George A Bond & Co Ltd (in Liq) v McKenzie

DECISION 1The Health Services Union East (HSUE) notified a dispute under s 130 of the Industrial Relations Act 1996 (the Act). The respondent to the Dispute is the Ambulance Service of New South Wales (the Service). The Notification identified the terms of the Dispute as follows:

1. According to Clause 5 of the relevant Award, ASNSW is required to pay Paramedics a Specialist Allowance when they complete the required Specialist training requirements.
2. Upon completion of such training, the ASNSW can utilise these skills by engaging these officers into the Special Casualty Access Team (SCAT), Rescue and/or other specialties with the ASNSW.
3. Paramedics who have qualified for the Specialist Allowance are required to be paid a weekly Specialist Allowance as specified in Table 2A of the relevant Award, currently $37.60 p/wk.
4. HSU East has called for the ASNSW to pay all Paramedics, with the relevant Specialist qualifications to be paid the Specialist Allowance, as per the Award. 2The relevant Award is the Operational Ambulance Officers (State) Award (the Award). The relevant part of clause 5 of the Award provides: Specialist Allowance is paid to an employee who has successfully completed the requirements for and is appointed by the Service to an identified Specialist position of Special Casualty Access Team (SCAT), Rescue and/or other specialties as agreed to by the parties. Provided that such an employee shall be required to undertake and successfully complete further instruction/in service courses and certification examinations as required by the Service every three years. 3During the hearing of the Dispute, HSUE contended that Paramedics belonging to the Special Operations Team (SOT) should be paid the Specialist Allowance on the basis that they fall within "other specialities" in clause 5. The contention was based on a number of propositions one of which was that the allowance, if payable, would not constitute an extra claim otherwise precluded under the Award and under the related Memorandum of Understanding. The Service contended to the contrary, namely, that any such payment would constitute an extra claim. The Commission was asked to interpret clause 5 to see whether the specialist allowance (if payable) would in fact constitute an extra claim. 4It should be noted at the outset that the exercise upon which the Commission is requested to embark is academic. This is because clause 5 contemplates that the allowance, if payable, is predicated upon agreement being reached between the parties. The Service has informed the Commission that no such agreement has been or will be forthcoming during the life of the Award. 5It is necessary to provide some preliminary background into the role and operations of SOT Paramedics by reference to those specialist positions expressly recognised as entitled to payment of the specialist allowance under clause 5. Two specialist positions are identified in the clause, namely, the Special Casualty Access Team (SCAT) and, "Rescue". Members of SCAT and Rescue are both recipients of the specialist allowance. A Standard Operating Policy issued by the Service sets out the procedure for activating SOT Paramedics operations. According to the Policy, SOT Paramedics are required in circumstances where access to patients may be difficult or where paramedics cannot otherwise be expected reasonably to safely access and treat patients. Activities that might require a SOT Paramedic response are listed in the Policy. They include the following: Helicopter responses (ground assistance) Aquatic incidents, including swift water Bush related incidents i.e. walk-in, 4WD Cliff/vertical, including buildings, towers, gantry, crane & roof access Specialised extrication equipment e.g. stokes litter, SKED or Paraguard stretcher Confined space i.e. tunnels, mines, pits or storm water drains Bushfires HAZMAT incidents or Major structural fires CBRN response Inter-agency specialised tasking i.e. NSW Police TOU, Bomb, DigPro, Public Order & Riot 6SCAT Paramedics fall within the SOT Paramedics group, however, under the Policy, SCAT Paramedics are required to undertake additional, more specialised functions which include responding to specific incidents requiring access to canyons, caves and other remote areas where an overnight camp may have to be established prior to extrication of a patient. 7Before dealing with the parties' submissions on the preliminary issue, reference should be made to a number of relevant provisions of the Award, the Memorandum of Understanding (MOU), which is to be read in conjunction with the Award, and certain statutory provisions. 8The MOU was entered into between HSUE and the NSW Department of Health for the period 1 July 2010 to 30 June 2014. It sets out the understanding and agreement of the parties in relation to wages and conditions outcomes and is expressed to apply to employees covered by the Award. 9Clause 1.5 of the MOU provides: There shall be no further salary or conditions claims made during the term of this Memorandum of Understanding that is from 1 July 2010 to 30 June 2014, other than as provided in existing Awards of the Industrial Relations Commission. 