Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 [2009] NSWIRComm 169

Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 [2009] NSWIRComm 169 - NSWIRComm 2009 case summary — Zoe

[14]

4 The consent award was a means by which the parties resolved differences in wages in return for a partial satisfaction of any requirement for cost savings, with the balance of such measures being resolved in accordance with the provisions of cl 47 of the initial Award. That clause was in the following terms: 47. Further Employee Related Reform Measures and Cost Savings 47.1 In order to fund the salary increases provided under this award, the parties have committed to the identification and implementation of further employee related reform measures and cost savings to improve TAFE operational efficiency and competitiveness. 47.2 The parties agree to establish immediately a working party to identify and finalise the reforms by 3 April 2009. The working party shall consider a range of initiatives, including direct teaching hours of work of TAFE teachers and time credit hours to fund (to the extent not already achieved by the employee related reform measures already agreed and implemented by the parties as outlined in the Industrial Relations Commission Recommendation [2009] NSWIRComm 2 relating to IRC Matter Numbers 1979 of 2008, 1980 of 2008, 2042 of 2008, 2241 of 2008 and 2242 of 2008) the salary increases beyond 2.5% each year. 47.3 Should the working party not identify the necessary employee related reform measures and cost savings or should any dispute arise during the process, the parties acknowledge and commit to take all necessary steps so that the Industrial Relations Commission shall arbitrate on and determine by June 2009, the employee related cost savings necessary to fund the salary increases under this award. 5 As it may be seen from the terms of the clause, it contemplated further proceedings to resolve the question of employee related reform measures and cost savings. The clause provided an exception to the 'no extra claims' provisions of the initial Award so as to permit parties to that Award to make claims in accordance with its provisions. It was contemplated that the Department may activate the provisions of the clause by filing a Notification of Dispute. This step was, in fact, taken on 14 April 2009 and, subsequently, on 1 July 2009 by the filing (within the dispute proceedings) of an application to vary the initial Award pursuant to s 17 of the Industrial Relations Act 1996 ('the Act'). That application was later amended. 6 Since the initial Award was made, the Commission determined that the terms of two other awards should be incorporated into it, namely, the Bradfield College (Department of Education and Training) Salaries and Conditions Award and the Crown Employees (Teachers in TAFE Children's Centres) Salaries and Conditions Award. Consequently, the award was made on 12 August 2009 entitled 'Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009' ('the Award'). As a result of a dispute about the form of cl 47 of the Award, the Full Bench resolved that cl 47 would be slightly varied and is now in the following form: 6. Further Employee Related Reform Measures and Cost Savings 6.1 In order to fund the salary increases provided under this award, including the salary increases for Bradfield College and TAFE Children's Centres, the parties have committed to the identification and implementation of further employee related reform measures and cost savings to improve operational efficiency and competitiveness. 6.2 The parties agree to consider a range of initiatives, including direct teaching hours of work of TAFE teachers and time credit hours to fund the salary increases beyond 2.5% each year to the extent not already achieved by the employee related reform measures and cost savings already agreed and implemented by the parties. 6.3 Should the parties not identify the necessary employee related reform measures and cost savings or should any dispute arise during the process, the parties acknowledge and commit to take all necessary steps so that the Industrial Relations Commission shall arbitrate on and determine the employee related cost savings to fund the salary increases under this award. 7 Because the parties were unable to identify and agree on the employee related reform measures and cost savings necessary to fund the salary increases the Department, as we have indicated, notified the existence of an industrial dispute in April 2009 and, in accordance with the terms of cl 6 of the Award, the dispute falls to be arbitrated. For that purpose this Full Bench was constituted and sat on 14, 15 and 17 September 2009 to hear the respective cases. 8 We should comment on the strenuous effort by the Commission to resolve this matter by conciliation. In Director General, NSW Department of Education and Training v NSW Teachers Federation [2009] NSWIRComm 147 the Full Bench gave its reasons for the making of dispute orders against the Federation its officers, employees and members employed by the Managing Director of TAFE. Those orders were made on 1 September 2009 pursuant to s 137(1)(a) of the Act and directions under s 136(1) of the Act. The dispute orders were made in the light of industrial action that had been taken and planned by the Federation in opposition to the Department's application to increase teaching hours. Details regarding the industrial action are set out in the Full Bench's reasons. 9 The Full Bench was critical of the Federation. At [29]-[30] of its reasons the Full Bench stated: [29] By its conduct in organising and encouraging industrial action by its members employed at TAFE, the Federation is now undoubtedly attempting to pressure the Department to either forego its right to have the hours issue proceed to arbitration or to have the Department alter its position to the advantage of the Federation, but at the same time the Federation intends that its members should keep the benefits of the Recommendation it accepted in February 2009. It is a clear attempt to subvert the process that the Federation understood would occur from the outset in return for the substantial increase in salaries. [30] The attitude of the Federation in pursuing a course of industrial action in this matter was indefensible, a fact reinforced by the Federation's weak defence of its position to embark on industrial action. That the Premier and/or Minister did not respond to the Federation's demand for them to intervene was to be completely expected given that the matter was proceeding before the Commission in conciliation, with dates having already been set for the matter to go to arbitration before a Full Bench, if conciliation was unsuccessful. 10 The need to arbitrate on the Department's application to, inter alia, increase teaching hours arose because a concerted effort by the Commission to achieve a settlement through conciliation failed. During December 2008 and January 2009 Walton J, Vice-President conciliated the matter and, as we have mentioned, made a Recommendation on 21 January 2009. The Recommendation was accepted by the parties and that resulted in the variation that was cl 47. However, the parties were unable to reach agreement on the matters identified in cl 47. Further conciliation occurred in April 2009, but unsuccessfully. 11 Notwithstanding the filing by the Department of its application to vary the Award in July 2009, Walton J persisted in his attempts to achieve a settlement by conciliation. His Honour had reached the point by 3 August 2009 where he was actively countenancing issuing a recommendation with a view to resolving the matter. It was at this time the Commission was advised of past and planned industrial action by members of the Federation at a number of TAFE campuses in the State. On 4 August 2009, the Full Bench made a direction that the industrial action not proceed and suspended the conciliation proceedings occurring before the Vice-President. 12 Following an indication by senior counsel for the Federation on 25 August 2009 that the Federation accepted 'the Commission's attempts to satisfactorily resolve the dispute should occur in the absence of industrial action', conciliation proceedings before the Vice-President resumed. However, those proceedings were again disrupted by an announcement from the Federation that TAFE teachers intended to take industrial action on 2 September 2009. The industrial action was to be in the form of a 24 hour strike as well as a rally. 13 On 1 September 2009, the Vice-President issued a certificate of attempted conciliation, thereby signalling the end of that process. 14 The Full Bench is not aware of whether conciliation would ultimately have resolved the dispute. But it does seem to us regrettable that it was apparently truncated in the face of industrial action and not able to run its full course. THE APPLICATION

