New South Wales Teachers Federation v Managing Director NSW TAFE Commission

APPELLANT Mr S Crawshaw SC UNION New South Wales Teachers Federation (Ms D Fairservice) LEGAL REPRESENTATIVES: RESPONDENTS Mr P M Kite SC and Mr S B Benson of counsel SOLICITORS Crown Solicitor (NSW)

INDUSTRIAL RELATIONS OF NEW SOUTH WALES IN COURT SESSION FULL BENCH

CORAM: WRIGHT J, President WALTON J, Vice-President MARKS J Wednesday 30 April 2003 Matter No IRC 6807 of 2001 New South Wales Teachers' Federation v Managing Director, New South Wales TAFE Commission and Director-General, Department of Education and Training

Application for leave to appeal and appeal against a decision of Justice Peterson given on 28 September 2001 in Matter No IRC 5914 of 2001

JUDGMENT OF THE COURT [2003] NSWIRComm 90

1 This is an appeal brought from a judgment of Peterson J delivered on 28 September 2001. His Honour had been asked by the appellant in these proceedings to make a declaration under s 154 of the Industrial Relations Act 1996 ("the Act") in the following terms: That full-time employees of the NSW Technical and Further Education Commission (TAFE) are entitled to have any prior service as a temporary or non full-time employee since the coming into force of the Education Commission Act 1980 (later retitled the Teaching Services Act 1980) recognised as service for the purposes of the extended leave provisions in the Technical and Further Education Commission Act 1990 and the Public Sector Management Act 1988.

2 Section 154 of the Act authorises this Court to make binding declarations of right in relation to certain matters in which the Industrial Relations Commission of New South Wales, however constituted, has jurisdiction. There is no issue concerning jurisdiction.

3 The declaration sought was opposed by the respondents to the application and the respondents on this appeal. His Honour had granted leave to the Public Service Association of New South Wales to intervene in the proceedings before him. That Association has not participated in these appeal proceedings.

4 The declaration sought was directed to extended leave entitlements of members of the staff of the TAFE Commission. Provision for extended leave is contained within s 22 of the Technical and Further Education Commission Act 1990 which is in the following terms: "(1) This section applies to all members of the staff of the TAFE Commission who are employed on a full-time basis. (2) Members of staff of the TAFE Commission to whom this section applies are entitled to extended leave at the same rate and under the same conditions as officers of the Public Service. (3) For that purpose, Schedule 5 to the Public Sector Management Act 1988 applies (with any necessary modifications) to those members of staff." It should be noted that the section applies to staff members who are employed "on a full-time basis". Full-time employment is obviously a condition precedent to entitlement to extended leave under this provision. The section, however, makes no reference to the application of extended leave to persons who might have had a previous period of service other than on a full-time basis.

