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

Industrial Relations Commission (NSW)|2019-12-10

Citation: [2019] NSWIRComm 1052 Date of Decision: 06 August 2019 Before: Commissioner Webster File Number(s): 2018/189728

Judgment

This is an appeal pursuant to s 187 of the Industrial Relations Act 1996 (NSW) ("the IR Act") against the decision of Commissioner Webster in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Industrial Relations Secretary & Anor (Destination NSW) [2019] NSWIRComm 1052 ("the Decision").
The appeal is brought by the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales ("PSA"). The respondents to the appeal are the Industrial Relations Secretary and Destination NSW.

The Appeal

The appellant appeals against the Decision on the following grounds: "1. The Commissioner erred in finding that non-executive public service employees for the purposes of the Government Sector Employment Act 2013 (NSW) working within Destination NSW are not covered by the Crown Employees (Public Service Conditions of Employment) Reviewed Award. 2. The Commissioner erred in finding that…individual contracts of employment entered into by employees working within Destination NSW constituted that 'another industrial instrument or arrangement applies to [the] group of employees' for the purposes of clause 6(b) of the Crown Employees (Public Service Conditions of Employment) Reviewed Award. 3. The Commissioner erred in finding that individual contracts of employment entered into by employees working within Destination NSW constituted an industrial instrument or arrangement that 'comprehensively determines conditions of employment for a group of employees' for the purposes of clause 6(b)(iii) of the Crown Employees (Public Service Conditions of Employment) Reviewed Award. 4. Such other or further grounds as this Honourable Commission considers appropriate."

Legal principles to be applied

Under s 188 of the IR Act an appeal to a Full Bench of the Commission may be made only with the leave of the Full Bench. The Full Bench is to grant leave to appeal if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted.
The principles in relation to the grant of leave to appeal a decision of the Commission were summarised in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Roads and Maritime Services [2015] NSWIRComm 16. In that matter the Full Bench stated: "10. It is well settled that an appeal under the IR Act is an appeal in the strict sense: see s 191 of the IR Act and King v State Bank of New South Wales (No 2) [2002] NSWIRComm 353; (2002) 126 IR 407. In such an appeal the appellate tribunal will only intervene to correct error: Aboud v State of New South Wales (Department of School Education) [1999] NSWIRComm 449; (1999) 92 IR 32. In the case of discretionary decisions it is not enough that the appellate tribunal would have come to a different view. It must be shown that the primary judge had failed to properly exercise the discretion committed to him: Mace v Murray [1955] HCA 2; (1955) 92 CLR 370 and House v The King [1936] HCA 40; (1936) 55 CLR 499. It is important to bear these principles in mind in approaching the question of leave to appeal. 11. The principles guiding the determination of leave were clearly set out in this often cited passage from Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263: [5] The law and practice governing leave to appeal is well settled and does not require restatement: see Knowles v Anglican Church Property Trust (No. 2) (1999) 95 IR 380. However, two principles warrant particular mention: first, leave will not be lightly or automatically granted (see King v State Bank of New South Wales (No 2) (2002) 126 IR 407 at [52]-[55] and Knowles at 381 - 382) and, subject to the requirements of s188(2) of the Act, will not, generally, be granted unless the appellant demonstrates that the appeal 'raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application' (see Knowles at 382) or raises issues going to the proper administration of justice. Secondly, leave will rarely be granted where an appeal primarily seeks to challenge findings of fact which are otherwise reasonably open on the evidence: Box Valley Pty Ltd v Price (2000) 97 IR 484; Austin v NF Importers Pty Limited [2005] NSWIRComm 353 at [5]."
In Industrial Relations Secretary v Wattie [2017] NSWIRComm 1007 the Full Bench stated at [12] and [13]: "12. We note that the Full Bench in Antonakopoulos v State Bank of NSW (1999) 91 IR 385 also held…that an appeal bench should not substitute its own views as to a decision that was reasonably open at first instance. We endorse and apply that approach. 13. Lastly, we add, as the Full Bench said in Fire Brigade Employees' Union of NSW (o/b Challinor) v Fire and Rescue NSW [2016] NSWIRComm 1050, that it will rarely be appropriate to grant leave to appeal unless an appellant can mount at least an arguable case pointing to appellable error. This is by no means a new element of the Commission's jurisprudence; it has long been held that an appellate body in an appeal of this nature will only substitute its own judgment where the first-instance decision maker has fallen into error of law, or made a finding of relevant determinative fact that is demonstrably wrong: Drake Personnel Ltd v Workcover Authority of NSW (1999) 90 IR 432 at 440. There will rarely be utility in granting leave to appeal where that degree of error cannot at least arguably be agitated on appeal."
The principles outlined in the cases cited above have since been approved in numerous decisions of the Full Bench. It is not necessary to list them all.
The Decision did not involve the exercise of a discretion. If leave to appeal is granted the question for the Full Bench is whether the Commissioner reached the correct decision, not whether the decision was reasonably open to her: Minister for Immigration and Border Protection v SZVFW & Ors [2018] HCA 30 at [17]-[18] and [48]-[50]; Branir Pty Limited v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424 and Australian, Municipal, Administrative, Clerical and Services Union v Commonwealth of Australia (acting through and represented by the Australian Taxation Office) [2018] FWCFB 1170.
The questions arising in this appeal concern the proper construction of the Crown Employees (Public Service Conditions of Employment) Reviewed Award ("Conditions Award"). At [23]-[26] of the Decision the Commissioner summarised the relevant principles to apply when interpreting industrial instruments. It was not suggested on appeal that the Commissioner failed to identify the correct principles of interpretation, and so it is unnecessary to reproduce them here.