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17 It is presently the case that TAFE teachers are required to attend for 30 hours per week: cl 13.1. Direct teaching hours are 20 per week for 36 teaching weeks, a total of 720 hours per annum: cl 15. Teachers are entitled to a reduction in direct teaching time by the requisite amount of professional development time: proviso to cl 15.1. For new teachers the requisite amount of professional development time is two hours per week. For other teachers it is one hour per week: cl 20.3. 18 Teachers are also entitled to 10 hours per week to perform related duties (e.g., preparation, marking, etc) which is included in their 30 hours per week attendance time: cl 15. Presently, the related duties to be performed by each teacher is determined in consultation with their supervisor: cl 16.5. 19 Although teachers are required to teach for 36 weeks they are required to be in attendance for 41 weeks per annum: cl 15. In addition, there are seven weeks where teachers are not required to attend and which are deemed to be leave in lieu of overtime: cl 30.4.1. 20 Schedule A proposed that TAFE teachers engage in direct teaching for an additional 47 hours in 2010 and 71 hours in 2011. That is, for 731 hours (being 767 less 36 hours of professional development) in 2010 and 755 hours (being 791 less 36 hours for professional development) in 2011. The Award would also be varied (cl 13.1.1) to provide a minimum attendance of 30 hours per week. Under this proposal the entitlement to professional development time deducted from direct teaching time would remain unaffected. 21 The second material change proposed in Schedule A related to the averaging of teaching hours and the payment of an excess teaching hours loading when the average is exceeded: cll 18 and 25. The proposal was to remove the cap on the number of average hours that may be worked in any one week (presently 24) above which the excess teaching hours loading is paid. A reasonable hours test would be inserted to ensure that the removal of the averaging cap did not detrimentally affect teachers. 22 The third material change proposed was the removal of 10 days professional development for related employees. Related employees are defined in cl 29 to include permanent and temporary education officers, counsellors, cluster managers, managers education and training resource centre, principal education officers, program managers, curriculum managers, quality assurance coordinators, chief education officers and senior education officers. But the removal of the present minimum of 10 days would not mean the end of professional development. The proposed new clause provides that Institute Directors are to ensure that all related employees undertake professional development related to their current and medium term individual development needs as identified in consultation with their line manager. It is further proposed that related employees employed at the time of the making of the variation with an existing balance of professional development time may utilise that time with the approval of their line manager. 23 It was submitted the cost savings of the foregoing variations would be as follows: Increased teaching hours $40.14m Removal of averaging cap $2.59m Removal of 10 days professional development time for related employees $5.0m Previously agreed reforms $6.103m Total $53.833m Shortfall on total cost of salaries of $55.12m $1.287m

[21]

