New South Wales Teachers Federation v Director General, Department of Education and Training. Application for declaratory relief under s 154 of the Industrial Relations Act 1996 - [2002] NSWIRComm 56 - NSWIRComm 2002 case summary — Zoe

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New South Wales Teachers Federation v Director General, Department of Education and Training. Application for declaratory relief under s 154 of the Industrial Relations Act 1996

[2002] NSWIRComm 56

Industrial Relations Commission (NSW)|2002-03-12|Before: Haylen J, Grayson DP, Mr J

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Court

Industrial Relations Commission (NSW)

Decision date

2002-03-12

Before

Haylen J, Grayson DP, Mr J

Source

Original judgment source is linked above.

Judgment (57 paragraphs)

[1]

Industrial Relations Commission of New South Wales in Court Session

[2]

CITATION : New South Wales Teachers Federation v Director General, Department of Education and Training. Application for declaratory relief under s 154 of the Industrial Relations Act 1996 [2002] NSWIRComm 56 APPLICANT: New South Wales Teachers Federation PARTIES : RESPONDENT: Director-General, Department of Education and Training FILE NUMBER: IRC 6752 of 2001 CORAM: Haylen J Industrial Relations Act 1996, s 154 - application for declaration - interpretation of provisions of industrial agreement - principles applicable - vacation leave accrued during "service" while teacher "on duty " - whether duty performed on same day as part day industrial stoppage "service" under terms of the agreement - declaration made confirming entitlement. CATCHWORDS : Industrial Relations Act 1996 s 143(1) - whether payment for leave accrued whilst on duty and when industrial stoppage occurred on same day is the payment of "any other financial benefit" and an offence. Conveyancing Act s 144(1) Industrial Relations Act 1996 s 143(1) s 154 LEGISLATION CITED : Annual Holidays Act 1944 s 3 s 4 s 4A s 5(1) s 5(1)(b) s 8 Teaching Service Act 1970 Australian Timber Workers Union v W Angliss & Co Pty Limited (1924) 19 CAR 172 Australian Workers' Union v Graziers' Association (NSW) (1939) 40 CAR 494 Beckwith v R (1976) 135 CLR 569 Bryce and anor v Apperley [1998] 82 IR 448 Cepus v Heggies Transport Pty Ltd [1993] 52 IR 123). City of Wanneroo v Holmes [1989] 30 IR 363 at 378 - 379 Clothing Trades Award (1950) 68 CAR 597 CASES CITED : Cole v Director-General of Youth and Community Services (1987) 7 NSWLR 541 at 546 Coleman v Shell Co of Aust. Pty Ltd (43) 5 SR (NSW) at 34 Crown Employees (Teachers, Department of Education) Award re deduction for strikes [1975] R 535 Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 530 Lidner Pty Ltd v Builders Licensing Board (1982) 1 NSWLR 613 NSW Teachers' Federation v Education Commission (NSW) [1987] 22 IR 35 Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales and the Department of Community Services [2002] NSWIRComm 33 Grayson DP 12 March 2002 Quinn v Leatham 1901 AC 495 at 506 State of Victoria v Australian Teachers' Union [1993] 47 IR 328 HEARING DATES: 03/12/2002 DATE OF JUDGMENT: 03/27/2002

[22]