10Clause 14 of the MOU, headed "No Extra Claims" provides relevantly: 14.1 The parties agree that during the term of this Memorandum of Understanding, no proceedings, claims or demands concerning wages or conditions of employment in respect of employees will be instituted before the Commission or any other arbitral tribunal. The exception being matters listed as 'leave reserved' in the relevant Awards. 14.2 The parties agree that during the term of this Memorandum of Understanding, with the exception of matters listed as 'leave reserved' in the relevant Awards, no extra wage claims, claims for improved conditions of employment or demands will be made in respect of the employees covered by the Union and employed under the Awards. 14.3 The agreement in the preceding paragraph does not prevent the parties from instigating any proceedings with respect to the interpretation, application or enforcement of this Memorandum of Understanding or existing provisions in the Awards or other Awards applicable to employees covered by this Memorandum of Understanding. 11The Award also contains a "no extra claims" clause (clause 46) which provides as follows: This Award recognises all work value and special case claims up to its commencement date, except for the following matters where leave is reserved to the parties to make application in respect of: (a) The Award arrangements for Operations Centres, including a new Award, classification structures, rates of pay and conditions of employment; (b) The operation of sub-clauses 22(a) and 22(b) in respect of the seven day period of notice for the posting of rosters and the seven day period of notice for subsequently altering such rosters; and (c) Review of allowance for undertaking a paid crib break away from Station. No additional claims to the Award can be pursued during the life of the 2010 Memorandum of Understanding between the Department and the Union, which ceases on 30 June 2014, excepting those listed in (a) to (c) above. Following the expiry of the Memorandum on 30 June 2014, the parties are entitled to pursue variations to salaries, salary related allowances and conditions of employment for 1 July 2014 onwards, which may include instituting proceedings before the Commission if the parties are unable to achieve agreement. 12The HSUE asked the Commission to apply clause 14.3 of the MOU to the interpretation of clause 5 of the Award. According to HSUE what it seeks on behalf of SOT Paramedics in the present application does not constitute a claim that would fall within either clause 14.1 or clause 14.2 of the MOU. Clause 14.3, in its terms, permits HSUE to make an application to the Commission to interpret clause 5 of the Award. The Service expressed a contrary view, contending that clause 14.3 had a very limited function in the context of binding agreements between the parties as reflected in the 'no extra claims' provisions. According to the Service, clause 14.3 applies to those employees covered by the Award (specifically clause 5). It would apply, for example, to an application that the Service was not properly administering the Award by refusing to pay SCAT Paramedics the specialist allowance to which they are entitled under clause 5. 13In my view, it is not necessary to rely on clause 14.3 of the MOU as an interpretative aid. Section 175 of the Industrial Relations Act 1996 confers power on the Commission to interpret clause 5 of the Award so as to declare its true meaning and intent: see decision of Full Bench (Walton J, Vice-President, Kavanagh J, Grayson DP) in Health Services Union and Others and Director-General, NSW Department of Health and Others [2010] NSWIRComm 42; 193 IR 359 at [57] [58] where it was held: [57] So as far as the interpretation or application of the subject awards is concerned there is ample power in s 175 of the Act for a determination to be made as to the effect of the "no extra claims" clauses of the awards. The issue raised as to the "no extra claim" clause plainly involves a question concerning the interpretation, application or operation of an industrial instrument, namely, an award (see definition of industrial instrument in s 8 of the Act) and that question arises for the purposes of the Commission exercising its functions in relation to a matter before it, namely the industrial disputes. [58] In our view, the section allows the Commission to declare the true meaning and intent of a particular provision of an award: Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch v ADT Security Pty Limited and Others (1994) 54 IR 26 at [41]. (That matter concerned the interpretation of s 198 of the then Industrial Relations Act 1991 but, in our view, it is equally applicable in the present context). 14Section 175 of the Act provides: The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument). 15The question which arises for determination in these proceedings is whether the specialist allowance under clause 5, if claimed by SOT Paramedics, would constitute an extra claim. The relevant matter before the Commission concerns an industrial dispute: see s 6 of the Act. 16As earlier noted by the Commission, HSUE seeks the agreement of the Service that SOT Paramedics should receive the specialist allowance payable in accordance with the terms of clause 5. The Service, although withholding agreement, has indicated its preparedness to enter into further discussions on the issue. 