Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Industrial Relations Secretary & Anor

Background

1. The historical legislative context of Destination NSW and the employment arrangements of those that work within it are relevant to the determination of this matter.
2. Destination NSW was created and is currently constituted by the Destination NSW Act 2011 (DNSW Act) which commenced on 1 July 2011. It is unable to directly employ staff. When Destination NSW came into existence, the Destination NSW Special Employment Division (the Division) was commenced to provide personnel services to Destination NSW.
3. When Destination NSW was created it was initially staffed by the Division which added employees from different non-public sector and public sector entities, including those working within: 1. Tourism NSW (constituted under the Tourism New South Wales Act 1984 (NSW)); 2. Events NSW Ltd - a State Owned Corporation; and 3. Homebush Motor Racing Authority (the body corporate established by the Homebush Motor Racing (Sydney 400) Act 2008 (NSW))(HMRA).
4. In September 2011, staff working within Events NSW and Tourism NSW were transferred to the Division.
5. Tourism NSW staff were public service employees prior to commencing with Destination NSW, while staff from Events NSW and HMRA were non-public service employees. In transferring staff from these entities to the Division, the Second Respondent sought to preserve their employment arrangements with some under public service arrangements and others on preserved non-public service arrangements and new staff on employment contracts.
6. The staff who work for Destination NSW (Destination NSW staff) are subject to common law contracts of employment. With respect to the new recruits, the Division use a standard form employment agreement, but allow employees to negotiate specific terms. Destination NSW also has an Employee Handbook which includes policies that apply to Destination NSW staff and contain further entitlements and benefits.
7. Prior to 24 February 2014, non-executive staff members of Destination NSW were not public servants as defined by the Public Sector Employment and Management Act 2002 (PSEM Act) as the entities staffing Destination NSW was not listed in Schedule 1, Part 1 of the PSEM Act. This meant that they were not covered by the Conditions Award, which read at the time: The provisions of this award shall apply to Officers, Departmental temporary employees and Casual employees (as specified in the award) as defined in the Public Sector Employment and Management Act 2002 employed in the Departments listed in Schedule 1, Part 1, to the Public Sector Employment and Management Act 2002.
8. From 24 February 2014, the status of Destination NSW staff changed.
9. The Government Sector Employment Act 2013 (NSW) (GSE Act) commenced operation on 24 February 2014, repealing the PSEM Act subject to certain matters contained in Schedule 4 of the GSE Act (the savings provisions). In particular, Clause 9 preserved the existing conditions of employment of public service employees applying under the former legislation, ensuring that those conditions continue under the GSE Act. Relevantly, clause 9 of the Schedule 4 provides: 9 Existing conditions of employment under former Act (1) In this clause: former non-Public Service group of staff means a group of staff: (a) who, immediately before the commencement of this Act, were employed in the Government Service of New South Wales (but not in the Public Service of New South Wales) or in the NSW Health Service and who become Public Service employees on that commencement, and (b) who comprise a Public Service agency or a discrete branch or other part of a Public Service agency, and includes any person who become members of that group of staff after the commencement of this Act. (2) Conditions of employment applying to any group of Public Service employees immediately before the commencement of this Act (whether under State industrial instruments, determinations under section 4E of the former Act or contracts of employment) continue to apply, subject to this clause, to that group of Public Service employees. This subclause extends to members of a former non-Public Service group of staff. (3) The conditions of employment of Public Service employees who are members of a former non-Public Service group of staff do not include any conditions of employment relating to leave or other matters that are conferred by the regulation under this Act on Public Service employees generally unless they apply because of conditions of employment applying to that group of staff immediately before the repeal of the former Act. In this subclause, a reference to conditions of employment conferred by the regulation includes conditions relating to extended leave and conditions under the Crown Employees (Public Service Conditions of Employment) Award 2009 for groups of staff to which that award did not apply immediately before the repeal the former act. … (5) a condition of employment that applies because of this clause applies until such time as provision is otherwise made under the act or any other law.
10. The savings provisions exhibit the intention of the parliament that the introduction of the GSE Act was not to change the terms and conditions of employment of staff working within government.
11. The Destination NSW Staff Agency (Staff Agency) was established in February 2014 following the execution of the Administrative Arrangements Order 2014, which resulted in all functions of the Division being transferred to the Staff Agency with effect from 24 February 2014. These changes had the effect of making non-executive Destination NSW staff public servants.