Appellant

The appellant submitted that leave to appeal should be granted for reasons including the following: 1. the appeal involves a significant issue concerning the coverage of the common award setting basic conditions for non-executive public service employees across NSW, namely, the Conditions Award, which has not been subject of previous consideration by the Commission, in particular relating to the exclusions in cl 6(b) of that Award; 2. the Decision gives rise to potential injustice in that it has the effect that employees who are part of the public service for the purposes of the Government Sector Employment Act 2013 (NSW) ("GSE Act") may have substantially different basic conditions of employment depending upon the agency to which they are allocated to perform work from time to time; and 3. the approach of the Commissioner raises significant questions as to the proper consideration of extrinsic materials, particularly private communications between the parties to proceedings before the Commission, in the interpretation of awards in that the Commissioner departed from the obvious and ordinary meaning of the words of the Conditions Award.
On the appeal, the appellant contended that the Commissioner erred in concluding that the relevant employees were excluded from the coverage of the Conditions Award by virtue of cl 6(b). This conclusion was said to have involved two erroneous findings: firstly, that "another industrial instrument or arrangement" applied to the relevant employees and, secondly, that cl 6(b)(iii) of the Conditions Award applied because the arrangements in place stood alone and were comprehensive.
The appellant submitted that the Commissioner did not attempt to give comprehensive meaning to the phrase "industrial instrument or arrangement" other than to conclude it includes whatever arrangements are in place at Destination NSW. Essential to the Commissioner's conclusion was the proposition that the requirement in cl 6(b) that "another industrial instrument or arrangement applies to a group of employees" is met "merely because the employer purports to execute individual common law contracts with employees performing work within [Destination NSW]". It was contended that such a conclusion could not be accepted for the following reasons: 1. the reasoning of the Commissioner focussed on whether the word "arrangement" was sufficiently broad to accommodate the meaning urged by the respondents, which involved her reading the word "arrangement" out of context. The "plain and ordinary meaning of the clause" is that the word "industrial" attaches to both the words "instrument" and "arrangement". That is, the relevant question is whether "another industrial…arrangement applies to a group of employees"; 2. the language and context of the provision dictate that an industrial arrangement must be a common collective agreement setting conditions for a group of employees. Furthermore, application of the interaction rules of cl 6(b)(i)-(v) requires that it be possible to identify the terms of the instrument or arrangement applying to the group of employees. The interaction rules would not operate if an "industrial…arrangement" included various individual contracts of employment; 3. if it is sufficient that an entity have individual contracts of employment for employees, then any agency could exclude its employees from the operation of the Conditions Award by executing individual contracts of employment which expressly or by reason of inconsistency displace the provisions of the award. Contracting out of the Conditions Award would be countenanced; 4. the provision in cl 10 of the Conditions Award for the making of a "local arrangement", which must be a collective arrangement negotiated between the PSA and the relevant Department Head, approved in writing by the Industrial Relations Secretary and contained within a formal document, may provide an indication of what might have been meant by the use of the phrase "industrial…arrangement".
For these reasons, the appellant submitted that the practice of executing common law contracts of employment with employees is not an industrial arrangement for the purposes of cl 6(b).
In the alternative, the appellant submitted that the Commissioner was also wrong to conclude that cl 6(b)(iii) applied. Even if the practice of executing common law contracts or employment agreements was capable of constituting an "industrial arrangement", the practice at Destination NSW was not comprehensive because, apart from anything else, it was variable and subject to individual negotiation with each employee.
The appellant further challenged the Commissioner's reliance on extrinsic materials to support the conclusion that non-executive employees within Destination NSW were not covered by the Conditions Award. It contended that the approach adopted by the Commissioner sought to interpret the extrinsic materials rather than interpret the actual language of the Conditions Award. The Commissioner failed to interpret the words used in cl 6(b) but rather adopted a conclusion derived from her reading of the extrinsic materials. She misunderstood aspects of the extrinsic materials and the context of what was sought to be achieved by the parties in the Commission. She attached importance to references to "continuity" or the "status quo" without correctly understanding the context of the communications.
The appellant argued that, read properly and in context, the extrinsic materials do not support the conclusion that no change to the coverage of the Conditions Award occurred following the commencement of the GSE Act. Rather, the variations sought and made provided that the Conditions Award would apply to all non-executive public service employees unless some particular industrial instrument or arrangement was in place in a particular agency that was intended to displace the Conditions Award, in whole or in part.