17According to the HSUE, if it were able to secure the necessary agreement under clause 5 SOT Paramedics would be entitled to receive the specialist allowance during the life of the Award and this entitlement would not constitute an 'extra claim'. According to the Service, what the HSUE ultimately seeks is that in the event the parties do not reach agreement, HSUE can access either the dispute settling powers of the Commission or make an application under s 17 of the Act for a variation of the Award. Either avenue could result in a successful claim for the allowance which effectively "sidesteps" the operation and application of the relevant "no extra claims" provisions. The submissions of the Service appeared to go further, namely, that in the event of agreement between the parties in the terms contemplated under clause 5 of the Award, the HSUE would still be precluded from claiming the specialist allowance because the claim would constitute an 'extra claim'. This further submission was based on the proposition that all clause 5 comprehends is that the parties can discuss whether SOT Paramedics fall within "other specialities", and that is as much as can be done during the life of the Award. 18HSUE in response reiterated that what it is seeking is the agreement of the Service to pay the allowance to SOT Paramedics. It is not seeking "an order" from the Commission that the Service pay that allowance. HSUE conceded that the Commission (in the absence of agreement) would lack the power to force agreement. What emerged from HSUE's response, however, was that HSUE might seek the assistance of the Commission by requesting that the Commission make a Recommendation to the effect that the Service should not withhold agreement. 19It was common ground that 'no extra claims' provisions should be strictly construed, and bind all parties to awards: see, for example, Re NSW Education Employees (Non-Continuing Contract Employment) Award (1999) 92 IR 239 at 245; Re Corrections Health Service Nurses' (State) Award (1999) 90 IR 235 at 245. In the last cited authority, Wright J said: In approaching the construction of no extra claims provisions, or provisions such as those contained in the Heads of Agreement, a strict approach of their construction should be applied consistent with the necessity of maintaining the integrity of the wage fixation principles. Nevertheless, a strict construction (that is, one which would be alert to ensure inappropriately brought claims do not proceed) does not require the Commission to ignore the actual words used in the provision or to ignore a clear attempt by the parties to limit the terms of the commitment. 20It should be emphasised that the particular provision which the Commission is being asked to interpret by HSUE, namely, clause 5, is not a 'no extra claims' provision. Whatever the ambit of clause 14.3 of the MOU, s 175 of the Act confers on the Commission the power to undertake the exercise presently under consideration, that is, the interpretation of clause 5. Consideration of the issue, however, requires consideration of the application of the 'no extra claims' provisions. 21I intend to approach the issue by considering in turn the submissions of the Service, first, that in the absence of agreement, HSUE cannot invoke the powers of the Commission because a claim for the allowance would constitute an extra claim otherwise precluded under the terms of the Award and the MOU, and, secondly, that in the event of agreement, a claim for the allowance would constitute an extra claim because clause 5 is confined in its terms to enabling the parties to reach agreement on "other specialities". This second submission emerged during the hearing when the Service summarised its opposition to the HSUE's application in the following way: A claim for a new specialty or any specialty takes on a new life once, should agreement not be forthcoming, it takes on a new life of a claim - and that has not been emphasised in submissions - in agreeing on new specialties. In agreeing on a new specialty, as contemplated by clause 5, to place a demand for a new specialty must, in our submission, fall within that clause as an extra claim. 22Consideration of clause 5 should be approached by reference to basic and well-recognised principles of construction of industrial instruments. A useful starting point is the observation made by Street J (with whom Cantor J agreed) in George A Bond & Co Ltd (in Liq) v McKenzie [1929] AR (NSW) 498 at 503-504: Now speaking generally, awards are to be interpreted as any other enactment is interpreted. They lay down the law affecting employers and employees in their relations as such, and they have to be obeyed to the same extent as any other statutory enactment. But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result, as this award in fact did, from an agreement between parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore, in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award. 