12. Also on 24 February 2014, the coverage clause of the Conditions Award came into operation with a variation made by consent on 12 December 2014 to apply retrospectively (the 2014 Coverage Clause). The 2014 Coverage Clause was in the following terms: With effect from 24 February 2014, the provisions of this award shall apply to all non-executive public service employees as defined in the Government Sector Employment Act, 2013 employed in Departments, Public Service executive agencies related to Departments, and separate Public Service agencies, listed in Schedule 1 to the Government Sector Employment Act, 2013, except where another industrial instrument or arrangement applies to the employees. Any officer, Departmental temporary employee and casual employee who, as at 23 February 2014, was employed in a Department listed in Schedule 1, Part 1, of the Public Sector Employment and Management Act, 2002 and who was covered by this award on that date will continue to be covered by this award. (my emphasis)
13. The coverage clause of the Conditions Award was again varied with effect from 3 March 2017 by a Full Bench of the Commission to its current form as set out below (the Current Coverage Clause): 6. Coverage (a) The provisions of this award shall, subject to cl 6(b) below, apply to all non-executive public service employees as defined in the Government Sector Employment Act, 2013 employed in Departments, Public Service executive agencies related to Departments, and separate Public Service agencies, listed in Schedule 1 to the Government Sector Employment Act, 2013. (b) Where another industrial instrument or arrangement applies to a group of employees covered by this Award the following interaction rules apply: (i) If the other industrial instrument or arrangement expressly displaces the entirety of this Award then this Award shall have no application to those employees; (ii) If the other industrial instrument or arrangement expressly displaces one or more provisions of this Award then: (a) this Award shall not apply to those employees covered by the other instrument or arrangement in relation to those provisions, (b) but the balance of this Award shall apply to those employees; and (iii) If the other industrial instrument or arrangement comprehensively determines conditions of employment for a group of employees then this Award shall have no application in relation to that group of employees; (iv) If the other industrial instrument or arrangement comprehensively determines a particular class of conditions of employment for a group of employees, then this Award shall have no application in relation to that group of employees in relation to that class of conditions; (v) If none of subclauses 6(b)(i)-(iv) apply, and the other industrial instrument or arrangement is silent as to its interaction with this Award, then: a. if the application of the other industrial instrument or arrangement is inconsistent with the application of this Award, the other industrial instrument or arrangement applies to the extent of the inconsistency; otherwise b. this Award applies. (c) Any officer, Departmental temporary employee and casual employee who, as at 23 February 2014, was employed in a Department listed in Schedule 1, Part 1, of the Public Sector Employment and Management Act, 2002 and who was covered by this award on that date will continue to be covered by this award. NOTATION: This clause was amended in 2014 and again in 2017 with the agreed intention of the parties to maintain the status quo of industrial coverage, by award, other industrial instrument or arrangement, following the commencement of the Government Sector Employment Act 2013 on 24 February 2014. (My emphasis)

The Evidence

1. The Applicant relied upon evidence from Mr Nicholas Player, Industrial Officer of the Applicant who gave a statement and an affidavit in reply.
2. The First Respondent relied upon evidence from the following witnesses: 1. Mr Charlie Heuston, Director, Public Sector Industrial Relations (PSIR) employed by NSW Treasury. Mr Heuston gave evidence on behalf of PSIR. 2. Mr Simon Kempson, Director, Industrial Relations of the Department of Industry. Mr Kempson was the Director Human Resources for the Department of Trade & Investment, Regional Infrastructure at the time Destination NSW was created in 2011.
3. The Second Respondent relied upon evidence from Mr Ross Pearson, Chief Operating Officer at Destination NSW.
4. The Commission had before it documents including submissions, evidence and transcript in respect of the variation applications relating to the 2014 and 2017 variations to the coverage clause of the Conditions Award.
5. None of the witnesses were required for cross-examination and their evidence, all given by way of statement or affidavit, was tendered without objection.