(2) Notwithstanding the provisions of Clause (1)-- (a) (i) Where, upon the occurrence of any school vacation, a teacher is, by reason of subclause (1) not entitled to be paid for the whole or any part of that vacation, the teacher's pay shall be adjusted accordingly. (ii) Where at the commencement of a school vacation a teacher has an accrued entitlement in accordance with subclause (1) in excess of the length of that school vacation the teacher shall be paid only for the length of that school vacation. (b) A teacher is not entitled to pay for a school vacation day when, on that day, the teacher is on full or half paid leave of any kind. Such leave shall be taken in lieu of any vacation entitlement and the teacher's accrued vacation leave entitlement calculated in terms of the formula in subclause (1) shall be reduced accordingly. Provided that payments on half pay leave may be made up to full pay from accrued vacation leave. (c) A teacher who is transferred - (i) from the Eastern Vacation Division to a school in the Western Vacation Division is entitled to be paid for the last week of the Western Vacation Division mid-summer vacation, regardless of whether the teacher otherwise has an entitlement to paid vacation for the mid-summer vacation; (ii) from the Western Vacation Division to a school in the Eastern Vacation Division is entitled to be paid for the mid-summer vacation as though that teacher had been appointed at all material times to a school in the Eastern Vacation division. (d) Upon the retirement or resignation of a teacher, or any other termination of that teacher's services, other than for wilful misconduct, the teacher shall be paid any entitlement under subclause (1) which has not already been paid to the teacher during that school year. In calculating this entitlement, the last day of service will be the date of resignation, retirement or termination. (e) Where a teacher is granted leave without pay during a school year and is absent from duty: (i) for part of the remainder of that school year then on return to duty the teacher's salary shall as necessary be adjusted in accordance with Clause 5(2), or (ii) for the balance of that school year the teacher shall be paid during the mid-summer vacation the balance of any paid vacation entitlement calculated in terms of subclause (1) of this clause. (f) All vacation periods without pay taken by a teacher pursuant to the operation of this Agreement shall, for the purpose of been this Agreement only, be deemed to have taken on leave without pay. (g) Where a teacher is absent during a school year on leave without pay any resultant vacation periods without pay following the teacher's return to duty shall count for the purpose of incremental progression. … 3. New Appointments Other Than at the Start of a School Year. (1) This Clause applies to a teacher in the first year of a service whether following first appointment or re-appointment at a time other than the start of a school year. (2) … 5. Salary Adjustments (1) This Agreement shall be subject to the parties entering a further agreement concurrently with this Agreement covering the recovery procedures that shall operate when salary is overpaid. … 7. Leave Reserved The following shall be leave in reserve: The effect of this Agreement on a teacher transferred to a position covered by administrative conditions of employment or an employee in the Education Teaching Service who is transferred from an administrative to a teaching position shall be the subject of further negotiation between the parties. Such negotiations to conclude on or before 30 November, 1986. 8. Area, Incidence and Duration This Agreement rescinds and replaces previous Determinations and variations thereof made or adopted by the Commission on the payment of vacation leave (including Commission Determinations No. 133 of 1984 and 162 of 1985 on Extended Leave and Vacation Entitlements) with the terms herein contained and shall apply to all teachers as defined herein.

[28]

13 In oral argument, the Federation drew attention to two authorities as giving guidance to the approach to be taken in the present matter. In State of Victoria v Australian Teachers Union (1993) 47 IR 328, Gray J in the Federal Court, dealing with an application for interpretation of a redundancy award, stated: This is not a situation in which there are two competing constructions, one of which would lead to absurdity. Rather, it is a situation in which the first applicant seeks to avoid what it regards as inconvenience arising from the obvious meaning of the award. What is inconvenience to the first applicant might not be inconvenient to the respondent or its members. In my view, Clause 3(d) of the Award is very clear. It is to be construed in accordance with the interpretation which I pronounced on 28 April 1993 (at 335-6). The Federation submitted that no ambiguity arises in the present matter. All that is required is the identification of a period when a teacher is on duty even if that be for part of a day, then that is service "within the definition of service and is a period to be taken into account when calculating vacation pay". All that the Department has identified is some inconvenience, primarily arising from its own practice, which is not authorised by the clear terms of the Agreement. Secondly, attention was drawn to the judgment of Glass JA (speaking for the Court) in Lidner Pty Ltd v Builders Licensing Board (1982) 1 NSWLR 613, where his Honour stated: It seems to me that once one arrives at that general conclusion about the purpose of the Act, it is, as Cross J., viz Builders Licensing Board v B J Lidner Pty Ltd [1982] 1 NSWLR 561, described it, a piece of social legislation designed to provide benefits for a category of the workforce. That being the case, it is entitled to beneficial construction rather than to a strictly literal one, this being the approach applied to legislation of similar purpose in cases such a State Government Insurance Office (Queensland) v Crittenden (1966) 117 CLR 412, and in earlier cases in the High Court, which are usually collected together in para 162, at pp 105,106 of Mr Pearce's book on Statutory Interpretation in Australia (1974). (at 163, E) The Federation submitted that the purpose of the 1986 Agreement was to calculate vacation leave and vacation pay and did not address the issue of denying paid leave to teachers who had participated in industrial action for less than a day.

