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[2004] NSWIRComm 165
Industrial Relations Commission (NSW)
2004-06-09
Wright J, Walton J, Boland J, Grayson DP, Mr P
Original judgment source is linked above.
CITATION : Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (STATEMENT) [2004] NSWIRComm 165 APPLICANT New South Wales Teachers' Federation
RESPONDENT PARTIES : Department of Education and Training TAFE New South Wales
INTERVENOR Minister for Industrial Relations FILE NUMBER: IRC 3749 of 2003 CORAM: Wright J President; Walton J Vice-President; Boland J; Grayson DP; McLeay C CATCHWORDS : Award - Wage fixation - Statement of Full Bench in relation to the decision of the Commission in Crown Employees (Teachers in Schools and TAFE and related employees) Salaries and Conditions Award [2004] NSWIRComm 114 LEGISLATION CITED : Industrial Relations Act 1996 CASES CITED : Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award Re [2003] NSWIRComm 481 HEARING DATES: 08/08/2003; 09/11/2003; 09/23/2003; 09/24/2003; 09/25/2003; 09/26/2003; 10/16/2003; 10/17/2003; 10/21/2003; 10/22/2003; 10/22/2003; 10/28/2003; 10/29/2003; 10/30/2003; 11/03/2003; 11/04/2003; 11/05/2003; 11/17/2003; 11/18/2003; 11/19/2003; 11/20/2003; 11/24/2003; 11/25/2003; 11/26/2003; 11/27/2003; 11/28/2003; 12/16/2003; 12/17/2003; 12/18/2003; 05/20/2004 DATE OF JUDGMENT: 06/09/2004
APPLICANT Mr S Crawshaw of senior counsel Mr A Hatcher and Mr M Gibian of counsel New South Wales Teachers' Federation Ms B Seymour, Assistant General Secretary Research and Industrial
RESPONDENT Mr R Kenzie of senior counsel Mr P Ginters of counsel LEGAL REPRESENTATIVES: Department of Education and Training TAFE New South Wales Mr G Boyd, Crown Solicitor
INTERVENOR Mr P Kite of senior counsel Mr S E Prince of counsel Minister for Industrial Relations Mr B Stewart, Assistant Crown Solicitor
JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES
CORAM: WRIGHT J, President WALTON J, Vice President BOLAND J GRAYSON DP McLEAY C Wednesday 9 June 2004
Matter No IRC 3749 of 2003 CROWN EMPLOYEES (TEACHERS IN SCHOOLS AND TAFE AND RELATED EMPLOYEES) SALARIES AND CONDITIONS AWARD
Application by the New South Wales Teachers' Federation for a new award
1 In December 2003 the Commission handed down a decision in which it awarded an interim increase of 5.5 per cent in the salaries of teachers and related employees in government schools and in TAFE: Re Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award [2003] NSWIRComm 481.
2 Whilst acknowledging at the time that the Commission had not fully examined the extent to which changes in teachers' work had already been compensated in earlier awards or agreements, or the existence of any other ameliorating factors, the Full Bench recognised that there had occurred a profound change in teaching work. The interim award granting the increase applied from 1 January 2004 for a period of six months.
3 The Commission's interim decision arose from an application by the New South Wales Teachers' Federation for a new Award. The Federation's application is a substantial one. The claim for increases in salaries alone is significant, being a claim for a 25 per cent across the board increase in salaries and allowances for teachers in schools and TAFE over a two year period. The application includes three additional claims: a further increase for teachers at the top of the Common Incremental Salary Scale (or alternatively a new step at the top of that scale); extension of the operation of the Year Adviser allowance; and creation of a new allowance for school counsellors. The Federation's application also seeks the inclusion of a Leave Reserved clause in the Award covering other salary related matters not presently pursued by the Federation. However, the magnitude of these proceedings extends beyond issues of remuneration.
4 The Federation's application represents the first assessment by the Commission of the work performed by teachers since 1991. As such, the case involved a reappraisal of the work performed by teachers, in a modern context, and encompassed a wide-ranging examination of the complex, challenging and often difficult circumstances that surround, define and impact on the work and role of teachers in government schools and TAFE.
