of the Professional Engineers Award. A copy of the petition was annexed to her statement.
56Ms Rose's evidence was that she had met with senior managers of RMS to raise APESMA's members' concerns and express its opposition to the loss of the Professional Engineers Award.
57Ms Rose's evidence was that a consolidated award would prejudice professional engineers' capacity to bargain effectively. Professional engineers will no longer be able to engage with RMS directly on issues that concern them, instead joint positions will be reached with all unions covered by the Consolidated Award. She contended that the interest of professional engineers can best be served through a separate award, contending that a consolidated award will have unfair and harmful consequences for professional engineers including that it will:
(a)Undermine the fair and efficient conduct of bargaining by engineers;
(b)Increase the likelihood that professional-specific issues of engineers are lost amongst the various issues of various professional and occupational groups covered by a consolidated award;
(c)Undermine the engineering classification structure and engineer-specific employment conditions;
(d)Limit RMS' capacity to be flexible and offering engineering-specific improvements to conditions of employment in response to the skills shortage or other factors; and
(e)Tend to increase the disparity between private and public sector employment conditions, thereby exacerbating the effect of the existing skills shortage.
58Ms Rose also filed a statement in reply addressing the evidence of Mr Edwards and Mr Fogarty. Ms Rose rejected Mr Edwards' evidence that the RMS Professional Engineers Award "did not relate to the RMS consolidated organisation". She contended that RMS has had the opportunity to adjust the award since 2011, and has not put forward any changes or raise any concerns about problems with conditions. Her evidence was that if a consolidated award was made, there would be a number of different sets of employment conditions and arrangements applying to employees who work alongside each other at RMS. For example, employees who work under the Wages Award, the Traffic Signals Award and the School Crossing Supervisors Award. Ms Rose noted that RMS has not proposed to merge the Wages Award into the Consolidated Staff Award. A further example was employees working within RMS who are employed by Transport for NSW.
59Ms Rose put in issue Mr Edwards' contention that the terms and conditions of professional engineers would be maintained in the Consolidated Award. She set out 10 clauses that are currently found in their award which she contended would be lost. Ms Rose annexed a letter from Mr Peter Duncan, Chief Executive, Transport Roads and Maritime Services dated 17 March 2014, to Professionals Australia (formerly APESMA), which relevantly read:
"RMS has given Professionals Australia, several times, an assurance that all existing award conditions for professional engineers will be preserved in the new award. Those specific conditions relating only to engineers are to be included in a separate part of the common award dealing with professional engineers only. The existing pay scale for engineers, which is different to the pay scale for other salaried staff, is also being maintained in the common award.
Whether or not the arbitrated outcome results in a new consolidated salaried award, the conditions and rates of pay of professional engineers will not change. Moreover, the new award will have no impact on salary, reliability and community service, nor on staffing levels.
However, RMS has a long history of supporting the development of professional engineers, including affiliations with Engineers Australia and sponsorship for a number of external postgraduate qualification programs.
...
Also, I again refer you to the attached letter which outlines just some of RMS' initiatives to attract, retain and develop its engineers. RMS has always been, and remains, committed to the ongoing development of professional engineers.
60Ms Rose also contended that bargaining in relation to an award which covers a large number of non-engineers and a large number of other unions will inevitably limit APESMA's capacity to pursue engineer-specific improvements in award conditions. It will also create significant administrative difficulties and inefficiencies for APESMA, as it will be necessary to coordinate bargaining between the six unions. She rejected Mr Edwards' statement that it is preferable "to include engineering-specific conditions in a policy rather than the award", and that this approach "provides both RMS and APESMA a larger degree of flexibility to develop and amend programs as needed to suit the organisation and staff". Ms Rose contended that RMS' record of introducing engineering-specific programs through policies does not support the argument that these matters should be dealt with outside the award.
61In respect of Mr Fogarty's evidence, Ms Rose disagreed with his evidence that the loss of the Professional Engineers Award would not devalue engineering as a profession, or contribute to a loss of goodwill, commitment and loyalty of existing and potential RMS engineers. Her evidence, as set out earlier, was that no single engineer agreed with RMS' approach and that APESMA had collected 590 postcards and 227 signatures on the online petitions calling for Minister Duncan Grey to stop attempts to abolish the award. Ms Rose noted that the Schott NSW Commission of Audit Interim Report into Public Sector Management, which she annexed, recommended an increased focus on occupation-based awards. At 21.1, the Report stated:
21.1 "Recommendations: ...that the DPC should consider a process of rationalisation of awards including:
consolidating multiple awards covering similar occupational groups ...