CURRENT COMMONWEALTH AND STATE GOVERNMENT POLICY IMPACT ON TAFE NSW INSTITUTE FUNDING · The total revenue received by TAFE NSW Institutes is comprised of: o Commonwealth and State government sourced revenue allocated through purchasing agreements; o Contestable revenue through programs at a national, state, regional, enterprise, and individual student level. · Contestable revenue is comprised of but not limited to the following programs : o Commercial courses provided to individual full fee paying students; o Courses for full fee paying international students; o Commercial training programs for enterprises and government agencies; o Government contestably funded programs include User Choice apprenticeships, traineeships, Productivity Places Program, language literacy and numeracy programs, and adult migrant English programs etc. · The objective of User Choice is to increase the responsiveness of the vocational education and training system to the needs of clients through the encouragement of a direct and market relationship between individual providers and clients. User Choice governs the flow of public funds to registered training organisations (RTOs). · In NSW, the Registered Training Organisations apply to be included on an Approved Provider List to deliver training for apprentices and trainees in NSW. The funding of RTOs for training delivered under User Choice arrangements in NSW is administered through the NSW Apprenticeship and Traineeship Training Program (ATTP) which is run by State Training Services, an arm of the NSW Department of Education and Training. · Employers, together with trainees and/or apprentices are able to select an RTO from that list which meets their specific needs. RTOs contracted to deliver apprenticeship and traineeship training under the ATTP are paid a set price for each apprentice and/or trainee who selects them as their RTO. · Currently there are 10 apprenticeship areas open to User Choice in Wollongong, Newcastle and Sydney affecting six of the ten TAFE NSW Institutes. From 2009, this number will increase to twenty four apprenticeship areas, further expanding the level of contestable funding. · In addition to the contestable funding available through the User Choice program, TAFE Institutes tender for competitive contracts to Commonwealth and State government agencies. · Commonwealth government programs such as the Language, Literacy and Numeracy Program (LLNP) and the Productivity Places Program (PPP) are provided on a contestable basis. The PPP from 2009 will expand significantly to include training places for those who are in existing employment in addition to those who are seeking employment. Following agreement through the Council of Australian Governments (COAG), the States have signed up to deliver an additional 506,750 PPP qualifications commencements for job seekers and existing workers over the four years, 2009-2012. This is indicative of the increasing proportion of resources that will be available through contestable rather than guaranteed revenue. · In 2009 all states have signed up to a COAG Agreement to provide a guarantee of training placements for young people aged 15-24 years and to retrenched workers who are 25 years and over. The only source of additional funding to honour this entitlement to training is the contestably allocated Productivity Places Program. · A number of State government agencies such as the Health Department also call for tenders to run education programs. The NSW Government Procurement Policy establishes a rigorous process that providers must participate in to be successful in winning state government service contracts. · Institutes engage on a commercial basis with enterprises such as Accor, and Optus and community organisations such as Catholic Health Care to deliver workforce development services. · In the period, July 2008 to June 2009, all of Northern Sydney Institute activities were funded from Revenues derived directly from the Government Funded Core Recurrent Allocation plus Revenues from Contestable Business. In 2008/2009 the proportion of all activity funded by other than the Recurrent Core Allocation was 29.21% which has increased from a proportion of 28.1% in 2007/2008. This revenue is uncertain and not guaranteed from year to year. · The proportion of revenue derived from contestable and commercial services of the total revenue for the whole of TAFE NSW has increased from 20.76% ($299,916,059) in the 2005-06 financial year to 21.85% ($396,139,257) in the 2008-09 financial year. · The sustainability of employment for employees engaged on commercial programs is wholly dependent on the ability of TAFE NSW to successfully tender for the contracts and to market and sell its commercial courses and services at a competitive course fee cost.

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· According to Tourism Australia, Australia has the third largest number of international students in the English-speaking world behind the US and UK. The number of international students studying in Australia has demonstrated the highest growth in the Vocational Education and Training (VET) and English Language Intensive Courses for Overseas Students (ELICOS) sectors, both of which are serviced by TAFE NSW Institutes. Australian Education International monthly data released in May 2008 demonstrates a 45.5% growth of international students in the VET sector and 31.4% in ELICOS. · Australian Education International data demonstrates that the majority of all VET enrolments across Australia in 2007 were with non-government providers. In New South Wales more than nine in ten students enrolled with a non-government provider. Non-government providers increased their national market share of commencements to 80% from 78% in 2006. In this market, TAFE NSW is not only competing with RTOs in NSW, but in all other states and territories. This is demonstrated through the 65% growth in commencements between 2006 and 2007 in Victoria and 59% in Queensland compared to only 44% growth in commencements for New South Wales. · The capacity for TAFE NSW Institutes to be competitive in the growing international student market is essential to the long term future of TAFE NSW. · Increasingly TAFE NSW is competing with interstate TAFE Institutes and private RTOs for the revenue from international business both on and off shore. · From 2008, under the Skilling Australia for the Future policy, the Commonwealth is funding the Productivity Places Program to deliver 701,000 training places over 5 years in areas of skills shortage. These training places will be delivered in an industry-driven system, ensuring that training is more responsive to the needs of businesses and participants. Of the places, 392,000 training places will be allocated to existing workers wanting to gain or upgrade their skills, and 309,000 (including 10,000 structural adjustment places) will be allocated to job seekers. · This commitment represents the only source of new vocational education and training funding however, the places and funding are fully contestable between Registered Training Organisations, including TAFE NSW Institutes.