Respondents

On the question of leave to appeal the respondents contended as follows: 1. there is no substantive matter of principle that arises in this case. The Commissioner's approach at first instance was in accordance with established principles; 2. there are no "significant ramifications for public service employees", as the Decision "only has application at the edges of the coverage of the Conditions Award"; 3. the appeal does not raise any matter of principle or public interest in relation to the use of extrinsic material. The Commissioner properly considered the industrial context in which the Award was varied in 2014 and 2017, including by reference to representations made by the parties in the course of the proceedings in which amendments were negotiated and arbitrated; and 4. the appeal does not include any consideration or issue pertaining to private communications between the parties. The Commissioner admitted no evidence of private communications. The appellant's submissions on appeal make no reference to private communications.
In their outline of submissions on the appeal, the respondents outlined the approach taken by the Commissioner in the Decision and her key findings. They submitted that it was reasonably open to the Commissioner to look beyond the ordinary meaning of the words in cl 6, and in particular what could be said to be the ordinary meaning(s) of "arrangement".
The respondents also summarised the Commissioner's key findings in relation to the industrial context within which cl 6 was amended in 2014 and 2017. They submitted that in considering the text of the Conditions Award in that context the Commission's conclusions in relation to the coverage of the Award were reasonably available.
In response to the appellant's submissions as to the interaction between the Conditions Award and individual contracts of employment, the respondents contended that it had never been suggested that the common law contracts of employees who worked for Destination NSW were designed to ouster or displace an industrial instrument that might otherwise apply. Nor had it ever been suggested that any such contracts actually do ouster an award that would otherwise apply.
Rather, the question before the Commission was whether the amended terms of cl 6 properly carved out coverage for employees such as those who worked for Destination NSW who were not covered by the Conditions Award prior to the GSE Act commencing. In 2014 employees who worked for Destination NSW were not outside of the Conditions Award by reason of the fact that they had contracts of employment. Clause 6 does not exclude those employees because they have contracts of employment. The appellant's submissions in this regard rely upon the Full Bench ignoring the industrial history and the industrial context.
The respondents submitted that in any event, cl 6 does not, on any fair reading, permit contracting out of award provisions.
On the meaning to be given to the term "industrial arrangement", the respondents submitted that it was clear by the long-standing arrangement between the appellant and the respondents that the group of employees that worked for the respondents prior to the commencement of the GSE Act were not covered by the Conditions Award. In its context this industrial arrangement did not need to be formal or collective. For a long period of time the appellant was either content with the arrangement, or not discontent enough to repair it.
The respondents contended that the arrangements for employees who work for Destination NSW have been clear for almost a decade. While those arrangements anticipate individual contracts of employment, the non-executive employees of the respondents were treated by the appellant, the Commission and the respondents as a group throughout the proceedings below. The appellant sought to organise the employees as a group and the award sought by the appellant treats the employees as a group. To the extent that it is required, the arrangements for employees who work for Destination NSW are industrial arrangements in so far as the employees have been dealt with collectively throughout the course of the industrial matter.
In response to the appellant's submissions as to how the Full Bench should view the extrinsic materials, the respondents contended that the appellant asks the Full Bench to accept (despite the Commissioner's undisturbed findings, all the evidence to the contrary and the fact that the appellant was a party to each of the earlier proceedings) that: 1. the parties and the Commission intended the word "arrangement" to be confined to common/collective/industrial arrangements; 2. the "status quo" that the parties and the Commission sought to preserve over this same period was not the circumstances that applied before the commencement of the GSE Act but was in fact the altered circumstances that applied immediately after the commencement of the GSE Act; 3. the common objective of maintaining "the existing coverage of various existing awards, industrial instruments and arrangements" referred to by the Full Bench in 2017 (see [46(14)] below) is to be understood in this same way; and 4. for employees who worked for Destination NSW the common intention of the parties was to maintain the existing coverage of various existing awards, industrial instruments and arrangements except as altered by the GSE Act.

