Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Department of Education; Application for Crown Employees

Applicable legislation and principles

1. The principles that the Full Bench must apply in determining the applications are well established. They are summarised in Applications for Variations to Crown Employees (Police Officers - 2017) Award and Paramedics and Control Centre Officers (State) Award [2021] NSWIRComm 1040 at [17]-[32].
2. We assume familiarity with the Act and the Regulation. We will not reproduce the provisions to which we refer.
3. We are mindful of the Commission's jurisdiction under s 10 of the Act, and the matters to which we must by subs 146(2) have regard in exercising that jurisdiction (including the objects in s 3). We note the constraints imposed on our jurisdiction by s 146C of the Act and the Regulation.

Determination

1. We have determined, pursuant to s 10 of the Act to make a New Award providing for an increase in remuneration of 3% from 15 July 2022 with a duration to 14 July 2023.
2. We have decided that the New Award will include a clause providing for a Health Support Allowance in accordance with the terms of those recommended by the Commission in conciliation on 9 September 2022.
3. In consequence of and subject to the making of the New Award, pursuant to s 17 of the Act the Commission will rescind the 2019 Award.
4. We set out our reasons for this decision below.

Increase to salary and salary-related allowances

1. The increases to salaries and salary-related allowances in the proposed New Award exhaust the Commission's jurisdiction as constrained by the Regulation. We are satisfied that the proposed New Award would set fair and reasonable conditions of employment for the employees to whom they apply, to the extent that the Commission is empowered to achieve that outcome.