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· the 1991 Hours and Conditions case where the Full Bench determined that the appropriate workload was 20 hours direct teaching and 10 hours related duties per week for all permanent/temporary teachers. 2. The impact of the reform measures recommended in January 2009 . In relation to these measures Mr Bradley stated: The changes to the Award in relation to direct teaching hours for permanent teachers, excess teaching hours, time credit and part time casual teacher salaries will allow the Department to change the way in which teaching hours are scheduled in the future to maximise the use of teaching times that previously would have attracted penalties and/or to allocate teaching loads to teachers who can be engaged at a lower cost. As the changes will increase direct teaching hours, reduce salary payments and reduce the span of time credit hours, the use of teachers at the affected times will increase over subsequent years and therefore provide greater savings than 2007/2008 statistics would suggest. Mr Bradley estimated the savings to be as follows: · time credit: $4.4m over the life of the Award; · excess hours: $7.0m over the life of the Award; · discontinuance of Death and Invalidity Award claim: $14.86 million of over the life of the Award. 3. Costing of Department's application (both Schedule A and Schedule B) . In respect of Schedule A, Mr Bradley stated: Over the last 10 or 15 years, there has been an increasing casualisation of the TAFE teaching workforce. An increasing proportion of teaching hours in TAFE have been performed by part time casual teachers rather than permanent or temporary teachers. It is the clearly stated intention of the Department and Kevin Harris to reduce costs in order to maximise competitiveness and the Department has reduced costs by reducing equivalent full time permanency by 112 from 2006 to 2008. It is likely that this trend will continue and the Department will utilise any additional direct teaching hours required to be performed by permanent and temporary teachers by reducing the numbers of permanent and temporary teachers. In other words, the Department will make its savings as soon as possible and to the greatest extent possible at the higher $150.78 and $156.61 (for 2010 and 2011 respectively) rates by reducing permanent teacher appointments.

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Savings achieved from other measures including TAFE restructure, teacher education . Mr Bradley stated: There has already been a restructure abolishing Curriculum Centres as set out in the document "Doing Business in the 21st Century". As a result, there is now an even clearer expectation that teachers do the work that the 30 or so educational staff (whose positions were deleted) previously did…. Rather than this work being largely centralised, there will be great duplication of effort across TAFE Institutes. The savings for the Department from the 30 positions is about $3.6 million each year (based on a Senior Education Officer Step 2 salary with oncosts at about $120,000 per annum) or $8 million over the duration of the Award. In relation to teacher education, Mr Bradley deposed that: From July 2008, the Department abolished higher education teacher education arrangements but allowed teachers to choose at the beginning of 2008 to enrol in higher education teacher education programs. In 2009 those teachers who chose in 2008 to complete a higher education teacher education qualification have benefited from time release of between 8 and 10 hours per week off their teaching loads. Newly appointed permanent teachers who commenced a higher education teaching qualification in Semester 2, 2008 continue to have the benefit of time release as a transitional arrangement. However, newly appointed permanent teachers from Semester 1, 2009 are required to teach an additional 8-10 direct teaching hours per week as a result of the abolition of higher education teacher arrangements. Savings from time release alone is about $45,000 per year per new teacher, based on documents annexed hereto which were produced pursuant to a Summons of Production in these proceedings. The Department indicated as from January 2008 all new TAFE teachers need to only hold a Certificate IV in Training and Assessment prior to employment, though the TAFE Award even allows the Director General to waive this requirement and allow a person without any teaching qualification to teach in TAFE. Based on previous years' figures, recruitments to replace teachers resigning or retiring would mean an average annual university intake of about 200 new teachers as set out in documents produced pursuant to a Summons of Production in these proceedings. This will produce savings in release time (with on costs) of about $9 million per annum and with HECS and other support arrangements the total savings are around $12 million per annum or savings of $36 million over the duration of the Award.

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· Increasing class sizes. · Providing teachers with much less teaching time with students than the Department claims for as "nominal course hours "(Federation members have often reported that as little as half of the nominal hours have been provided for delivery). · Not paying teachers for recognition of prior learning done with student interaction during assessment. · Maximising use of much cheaper part time casuals teaching fewer than 10 hours per week (TAFE's "casual" and temporary employees constitute an appallingly high 70% of teachers, when Australia's 30% insecure workforce figure is the second highest in the industrialised world). · Cutting educational support staff, including about 50 positions in the "Doing Business in the 21st Century" restructure. · Reducing technical, stores, clerical and administrative support even though the demand for reporting and auditing processes has escalated significantly. The Government and the Department seem to be ignoring legislative requirements to maintain high quality vocational education and training programs…. Likewise, TAFE is required to provide access to the disadvantaged including specialised services such as delivered by special program coordinator teachers (see section 6(1) (e) of the TAFE Commission Act …). As these cause increased costs, which places TAFE at a competitive disadvantage, the Federal Government is already giving consideration to "market design" principles which should address this issue. In Kevin Harris' affidavit…, there is reference to TAFE not being able to deliver Commonwealth Government funded Productivity Places Programs "primarily due to the comparatively high cost of putting a full time TAFE teacher in front of a class to deliver these programs". This is grossly misleading as TAFE NSW has nearly three times as many part time casual teachers as full time teachers, and by the Department's own evidence, their hourly rate is nearly half of that of a full time teacher. Furthermore, part time casual teachers have not received a salary increase above 2.5%. The granting of slightly higher increases to full time teachers will have negligible impact on tendering for these programs. TAFE's ability to win major contracts with current salary arrangements is also clearly shown by Northern Sydney Institutes just winning a major $100 million contract.