Appellant in reply

The appellant's submissions in reply included the following contentions: 1. in interpreting an instrument, it is necessary to avoid the danger of making some a priori assumption about the purpose of the statute or other instrument. It is not legitimate to seek to answer a question of construction by reference to an assumed purpose which is not derived from the text of the instrument. The Commissioner and the respondents adopt that approach; 2. in the context of cl 6(b), there must be "another industrial…arrangement" which applies to "a group of employees". For the subclause to apply there must be a single industrial arrangement applying to the group. It does not assist to suggest that non-executive employees within Destination NSW were treated "as a group" in the proceedings. In any event, it is wrong. The evidence indicated that a variety of arrangements applied to employees; 3. cl 6(b) contemplates that an arrangement will have express provisions which may comprehensively determine conditions of employment of a group of employees or a particular class of conditions of employment for those employees, and in relation to which an assessment can be made as to the extent of any inconsistency between the arrangement and the Conditions Award. The respondents do not point to any industrial arrangement answering the description; 4. even if it were correct to say that the appellant had only adopted its present view as to the application of the Conditions Award recently, that is of no assistance in answering the question of award interpretation which arises in the appeal; 5. the respondents misread the extrinsic materials. The materials do not suggest that the parties intended that the Conditions Award would not apply where no existing separate instrument or appropriate industrial arrangement applied. The parties do not appear to have reached any understanding as to whether the Conditions Award should apply to Destination NSW following the commencement of the GSE Act; and 6. it is in any event necessary to construe the actual language used in cl 6(b), that is, to determine the meaning of the phrase "industrial…arrangement applies to a group of employees" and to determine whether the "arrangements" for staff at Destination NSW answer that description. The question is not answered by the extrinsic materials and cannot be approached on the basis of an assumption as to the correct answer.

Leave to appeal

In the circumstances, and given the conclusions we have reached as set out below, we are satisfied that there are proper grounds on which, in the public interest, leave to appeal should be granted. While it is correct, as the respondents submitted, that the number of employees affected by this matter is small, we do not accept that the issues that arise are "at the edges of the coverage of the Conditions Award".
As the appellant submitted, the Conditions Award sets basic conditions of employment for non-executive public service employees across NSW. The question at the heart of the appeal is whether a particular group of employees are excluded from that award and the conditions it mandates, which in turn centres on the meaning of the phrase "industrial…arrangement applies to a group of employees". This has not previously been considered by the Full Bench. We consider that the matters arising on appeal therefore have potentially wider implications for the jurisprudence of this Commission.

The appeal

The case advanced by the appellant involves answering the following questions: 1. Did the Commissioner err in finding that "another…arrangement applies to [the] group of employees" for the purposes of clause 6(b) of the Conditions Award? (An affirmative answer would determine the appeal.) 2. If not, did the Commissioner err in finding that such an arrangement "comprehensively determines conditions of employment" so as to invoke cl 6(b)(iii) of the Conditions Award?

Meaning of "another industrial instrument or arrangement"