5 The precise basis for the entitlement to extended leave for those persons for whom such leave is provided by s 22 of the Technical and Further Education Commission Act 1990 is Schedule 5 to the Public Sector Management Act 1988. Schedule 5 is in the following terms: "1 Officer to be entitled to extended leave after a certain period of service (1) Subject to this Schedule, an officer is entitled: (a) after service for 10 years, to leave for 2 months on full pay or 4 months on half pay, and (b) after service in excess of 10 years, to: (i) leave as provided by paragraph (a), and (ii) in addition, an amount of leave proportionate to the officer's length of service after 10 years, calculated on the basis of 5 months on full pay, or 10 months on half pay, for 10 years served after service for 10 years. (2) For the purpose of calculating the entitlement of a person to extended leave under this clause at any time: (a) service referred to in this clause includes service before the commencement of this Schedule, and (b) there must be deducted from the amount of extended leave to which, but for this paragraph, that person would be entitled: (i) any extended leave, or leave in the nature of extended leave, and (ii) the equivalent, in extended leave, of any benefit instead of extended leave or leave in the nature of extended leave, taken or received by that person before that time, including any such leave taken, or benefit received, by that person in accordance with the Public Service (Amendment) Act 1919 as in force at any time, and (c) the provisions of the Transferred Officers Extended Leave Act 1961 have effect. (3) Nothing in subclause (2) shall be regarded as authorising, in respect of the same period of leave taken or the same benefit received, a deduction under both subclause (2) (b) and section 3 (7) of the Transferred Officers Extended Leave Act 1961 . (4) If the services of an officer with at least 5 years' service and less than 10 years' service are terminated: (a) by the Crown, the Governor or the appropriate Department Head for any reason other than the officer's serious and intentional misconduct, or (b) by the officer on account of illness, incapacity or domestic or other pressing necessity, the officer is entitled: (c) for 5 years' service, to 1 month's leave on full pay, and (d) for service after 5 years, to a proportionate amount of leave on full pay calculated on the basis of 3 months' leave for 15 years' service. (5) (Repealed) (6) For the purposes of subclause (1), service includes: (a) service under the Teaching Services Act 1980 , and (a1) service as an administrative officer under the Police Service Act 1990 , and (b) any period of leave without pay taken before the commencement of the Public Service and Other Statutory Bodies (Extended Leave) Amendment Act 1963 , and (c) in the case of an officer who has completed at least 10 years' service - any period of leave without pay, not exceeding 6 months, taken after that commencement. (7) In subclause (6) (c), for the purpose of determining whether or not an officer has completed at least 10 years' service, the officer's period of service shall be taken: (a) to include any period of leave without pay taken before the commencement of the Public Service and Other Statutory Bodies (Extended Leave) Amendment Act 1963 , and (b) to exclude any period of leave without pay taken after that commencement. (8) For the purposes of subclause (4), service does not include any period of leave without pay whether taken before or after the commencement of the Public Service and Other Statutory Bodies (Extended Leave) Amendment Act 1963 . 2 Certain officers to be entitled to be paid a gratuity instead of extended leave (1) An officer who has acquired a right to extended leave with pay under clause 1 is entitled, immediately on the termination of the officer's services, to be paid instead of that leave the money value of the extended leave as a gratuity in addition to any gratuity to which the officer may be otherwise entitled. (2) Any pension to which any such officer is entitled under the Superannuation Act 1916 commences from and including the date on which the officer's extended leave, if taken, would have commenced. (3) Any officer may elect, on termination of the officer's services, to be paid the money value of extended leave under subclause (1) or may elect to have the Transferred Officers Extended Leave Act 1961 apply to the periods of service for which the leave has accrued. 3 Payment to be made where an officer entitled to extended leave has died (1) If an officer has acquired a right under clause 1 to extended leave with pay and dies before starting it, or after starting it dies before completing it: (a) the widow or widower of the officer, or (b) if there is no such widow or widower, the children of the officer, or (c) if there is no such widow, widower or children, the person who, in the opinion of the appropriate Department Head, was, at the time of the officer's death, a dependent relative of the officer, is entitled to receive the money value of the leave not taken, or not completed, computed at the rate of salary that the officer received at the time of his or her death, less any amount paid to the officer in respect of the leave not taken, or not completed. (2) If an officer with at least 5 years' service and less than 10 years' service as referred to in clause 1 (4) dies: (a) the widow or widower of the officer, or (b) if there is no such widow or widower, the children of the officer, or (c) if there is no such widow, widower or children, the person who, in the opinion of the appropriate Department Head, was, at the time of the death of the officer, a dependent relative of the officer, ..is entitled to receive the money value of the leave which would have accrued to the officer had his or her services terminated as referred to in clause 1 (4), computed at the rate of salary that the officer was receiving at the time of his or her death. (3) If there is a guardian of any children entitled under subclause (1) or (2), the payment to which those children are entitled may be made to that guardian for their maintenance, education and advancement. (4) If there is no person entitled under subclause (1) or (2) to receive the money value of any leave not taken or not completed by an officer or which would have accrued to an officer, payment in respect of that leave must be made to the officer's personal representatives. (5) Any payment under this clause is in addition to any payment due under any Act under which superannuation benefits are paid. (6) If payment of the money value of leave has been made under this Act, the Crown ceases to be liable for payment of any amount in respect of that leave. 4 Extended leave for temporary employees (1) In this Schedule, a reference to an officer includes a reference to a temporary employee. (2) If the period of leave to which a temporary employee is entitled under this Schedule exceeds the period for which the temporary employee is employed under this Act, the balance of that period of leave may be granted during subsequent periods of employment in the Public Service if each subsequent period of employment commences on the termination of a previous period of employment in the Public Service. 5 Calculation of money value of extended leave For the purpose of calculating the amount of an entitlement under clause 2 or 3, the money value of extended leave accrued or payable to a chief executive officer or senior executive officer is to be determined on the basis of the officer's notional salary."