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b. the abolition of curriculum centres said to have saved $8M. 53 In this respect, it was submitted the Recommendation and cl 6 called for 'further employee reform measures and costs savings…', that is, further to those reforms already agreed or measures implemented prior to the making of the Recommendation. It was submitted the suggested savings did not fall into this category. 54 The Federation also claimed that since 22 per cent of TAFE revenue was derived from commercial sources, the Department was obliged to forego 22 per cent of the costs of funding pay rises in excess of 2.5 per cent. As to this proposition the Department submitted that it was the need to secure commercial funding and contestable funding which required TAFE to be price competitive with private Registered Training Organisations ('RTOs'). It was contended that the effect of the Federation's proposition was to apply the Treasury funding to the salaries of the teachers involved in these courses but not accept the conditions of that funding which apply to all other activities of TAFE. Further, that it was inconsistent with cl 6 of the Award, which required savings in relation to salaries paid under the Award. 55 A further issue addressed in the Department's submission was the discontinuance by the Federation of a claim for a Death and Invalidity Award. This was referred to in section 4 of the Recommendation as follows: The Federation will discontinue proceedings IRC 618 of 2008, Crown Employees (Education Employees Death and Invalidity) Award and will not make any further application for death and disability provisions during the life of this award. 56 The Federation had costed the claim at full value of $14.86 M and claimed this amount as an offset. It was submitted for the Department: There is no evidence from NSWTF as to the likelihood of the claim being acceded to. The claim for death and disability for public servants other than emergency services workers is unprecedented. There were compelling reasons for providing such a benefit to emergency service workers which do not apply to TAFE teachers….

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57 As to the approach to be taken to cl 6, the Federation submitted the cost savings to be considered should also include cost savings from measures unilaterally made by the Department. In that respect, the Federation contended that cl 6.3 envisaged only the determination of employee related cost savings measures to fund the salary increases. To the extent that the salaries costs of the Department in relation to TAFE teachers during the life of the Award had been reduced by other measures implemented by the Department, further measures were not necessary, it was submitted. 58 It was further submitted regarding the approach to be taken by the Full Bench that it should consider the maximum savings available to the Department as a result of each of the agreed reforms, each of the existing cost measures or further changes sought by the Department. This approach, it was said, was consistent with the evidence of Mr Harris as to the approach the Department would urge the Commission to adopt of 'erring in favour of attributing maximum savings from each reform'. This approach also reflected the way that the Department functioned in practice which in Mr Bradley's experience was to always seek to maximise savings. 59 The Federation submitted: The onus must be upon the Department, as the party that has proposed the reforms contained in its amended application, to put forward convincing evidence as to the savings it would derive from the introduction of the award changes sought. It is particularly surprising that the Department did not in its evidence in chief endeavour to support its savings estimates. The initial affidavit of Harris did no more than assert certain figures without providing any justification or analysis. The Federation was forced to interrogate these bald assertions by issuing a summons to find any documents the Department used as a basis for its calculations and by thereafter making its own calculations. The Commission is, of course, bound by the usual obligations imposed by the Act in the context of Award proceedings. In addition to satisfying the criteria in clause 6.3 of the Award, the Commission must be satisfied that any measures to be implemented involving variation to the conditions of employment of teachers are such as to provide for fair and reasonable conditions of employment for employees covered by the Award for the purposes of section 10 of the Act. Ongoing savings 60 The Federation raised the issue of ongoing savings. In that respect, it was submitted, that the cost saving measures to fund the salary increases upon which the Commission was required to arbitrate pursuant to cl 6.3 were not confined to cost savings only accruing during the life of the Award and/or for the remainder of the life of the Award. Those cost savings continue in subsequent years. The Federation contended that the determination envisaged by cl 6.3 precluded the introduction of measures that would provide ongoing savings to the Department that would outstrip the cost of the salary increases afforded to teachers covered by the Award. Cost of salary increases 61 On the cost of the salary increases the Federation claimed that the total additional salary costs and oncosts above 2.5 per cent per annum were less than was estimated by Mr Harris. Mr Harris had estimated a total cost over the life of the award of $54.66 M. Mr McVicar had estimated a total cost over the life of the award of $53.21 M. It was submitted the estimates provided by Mr McVicar were much more transparent than those of Mr Harris and should be relied upon. However, it was further submitted: The relatively small costs of the salary increases for Bradfield College and TAFE Children's Centres must be added to the cost of salary increases for TAFE employees to assess the total cost of salary increases under the incorporated award. The Federation does not contest the total amounts of $270,000 for Bradfield College and $190,000 for TAFE Children's Centres attributed by Harris to the salary increases for the life of the award.