23The authorities also emphasise the importance of context when interpreting a provision of an Award, that is, understanding the words used in relation to the circumstances in which they are used. I also mention a decision of a Full Bench of the Commission in Re State Rail Authorities Firefighters Award 2001 [2002] NSWIRComm 159; (2002) 122 IR 13 where it was observed that an Award is an instrument created to include and benefit employers and should be interpreted in accordance with that purpose: at [22]. 24The plain words of clause 5 indicate that in the absence of agreement, SOT Paramedics do not fall within "other specialities" referred to in that clause. In the absence of agreement, therefore, SOT Paramedics are not entitled to the specialist allowance over and above the rates of pay to which they are entitled under the Award. I did not understand the submission of HSUE to contend otherwise. Accordingly, any claim or demand for the specialist allowance in the absence of agreement made by or on behalf of the SOT Paramedics must constitute an additional or 'extra claim' precluded under the terms of the Award and the MOU. 25The regime of 'no extra claims' provisions set out in the Award and in the MOU have already been referred to. It was common ground that such clauses are to be given a strict construction. There are sound reasons for adopting this approach. A helpful exposition of those reasons is set out in Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award and Crown Employees (Teachers in TAFE and Related Employees) Salaries and Conditions Award [2008] NSWIRComm 209 at [15] and [16]: We would observe that no extra claims undertakings were adopted in the early 1980s in the federal Metal Industry Award 1971, as a device to prevent further award, but particularly over award, claims being made for an agreed period. Such undertakings have become a standard feature of both wage fixing arrangements both at the federal and State level, especially through the mechanism of wage fixing principles. Commendably, employees, unions and employers have regarded their commitments to make no extra claims during the life of an award or agreement as solemn undertakings and rarely have they been breached. The commitments have been regarded as morally, as well as legally binding. The purpose of no further claims commitments is to ensure certainty during the life of the relevant industrial instrument. That is to say, all matters agreed or arbitrated upon represented a settled arrangement for the term of the award or agreement. Depending on the terms of the commitment, employers could plan and act on the basis that during the life of the award or agreement, they would not incur any additional labour costs or industrial action in support of extra claims, nor would they be required to divert resources to dealing with such claims. Employees and their unions would not face claims to cut wages or alter to their detriment employment conditions prescribed by the award or agreement. 26Clause 14.2 of the MOU sets out the parties' commitment not to make extra claims during the life of the Award. The exception set out in clause 14.2 concerns matters listed as 'leave reserved'. Clause 46 of the Award sets out the matters where leave is reserved to the parties to make application within the life of the Award. None of these matters, on a plain reading, concern clause 5 of the Award, or provide any basis for Paramedics, for example, to make an application for the payment of the specialist allowance in the absence of agreement. Such an application, if made, would also be inconsistent with the need to ensure certainty during the life of the Award. It would defeat the purpose of securing prior agreement to 'no extra claims' commitments. 27On the other hand, where the parties have secured agreement that SOT Paramedics fall within "other specialities", it cannot follow on any reasonable construction of clause 5 that entitlement to the specialist allowance would be precluded on the basis that it constituted an 'extra claim'. If all clause 5 permits is the securing of agreement on "other specialties", what then is the purpose of securing the agreement if the "specialist allowance" otherwise constitutes an extra claim to which there is no entitlement? It was emphasised in Health Services Union and Director-General, NSW Department of Health that although 'no extra claims' clauses operate "so as to commonly bind all parties" for the period of the Award, a notable exception to this is where the parties agree to accept a claim: (at [39] citing with approval Re: NSW Education Employees (Non-Continuing Contract Employment) Award at 245). My conclusion is reinforced by clause 14.4 of the MOU which provides for consent variations to the Award as follows: The parties further agree that during the term of this Memorandum of Understanding, consent variations to the Awards can proceed. 28Accordingly, in the absence of agreement the HSUE is precluded from claiming the Specialist Allowance on behalf of SOT Paramedics on the basis that it would constitute an extra claim. Where agreement is forthcoming under clause 5 between the parties during the life of the Award, SOT Paramedics should be entitled to payment of the Specialist Allowance under the clause, on the basis that such payment would not constitute an "extra claim". 29The matter is set down for a directions hearing at 9.30am on Wednesday, 4 April 2012. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 March 2012