Relevant Law and Principles

1. The principles relevant to award interpretation are well settled in this jurisdiction. These were set out in the decision of Walton J, President in the matter of Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury (2014) 87 NSWLR 41, where detailed consideration was given to the principles by reference to the relevant authorities. The statements of principle were set out in the decision at [115]: (1) The legal meaning of 'a provision of an award' is to be ascertained through a process of construction by which the intention of the provision is deduced. It is the duty of the court to give the words of the award a meaning that the authors of the award are taken to have intended them to have; (2) The process of construction must begin with a textual analysis of the words of the provision, that is, a consideration of the ordinary and grammatical meaning of the words; (3) Whilst the surest guide to the meaning of an award provision is language used in a provision of an award, the meaning of the text may require consideration of the context (which includes, inter alia, consideration being given to the instrument as a whole). Thus, the initial step to construction may involve construing the words of an award provision in context; (4) The consideration of the words of the provision of an award in context includes examining the general purposes and the policy of the provision derived from a statement of policy in the award or from the terms of the award. Thus, the legal meaning may be ascertained by reference to general purpose, consistency and fairness, although, again, the purpose of a provision derives in its text and structure. A relevant consideration in this respect is the mischief remedied by a provision. (See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47].); (5) An examination of the purpose of an instrument is very much part of the traditional approach to award interpretation. It was accepted by Kelleher J in Re Dispute between Broken Hill Pty Co Ltd and the Federated Ship Painters and Dockers' Union of Australia, New South Wales Branch, Re Tank Tops [1961] AR (NSW) 312 at 314 that it is proper to pay regard to "the purposes for which a provision is intended" (as quoted in Bryce v Apperley at 452 and Kingmill at [63]). An application of this approach may be found in the judgment of Hill J in Australian Workers Union (NSW) v Pioneer Concrete (NSW) Pty Ltd (1991) 38 IR 365 at 380, where it was stated that provisions in awards must be construed reasonably and realistically, "having regard to their purposes and objectives". I will add further to this consideration when returning to the notion, developed in the dicta of Street and French JJ, that a generous construction should be adopted in the interpretation of awards; (6) The determination of the purpose or intention of a provision of an award neither permits nor requires a search for what those who drafted or made the award had in mind when the award was made: see Construction, Forestry, Mining and Energy Union (NSW Branch) v Delta Electricity [2003] NSWIRComm 135; (2003) 146 IR 360 at [44] and NSW Fire Brigades at [47]. Further, it is not for the court to construct its own idea of a desirable policy, import it to the award maker and then characterise it as the purpose of the provision: see Brown at [40] (Bathurst CJ).
2. Walton J also cited with approval authorities to the effect that awards should receive a generous construction: George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504; City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362 at [57]; Kucks v CSR Ltd (1996) 66 IR 182 at 184; Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 at [94] and [96] per Kirby J; Director of Public Employment (by her Agent the Commissioner of New South Wales Fire Brigades) v New South Wales Fire Brigades Employees' Union [2008] NSWIRComm 158; (2008) 180 IR 170 at [45]-[46]. The passage in Kucks cited by his Honour makes the point: "It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading."
3. These principles have subsequently been cited with approval by the Full Bench in State Transit Authority of New South Wales v Australian Rail, Tram and Bus Industry Union, New South Wales Branch, Bus and Tram Division [2014] NSWIRComm 41, Secretary of the Department of Transport (in respect of Roads and Maritime Services) v Construction, Forestry, Mining, and Energy Union, New South Wales Branch [2018] NSWIRComm 1038 and more recently New South Wales Nurses and Midwives' Association v Health Secretary on behalf of Western NSW Local Health District [2019] NSWIRComm 1025.