[98]

It was noted that the total cost of the claim was estimated to be $14.86 M over the life of the Award. 71 In pressing this offset the Federation indicated that it had agreed to discontinue its application for the making of a death and invalidity award as part of the salaries settlement for teachers in schools. This was a feature of the Recommendation accepted by the parties. The Federation recounted the fact that the Recommendation that was accepted by both parties provided a common increase for schools and TAFE of 4.4 per cent from 1 January 2009, 3.8 per cent from 1 January 2010 and 3.8 per cent from 1 January 2011, resulting in a common cumulative increase of 12.48 per cent. It was noted that the Director-General of the Department of Education was also the Managing Director of TAFE and his Department carried out the employer role for TAFE. Accordingly, it was submitted: The evidence demonstrates that the other employee cost savings agreed in relation to teachers in schools did not fund the cost of the salary increases over and above 2.5% per annum. The only inference that can be drawn is that the savings from the potential cost of a successful claim in the death and invalidity proceedings was considered by the Department as sufficient to bridge the differential. It is submitted that, given the close connection between teachers and related employees employed in schools and in TAFE that the same approach should be taken in these proceedings. 72 It was further submitted that it could not be said that no value should be attached to the agreement of the Federation to discontinue its claim for the making of a death and invalidity award and to not pursue the matter during the life of the Award. Such an approach, it was contended, would be inconsistent with the approach adopted in relation to teachers in schools and would permit the Department to accept the giving up of a valuable claim by the Federation as part of the quid pro quo for salary increases and subsequently contend it had no value. 73 It was submitted that the application for the making of a death and invalidity award was a serious claim that was foregone in return for salary increases. The costs saved by the Department as a result must be given consideration in these proceedings. The Federation submitted its application was not merely for a flow on of the arrangements applying in the emergency services: Further, the restriction of death and disability benefits to employees in the emergency services is not a position that has been endorsed by the Commission. It is no more than the position of the Government. There is no reason why these benefits should be confined to employees in high risk employment when they apply to death and disability outside the workplace.

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Furthermore, the contention that a reduction of permanent staff would not be practicable because of a desire to maintain a core of experienced staff can have no application to temporary teachers who receive the same salaries and conditions as permanent teachers. As at 30 June 2008, there were approximately 379 FTE temporary teachers. Most temporary teachers are appointed only for a period of one semester with no guarantee of ongoing employment which makes it easy to dispense with their services. 78 The Federation noted that the increase in direct teaching hours of 47 hours in 2010 and 71 hours in 2011 sought in Schedule A to the amended application would produce a continuing saving of approximately $50 M per annum and the increase of direct teaching hours of 36 hours per annum sought in Schedule B would produce a continuing saving of approximately $27 M per annum. The ongoing salary costs after the end of the Award would be less than $27 M per annum. Accordingly, it was submitted: When other cost savings are introduced into the equation, the calculation of the amount of this windfall and the resulting overfunding in the Department's proposals in relation to direct teaching hours increases significantly. Depending on the extent to which the Commission takes account of the reform measures and costs savings discussed above, the only way this windfall from overfunding can be avoided is to either not introduce any increase in direct teaching hours at all or to have an increase in direct teaching hours significantly smaller than that proposed by the Department. 79 In summarising its position on this issue, the Federation contended that an increase in direct teaching hours was not warranted because of the evidence as to the deleterious impact on the quality of provision of services of increased direct teaching hours. The evidence indicated that TAFE teachers commonly worked well in excess of ordinary working hours in order to maintain good quality lessons and delivery with their existing direct teaching load.

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Removing or Reducing Provision for Ten Days Professional Development Time for Related Employees 80 As the Federation observed, Schedule A to the Department's amended application proposes eliminating all professional development for related employees while Schedule B proposes a reduction in professional development for related employees by 50 hours per annum. 81 The Federation referred to the savings estimated by Mr Harris as follows: (a) eliminating all professional development for related employees would save nothing in 2009, $2.62 million in 2010 and $2.72 million in 2011, resulting in a total of $5.34 million over the life of the award; and (b) a reduction in professional development for related employees by 50 hours per annum would save nothing in 2009, $1.87 million in 2010 and $1.94 million in 2011, resulting in a total of $3.81 million over the life of the award. 82 These estimates were contrasted with those of Mr McVicar which, unsurprisingly, were favoured by the Federation: (a) eliminating all professional development for related employees would save nothing in 2009, $3.33 million in 2010 and $3.58 million in 2011, resulting in a total of $6.91 million over the life of the award with a continuing saving thereafter of $3.58 million per annum; and (b) a reduction in professional development for related employees by 50 hours per annum would save nothing in 2009, $2.47 million in 2010 and $2.55 million in 2011, resulting in a total of $5.02 million over the life of the award with a continuing saving thereafter of $2.55 million per annum. 83 The Federation submitted that the other problem with the Departmental calculations in relation to professional development reduction was that they did not take into consideration the abolition of the previous entitlement to accumulate any of the annual professional development available (20 hours in Schedule B), but not taken during the year. It was said this could result in a loss of about 10 hours per person per annum unable to be accumulated with a cost savings of about $1.0 M over the award duration.