Move distinct occupational groups out of the Crown Employees Award into separate awards to be administered by cluster Director General." (page 82)
62During cross-examination Ms Buchanan stated that she had not been involved in any of the negotiations with RMS relating to the Consolidated Award.
63Ms Rose during cross-examination acknowledged that any provisions of the Consolidated Award could not be removed or varied without the agreement of all the parties, or by decision of the Commission. She said that the Consolidated Award would give security to the classification structure than presently exists in the standalone award.
64Ms Rose was taken to a letter from Mr Duncan, Chief Executive of Transport, Roads and Maritime Services dated 26 July 2012, which was forwarded to all RMS engineers in response to the petition calling on RMS to maintain a separate Professional Engineers Award. Relevantly, it read:
"Having a single award in RMS is a strategic decision taken in attempt to gain consistent conditions across the new organisation. The conditions applying to engineers in the former Roads and Traffic Authority (RTA) are, with a couple of exceptions, identical to the conditions applying to the Public Service Association (PSA) and (PSA) covered staff. The exceptions are recognition of engineering skills, specialist engineers, rollup annual leave loading and access to motor vehicles. RMS is not seeking to change these. Additionally, RMS has made a commitment that it will maintain a separate engineering classification structure in any future industrial instrument that applies to engineers.
APESMA has advised its members that by not having a separate engineers award, RMS is downplaying the role of engineers in the organisation, in some ways, suggests that RMS does not recognise the value that engineers bring to the organisation. This is incorrect.
RMS has always valued the important role that engineers play in delivering RMS' s commitments and incorporating APESMA into a single award in no way dimishes RMS's view of their continued importance to the organisation.
RMS has introduced or reintroduced a number of initiatives over the past 5 years in order to attract, cover, retain and upskill engineers. Many of these initiatives occur outside the current engineers award, and none will be impacted by the inclusion of engineers in a single award. A list of examples in this regard is attached.
You should also be aware that RMS has already made a number of commitments to APESMA for engineers under a single award:
There will be a separate classification structure for engineers;
A continuation of the few differences in conditions that engineers have, such as specialist engineers;
RMS will continue to deal with the issues surrounding the skills shortages with engineers regardless of which they are covered by.
65Ms Rose acknowledged that upon receipt of this letter, APESMA did not write to the Chief Executive indicating that they did not believe what he said in this letter. Ms Rose's evidence was that at the time that she organised the petition, she had not seen any proposed consolidated award. Ms Rose said she was on maternity leave, from September 2012 until October 2013. She was aware that discussions continued between the APESMA and the other unions in respect of a consolidated award during this time, and after her return. Her evidence was that APESMA's position was that they wished to renegotiate a separate Professional Engineers Award. She agreed that meetings between the various unions and RMS were occurring within the context of a conciliation process within the Commission, and that APESMA made a decision not to engage in discussions in respect of the particular terms and conditions of the proposed consolidated award throughout the process within the conciliation because its position was that engineers should be covered by their own award.
66Ms Rose acknowledged that the first occasion that she had identified clauses in the Consolidated Award which she contended resulted in a loss of conditions for engineers from their existing award were set out in her witness statement in reply dated 24 March 2014. Her evidence was that she was not suggesting that the clauses referred to in her witness statement in reply were missing from the proposed consolidated award. Ms Rose accepted that minds can differ about whether or not, as a matter of substance, a clause in the Professional Engineers Award had, or had not been incorporated in the Consolidated Award. An example given was that the Professional Engineers Award provides for specific consultation arrangements for engineers. However, the Consolidated Award has a consultation provision which would apply to all parties to the Consolidated Award.
67Ms Rose acknowledged that if there was a particular dispute about a clause in the Consolidated Award, it would be up to the Commission to decide whether or not, in light of the concession made by RMS that it did not intend to diminish the existing terms and conditions of employment for engineers, to determine whether the proposed clause had a detrimental effect on engineers.