4. In their submissions, the Respondents referred to the recent analysis of Commissioner Seymour in Health Services Union New South Wales v Ambulance Service of New South Wales [2017] NSWIRComm 1057 at paragraph [10]-[19] which provides a convenient summary of those principles which I have relevantly extracted below: [10] The Commission has powers to provide an interpretation of a clause in an award pursuant to s.175 if that is a step necessary for the purpose of exercising its powers under s.136. The powers of the Commission under s.175 do not stand alone, permitting applications for declaratory relief simpliciter. Rather they may be exercised 'for the purpose of exercising [the Commission's] functions in a matter before it', in this case the powers set out in s.136 of the Act: Australian Rail, Tram and Bus Industry Union, New South Wales and State Transit Authority [2013] NSWIRComm 102 at [67]; Health Services Union v Director-General, Department of Health (NSW) [2010] NSWIRComm 42; (2010) 193 IR 359 at [57] - [58]. [11] The relevant principles applied by the Commission to award interpretation are well settled. The Full Bench of the Commission in Bryce v Apperley (1998) 82 IR 448 at 452 observed as follows: In our view, in construing the true meaning of an industrial award, like any other instrument with legal force, the task requires an approach according to the actual words used and their plain, ordinary English meaning. As was said by Kelleher J in Re Dispute between Broken Hill Pty Co Ltd and the Federated Ship Painters and Dockers' Union of Australia, New South Wales Branch, Re Tank Tops (1961) AR (NSW) 312 at 314: The meaning is to be ascertained primarily from a consideration of the words actually used and, while it is proper to pay regard to the surrounding circumstances and the purposes for which the provision was intended, this cannot justify a meaning being given to the words which they are not fairly capable of bearing. Particular words or expressions, having a special trade significance, however, may need to be construed in that light. [12] In New South Wales Fire Brigade Employees Union and New South Wales Brigades [2003] NSWIRComm 55, Boland J endorsed the principles applied in Bryce as follows: [9] In approaching the task of interpreting an award the starting point is the actual words of the award itself and their plain, ordinary English meaning: City of Wanneroo v Holmes (1989) 30 IR 362 at 378; Bryce v Apperley (1998) 82 IR 448 at 452. If the language of the award provision is clear and unambiguous and is consistent and harmonious with the other provisions of the award and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning even if it leads to a result that may seem inconvenient or unjust (see Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth)(1981) 147 CLR 297 at 305 per Gibbs CJ). Although he was concerned with statutory provisions, the observations of the Chief Justice apply with equal force to an award: Bryce v Apperley at 453. However, as French J observed in City of Wanneroo, "That is not to say the words (of an award) must be interpreted in a vacuum divorced from industrial realities." French J referred to the decision of Street J in Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503 where his Honour said: [I]n 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. [13] The principles in Bryce were reaffirmed by the Full Bench in Zoological Parks Board of New South Wales v The Australian Workers' Union, New South Wales (2004) 135 IR 56 where the Commission held: [43] The relevant principles to be applied when interpreting industrial instruments are well settled: for example, Kingmill Australia Pty Ltd t/a Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2001) 106 IR 217 and Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Delta Electricity [2003] NSWIRComm 135 at [44] - [46]. Broadly speaking, the primary consideration in such matters is the actual words used (and these should be given their plain, ordinary meaning) and the context in which the words are used. .... [18] The first step is to consider the plain, ordinary meaning of the actual words of cl. 23(b)(ii), giving consideration and weight to every part of the Award, in order to ascertain the provision's meaning. If cl. 23 (b)(ii) is unambiguous, harmonious with the other provisions of the Award and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning.
5. I have applied these principles in interpreting the coverage clause of the Conditions Award.

The Submissions

1. The Applicant and Respondents relied upon both an outline of submissions filed prior to the hearing of this matter and oral submission before the Commission on 28 May 2019.
2. The controversy in this matter is whether the Destination NSW staff are subject to the interaction rules set out in clause 6(b)(iii) and/or (v) of the Current Coverage Clause of the Conditions Award. Pursuant to the introductory words of clause 6(b), the interaction rules apply, "Where another industrial instrument or arrangement applies to a group of employees covered by this Award". A threshold issue for determination is whether Destination NSW staff is subject to another "arrangement", invoking the interaction rules.
3. The parties were not in dispute with respect to how Destination NSW staff have been engaged by the Second Respondent since 2011. As set out above at paragraph [10], staff who were engaged at the inception of Destination NSW were transferred with the intention of retaining their existing conditions of employment with new recruits negotiating common law contracts and other conditions being determined by the organisations policies. The Respondents advances that this set of circumstances constitutes an "arrangement applying to a group of employees" pursuant to the Current Coverage Clause while the Applicant says that it does not.
4. The parties are at odds with respect to how the words "industrial instrument or arrangement" should be interpreted in clause 6(b) of the Award. The Applicant argues that there is no existing industrial instrument or arrangement applying to employees working within Destination NSW and therefore the exclusion rules do not apply. The Conditions Award therefore applies to Destination NSW staff and there is no cause to consult the interaction rules contained in the Current Coverage Clause at all.
5. They argue that an "arrangement" must be a collective arrangement, applying to a group of employees on a collective basis. It was put that the coverage clause must be read in this way in order for the exclusions to sensibly operate.