Commencement date

1. The parties do not agree on the date upon which the New Award should commence. The PSA submitted that the New Award should be made to commence from the earliest possible date, which they argue is 15 July 2022 when the first application was filed. Further, they argued that the Commission should recommend that the employees be paid the increases to remuneration between 1 and 14 July 2022 through administrative action. The Department argues that the New Award should commence from the date the Commission makes it.
2. Clause 6(1)(e) of the Regulation provides that "changes to remuneration or other conditions of employment may only operate on or after the date the relevant parties finally agreed ... or the date of the Commission's decision", although clause 6(2) provides that clause 6(1)(e) does not apply "if... there are exceptional circumstances". Exceptional circumstances are those which are "out of the ordinary course, or unusual, or special, or uncommon" but need not be unique, unprecedented, or very rare: Yacoub v Pilkington (Aust) Ltd [2007] NSWCA 290 at [66]; Maan v Minister for Immigration and Citizenship (2009) 179 FCR 581 at [51]; Re Crown Employees (Public Sector-Salaries 2011) Award (No 3) (2011) 210 IR 458 at [48]; Re Crown Employees (Public Sector-Salaries 2020) Award and Other Matters (No 2) (2020) 301 IR 321 at [141]-[143].
3. Exceptional circumstances may be established in the case of single factors or a combination of factors: Ho v Professional Services Review Committee No 295 [2007] FCA 388 at [26]-[27]; Yacoub v Pilkington (Aust) Ltd [2007] NSWCA 290 at [66]; Re Crown Employees (Public Sector-Salaries 2020) Award and Other Matters (No 2) (2020) 301 IR 321 at [143].
4. In the absence of the consent of the parties for the proposed award to apply from any earlier date, subs 15(3)(c) of the Act otherwise provides that an award may be expressed to apply retrospectively, but not earlier than the date on which "the industrial dispute giving rise to the award was notified to the Commission". The parties were unable to identify any decisions from the Commission where consideration has been given to the meaning of the expression "giving rise to the award".
5. At the hearing of the matter, counsel for the PSA, Mr Chin SC referred the Commission to the decision of the Court of Criminal Appeal in Sheng v R; Li v R; Pan v R [2021] NSWCCA 78 where Bell P, as the Chief Justice then was, stated at [68]: "The expression 'gives rise to', like the expression 'arising out of', connotes a causal relationship (even if not necessarily proximate) or, when coupled with the word 'risk', a potential causal relationship: compare State Government Insurance Commission v Stevens Brothers Pty Ltd (1984) 154 CLR 552 at 555 and 559; [1984] HCA 32; Comcare v PVYW (2013) 250 CLR 246; [2013] HCA 41 at [53], [94] and [110]-[111]; and see P Herzfeld and T Prince, Interpretation (2nd ed, Thomson Reuters, 2020) at [4.350]."
6. The PSA also referred to the text relied upon by Bell P, namely, P Herzfeld and T Prince, Interpretation (2nd ed, Thomson Reuters, 2020) at [4.350], where it is stated: "… Nevertheless, give the frequency of their appearance, there are many cases in which explanations have been given of some of these terms. They include the following: … (2) where expressions such as 'by reason of', 'on the ground of', 'because of', 'by virtue of', 'in consequence of' or 'arising out of' are used, there must be a causal connection but it need not be direct or proximate." (footnotes omitted)
7. The PSA submitted that the first application notified to the Commission by the PSA on 15 July 2022 "gives rise" to the New Award for the purposes of subs 15(3)(c). The PSA made the following submission in support of this contention: 1. The central element of the first application concerned the terms of a new award providing for an increase to salary rates for the relevant employees following the expiry of the 2019 Award on 30 June 2022. In this regard, the PSA referred to [1]-[5] and [16]-[21] of the first application. 2. The Department and the PSA were engaged in "active award negotiations" in the context of the conciliation in the first application. 3. On 3 August 2022, as a result of the conciliation of the first application before Commissioner O'Sullivan, the Department applied for the making of the proposed New Award providing for salary increases in line with its stance in negotiations with the PSA. 4. The first application as to the terms of the New Award proposed by the Department was programmed and listed for determination by the Full Bench.
8. During the hearing, the PSA took the Full Bench to email correspondence of 3 August 2022 from Ms Louise Coory, Senior Solicitor, Crown Solicitor to Ms McRobert attaching the second application. In the email, Ms Coory stated: "Please find attached by way of service an unsealed copy of the above named application for a new award which was filed in the Industrial Relations Commission this morning. Regrettably, the Registry has kept all 4 copies that were filed, so I am awaiting a sealed copy to be emailed by the Commission. I note that the Registry staff have issued a new proceedings number (2022/227698). I trust the two [matters] will run together."
9. The Department submitted that the second application is a separate and distinct matter to, and did not arise from, the first application. Mr Britt of counsel, who appeared for the Department, argued that there is no evidence that the lodging of the application for a New Award resulted from the industrial dispute. He further submitted that the email of Ms Coory did not support the PSA's contention that the second application arose out of the first application and referred to a letter dated 21 July 2022 addressed to Mr Stuart Little, General Secretary of the PSA from Chris Lamb, Acting Chief People Officer of the Department, in which the Department confirmed its intention to file the second application. We have found these submissions to be unpersuasive.
10. At the hearing the Full Bench also noted that the second application was filed with references to the first application in the formal parts of the initiating documents. From this and the email of Ms Coory set out above, it would appear that the Department in fact intended to seek the New Award in consequence of, if not through, the first application. This is strong evidence that the first application has given rise to the making of the New Award.
11. We agree with the PSA's contention that the first proceedings gave rise to the making of the New Award for the reasons it argued before the Commission and as set out above. Indeed, the letter of 21 July 2022 relied upon by the Department only solidifies the PSA's argument given the opening words refer to the first application and "the outcome of the compulsory conference before Commissioner O'Sullivan on 18 July 2022 when the Department advised that it would inform the PSA before the end of this week whether it intended to file an application in the Commission for a new Crown Employees (School Administrative and Support Staff) Award".
12. We also agree with the PSA that "exceptional circumstances" exist within the meaning of cl 6(2) of the Regulation, allowing for a retrospective commencement date for the New Award to 15 July 2022.
13. The PSA made submissions in respect of exceptional circumstances which they argued, individually and taken together, justify the New Award commencing retrospectively from 15 July 2022. The Full Bench recently considered whether "exceptional circumstances" existed justifying retrospective operation of an award in the Public Sector Salaries Case. At [43]-[45] it was stated: "[43] In respect of the commencement date of the New Awards, we agree with the PSA that exceptional circumstances exist within the meaning of cl 6(2) of the Regulation so as to allow for a retrospective commencement date for the New Awards. We observe that in responding to the PSA's submissions, the Applicants submitted in part that the delay in determining and announcing the Government's position in respect of wages to be paid to public sector employees, and subsequently in filing the Applications, was brought about by particular and unusual events. Those submissions suggest to us, as contended by the PSA, the AWU and the AMWU, that the present circumstances are 'exceptional'. [44] In addition to the matters to which the PSA drew our attention, we have had regard to the fact that the proceedings in respect of each Application were commenced on 1 July 2022. In their original terms, the Applications sought that the Proposed Awards commence on 1 July 2022. The Applicants filed amended applications on 19 July 2022 seeking that the Proposed Awards commence from the date on which they are made by the Commission. No reason was offered for the change in the Applicants' position. [45] We consider that the prevailing high levels of inflation constitute an exceptional circumstance. Any delay in employees covered by the New Awards receiving an increase to their remuneration following the nominal expiry of the 2021 Awards will have a greater negative impact on them than may have been the case in the past years."
14. The Department conceded (appropriately) that in relation to the issue of inflation those matters that were applicable in the Public Sector Salaries Case are at least applicable to these proceedings. However, the Department did not go so far as to concede that this constituted exceptional circumstances.
15. The issue of prevailing inflationary pressures in this matter are indistinguishable from those considered in the Public Sector Salaries Case. Although we are of the view that these circumstances alone are exceptional and justify the retrospective operation of the New Award to 15 July 2021, we additionally note the Department's delay in engaging with the PSA in respect of the proposed New Award is an exceptional circumstance. The Department's wages policy provides that the bargaining parameters will be settled no later than three months prior to the expiry of the current industrial instrument, "to enable sufficient time for bargaining". Despite this, the PSA did not receive a substantive response to its attempts to negotiate with respect to the New Award until a formal offer was communicated on 24 June 2022.
16. We decline to make the recommendation sought by the PSA that the New Award increases be paid by way of administrative order from 1 July 2022. Such a recommendation would be contrary to the legislative scheme and in particular the assumed purpose and intent of subs 15(3) of the Act.