5 In our decision we examine the history of the regulation of salaries of teachers in government schools and TAFE and, in particular, decisions of this Commission and its predecessors bearing upon such matters. The decisions of this Commission recite with perspicuity and incisiveness the importance of teachers to the future of our children and our society. The importance of the work considered in these proceedings has been ably and eloquently stated by our predecessors. It is not mere rhetoric, but a truth which forms the cornerstone of our findings that "education is made or broken on the anvil of the human efforts, qualities and ideals of these teachers". That description remains true today.
6 The proceedings were somewhat unusual in that there was no disagreement between the parties that there had undoubtedly been significant changes in the work performed by teachers since the 1991 datum point, and when considered as a whole, those changes represent a "significant net addition to work requirements" of teachers.
7 The Federation's claim proceeded on two main bases. First, that there were special considerations relating to the work of teachers since 1991, which under the Commission's special case principle, justified the granting of salary increases. These considerations, which are summarised in our decision, included, for instance, a significant risk of a future shortage of teachers if salaries were not increased and improvements in the productivity, efficiency and quality of work of teachers.
8 The second plank of the Federation's claim was that there had been an increase in the value of work of teachers. At the heart of this part of the application was a claim that there have been revolutionary changes to curriculum.
9 The Federation's claim was opposed by the respondents, the Department of Education and TAFE New South Wales and also by the Intervenor, the Minister for Industrial Relations, representing the New South Wales government. Their position was that salaries for teachers should be increased by no more than six per cent over two years, the amount of six per cent being that sum budgeted by the New South Wales Government for wage increases to the public sector so that the real value of wages might be maintained. Broadly speaking, the respondents challenged the increase in salaries sought by the Federation upon the basis that the changes in work value were overstated or already compensated for in previous awards or agreements and economically inappropriate (a submission in which the Intervenor joined).
10 The Commission has now had the opportunity of examining all of the evidence and the submissions of the parties in close detail and we have reached a unanimous decision as to the outcome of the Federation's application.
11 In the course of undertaking such an extensive review, the Commission heard evidence from 67 witnesses, conducted inspections of seven schools and TAFE campuses, and reviewed a mass of material that comprised 169 exhibits. The inspections provided a valuable insight into the current circumstances of work for teachers and put into proper context the issues relating to their claim that a significant change had occurred in the value of their work.
12 Given the breadth and complexity of the issues we have found necessary to consider in this case, it is not practicable to record an adequate summary of our findings in relation to each of the issues in this brief Statement. However, for the purpose of this Statement we make two observations critical to our conclusions.
13 First, the Federation has plainly made out a special case, principally relating to improvements in the productivity, efficiency and quality of teaching work brought about by the contribution and commitment of teachers and the nature and extent of work value changes demonstrated in this matter. For the reasons contained in our decision, we do not consider the Federation has made out a case for across the board increases on the basis of teacher shortages and certain other factors relied upon by it.
14 We consider that the Federation has demonstrated that teachers have contributed significantly to the outcomes achieved by the respondents which may be broadly described as improvements in productivity, efficiency and the quality of the service provided to students (and consequentially to the broader society including parents). Further, we consider that there is ample evidence before us in the form of official reports and statements and through the evidence of senior officers engaged by the respondents, or other significant educational institutions, that improvements in teaching (and in particular the productivity, efficiency and quality thereof) have substantially improved educational standards for students.
15 Secondly, the requirements of Principle 6, Work Value Changes, of the State Wage Case principles, have been overwhelmingly met in so far as teachers in government schools are concerned; there could not be a clearer case justifying substantial salary increases. In this respect, we make particular reference to the introduction of "revolutionary" curriculum changes and outcomes based education since the datum point in 1991.
16 Whilst we acknowledge that there have also been changes in the value of work of TAFE teachers which amply satisfy the work value principle, on balance, we do not consider the changes affecting TAFE teachers to be as extensive or as significant as the changes affecting teachers in government schools. On the case advanced by the Federation, we have, therefore, been required to average the adjustments in rates of pay having regard to these differences (and other relevant differences such as the impact of such changes on higher and lower levels of the incremental scale for teachers in the existing Award).