6 The appellant argued that "service" where appearing in Schedule 5 embraced not only full time service but included also any previous discrete periods of service with the TAFE Commission and its predecessor whether as a full time employee or as a temporary, part-time or casual employee. The respondents in both sets of proceedings submitted that "service" where used applied to a period of continuous service so that there was no entitlement unless an employee had relevantly served for a continuous period of service of 10 years.

7 Peterson J declined to make the declaration sought. His Honour referred to well-known principles of construction enunciated in a number of leading authorities in this area and to relevant statutory provisions. His Honour advanced three substantial reasons for this conclusion. The first was that: "(The) expression 'service for 10 years' seems to me to unavoidably convey a notion of uninterrupted service. The expression appears to be the most simple and direct means of referring to a continuous or uninterrupted period. Were it intended to embrace a series of periods of service which total 10 years, the language would appear to require a considerable expansion to achieve that end." The second ground was based on other provisions within clause 1 of Schedule 5 which included within "service", as defined, service under the Teaching Services Act 1980 and certain periods of leave taken without pay, but excluded certain other periods of leave taken without pay. His Honour noted that the exclusion of certain periods of absence on leave without pay: "occur in the context of a continuous period of employment which would otherwise be afforded full credit. I would infer from these provisions again were it necessary to give credit to interrupted periods of prior service, special mention would be required." The third ground was that the purpose of the provisions of clause 1 of the Schedule was "patently to give leave in response to long and continuous service." His Honour concluded that entitlement to extended leave was conditional upon employment being continuous over the relevant period, and he declined to issue the declaration sought.

LEAVE TO APPEAL 8 An appeal lies to a Full Bench of this Court only by leave (s 188 of the Act). In our opinion the subject matter of the appeal is of such importance that in the public interest leave should be granted. The provisions of Schedule 5 to the Public Sector Management Act 1988 apply to a large number of officers of the public service in this State. It is in the public interest that any controversy with respect to the application of this provision be authoritatively resolved.

APPELLANT'S SUBMISSIONS ON APPEAL 9 Mr Crawshaw SC who appeared for the appellant submitted that Peterson J did not accord the appellant procedural fairness because none of the reasons relied upon by his Honour for declining to make the declaration sought were dealt with in the course of the proceedings before him. We do not agree that there is any merit in this submission, having regard to the nature of the proceedings before his Honour and having regard to the documentary material which was made available to his Honour both by way of evidence and submissions: Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145. In any event, his Honour's reasoning and the grounds relied upon by his Honour have been fully debated in these proceedings, so that any alleged breach of the requirements of procedural fairness has been cured: Calvin v Carr [1980] AC 574 at 593; R v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation (1981) 147 CLR 471 at 485.

10 The substantive submission made by the appellant both below and on appeal was that the words of the provision were to be accorded their normal meaning and that "service" embraced and included all service. Accordingly the expression should be read as including within it the aggregate of all periods of service of the employee including previous service with the TAFE Commission and its predecessor whether as a permanent, part time or casual employee. On this basis Mr Crawshaw submitted that it strained the ordinary meaning of the word "service" to imply into it the necessity for such service to be a continuous period of service.

CONSIDERATION 11 As we have concluded that the appellant's submissions are not correct it is not necessary that we refer in detail to the submission advanced by the respondents. They are, in any event, sufficiently comprehended within our reasons for dismissing the appeal.