[29]

14 Mention was made by both parties to the decision of Macken J in New South Wales Teachers Federation v Education Commission (NSW) (1987) 22 IR 35: the Federation submitted that the interpretation it contended for was conceptually supported by the decision, while the Department stated that the finding that deductions could be made from vacation pay because of a one day stoppage was not in issue in the present proceedings. In that case, the Federation had applied for a declaration that the employer was only entitled to deduct salary at the rate of one-fourteenth of a fortnight's pay for each day of strike action and was entitled to make no further deductions on account of such days of strike action. The Federation's argument seemed to be that a deduction could be made from pay for the day on which the strike took place but that there was no basis to make any deduction from vacation pay calculated in relation to that same period of stoppage. It became clear in the course of the proceedings that no party was calling into question the judgment of Dey J in Re Crown Employees (Teachers, Department of Education) Award; re deduction for strikes (1975) AR 535, where his Honour ruled that a full day's stoppage would result in a deduction from pay of one-fourteenth of the fortnightly remuneration of a teacher, and not one-tenth of the fortnightly remuneration as had been applied by the employer. In light of the fact that there was no issue about the amount of deduction, Macken J concluded that no declaratory order was necessary to ensure that deductions for strike action were not to exceed one-fourteenth of a fortnight's pay for each day of strike action; the real issue was identified by his Honour as to whether a strike constitutes "service" for the purposes of the 1986 Agreement, being the same Agreement under consideration in the present proceedings. Based on submissions made by the Federation and responded to by the Department, Macken J treated the issue as being governed by whether or not a teacher on strike was treated more or less favourably than a person on leave without pay or on some other absence dealt with by the Agreement. Approached in this way, his Honour accepted that the definitions contained in the Agreement made it clear that a teacher on strike is treated no more or less favourably than anyone else who was on leave without pay under the terms of the Agreement. His Honour concluded: "Service" is defined in such a way that a strike does not constitute "service" within the meaning of the industrial Agreement because it is not a working day, nor is it a sick day (whether covered by workers compensation or not) nor is it a period of study leave, nor leave without pay which has been "approved", as in par (f) of the definition. It is leave without pay because it is "unauthorised absence without pay", as in the definition of leave without pay. Accordingly, a day spent on strike will have an effect on vacation leave so as to reduce in proportion to service during a school year. The number of days of "service" as defined would be reduced by the number of days spent on strike. This interpretation means that any teacher who goes on strike will not be advantaged in terms of his vacation leave over a teacher who has been granted leave without pay for some purpose. The fear evinced by Mr Rennie that a person going on strike would be treated less favourably for a day's strike action than someone who is on leave without pay would also be without foundation. A strike is leave without pay that is not "approved" by the Department and is quite different to the concession of five days or less of leave without pay which may be approved by the Department during any school year. (at p 38).