6. The Applicant argues that because Destination NSW staff have been engaged on individual contracts, negotiated on an individual basis, they are not covered by an "industrial arrangement" applying to "a group of employees".
7. The Applicant argues that this is the only sensible reading of the meaning of "industrial instrument or arrangement" because if an arrangement could include an individual contract of employment, parties could effectively contract out of the award by agreement by entering into private arrangements. They continue that this would not have been intended by the Commission; is generally not contemplated by awards and would be inconsistent with s.406 of the Industrial Relations Act 1996 (NSW) which provides that Awards and other industrial instruments provide for minimum entitlements.
8. It was put by the Applicant that if there is an "industrial arrangement" in place that operates to exclude the operation of the Award, it must have specificity and formalities so far as expressly identifying its operation and the conditions of employment that are conferred by it. The arrangement must provide for and set out particular conditions of employment. They say this must be so because each of the subclauses to clause 6(b) provide for the industrial instrument or arrangement to expressly provide for the displacement of the award in whole or in part, or in the case of (v), there be an identifiable inconsistency with the award.
9. Reference was also made to the use of the term industrial arrangements within the Conditions Award as relating to arrangements such as those local arrangements provided for by clause 10 of the Conditions Award. In short, this clause provides for local arrangements to be negotiated between the Department Head and the Applicant in respect of whole Department or part of a Department in relation to any matter contained in the Conditions Award. This was an example, it was argued, of what type of industrial arrangement that might have been envisaged as falling into the definition of the "arrangement" in clause 6(b).
10. The Respondents argue that there are industrial arrangements applying to Destination NSW staff which has been in place since its inception in 2011 and those are inconsistent with the application of the Conditions Award.
11. They rely upon the words of clause 6(b) but to the extent there is ambiguity, they submit the extrinsic material puts this matter beyond doubt. In particular, they submit that the Conditions Award clearly intends to accommodate contractual arrangements and accommodate arrangements in place prior to the GSE Act, even where such arrangements are not contained in an industrial instrument.

Consideration

1. In deciding whether "another industrial instrument or arrangement" applies to Destination NSW staff, I must start by considering the plain, ordinary meaning of the actual words of the coverage clause and in particular, the word "arrangement". The Online Oxford English Dictionary provides for the following definitions of 'arrangement': 1. The action of arranging or disposing in order. 2. Arranged condition, orderly disposition, order. 3. Style or mode in which things are arranged. 4. Concrete. A structure or combination of things arranged in a particular way or for any purpose; hence loosely, like affair, concern, production. 5. Music. The adaption of a composition for voices or instruments for which it was not originally written; concrete a piece so adapted. 6. a. A settlement of mutual relations or claims between parties; an adjustment of disputed or debatable matters; a settlement by agreement. b. euphemistic. An affair of gallantry an amour. 7. Disposition of measures of the accomplishment of a purpose; preparations for successful performance. (my emphasis)
2. I have emphasised the definitions that might apply to the words in the context of the Current Coverage Clause.
3. In seeking to amend the coverage clause by its application in 2015 (ultimately determined in 2017), the Applicant argued in its written submissions: 40. It is also necessary to say something as to the construction of the carve-out in cl 6 of the Award. The text is "except where another industrial instrument or arrangement applied to the employees." The legal meaning of that text is that it bears according to its "plain, ordinary English meaning": Bryce v Apperley (1998) 82 IR 448 at 452. Applying that standard: the meaning and operation of the carve-out is uncertain; and whatever meaning it bears, it is a broad one. ………. 42. In addition to the difficulties in interpreting the carve-out, whatever meaning it is given, the carve-out would appear to have a very broad operation. It applies to arrangements. In terms, it applies where any industrial instrument or arrangement applies.
4. In these proceedings, the Applicant argues the word "arrangement" should be interpreted as having a narrower meaning than its ordinary definition. Clearly, there is some ambiguity in what is meant by "arrangement" in the coverage clause.
5. There is some force in the Applicant's submission that the context of the Award supports its interpretation of the coverage clause as meaning collective arrangements. The principles of beneficial interpretation apply and the objectives of the Award system to create minimum entitlements for workplace participants are relevant too.
6. However, the weight of the extrinsic material clearly points in the direction that the word "arrangement" contained in the coverage clause should not be given the meaning of a collective arrangement in the way the Applicant has argued. That would be inconsistent with the industrial context within which the coverage clause was amended in 2014 and 2017.