12 Important considerations relevant to the construction of legislation are, for present purposes, set out in Part 5 of the Interpretation Act 1987, in particular ss 33 and 34 thereof, which provide: 33 Regard to be had to purposes or objects of Acts and statutory rules In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object. 34 Use of extrinsic material in the interpretation of Acts and statutory rules (1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or (b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable. (2) Without limiting the effect of subsection (1), the material that may be considered in the interpretation of a provision of an Act, or a statutory rule made under the Act, includes: (a) all matters not forming part of the Act that are set out in the document containing the text of the Act as printed by the Government Printer, (b) any relevant report of a Royal Commission, Law Reform Commission, committee of inquiry or other similar body that was laid before either House of Parliament before the provision was enacted or made, (c) any relevant report of a committee of Parliament or of either House of Parliament before the provision was enacted or made, (d) any treaty or other international agreement that is referred to in the Act, (e) any explanatory note or memorandum relating to the Bill for the Act, or any other relevant document, that was laid before, or furnished to the members of, either House of Parliament by a Minister or other member of Parliament introducing the Bill before the provision was enacted or made, (f) the speech made to a House of Parliament by a Minister or other member of Parliament on the occasion of the moving by that Minister or member of a motion that the Bill for the Act be read a second time in that House, (g) any document (whether or not a document to which a preceding paragraph applies) that is declared by the Act to be a relevant document for the purposes of this section, and (h) any relevant material in the Minutes of Proceedings or the Votes and Proceedings of either House of Parliament or in any official record of debates in Parliament or either House of Parliament. (3) In determining whether consideration should be given to any material, or in considering the weight to be given to any material, regard shall be had, in addition to any other relevant matters, to: (a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), and (b) the need to avoid prolonging legal or other proceedings without compensating advantage.

13 For the purpose of the appeal, the respondents prepared a body of material of an historical nature, which was not made available to Peterson J. The material consists principally of legislation and Second Reading Speeches in connection with the legislation which touched upon the provisions of extended leave and long service leave for public servants and employees generally, and also for members of the teaching service particularly in New South Wales. We have found the material useful in having regard to the purpose and effect of Schedule 5 of the Public Sector Management Act, the construction of which will be determinative of these proceedings.

14 The first New South Wales statute which made provision for extended leave for public servants was the Civil Service Act, 1884. Section 40 of that Act was in the following terms: "The Governor may grant to any officer of twenty years service leave of absence not exceeding twelve months on half salary or six months on full salary or of ten years service for any time not exceeding six months on half salary or three months on full salary or in case of pressing necessity may grant leave of absence to any officer but such last-mentioned leave may be deducted from the leave hereinbefore provided."

15 The Second Reading Speech of Mr Stuart in the Legislative Assembly made it clear that the purpose of the legislation as a whole was to regulate the terms and conditions of employment of members of the civil service in New South Wales on the basis that such persons were considered to be long serving career employees. It should be noted that that legislation did not in terms apply to teachers.

16 The Public Service Act 1902 consolidated a number of enactments which applied to members of the public service.

17 The Public Service (Amendment) Act 1919 provided for leave on full pay after certain periods of service. Section 13 was in the following terms: "Every officer who has had fifteen years service shall be entitled to three months' leave on full pay or six months on half pay, and on the completion of twenty years service shall be entitled to a further three months' leave on full pay or six months on half pay. After completion of further service after twenty years and up to a total service of forty years in all, he shall be entitled to a further proportionate amount of leave on full pay or half pay calculated on the basis of six months or twelve months respectively for twenty years' service: Provided that nothing in this section shall affect the provisions of s.56 of the Public Service Act , 1902."

18 In 1951 the New South Wales Parliament amended the Industrial Arbitration Act 1940 by inserting a new provision, s 88C. That section enabled the Industrial Commission of New South Wales, or a conciliation committee, upon application to insert in an award or industrial agreement "provisions entitling employees to long service leave on full pay." The amount of long service leave to which employees would be entitled depended upon whether employees had certain years of "service".