[32]

17 A question did arise during argument as to the effect of the Annual Holidays Act 1944 and how its provisions might affect the construction of the 1986 Agreement. The issue arose in this way: Section 5(1) of the Annual Holidays Act permits an award, agreement or contract of employment to provide for a benefit that is more favourable to the worker than benefits provided under s 3, s 4 or s 4A of the Act, in which case that section is not to apply; but, where the benefit is not more favourable than that provided under the nominated sections of the Act, the sections are to apply; s 5(1)(b) appears to be another way to give effect to s 8 of the Act, prohibiting the contracting out of provisions made by the Act. The parties were unable to point to any provision of the Annual Holidays Act which had the effect of reducing annual leave because of strike action taken during the period of employment. Significantly, the Annual Holidays Act operates on the concept of "employment", whereas the 1986 Agreement operates on the concept of "service" as defined, but both instruments deal with entitlement to annual leave. Clause 2(1) of the Agreement acknowledges that pro rata vacation leave under the Agreement is in lieu of the provisions of the Annual Holidays Act. It may be, as suggested by the Department, that the period of approximately ten weeks' leave available to teachers would not be in conflict with the provisions of the Annual Holidays Act by the deduction of vacation leave until such time as the deductions reduced the leave below four weeks. Whether this be so or not, it is surprising that, in the absence of the Annual Holidays Act making provision for the reduction of holidays because of industrial action taken during the period of employment, the parties would agree to such deductions being made under the Agreement. The concept of the benefit of the Annual Holidays Act may encompass not only leave and the standard of leave available but also the lack of a statutory basis for reducing that leave because of time taken during the employment as industrial action. Perhaps the more appropriate way to express this approach is to note that the Court would expect a clear and unambiguous indication of this intention to depart from the position that normally applies under the Annual Holidays Act. I can see no such clear and unambiguous indication in the terms adopted by the parties in their 1986 Agreement.

[34]

19 The issue of the hours worked by teachers also arose in the 1975 dispute dealt with by Dey J. In that case, the Federation pointed out that teachers' hours of work were not limited to their school hours and quoted passages from the Crown Teachers Award and the Teachers, Technical Education, Overtime Case to indicate that very many teachers find it essential to devote a substantial number of hours outside school hours to do their work. Under a regulation made pursuant to the Teaching Service Act 1970, teachers were required to be on duty at their schools half an hour before school work began in the morning and could be required to be present if thought necessary by the teacher in charge for half an hour after the dismissal of school in the afternoon. The regulation also recognised that special circumstances might arise which, in the interests of the school, necessitated attendance beyond these hours. (See 1975 AR at 537). In dealing with a submission for the employer that it was due to an historical accident that some concessions had been made treating teachers' salaries as accruing over seven days of the week, when in fact they were only working on five days of the week, his Honour stated: The Act authorises an award to fix the rates of wages payable to employees and obviously they can be fixed on an annual basis. I do not consider that there is anything incongruous in allowing the salary to accrue due on a calendar day basis where no ordinary hours of work are fixed in the normal industrial manner … (Mr Macken) claimed that there was "conceptionally a world of difference" between an employer allowing leave without pay on a basis which involved a concession, and employees who had gone on strike claiming the benefit of similar generosity. However, the real issue in this instance is not whether the employer has the right to decline to pay for work not performed, by reason of the strike, but the basis upon which salary accrues for the purpose of ascertaining what is a day's pay, which has been forfeited by the striking employee. The fact that the action was illegal does not confer the right on the employer to impose its own penalty by making a greater deduction than it was otherwise entitled to do. The question of how the award and the regulations operate as a matter of interpretation is not capable of a simple clear cut answer because none of the provisions deal directly with the fundamental issues. The situation has just "grown up" over the years. Indeed, as Mr Macken suggested, the approach to salary accrual for teachers, no doubt pre dates the concept of standard hours of work or a five day a week for public servants. (at 540 - 541).