Clause 6(b) refers to "another industrial instrument or arrangement" applying to the relevant group of employees. The appellant contended that the adjective "industrial" qualified both "instrument" and "arrangement", with the result that in the absence of an industrial instrument the clause could only operate if an "industrial arrangement" applied.
We observe that the term "industrial instrument" is specifically defined in s 8 of the Act in these terms: 8 Definition of industrial instrument In this Act, industrial instrument means an award, an enterprise agreement, a public sector industrial agreement, a former industrial agreement, a contract determination or a contract agreement.
If the parties to the Conditions Award intended to apply this definition when using the term "industrial instrument" in cl 6(b) then it is open to question whether "industrial" should qualify "arrangement" and, further, the significance if it does not. Ultimately, the respondents did not appear to challenge the construction posited by the appellant in this regard and so it is unnecessary to traverse the matter in greater depth.
It does not seem to be controverted that the Australia-based staff of Destination NSW fall into two broad categories. The first comprises those public sector employees who transferred to Destination NSW from Tourism NSW in 2011. Immediately prior to the transfer they were covered by the Conditions Award and they were entitled to retain those conditions. As at July 2018 approximately 16 of the Australia-based staff, or 13% of the relevant workforce, were in this category.
It is the respondents' position that the terms and conditions for the remainder of its employees are set through common law employment contracts, to the exclusion of the Conditions Award. In the proceedings below, the respondents read an affidavit of Ross Pearson, the Chief Operating Officer of Destination NSW, in which he stated: "23. Destination NSW uses a standard form of employment agreement to offer employment to new recruits. This is so that consistent terms are offered to employees, and so that employees have an opportunity to consider and negotiate arrangements that best suit their personal circumstances. …" A copy of the "standard form of employment agreement" was annexed to the affidavit.
The appellant contended that the Commissioner erred in finding that this approach to regulating the terms and conditions of employment for the employees constituted an "industrial arrangement" within the meaning of cl 6(b). In its submission an "industrial arrangement" must be "a common collective agreement setting conditions for a group of employees". This was a point emphasised at the hearing of the appeal by Mr Gibian SC, who appeared for the appellant, when he submitted: [1] "That is there must be another, that is a single, industrial instrument [or] arrangement applying to the group." And further: [2] "…what is contemplated is an instrument or arrangement which has sufficiently defined ascertainable terms."
As the evidence reproduced at [38] above makes clear, Destination NSW utilises a template employment agreement for new recruits. While some negotiation of terms may occur to accommodate personal circumstances, with the possibility of changes being made to the standard terms, there is no evidence to suggest that such changes are so prevalent or material as to undermine the aim expressed by Mr Pearson of ensuring that consistent terms are offered to employees. A system which allows for ostensibly generic conditions to apply to employees, albeit that these are applied through individual employment agreements, can lend itself to the analysis required by the interaction rules in cl 6(b)(i)-(v) of the Conditions Award.
It does not strain the language of the Conditions Award to extend "arrangement", or "industrial arrangement" if that construction is adopted, to include a system by which terms and conditions for employees are established, even if they are contained in individual contracts of employment. Each individual contract is not, as the appellant submitted, the relevant arrangement. Rather, the arrangement is the system under which those contracts are applied.
It follows that we do not accept the appellant's submissions that for the purposes of cl 6(b) an "arrangement" (or "industrial arrangement") can only be a single, collective agreement.
We find some support for this construction of "arrangement" in Legal & General Assurance Society Limited v Stock (1993) 49 IR 464, in which the Full Court of the former Industrial Court considered the meaning of the word as it appeared in s 275 of the now-repealed Industrial Relations Act 1991 (NSW). The Court held (at 481) that the term "embraces a situation where there exists two or more separate contracts which, notwithstanding their separateness, are, in a particular factual context, so sufficiently associated with each other in a practical sense as together to constitute an arrangement of which each contract is a constituent part".
Stock was cited with approval in Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) [2000] NSWIRComm 143; (2000) 49 NSWLR 551 at [162]. In that case the Full Bench was considering the meaning of "arrangement" in the context of s 105 of the Act, a successor provision to s 275 of the Industrial Relations Act 1991.
Admittedly, both Stock and Reich concerned the Commission's unfair contracts jurisdiction and so are not determinative of the meaning of "arrangement" in the Conditions Award. That said, we consider that the extract from Stock reproduced at [43] provides at least some guidance.