19 During the course of the Second Reading Speech the then Minister for Labour and Industry and Minister for Social Welfare, Mr Finnan said, inter alia: "The principle of long service leave in New South Wales can be traced back to the Civil Service Act of 1884. It has now been extended by statute to cover the employers of almost all Government Departments and statutory bodies in the State, and this position prevails over the whole of Australia. In New South Wales awards have generally been restricted to employees of public utilities and government and statutory bodies. Of some 600 State awards fifty-two contained provisions as to long service leave, as at 30 September 1950. The leave awarded varies from four weeks after ten years - motor bus drivers and conductors - to three months after ten years - hospital secretaries, Sydney County Council and Council of the City of Sydney awards. Many private employers have schemes similar to these which are not embodied in any formal agreements or awards. The Government has taken this action with several aims in view: (1) it will be an influence tending to reduce labour turnover which today is costing employers a considerable waste of effort and money; (2) it will reward long and faithful service with a single employer; and finally (3) it will enable an employee half-way through his working life to recover spent energies and return to work renewed, refreshed and reinvigorated. Thus we hope to benefit the community as a whole as well as employers and workers ... Others may ask why should the principle be extended to cover all employees instead of only public servants as at present. Once the group of employees known as public servants were not only employees of a special employer but they carried out a type of work peculiar to themselves. Nowadays, Government employees are performing all the functions found in private enterprise. ... They all equally owe a duty to serve the public and they should be entitled to equal benefits. This right has been granted to coal miners and it is the purpose of this bill to extend the principle to all workers under State awards or State agreements." (Hansard 16 May 1951 p 2089)

20 The provisions of s 88C of the Industrial Arbitration Act 1940 were considered by a Full Bench of the Industrial Commission (Webb, Ferguson and De Baun JJ) in Re Storemen and Packers, Wholesale Drugs Stores (State) & Other Awards [1951] 50 AR (NSW) 527. The Full Bench considered that the phrase "service with an employer" in s 88C referred to an employee who had worked for the one employer under a contract of employment which had existed for the requisite number of years "and has remained unbroken for that period". In reaching this conclusion the Commission referred firstly to the fact that long service leave "is properly regarded as a reward for long service with one employer". Secondly, the Full Bench said (at 551) that an interpretation which would have applied long service leave to broken periods of service "appears to us to be contrary to the accepted concept of long service leave as provided by Statute, regulation or award for employees who have for many years enjoyed a right to long service leave."

21 The Full Bench then considered the circumstances under which service might be said not to have been broken (eg absence whilst away sick or in receipt of worker's compensation benefits, or on authorised leave), as well as the impact on the entitlement to long service leave where the business of an employer was assigned or transmitted.

22 In 1955 the New South Wales Legislature enacted the Long Service Leave Act. This extended long service leave benefits to workers generally throughout New South Wales. During the Second Reading Speech the Minister for Labour and Industry and Minister for Social Welfare, the Hon Mr A Landa referred firstly to the history of long service leave in New South Wales. He said that: "[B]efore 1951 the only workers in the State who received long service leave were employees of the public service and of some other government bodies and a few groups of employees who were entitled to the leave under the terms of their particular award. In 1951 the Labour Government amended the Industrial Arbitration Act to give to all employees working under State awards the right to long service leave. All that they had to do was to ask the Industrial Commission or the conciliation committee dealing with their industry for a suitable clause to be inserted in the award. This was novel legislation, introduced for the first time in the English-speaking world." (Hansard, 20 October 1955 at p 1180). The Minister also made it clear during the Second Reading Speech that long service leave had applied, and would under the new legislation apply, to periods of continuous service with the one employer save for certain exceptions where service was deemed not to have been interrupted or where the business of the employer had been transmitted or assigned in certain circumstances.