[111]

87 The Federation observed that Schedules A and B to the Department's amended application proposed to introduce a new definition of 'approved program' in cl 2.3 of the Award which required a teacher's teaching and other duties be approved by the employee's line manager. A new cl 16 was proposed which would provide in cl 16.3 that managers would 'determine' the duties related to teaching that shall be conducted as part of an approved program. In relation to this variation it was submitted it: [C]onstitutes a significant alteration to the duties and responsibilities of teachers throughout TAFE and would undermine the professional standing and discretions of teachers. Absolutely no evidence has been presented by the Department to justify this proposed alteration to long-standing arrangements for the determination of the duties undertaken by teachers and other employees in TAFE. 88 It was further submitted the measure would not produce any cost savings and appeared to be no more than an opportunistic attempt to alter the working arrangements of teachers which was foreign to the cost savings exercise envisaged by cl 6.3 of the Award. 89 In concluding its written submissions, the Federation made the following points: 1. The award variations sought by the Department would go well beyond funding the cost of the salary increases provided for in the Award and provide ongoing windfall savings to the Department each year at the expense of the conditions of employment of teachers and the quality of teaching in TAFE. 2. The measures proposed by the Department in both Schedule A and Schedule B are also not justified by any necessity on the part of TAFE to improve efficiency or productivity. 3. The proposed increases in direct teaching hours, increase in attendance hours and removal of any limitation upon averaging of direct teaching hours, would impose pressures on teachers that have the potential to endanger the quality of teaching provided in TAFE and cause stress, anxiety and workload pressures. 4. No further cost saving measures were required to fund the cost of the salary increases in excess of 2.5 per cent per annum which were fully funded having regard to the following: a. The agreed reforms and cost savings measures in the January recommendation;

[122]

Should the working party not identify the necessary employee related reform measures and cost savings or should any dispute arise during this process, the parties commit that the Industrial Relations Commission shall arbitrate on the employee related reform measures and cost savings to fund the salary increases under the award in June 2009. 96 Clause 6 of the Award: 1. acknowledges there have been employee related reform measures and cost savings already agreed and implemented by the parties; 2. commits the parties to the identification and implementation of further employee related reform measures and cost savings to improve operational efficiency and competitiveness in order to fund the salary increases provided by the Award; 3. records the parties' agreement to consider a range of initiatives, including direct teaching hours of work of TAFE teachers and time credit hours to fund the salary increases beyond 2.5 per cent each year to the extent not already achieved by the employee related reform measures and cost savings already agreed and implemented by the parties; and 4. records that in the event the parties are unable to identify the necessary employee related reform measures and cost savings the parties are committed to take all necessary steps so that the Commission shall arbitrate on and determine the employee related cost savings to fund the salary increases under the Award. 97 It is clear from cl 6 and the background to that provision that the parties had committed themselves to finding further reform measures and cost savings that were employee related in order to fund the salary increases beyond 2.5 per cent each year that were not offset by the measures that were identified in section 2 of the Recommendation. Those measures were time credit, excess teaching hours, appeals to GREAT, sick leave and part time casuals. What is more, the parties committed themselves to the process of arbitration by the Commission in the event there was no agreement on the measures and savings. 98 The nature of the parties' commitments as recorded in cl 6 is important. It means that reform measures and cost savings that may have been achieved unilaterally by the Department at some earlier time, such as the abolition of Curriculum Centres and the changes in 2008 relating to teacher education, are not to be countenanced as part of any arbitration. The purpose underlying cl 6 was to find reform measures that would produce cost savings in addition to those already agreed upon measures and savings in order to fund the salary increases that exceeded 2.5 per cent in 2009, 2010 and 2011. It did not involve a retrospective search for savings that had already been achieved by TAFE at a time when the exercise required under cl 6 was not even in contemplation.

