9 The dispute came again before the Commission on 14 January 2010. On that occasion, the Commission was advised by the Federation that the Department had indicated to all TAFE staff on 23 December 2009 that in response to concerns raised by teachers regarding the Full Bench decision, it would not implement aspects of the decision (attendance time, cap on teaching hours, extended leave). However, it was also indicated that the Department would implement that part of the decision requiring an increase in direct teaching hours. The Department's concessions did not meet the Federation's demands not to implement the Full Bench decision at all.
10 In the proceedings, the Commission indicated that it would countenance assisting the parties to resolve the dispute if the threat of industrial action was withdrawn. The Federation was given until 4.00 pm Monday, 18 January 2010 to advise the Department whether it was prepared to withdraw the threat and that the Commission would sit the following day, 19 January, to hear the Federation's position.
11 On 19 January, the Commission was advised by senior counsel for the Federation that:
…
The Federation is prepared to discuss with the Department… matters relating to TAFE. The Federation noted that no industrial action has been authorised. The Federation has no intention of authorising any industrial action while discussions take place. The Federation will advise its members of this.
…
12 In the result, after further discussion by the Commission with the parties, the Federation gave the following undertaking, which was accepted by the Commission:
The Federation will take action to prevent industrial action occurring at TAFE colleges until it has reported back to the Commission about discussions with TAFE. This action will include: (1) the Federation's officers will not authorise any industrial action at TAFE colleges while discussions are taking place between TAFE and the Federation; (2) the Federation's officers will put a notice on the Federation's website that while discussions are taking place between TAFE and the Federation no industrial action is authorised by the Federation at TAFE colleges and that the guidelines and any suggestion of industrial action in the email of 15 December 2009 are suspended.
13 On 2 February, the Commission was advised by the Federation that discussions held between the parties 'did not satisfactorily resolve the issues' and that 'the Federation believes no useful purpose will be served by continuing these discussions.' On 3 February, in light of the Federation's communication the previous day, the Commission was requested by the Crown Solicitor's Office, acting for the Department, to list the matter 'as soon as possible'.
14 On 3 February, in proceedings before the Commission senior counsel confirmed what was said in the Federation's communication of 2 February. However, senior counsel raised the prospect of conciliation by a Member of the Commission. Senior counsel for the Department submitted that in his client's view there was no scope for conciliation and the Department's application for dispute orders should be listed for hearing given that industrial action in the form of work bans by teachers was occurring and that a stop work meeting had been called by the Federation for Friday, 5 February.
15 In my opinion, given the position of the parties, there would be no utility in further conciliation. The Federation's position expressed most strongly in its communication to members is that it opposes the implementation of the Full Bench decision of 15 October 2009 and has set its face against observing the terms of the award variations arising from that decision. Despite having provided to them the opportunity for discussions about terms for resolving the dispute the parties have been unable to do so. In my view it would not be a proper use of the conciliation processes under the Act and would be against the public interest for a Member of the Commission to engage in conciliation where one party is seeking an outcome entirely inconsistent with a recent Full Bench decision and the terms of a current Award and the other party has indicated it may be prepared to concede that aspects of the decision and the award variations would not be implemented. The proper course, and one I commend to the parties, is for an application to be made under s 17 of the Act.
16 Accordingly, on 4 February 2010, the Commission heard the parties on the question of dispute orders.
Full Bench decision
17 The Full Bench decision of 15 October 2009 dealt with an application by the Department to vary the Award to, amongst other matters, increase attendance hours and direct teaching hours for TAFE teachers and introduce an annualised system of hours. These were the further reform measures identified by the Department to fund the salary increase above 2.5 per cent. Prior to the hearing that led to the Full Bench decision, on 1 September 2009 the Department advised the Commission that the Federation planned industrial action for 2 September 2009. The industrial action had been planned by the Federation in opposition to the Department's application. The Full Bench made certain orders restraining industrial action pursuant to s 137(1)(a) of the Industrial Relations Act 1996: Director General, NSW Department of Education and Training v NSW Teachers Federation [2009] NSWIRComm 147.
18 The Full Bench decision of 15 October 2009 varied the Award in accordance with the less preferred position (Schedule B to the application) contended for by the Department and not the Department's preferred position (Schedule A). Nevertheless, Schedule B involved increased attendance hours and direct teaching hours (albeit to a lesser extent than Schedule A) and the introduction of an annualised system of hours. The variations were ordered to take effect as of the commencement of the first TAFE term in 2010.
19 The Full Bench decision was immediately condemned by the Federation and the industrial action referred to in Mr Husdell's affidavits occurred. On 26 October 2009, the notifier commenced proceedings in Matter No IRC 1679 of 2009 alleging breaches of earlier orders made by the Commission on 1 September 2009. Those proceedings have not yet finalised, but the orders made on 1 September expired on 30 November 2009. As earlier indicated, the Department now seeks further dispute orders in light of the planned industrial action by the Federation and its members.