23 There have been other legislative changes to the regime of extended leave applying to public servants in New South Wales. These include amendments to the Public Service Act, the Transferred Officers' Extended Leave Act 1961, the Public Service and Other Statutory Bodies (Long Service Leave) Amendment Act 1963, the Teaching Services Act 1970 and the Public Sector Management Act 1988. The totality of the legislative provisions and the Second Reading Speeches which relevantly apply to them are all indicative of an approach to extended leave for public servants which equates that leave with long service leave as it is generally known. Thus a reference to extended leave is plainly synonymous with a reference to long service leave. All of the legislation and the relevant Second Reading Speeches approach entitlement to extended leave and long service leave (however called) on the basis of a requirement of continuous service save for specific qualifications and save for specific circumstances such as a transfer of employment within branches, sections or authorities of the public service.

24 The totality of the history of extended leave and long service leave as it applies in particular to the public service shows that the legislature has invariably approached entitlement on the basis of a requirement of continuous service and not on the basis of an aggregation of non continuous periods of service.

25 This situation has applied since 1884. Indeed, the words used in the 1884 legislation have a striking similarity to the words used in the Fifth Schedule to the Public Sector Management Act.

26 Since 1884 a requirement of continuity of service has prevailed and been applied. Indeed, the parties to these proceedings proceeded on this basis. In these circumstances any approach to construction which sought to confer entitlement to extended or long service leave on the basis of aggregation of periods of service, as contended for by the appellant in these proceedings, would not, in our opinion, promote the purpose or object underlying the provisions which we are required to interpret. Such a construction which is contended for by the appellant is not, in our opinion, available and does not reflect the ordinary meaning conveyed by the text of the Fifth Schedule.

27 Although the thrust of these proceedings related to the issue of whether continuous service as a teacher was to be taken in account for the purposes of calculating extended leave entitlement, which has been determined against the appellant's contentions, it also indirectly raises the issue whether prior part-time or casual service may be taken into account. Although s 22 of the TAFE Commission Act provides entitlements to TAFE employees employed on a full-time basis there is no basis either in s 22 itself or Schedule 5 of the Public Service Management Act, the terms of which are incorporated by reference into s 22, to conclude that prior periods of continuous service whether they be full-time, part-time or casual are not to be taken into account for the purpose of calculating relevant "service": see, for example, the way in which "service" is referred to in sub-clauses (1), (2)(a), (6) and (8) of clause 1 of Schedule 5.

28 The conclusions which we have reached are consistent with the provisions of the current industrial award namely the Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (2001) 323 NSWIG 464 (consolidated version at (2001) 327 NSWIG 582) which was made on a consent basis. Clause 60.16 of the award is entitled "Recognition of Previous TAFE Part-time Casual Service". Clause 60.16.1 provides that: "Part-time casual teachers, coordinators and counsellors who are subsequently appointed to full-time TAFE positions are eligible to have such part-time casual TAFE service recognised for extended (long service) leave purposes, provided their service merged without break into full-time service." Such a provision is inconsistent with the aggregation of non-continuous periods of service but is consistent with the approach to construction that we have held is correct. Reference to the award provisions is made merely for completeness. It is not suggested that the way in which the parties have in practice subsequently treated the statutory provisions as to long service leave, whether by their consent awards, or otherwise, is relevant to the construction of the statutory provisions: cf Health and Research Employees' Association of New South Wales v Baptist Community Services NSW and ACT [2002] NSWIRComm 32 at [74] and [75] applying Seamen's Union of Australia v Adelaide Steamship Company (1976) 46 FLR 444 and Re Security Officers (Waterfront) Award (1988) 26 IR 1 at 7 - 8.

30 Costs are unlikely to be in issue in these proceedings: see, for example, Police Association of New South Wales v Commissioner of Police [2002] NSWIRComm 126 at [73]. Liberty to apply is however granted with respect to costs provided it is exercised within 21 days.

ORDERS 31 The Full Bench makes the following orders: 1. Leave to appeal is granted. 2. The appeal is dismissed. 3. Liberty to apply with respect to costs, which must be exercised within 21 days. --------------------------------

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