7. The evidence in this matter demonstrates that in amending the coverage clause in 2014, the Applicant and the First Respondent sought to retain the "status quo" with respect to Award coverage given the changed status of some employees brought about by the commencement of the GSE Act. The "status quo" with respect to the Destination NSW staff (and other employees not previously defined as public service employees) was that they were not covered by the Conditions Award just prior to the commencement of the GSE Act (even if some continued to enjoy the benefit of those conditions by way of common law contract upon transfer from Tourism NSW).
8. On 17 February 2014, the Applicant filed an application in the Commission to vary the coverage clause of the Conditions Award (the 2014 variation proceedings). The original variation sought in the 2014 variation proceedings did not include any exclusions in respect of non-executive public service employees listed in Schedule 1 of the GSE Act and instead provided: The provisions of this award shall apply to all non-executive public service employees as defined in the Government Sector Employment Act 2013 employed in Departments, Executive agencies related to Departments, and Separate agencies, listed in Schedule 1 to the Government Sector Employment Act 2013.
9. After setting out the background to the application in the 2014 variation proceedings, paragraph [11] of Schedule B of the application titled, "Grounds, Reasons and Particulars" provided: In the circumstances, the Association seeks a variation to the award so as to clarify, and confirm coverage of the award so as to maintain continuity of its existing application in light of the administrative arrangements coming into operation with the commencement of the GSE Act. (my emphasis)
10. On 11 December 2014, an amended application for variation of the Conditions Award was filed by the Applicant. The variation sought was in the same terms as the original variation except that it now provided for an exception to coverage where, "another industrial instrument or arrangement applies to the employees" (the carve-out). Accordingly the amended variation sought by the Applicant in the 2014 variation proceedings was: The provisions of this award shall apply to all non-executive public service employees as defined in the Government Sector Employment Act 2013 employed in Departments, Executive agencies related to Departments, and Separate agencies, listed in Schedule 1 to the Government Sector Employment Act 2013, except where another industrial instrument or arrangement applies to the employees. (my emphasis)
11. Mr Thane Pearce, then Senior Industrial Advocate of the Applicant gave the following evidence in the 2014 variation proceedings: [6] At the time the variation was granted it was the intention of the PSA that the coverage of the Conditions Award maintain the status quo following the commencement of the Government Sector Employment Act 2013 (GSE Act) on 24 February 2014. ……. [11] Secondly there was an exclusion as to where an arrangement applies to the employees. This is a new exclusion. The PSA accepted the view expressed by the solicitor for the Secretary of Treasury in an email to Aaron Jones sent 27 November 2014 at 4:33 as follows: Arrangement. I am instructed that there may be employees (eg psychologist) who may have come from a professional background where they were covered by a different award or employment arrangement and may have agreed to their current position on the basis that their former conditions of employment would continue to apply. The word has been inserted to assure exclusion of such individuals.
12. It is noteworthy that the example of who might be excluded from coverage of the Conditions Award as referred to in the evidence of Mr Pearce, namely psychologists and people coming from a professional background, are the types of employees not traditionally bound by collective arrangements.
13. Further, Aaron Jones of the Applicant states in an email to Charlie Heuston and Geoff Boyd on 2 December 2014: On the basis of our recent discussions I understand the intention of NSWIR's reference to another "arrangement" to refer to existing contractual arrangements outside the scope of the Crown Employees Award. Where these employees have legitimately not been covered by this Award, such as the example given of a consulting Psychiatrist of the NSW Institute of Phsychiatry Staff Agency, this is not something we would object to in the context of this application. (my emphasis)
14. In a memo dated 12 December 2014, the Applicant explained to its members with respect to the amended coverage clause: The new clause ensures the terms and conditions of employment are retained despite the changed agency arrangements and introduction of the GSE Act. It also ensures that the employment arrangements apply to certain employees, such as those who may have come from a professional background where they were covered by different award or employment arrangement and may have agreed to their current position on the basis that their former conditions of employment would continue to apply (e.g. psychologists working at the Mental Health Commission Staff Agency). (my emphasis)
15. This explanation given by the Applicant to its members also supports the argument that "arrangements" intended to be carved out of the operation of the Conditions Award included individual contractual arrangements.
16. The context of the 2017 amendment to the coverage clause also goes against narrowing the meaning of arrangements in the Current Coverage Clause.