A construction of "arrangement" so as to encompass the practice adopted at Destination NSW is not only permitted by the language of the Conditions Award but is consistent with the extrinsic material to which the Commissioner had regard. Without traversing the entirety of the evidence in this regard, we note in particular the following: 1. On 17 February 2014 the PSA filed an Application for an Award Variation, seeking changes to the Conditions Award. The Application included the following statement: "11. 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." 1. On 9 July 2014 Aaron Jones of the PSA wrote to Charlie Heuston, then Manager, Public Sector Industrial Relations, proposing an alternative version of cl 6 to that contained in the Application for Variation. It provided for a "carve out" which allowed for a "separate industrial instrument", as defined in the Act, to prevail to the extent of any inconsistency with the Conditions Award. 2. In an email of 6 August 2014 Mr Heuston wrote to Mr Jones proposing an alternative clause which expressly excluded from coverage of the Conditions Award a number of agencies, including Destination NSW Staff Agency. 3. On 19 August 2014 Mr Jones responded to Mr Heuston. He proposed an alternative version of the clause which listed some entities to be excluded from the coverage of the Conditions Award, but which did not include Destination NSW. His email stated, however, that the PSA was open to expanding the list subject to clarification of what "ongoing industrial arrangements" would apply. The email attached an Excel spreadsheet which included reference to Destination NSW and a notation that "the PSA understands that the Crown Employees Award has been grandfathered for employees who were transferred into Destination NSW from other agencies". In the spreadsheet the PSA suggested that the grandfathering arrangements be confirmed and continue to operate. (The document makes no reference to what would apply to those employees for whom such grandfathering arrangements were not in place.) 4. In an email to Mr Jones of 17 September 2014, Mr Heuston wrote that there "remain a number of agencies which are not currently covered by the Conditions Award and we will not be consenting to extend coverage to include these". 5. In an email exchange on 18 September 2014 Mr Jones sent a table to Mr Heuston which stated that the preference of the PSA was to include Destination NSW Staff Agency under the Conditions Award. Mr Heuston's response was that "Conditions Award doesn't apply and should not be extended to this group". 6. In an email to Geoff Boyd of the Crown Solicitor's Office dated 24 November 2014 Mr Jones asked: "What in the view of NSWIR is deemed an arrangement?" In a reply dated 27 November 2014 Mr Boyd wrote: "'Arrangement'. I am instructed that there may be employees (e.g. 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." 1. In an email to Mr Heuston and Mr Boyd of 2 December 2014, Mr Jones wrote: "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 to the NSW Institute of Psychiatry Staff Agency, this is not something we would object to in the context of this application. I think there is utility however in the parties exchanging some form of agreed understanding of this term. Our concern is that the term 'arrangement' could be interpreted by an agency more broadly and be sought to be used as means of denying coverage of the Award to an employee/s on the basis of some undefined 'arrangement' being in place." (Emphasis added) 1. In an Application for Variation of Award filed 11 December 2014 the PSA sought to amend cl 6 of the Conditions Award to read as follows: "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." (Emphasis in bold added) 1. In the Application the PSA represented as follows: "16. The amended wording contained in the proposed clause creates a clear scope of coverage of the Award on the basis of Schedule 1 of the GSE Act, whilst allowing for exemptions from its application on the basis of alternative industrial arrangements. … 18. The respondent consents to this application." 1. The variation was made by Walton J on 12 December 2014, effective on and from 24 February 2014. 2. On 14 December 2015 the PSA filed an Application for Award Variation seeking to delete from cl 6 of the Conditions Award the words "except where another industrial instrument or arrangement applies to the employees". The proceedings which ensued were subsequently allocated matter number 2016/6216. 3. In its Outline of Submissions in the proceedings the PSA submitted that its understanding of the words sought to be excised "rightly or wrongly, was that they operated to 'enable agencies that had not traditionally been covered by the…Award and who had in place comprehensive arrangements to retain those arrangements undisturbed'." 4. The Full Bench decision in 2016/6216 was handed down on 3 March 2017. It varied the Conditions Award to insert the current cl 6. In the course of its decision the Full Bench stated as follows: "4. The consent variation [in 2014] was effected by the parties with, we accept, the common objective of introducing a formulation that maintained 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 that 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. … 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 and the Award will not always be read by persons who have that knowledge. Accepting that, as a 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." 1. The Application for a New Award commencing the proceedings below was filed by the PSA on 19 June 2018. In the Application the PSA stated: "Currently no Award exists for the majority of staff employed by this agency."
The appellant challenged the Commissioner's use of this extrinsic material. The effect of the appellant's submissions was that the Commissioner did not seek to interpret the Conditions Award by reference to the extrinsic material, but rather sought to discern from that material the intention of the parties which she then attempted in some Procrustean fashion to impose on the Conditions Award.
The Commissioner found that the term "arrangement" was intended to have a broader meaning than that for which the appellant now contends. She found that the word "arrangement" can contemplate the system in place at Destination NSW. The extrinsic material did not displace, but rather confirmed, the meaning of the text of cl 6. There is no error to be found in the use by the Commissioner of the extrinsic material.
Indeed, the appellant's submissions regarding the Commissioner's use of extrinsic material rest on their primary contention being accepted - that is, that "arrangement" is confined to a single, collective document that applies to a group of employees. Once this assumption is removed the challenges to the Commissioner's approach fall away.
It follows from the above that we find no error in the Commissioner's finding that "another industrial…arrangement applies to [the] group of employees" for the purposes of clause 6(b) of the Conditions Award.