Industrial action not justifiable
20 The industrial action planned by the Federation is entirely without justification:
a. In January 2009, in return for a salary increase of 12 per cent over three years, the Federation agreed that in order to fund the salary increase beyond 2.5 per cent per annum it would commit to identifying and implementing further employee related reform measures and cost savings to improve TAFE operational efficiency and competitiveness in addition to measures already agreed upon. The Federation agreed that direct teaching hours would constitute one of the reform measures to be the subject of negotiations.
b. The Federation also agreed, in terms that constituted a consent provision of the Award, that in the event the parties to the negotiations were unable to 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 necessary to fund the salary increases under the Award.
c. The parties to the Award were unable to agree on the necessary employee related reform measures and cost savings. The Commission sought, strenuously, to conciliate an outcome acceptable to the parties rather than have the matter proceed to arbitration. All major public sector wage claims in 2008 and 2009, including public school teachers, and many of which were hotly contested, had been settled through conciliation or using the 'Bluescope' approach. However, conciliation in relation to TAFE teachers was unsuccessful.
d. In the absence of agreement the Department sought to exercise its obligation under the Award to have the Commission arbitrate in the absence of agreement.
e. Prior to the Department's application being listed for hearing, the Federation initiated industrial action designed to pressure the Government into not proceeding with the arbitration, despite having freely agreed to that process in return for a 12 per cent salary increase. Dispute orders were made that the Federation not engage in industrial action.
f. The Full Bench heard evidence and submissions over three days in September 2009. On 15 October 2009, the Full Bench gave its decision in the matter.
g. An important consideration of the Full Bench in deciding to vary the Award in terms of Schedule B to the Department's application was that the Federation had committed itself to an arbitration in the event the parties were unable to agree on the necessary employee related reform measures and cost savings to fund the salary increase above 2.5 per cent. That is to say, the Federation agreed that in the absence of the matter being settled by the parties themselves, the Full Bench should determine the necessary employee related reform measures and cost savings. That is what the Full Bench did.
h. Schedule B involved the following variations to the Award:
i. that TAFE teachers engage in direct teaching for an additional 36 hours in 2010 and 2011, In the case of new teachers their direct teaching hours would be reduced by half of the requisite professional development time. For other teachers there would be no reduction.
ii. that the averaging cap of 24 hours be removed.
iii. that TAFE teachers be required to attend at work for 35 hours per week (presently 30) and that the additional five hours be devoted to related duties work.
iv. that there be a reduction in professional development time to 20 hours per annum for related employees.
v. that presently, where a teacher takes extended leave that spans student vacation periods, that leave is, in effect, extended by the period of the student vacation without the student vacation being debited against extended leave entitlements. The variation removed the benefit by deeming any student vacation within a period of extended leave to form part of the extended leave.
i. The savings to be achieved by these reform measures was $49.853m, some $5.267m short of the increased cost of salaries.
j. In its decision, the Full Bench made a number of relevant observations and findings that appear to have been overlooked in the Federation's attempt to garner support for its industrial campaign:
· NSW TAFE teachers at the top of the salary scale are currently the highest paid TAFE teachers in Australia. Prior to the Award variation the current ordinary working hours for a NSW TAFE teacher was 30 hours. Of those 30 hours, the teaching allocation of TAFE teachers was 20 hours per week, with a weekly deduction of 1 hour per week for professional development. There were 36 teaching weeks in each year resulting in 684 hours teaching per annum by a teacher.
· Except for the Australian Capital Territory, NSW TAFE teachers had the least number of ordinary weekly working hours than in any other State and the least number of teaching weeks in a year. The number of ordinary weekly working hours in other States varied from 35 to 38. The number of teaching weeks in other States varied from 39 to 42.
· The Federation sought to rely on the proposition that because it had withdrawn a claim for a death and invalidity benefit to be paid to TAFE teachers, the withdrawal of that claim should be regarded as a cost saving to the value of $14.86m. The Full Bench took the view that 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.
· Under the terms of the Award the objective was to find employee related reform measures and cost savings to improve TAFE operational efficiency and competitiveness in order to fund the salary increases provided in the Award. The Full Bench found that TAFE operated in a highly competitive environment and was in competition with both interstate TAFE Institutes and private RTOs for the training and vocational education dollar. It was accepted by the Full Bench that TAFE NSW's ability to offer quality educational services that were cost effective was essential to its ongoing viability.
· 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, it was submitted the cost of the salary increases should be reduced by 22 per cent. The Full Bench found that the parties' agreement to identify cost savings for the purpose of funding the salary increase did not involve a retrospective search for savings that had already been achieved by TAFE prior to the agreement to identify further cost savings. Further, the Full Bench stated that by discounting the costs needed to be saved on the grounds that 22 per cent of TAFE's revenue was derived from commercial/contestable sources, it would likely have the effect of reducing TAFE's ability to be as competitive as it otherwise might be if there were no discounting. That is to say, if TAFE was rendered less competitive it would hinder its capacity to continue to expand and to increase its workforce of teachers and related staff. Further still, the evidence indicated that the revenue derived from commercial services by TAFE was used to subsidise the services it provided for the neediest people in the community. It did not seem to the Full Bench, in those circumstances, to be in the public interest to hinder TAFE's competitiveness by removing commercial gained revenue from the equation.
· The Full Bench did not see as a legitimate objective of an increase in teaching hours, the reduction in the number of permanent and/or temporary teachers.
21 In relation to the challenge by the Federation to the jurisdiction of the Full Bench in the Court of Appeal it is understood the challenge was dismissed.
22 The Federation has made a number of specific criticisms of the Full Bench decision. Most of the criticisms contain a distortion of the actual position. It was suggested, for example, that the Full Bench valued each additional hour of teacher time at less that $3. The Full Bench found that NSW TAFE teachers at the top of the salary scale are currently the highest paid TAFE teachers in Australia. The total annual hours for a TAFE teacher is 1435. The annual salary for a top of the scale teacher from 1 January 2010 is $81,656, making an hourly rate of $56.90.