17. It is necessary to contextualise the 2017 amendment to the coverage clause.
18. There is an exchange of letters between the Applicant and the Executive Director of NSW Industrial Relations in September and November 2015 in which the Applicant seeks the advice of the Department with respect to whether it would consent to a variation of the coverage clause to include the following terms: This Award will apply in accordance with subclause (i) except where another industrial instrument or arrangement applies to the employees and the instrument or arrangement is expressed to override or supersede this award in its entirety.
19. In this exchange, the Applicant asserts that: The exclusion provision in the current Coverage Clause were intended to operate in a way that enabled agencies that had not traditionally been covered by the Conditions Award and who had in place comprehensive arrangement to retain those arrangement undisturbed. (my emphasis)
20. In its response the Executive Director of NSW Industrial Relations stated: The alternative wording proposed in your letter was previously canvassed in those earlier discussions and was not agreed as it appears to seek an extension of the coverage of the conditions award to areas where it does not currently apply - specifically the current arrangements do not expressly override or supersede the conditions award (e.g. Taronga Conservation Society Australia Salaried Employees Award).
21. An Application for Award Variation was filed on 14 December 2015 by the Applicant (the original 2015 variation application). The Grounds, Reasons and Particulars of the original 2015 variation application referenced employees of the Home Care Service Staff Agency, but ultimately the issues specific to that Agency were not pursued by the Applicant.
22. There is nothing in the original 2015 variation application that suggests that the Applicant was seeking to clarify an expanded coverage of the Conditions Award to those not previously covered just prior to the commencement of the GSE Act.
23. The written submissions of the Applicant identify the nub of their concern with the coverage clause prompting the variation application at that time: that the status quo was not maintained by the coverage clause because "the Award no longer provides a common, consolidated award for non-executive departmental employees; as soon as another instrument or arrangement applies, employees lose the benefit of the Award": Paragraph [2.6] of the Applicant's written submissions dated 24 June 2016.
24. The Applicant submitted in support of its original 2015 variation application that the parliamentary intention of the introduction of the GSE Act was to not directly cause a variation in the conditions of employment of members of the public service or public service agencies. They argued that this should inform the Commission with respect to the public interest test required to be addressed in considering the variation application: see [15] of the Applicant's written submissions dated 24 June 2016.
25. The Applicant further submitted that they were seeking to maintain the status quo as provided for immediately prior to the introduction of the GSE Act and that the 2014 amendment to the coverage clause did not achieve this: see [21] of the Applicant's submissions dated 24 June 2016.
26. The First Respondent opposed the original 2015 variation application. In its written submissions, it argued that the removal of the carve-out would cause "more agencies to be covered by the Conditions Award than was previously the case because the number of agencies covered by the relevant subsection of Schedule 1 of the PSEM Act is less that the number of agencies covered by the relevant subjection of Schedule 1 of the GSE Act": see 1 and (h) of the First Respondent's submissions dated 29 June 2016.
27. The Applicant's written submissions in reply did not directly address the First Respondent's submissions with respect to the extension of coverage to new agencies if the carve-out was removed.
28. An amended application to vary the Conditions Award was filed on 31 August 2016 (the amended variation application). It is similar in terms to the Current Coverage Clause, however, it provided for a retrospective operation back to 23 February 2014. The amended Grounds, Reasons and Particulars provided that, "The alternative formulation proposed by the applicant provides a set of interaction rules calculated to ensure that the Conditions Award achieves its objective of providing common consolidated conditions for identified public service employees save where another industrial award or industrial arrangement is intended to displace the Conditions Award."
29. There is nothing in the amended variation application about the Applicant seeking to expanded coverage of the Conditions Award to those employees not previously covered just prior to the commencement of the GSE Act.
30. The amended variation was an alternative presented by the Applicant. However, its primary position was that the carve-out should simply be struck out of the coverage clause.
31. While the First Respondent continued to oppose any change to the coverage clause, it argued that the amended variation sought was "a better repair" than the variation sought in the original application.