17 A matter of general significance that we should comment on is that component of the Federation's claim related to increased workload. The Federation contended that the various changes they described have had the effect, inter alia, of increasing the volume of work teachers are required to perform. Part of the Federation's case in this respect merely demonstrated that there had occurred an increase in the volume of teachers' work, resulting from either an increase in the frequency of existing tasks or the introduction of new tasks, which do not meet the 'significant change' criteria of the work value principle. Whilst we are sympathetic to the difficulties teachers face in meeting such demands, we do not consider that such factors, of themselves, meet the strict requirements of the work value principle. 18 It would be a rare case where change in volume of work would have even an indirect effect on work value. However, part of the Federation's case came within this rare situation. That is because the nature of the changes in the skills and responsibility of teachers, which are discussed in detail in our decision, not only satisfied the work value principle because of the significant change in the functions and tasks of teachers, but also because the magnitude of those changes required a significant adaptation of work methods by teachers to enable them to discharge the full range of their current duties. In other words, in order to carry out the full range of the complex and voluminous professional responsibilities since 1991, teachers have been required to be more sophisticated and skilled in the management of their work and the discharge of their new accountabilities, both in and outside of school hours. This is a factor relevant to be considered under the work value principle.
19 We have had particular regard to the submissions of the respondents as to potential areas of double counting, and we have considered closely the earlier awards and agreements identified by the respondents as recognising changes in the value of work performed by teachers. The respondents, correctly in our view, in the particular circumstances of these proceedings, accepted it was necessary for them to demonstrate, in order to make out their general contentions as to double counting, that the claims relied upon by the Federation had been compensated for, or adequately compensated for, by previous wage adjustments.
20 The changes which occur within those areas may vary in their significance at any point in time, but, as we consider is well demonstrated in the history of the review of teachers' salaries, the mere fact that the change occurs within a common descriptor of educational reform does not, by that fact alone, diminish its significance. We consider that the respondents' submissions tended on occasions to blur this distinction, although the point was well made by them that it is important that the Commission avoid any prospect of double-counting of factors which have been previously taken into account. It is important to ensure that unions adhere fully to the terms of bargains earlier made when pursuing salary adjustments. It is equally important, in our view, to avoid inflating the effect of an earlier change and in that respect it is necessary to examine the nature of the agreement and its historical context.
21 On balance, we consider that the respondents have demonstrated that there should be some reduction in any salary increase given based on some aspects of earlier awards or bargains but that the amount of any such reduction is relatively minor when compared with the true extent of the changes experienced in teachers' work since the datum point.
22 We have considered carefully the evidence and submissions presented by the Intervenor relating to the State's economic position and, in particular, the State's budgetary position and the implications of that position for any decision on wage increases for teachers in reaching our decision.
23 Having regard to the terms of s146 of the Industrial Relations Act, we propose to take into account the State's economic position in reaching our decision. In that respect, we propose to have regard to the soundness of the State's economic fundamentals and the expected deterioration of the State's budgetary position (particularly in the light of any increase in wages we may grant).
24 As we note in our decision, it may be that the projected deficit will have a negative effect on the economy that could be exacerbated by the grant of a wage increase over 6 per cent as proposed by the respondents and the Intervenor. However, it is not at all apparent on the evidence led by the Intervenor, what will be the precise economic effect of any growth in the deficit. The actual effect of any deficit may depend on a number of factors that the Intervenor did not address in any great detail. For example, we have not been advised with any precision as to the potential implications of any wage increase (or potentially resulting change in a deficit outcome) for net debt or what role projected levels of employment may play in any such outcome. Nor has there been any discussion of possible expansionary effects of any deficit. We emphasise that we have not been asked to entertain a claim by the respondents or the Intervenor based on economic incapacity to pay.
25 The difficulty the Commission now faces is that we have been left to largely speculate as to the proper weight to be given to the projected budgetary decline and its potential impact on the economy if more than a six per cent total salary increase is granted. In addressing this problem, the primary consideration for the Commission is the terms of the statute that binds us.
26 The evidence relating to the deteriorating state of the budget and the government's obvious concern in that respect is not, however, a matter that can be ignored or put aside; it is an development that must be taken into account given the obligation on the Commission to have regard to the public interest in its decision making, notwithstanding the disquiet we expressed in our earlier interlocutory decision about the timing of and manner in which the additional material relating to the budget was placed before the Commission.