[41]

DELIBERATION 26 It has been long been accepted that the interpretation of an industrial instrument such as an award or agreement begins with a consideration of the natural and ordinary meaning of its words (re Clothing Trades Award (1950) 68 CAR 597): the words are to be read as a whole and in context (Australian Timber Workers Union v W Angliss & Co Pty Limited (1924) 19 CAR 172. In City of Wanneroo v Holmes, [1989] 30 IR 363 at 378 - 379, French J, dealing with an application for interpretation of an award in the Federal Court, noted that the words used in an industrial instrument must not "… be interpreted in a vacuum divorced from industrial realities", citing the famous passage from Street J in Geo A Bond & Co Ltd (in liq.) v McKenzie [1929] AR (NSW) 498 at 530. His Honour went on to state that it was of course no part of the court's task to assign a meaning in order that the award may provide what the court thinks is appropriate, citing Australian Workers' Union v Graziers' Association (NSW) (1939) 40 CAR 494. These expressions are consistent with what was said by the Full Court of the previous Industrial Court in Cepus v Heggies Transport Pty Ltd [1993] 52 IR 123 and by the Commission in Court Session in Bryce and anor v Apperley [1998] 82 IR 448. It is therefore appropriate to commence with a consideration of the terms chosen by the parties to constitute their agreement. I note the following matters: (a) In the definition "Leave without Pay" and in cl 2(2)(b), cl 4(b) and cl 4(c) reference is made to half pay or half ordinary pay and appears to be the only portion of a full day by reference to pay with which the Agreement deals; (b) The definition of "service" involves six or more specified and different periods, none of which in turn deals with a whole day on strike or a proportion of a day on strike; (c) The definition of "working days", contrary to a submission made for the Department, is extended to include public holidays which fall on any ordinary working day; (d) Clause 2, which provides the formula for the calculation of pro rata vacation leave and the entitlement to payment during that leave is subject to sub cl 2(2) and cl 3 of the Agreement. Clause 2(2) is extensive and deals with a variety of circumstances where a teacher will be entitled or not entitled to have particular periods counted for the purpose of calculating vacation leave and vacation pay. Clause 3 makes a special provision for new appointments that occur other than at the start of a school year and provides another formula for calculating entitlement to vacation pay. These extensive provisions, where the parties have turned their minds to all kinds of exceptions, exclusions and particular circumstances, make no reference to what is to occur when a day is spent on strike or part of a day is spent on strike; (e) Clause 7 deals with the matters in relation to which leave is reserved but there is no mention of reserving the issue of the treatment of days or parts of a day on strike for the purposes of qualifying for paid vacation leave; (f) Clause 8, the Incidence clause, makes it clear that the Agreement rescinds and replaces previous determinations and variations made or adopted by the previous Education Commission relating to the payment of vacation leave and replaces them with the terms of this Agreement which "… shall apply to all teachers as defined herein". It appears that the parties intended that all previous approaches and practices would be replaced by the regime implemented by the Agreement; (g) Clause 5(1) provides that the Agreement is "subject to the parties entering a further Agreement concurrently with this Agreement covering the recovery procedures that shall operate when salary is over paid". This clause gives some appreciation of the industrial context in which the Agreement was reached and, importantly, records that there were considerations beyond the scheme of payment for vacation leave which were the subject of bargaining between the parties and permitted this Agreement to be entered into. Caution needs to be exercised when the Court is asked to read into the Agreement provisions which do not, in terms, appear in the Agreement and when there is a background of bargaining about other matters. The parties may have been content not to attempt to determine or lay down provisions for all of the circumstances which might arise or be taken into account in calculating the entitlement to paid vacation leave but to permit such matters to be dealt with "in the broad". In this regard it is worth recalling what was said by Gummow J (as a member of a Full Court of the Federal Court) concerning the related subject of statutory construction: However, as Posner also points out … and with reference to abundance of United States literature, statutes are often the result of a compromise between contending factions or interest groups and of accommodations which, whilst properly reached as an appropriate part of the legislative process, involved terms and understandings which cannot readily be made apparent to a Court. The "purposive" school of statutory interpretation thus encounters the difficulty that it cannot accommodate the notion of "factual matrix" as understood in modern authorities dealing with contractual interpretation.