Which interaction rule applies?

It is necessary to consider the appellant's further contention that the Commissioner erred in finding that the arrangement "comprehensively determines conditions of employment" so as to invoke cl 6(b)(iii) of the Conditions Award.
On the appeal we were given little assistance from the parties as to the meaning to be attributed to the phrase "comprehensively determines conditions of employment". The appellant put its case in the negative, arguing that the arrangement could not be comprehensive if it was variable and subject to individual negotiation with each employee. This to us appears to be a non sequitur. Even if it were to be accepted that there was significant variation in the terms of employment applying to Destination NSW employees, it does not necessarily follow that the resultant terms and conditions could not be comprehensive. For an abundance of caution we reiterate the observations made above that the evidence does not demonstrate that there is a wide variance in the terms and conditions apply to staff at Destination NSW as a consequence of contracts being able to be individually negotiated.
The respondents did not traverse this issue to any great degree. It appears that the respondents approached the proceedings below on the basis that cl 6(b)(v) applied "and then (iii) was suggested and we took up the Commissioner on her enquiry". [3]
The Commissioner's consideration of this issue was set out at [77]-[80] of the Decision, reproduced at [6] above. The Decision contains no analysis of the basis on which she found that the arrangement at Destination NSW "comprehensively determines conditions of employment" for the relevant employees. The Commissioner dealt with the issue in rather short order by saying at [79] that "the arrangements in place with respect to the employment of Destination NSW staff stood alone and were comprehensive". Those arrangements were described at [10] of the Decision as being the standard form employment agreement and "an Employee Handbook which includes policies that apply to Destination NSW staff and contain further entitlements and benefits".
The standard form of employment agreement attached to the affidavit of Mr Pearson is a document of some heft. The agreement contains the following provisions, in the order in which they appear, with subclauses in parenthesis (with clause titles reproduced verbatim): 1. Employment (Position, Commencement, Location) 2. Duties and Reporting Structure (Duties of your Position, General Duties, Reporting structure, Changes to your position) 3. Hours of Work 4. Probationary Period 5. Authority Policies 6. Remuneration (including Review of remuneration package) 7. Principles and Objectives 8. Annual Leave 9. Personal/Carer's Leave 10. Compassionate Leave 11. Notice Requirements for Personal/Carer's Leave and Compassionate Leave 12. Long Service Leave 13. Other Leave 14. Public Holidays 15. Ending your Employment (Termination of Contract, Deduction of amounts owed, Payment in lieu of notice period, Summary Dismissal, Return of Property) 16. Confidential Information (Disclosure of Confidential Information, Your obligation during employment, Your obligations after your employment ends, Preventing disclosure) 17. Intellectual Property 18. Moral Rights 19. Restrictions during your employment 20. General (Governing law, Entire Agreement, Agreement is confidential, Continuing obligations, Variation, Severability, Other) 21. Offer conditional
In his affidavit Mr Pearson deposed that the policies applicable to Destination NSW staff are contained in an Employee Handbook, which "contains further entitlements and benefits offered to Destination NSW staff". The Employee Handbook is not in evidence and there is no other description of its contents.
The conditions of employment set out in the standard employment contract, presumably supplemented by the Employee Handbook, are quite detailed and of significant scope. To that extent there is a basis for the Commissioner to have described them as "comprehensive". However, with respect we do not consider that this is (or should have been) the end of the analysis.
A list of the provisions of the Conditions Award is at Appendix A to this decision. While there is a clear overlap between the Conditions Award and the standard employment agreement, it is apparent that the former is of considerably broader scope. The question arises as to whether an arrangement which seems "comprehensive" in a stand-alone sense would necessarily be regarded as "comprehensively determining conditions of employment" when viewed in the context of the full suite of terms contemplated by the Conditions Award.
It is necessary to consider the phrase "comprehensively determines conditions of employment" within the structure of cl 6(b). The effect of cl 6(b)(iii) is that the Conditions Award will have no application at all if the alternative instrument or arrangement comprehensively determines conditions of employment. This is to be contrasted with cl 6(b)(v) which provides that the alternative instrument or arrangement will prevail over the Conditions Award to the extent of any inconsistency, but that otherwise the Conditions Award will apply. In this context, the other arrangement might only be regarded as comprehensively determining conditions of employment if it encompasses substantially the same areas as are dealt with in the Conditions Award.
On the evidence we do not consider that there was a proper basis for finding that the arrangement at Destination NSW "comprehensively determines conditions of employment" so as to invoke cl 6(b)(iii) of the Conditions Award. We respectfully disagree with the Commissioner in this regard.
During the hearing of the appeal, Mr Gibian submitted that the Commissioner was correct to find that cl 6(b)(v) did not apply and was in error in finding that cl 6(b)(iii) did apply. We can only assume that this submission was again premised on the appellant's primary contention that there was no "industrial…arrangement" applying at Destination NSW within the meaning of cl 6(b). Having found to the contrary, it is necessary to determine which of the interaction rules anticipated by cl 6(b) applies. On the terms of the provisions, if cl 6(b)(iii) does not apply, and it is common ground that cl 6(b)(i), (ii) and (iv) do not apply, then cl 6(b)(v) must necessarily apply.
Once again, we respectfully disagree with the Commissioner's finding to the contrary.
The extent to which there is an inconsistency within the meaning of cl 6(b)(v), and by extension the extent to which the Conditions Award applies, do not require determination by the Full Bench on the appeal presently before it. These are properly matters to be determined by the parties, presumably in the context of the appellant's application for an award in matter number 2018/189728.