27 However, the Federation and its members have a legitimate expectation of a reasonable salary increase arising from these proceedings because the case put by them has been compelling. It must also be plainly stated that, in the absence of evidence showing poor economic prospects or an incapacity to meet the wage adjustments awarded by us (an argument which has not been advanced in these proceedings by the respondents or the Intervenor) we are required to strike a proper balance between the legitimate expectations of the Federation and its members where they have demonstrated a compelling case in conformity with the wage fixing principles and economic factors which we must take into account pursuant to s146 of the Act. We emphasise that, whilst s10 of the Act gives the Commission a discretion as to whether to make an award, it mandates that in any award made the Commission set "fair and reasonable conditions of employment for employees".
28 Accordingly, whilst giving primacy to our statutory function under s 10 of the Act, in determining the amount of increase in this case we have, in the public interest, given appropriate weight to the economic evidence of the respondents and the Intervenor and thereby modestly tempered our decision. We note that one means we have adopted to adjust for economic factors is to stagger the operative dates of the increase in salaries and allowances awarded.
29 The Intervenor expressed concern as to the flow on implications of any increases granted to teachers above the six per cent that has been budgeted. It was contended that any increase in teachers' salaries would influence the expectation of other public sector groups.
30 If any expectations arise that increases to teachers will flow to other public sector employees we say this about such expectations: We consider that the prospect of any flow on of the increases granted to teachers is most unlikely for three reasons: 1. Given the position of the government as to public sector wage increases, it is unlikely that the government would agree to any flow on and we would be most surprised if it did because it would be inconsistent with the stance it adopted in these proceedings; 2. The Commission would not countenance any increase in rates of pay based on a contested claim that was, in reality, a flow on of increases granted to teachers;
31 The existence of the rule of law and the community's support and encouragement of the rule of law are essential foundations of a stable and productive society. For over one hundred years a key feature of the fabric of the rule of law in New South Wales has been the existence of an independent Industrial Commission which determines important industrial and employment proceedings on the basis of the evidence and submissions put before it. The Commission has always done so without fear or favour. It will continue to do so. The present decision is a further instance of a decision based only on the material placed before the Commission.
32 Given the nature and extent of work value changes, and that a special case has been made out, and having regard to appropriate discounts, the public interest, and the impact of any salary adjustment on the New South Wales economy, we consider that rates of pay for employees in classifications covered by the Award who are entitled to be paid and progress by way of annual increments on the Common Incremental Salary Scale shall be increased by a further 6.5 per cent, in addition to the interim increase of 5.5 per cent awarded in the Interim Decision. This provides for all teachers in government schools and in TAFE a total increase of 12 per cent over two years. The Commission awards accordingly.
33 The further increase of 6.5 per cent shall be applied in two tranches of 3 and 3.5 per cent respectively. The first tranche will operate from 1 July 2004 and the second from 1 January 2005.
34 We reject the Federation's application for an additional increase in the rate of pay applicable at Step 13 of the Common Incremental Scale (and the alternative claim for a further step in that Scale) for the reasons given in our decision.
35 Our decision also addresses the question of allowances and the claim by the Federation for leave reserved to be granted in respect of certain matters. In this respect, we note that we have granted the Federation's claim in relation to the Year Adviser allowance by altering the definition of Year Adviser as sought by the Federation subject to the exclusion of the requirement that a Year Adviser be appointed for each year. We have increased the quantum of this allowance and other relevant allowances by the same percentage adjustment that applies to rates of pay.
36 The Award shall operate from 1 January 2004 for a period of two years. The nominal term of the award shall expire on 31 December 2005.
37 We make the following directions: (a) Within 14 days from the date of this decision, the Federation shall serve on the respondents a draft award reflecting our decision in this matter; (b) Within 14 days of being served with the draft award, the respondents shall specify, by serving upon the applicant appropriate documentation, whether they accept the proposed form of the award; and (c) Within 7 days thereafter, the Federation shall file and serve a draft award, indicating if it is filed by consent or whether there is disagreement with, in the latter case, specifics of the areas of disagreement.
38 If the award is filed by consent, it shall be dealt with administratively in Chambers. If there is a dispute as to the terms of the award, the matter shall be listed before Walton J, Vice President, for resolution. ____________________________
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