32. The parties were unable to reach an agreement as to the terms of the variation of the coverage clause.
33. The Commission's decision of 12 paragraphs with respect to the variation of the coverage clause can be found in Re Crown Employees (Public Service Conditions of Employment) Reviewed Award 2009 [2017] NSWIRComm 1008. In determining the words of the coverage clause as it currently stands, the Commission proceeded squarely on the basis that the parties' joint intention was to maintain the status quo with respect to award coverage following the commencement of the GSE Act in 2014. Accordingly, the Commission noted with respect to the 2014 variation: [4] The consent variation was affected by the parties with, we except, the common objective of introducing a formulation that maintain the existing coverage of various existing awards, industrial instruments and arrangements, what might be referred to as the 'status quo' in relation to coverage. [5] Our decision must be understood in this context, that the parties both maintain the view that some form of award provision is necessary to maintain the status quo industrial coverage. As the argument developed, and following an amendment to the formulation advanced by the applicant, the differences between the parties in practical terms resolved to one. [6] The respondent submitted, firstly that the variation affected in 2014 was sufficient to maintain the status quo in relation to coverage, and secondly, that there was a danger that any more prescriptive provision would inadvertently omit necessary inclusions or exclusions. [7] We are not satisfied that the existing formulation is sufficient to reflect the parties' intention which is the maintenance of the status quo. The present formulation relies on an understanding of the pre-existing circumstances in the Award will not always be read by persons who have that knowledge. Accepting that, as the respondent advanced, there are difficulties in drafting a more precise set of interaction rules as an award clause, we are nevertheless of the view that an award clause providing clear interaction rules is necessary to allow the Award to function to the greatest extent possible as a stand-alone industrial instrument. …… [9] In all of this we do not propose to depart from the parties' original intention, to maintain the status quo, as we have used that term in this decision, in relation to industrial coverage.
34. There is nothing in the decision of the Commission evidencing an intention to expand the coverage of the Conditions Award to those not covered just prior to the commencement of the GSE Act. Rather, the decision confirms an intention to cement the coverage as it existed at that time.
35. The interpretation of the coverage clause should be read consistent with the Commission's decision and with what both the Applicant and First Respondent represented to each other and the Commission it intended. Again, the "status quo" with respect to the Destination NSW staff prior to the commencement of the GSE Act was that they were not covered by the Conditions Award.
36. It is proper to have regard to the circumstances of the 2014 and 2017 amendments and the plain words of the coverage clause are capable of being given the meaning which is urged by the Respondents: Re Dispute between Broken Hill Pty Co Ltd and the Federated Ship Painters and Dockers' Union of Australia, New South Wales Branch, Re Tank Tops (1961) AR (NSW) 312 at 314.
37. Accordingly I am unable to agree with the submissions of the Applicant that the Destination NSW staff are not subject to an "industrial award or arrangement" applying to a group of employees. To do so would be to read the words of the coverage clause in a vacuum divorced from the industrial realities of the parties: City of Winneroo v Holmes (1989) 30 IR 362.
38. That interpretation is consistent with the plain words given their ordinary meaning and appropriately reflects the industrial context within which the coverage clause was amended in 2014 and 2017.
39. Having found that the interaction rules in the Current Coverage Clause are applicable to Destination NSW staff, I am required to consider which of the subclauses contained in Clause 6(b) applies, which will in turn determine when and if the Conditions Award applies.
40. In its written submissions, the Respondents argued that clause 6(b)(v) applied to Destination NSW staff. During the hearing of the matter, they indicated that clause 6(b)(iii) may instead apply. For ease of reference, I set both out below again: (b) Where another industrial instrument or arrangement applies to a group of employees covered by this Award the following interaction rules apply: …….. (iii) If the other industrial instrument or arrangement comprehensively determines conditions of employment for a group of employees then this Award shall have no application in relation to that group of employees; ………. (v) If none of subclauses 6(b)(i)-(iv) apply, and the other industrial instrument or arrangement is silent as to its interaction with this Award, then: a. if the application of the other industrial instrument or arrangement is inconsistent with the application of this Award, the other industrial instrument or arrangement applies to the extent of the inconsistency; otherwise b. this Award applies.
41. As at the commencement of the GSE Act, the arrangements in place with respect to the employment of Destination NSW staff stood alone and were comprehensive. Whilst there were employees subject to the Conditions Award, this was the consequence of the terms being imported into their contract of employment by agreement. Accordingly, I find that clause 6(b)(iii) applies and therefore clause 6(b)(v) does not.
42. It follows that the Conditions Award does not apply to the non-executive staff of Destination NSW as its operation is excluded by clause 6(b)(iii) of the Current Coverage Clause. Janine Webster Commissioner

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