Orders

The Full Bench makes the following orders: 1. Leave to appeal is granted. 2. The appeal is upheld in so far as the Commissioner found that cl 6(b)(iii) of the Crown Employees (Public Service Conditions of Employment) Reviewed Award ("Conditions Award") applies, and that cl 6(b)(v) of the Conditions Award does not apply, in the circumstances of this case. 3. The findings of the Commissioner that in the circumstances of this case cl 6(b)(iii) of the Conditions Award applies, and that cl 6(b)(v) of the Conditions Award does not apply, are quashed. 4. The appeal is otherwise dismissed. 5. Matter number 2018/189728 will be remitted to Commissioner Webster for determination.

APPENDIX A List of Provisions in Conditions Award Part A Section 1 - Framework

Arrangement
Title
Definitions
Parties to the Award
Conditions of Employment
Coverage
Statement of Intent
Work Environment
Grievance and Dispute Settling Procedures Section 2 - Attendance/Hours of Work
Local Arrangements
Working Hours
Casual Employment
Part-Time Employment
Morning and Afternoon Breaks
Meal Breaks 15A. Lactation Breaks
Variation of Hours
Natural Emergencies and Major Transport Disruptions
Notification of Absence from Duty
Public Holidays
Standard Working Hours
Flexible Working Hours
Rostered Days Off for 38 Hour Week Workers
Non-Compliance
Flexible Work Practices
Existing Hours of Work Determinations Section 3 - Travel Arrangements
Travelling Compensation
Excess Travelling Time
Waiting Time
Meal Expenses on One-Day Journeys
Restrictions on Payment of Travelling Allowances
Increase or Reduction in Payment of Travelling Allowances
Production of Receipts
Travelling Distance Section 4 - Allowances and Other Matters
Camping Allowance
Composite Allowance
Allowance Payable for Use of Private Motor Vehicle
Damage to Private Motor Vehicle Used for Work
Camping Equipment Allowance
Allowance for Living in a Remote Area
Assistance to Employees Stationed in a Remote Area When Travelling on Recreation Leave
Overseas Travel
Exchanges
Room at Home Used as Office
Semi-Official Telephones
Flying Allowance
Uniforms, Protective Clothing and Laundry Allowance
Compensation for Damage to or Loss of Employee's Personal Property
Garage and Carport Allowance
Forage for Horses
Community Language Allowance Scheme (CLAS)
First Aid Allowance
Review of Allowances Payable in Terms of This Award Section 5 - Union Consultation, Access and Activities
Trade Union Activities Regarded as On Duty
Trade Union Activities Regarded as Special Leave
Trade Union Training Courses
Conditions Applying to On Loan Arrangements
Period of Notice for Trade Union Activities
Access to Facilities by Trade Union Delegates
Responsibilities of the Trade Union Delegate
Responsibilities of the Trade Union
Responsibilities of Workplace Management
Right of Entry Provisions
Travelling and Other Costs of Trade Union Delegates
Industrial Action
Consultation and Technological Change
Deduction of Trade Union Membership Fees Section 6 - Leave
Leave - General Provisions
Absence from Work
Applying for Leave
Extended Leave
Family and Community Service Leave
Leave Without Pay
Military Leave
Observance of Essential Religious or Cultural Obligations
Parental Leave
Purchased Leave
Recreation Leave
Annual Leave Loading
Sick Leave
Sick Leave - Requirements for Evidence of Illness
Sick Leave to Care for a Family Member
Sick Leave - Workers Compensation
Sick Leave - Claims Other Than Workers Compensation
Special Leave 84A. Leave for Matters Arising from Domestic Violence Section 7 - Training and Professional Development
Employee Development and Training Activities
Study Assistance Section 8 - Shift Work and Overtime
Shift Work
Overtime - General
Overtime Worked by Shift Workers
Overtime Worked by Day Workers
Recall to Duty
On-Call (Stand-By) and On-Call Allowance
Overtime Meal Breaks
Overtime Meal Allowances
Rate of Payment for Overtime
Payment for Overtime or Leave in Lieu
Compensation for Additional Hours Worked by Duty Officer, State Emergency Services
Calculation of Overtime
Provision of Transport in Conjunction with Working of Overtime Section 9 - Miscellaneous
Anti-Discrimination
Secure Employment
Existing Entitlements
Area, Incidence and Duration Part B Monetary Rates Table 1 - Allowances

Endnotes

Tcpt p 7 (48-49)
Tcpt p 8 (11-13)
Tcpt p 30 (49-50) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 January 2020

Industrial Relations Act 1991(NSW)s 275

Tourism New South Wales Act 1984(NSW)

Homebush Motor Racing (Sydney 400) Act 2008(NSW)

Industrial Relations Act 1996(NSW)ss 8, 105, 187, 188

[1999] NSWIRComm 449

At a glance

Court

Decision date

Source

Judgment (15 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (25)

Cited By (2)