[123]

99 Further, it is apparent from the Recommendation that the discontinuance of the Federation's death and invalidity claim did not constitute an element of the already agreed upon measures to fund the increases beyond 2.5 per cent. The discontinuance of the claim was not a 'reform' measure representing a cost saving in section 2 of the Recommendation. Moreover, the discontinuance of the claim cannot be regarded as a reform measure representing a cost saving. It would lead to an absurdity if an organisation could make a claim, regardless of its merit, and then by discontinuing the claim contend that thereby the employer had achieved a saving by virtue of the organisation not proceeding to have the claim determined. There is no certainty the Federation's death and invalidity claim would have been granted, it being reasonably novel given the class of employee proposed to be covered (there are particular award provisions applying to emergency service personnel). Further, even if the claim had not been withdrawn and had been the subject of negotiations between the parties, given the Department's position of requiring the increased cost of salaries and improved employment conditions to be offset by employee related savings, we would expect that the cost of the death and invalidity claim ($14.86 M) would have to have been funded by a commensurate amount of savings. 100 The Federation had contended that an inference could be drawn that the savings from the potential cost of a successful claim in the death and invalidity proceedings was considered by the Department as sufficient to bridge the differential between the parties in relation to the settlement for teachers in schools and that given the close connection between teachers in schools and teachers in TAFE, the same approach should be taken in these proceedings. The Department does not accept that such an inference is available and nor do we. The Recommendation made by Walton J in respect of teachers in schools refers to the Death and Invalidity claim in a section on its own, separate to the other reform measures that had been agreed and in a manner similar to the structure of the Recommendation applying to TAFE teachers.

[130]

109 The Federation had submitted that when assessing the cost of the salary increases the Commission must have regard to the fact that TAFE obtains approximately 22 per cent of its revenue from commercial sources. Accordingly, the cost of the salary increases should be reduced by 22 per cent to approximately $42 M if the evidence of Mr McVicar was to be accepted. It followed, it was submitted, that reform measures necessary to produce cost savings of $53.67 M (Mr McVicar's figure) were not justifiable. 110 There is a superficial attraction to the Federation's contention that because 22 per cent of TAFE's revenue is derived from commercial sources, Treasury is not required to fund 22 per cent of the cost of the salary increases above 2.5 per cent and, therefore, the cost savings necessary are some $12 M less that the original estimate (based on Mr McVicar's estimate). 111 The Federation's approach, however, is inconsistent with what was stated earlier, namely, the application of cl 6 does not involve a retrospective search for savings that had already been achieved by TAFE at a time when the exercise required under cl 6 was not in contemplation. It is also inconsistent with cl 6 to the extent that it requires savings in relation to salaries paid under the Award. Further, the 22 per cent is revenue derived from contestable and commercial services and we do not know what proportion of that percentage relates to the provision of contestable services, which includes revenue from successful bidding to conduct training at often pre-determined cost for Commonwealth and State government agencies. Commercial services, on the other hand, involve pricing services such that they deliver a profit. 112 More importantly, however, was the evidence of Mr Harris that: The sustainability of employment for employees engaged on commercial programs is wholly dependent on the ability of TAFE NSW to successfully tender for the contracts and to market and sell its commercial courses and services at a competitive course fee cost.

[162]

135 In so far as direct teaching hours is concerned, Schedule B effectively restores the standard of 20 hours per week fixed by the Full Bench in the 1991 TAFE case. In the 1994 NSW TAFE Commission Teachers and Other Educational Staff Enterprise Agreement a new clause, 14.2 Professional Development - Teachers, provided two hours per week in the first and second years of employment and one hour per week thereafter for professional development for all permanent teachers. This professional development time was deducted from the 20 hours direct teaching time per week fixed in 1991, meaning that teachers (after the first two years of employment) were required to undertake 19 hours direct teaching per week. 136 Schedule B (cl 16) proposes the removal of the current practice of discounting of the direct teaching component by one hour a week for professional development. Professional development would no longer be allocated on a weekly basis, but rather an annual allocation of hours would be guaranteed under the Award. Professional development would be debited from the annual hours allocation for duties related to teaching. Professional development is already prescribed as a duty related to teaching under cl 15 of the current award. 137 The annual hours allocation for duties related to teaching is increased to 540 hours or five additional hours per week to 35 hours. 138 Teachers undertaking teacher training will retain their existing entitlements but these will be expressed as an annual hour allocation that is 72 hours per annum in their first two years of service. Teachers who are teacher training on recruitment will retain their existing entitlements but these will be expressed as an annual hour allocation that is 72 hours per annum in their first year of service. In the case of these new teachers, their direct teaching hours would be reduced by half the requisite professional development time. All other teachers will be required to provide 20 hours per week of direct teaching time and they will be entitled to 20 hours of professional development per annum, which will be a guaranteed component of the annual hour allocation for duties related to teaching as set out in the proposed cl 16. 139 According to the Department's evidence the changes proposed in Schedule B in relation to working hours will deliver nearly $33 M over the life of the Award. Increasing the existing hours of attendance will result in an increase in the number of hours that teachers are available to engage in duties other than teaching at their place of work and may, therefore, reasonably be expected to increase productivity. We also accept that increasing the direct teaching component of all teaching classifications, and freeing up the way in which these direct teaching activities can be delivered in accordance with the proposed cl 16 - Approved Program, will assist in improving TAFE NSW's operational efficiency and competitiveness.

At a glance

Court

Decision date

Before

Source

Judgment (172 paragraphs)

Cases Cited (11)

Cited By (3)