Term of the Award

1. The PSA seeks a one year award, the Department a two year award. We have decided the New Award should commence from 15 July 2022, with a nominal expiry date of 14 July 2023.
2. As was the case in respect of the Public Sector Salaries Case, the Regulation has had a significant bearing on our decision to limit the term of the New Award to one year. Clauses 6A(3) and 6A(5) of the Regulation allow for the possibility of additional increases in the financial year 2023-2024. While cl 6A(5) is subject to agreement, we consider that there may be scope for the Commission to intervene to resolve any dispute as to whether an additional increase under cl 6A(3) ought to be awarded to employees. At the hearing of the proceedings, the Department suggested through Mr Britt that unless there was agreement between the parties, the PSA and its members would not be able to bring the issue of the additional 0.5% to the Commission given the no extra claims clause: Tcpt, 5 September 2022, p 34 (47).
3. On the terms of the award, particularly in light of the no extra claims clause agreed to by the parties, we are concerned that PSA and its members might be disentitled to, or be perceived to be disentitled to, pursue any additional increases under cl 6A(3) during the term of a two year award. We are not persuaded by the Department's submissions that a two year award should be made because "it beggars belief that as a model litigant, the [Department] would agree to such changes but not then agree to the additional payments available under the Regulation to be included" in the award: [46] of the Department's submissions filed 1 September 2022 This misses the point - the parties may not agree on whether the entitlement is due and payable. It is foreseeable that the parties may descend into dispute with respect to the employees' entitlement to the additional 0.5% provided for in the Regulation. It is consistent with the objects of the Act that the Commission ensure retains the capacity to resolve any such dispute through the exercise of its jurisdiction.
4. In addition to this, we also consider the exceptional circumstance of the current and projected inflationary pressures to be relevant and in favour the making of a one year award.
5. We have not overlooked the evidence of Ms Archibald that the Department considers that a two-year award will give certainty to both staff in relation to the confirmed salary increases for the next two years and to the Department's school operations. However, for the reasons set out above we are of the view that the provision of a one year award is more suitable given the terms of the Regulation with respect to a further potential increase of an additional 0.5% to remuneration in 2023-2024. We also note that Ms Archibald did not depose that there was anything specific to the current operations or the financial environment of the Department that warranted a two-year term in respect of the New Award.

Orders and direction

1. We make the following orders: 1. pursuant to s 10 of the Act, we make an award to be known as the "Crown Employees (School Administrative and Support Staff) Award 2022" in the form of Annexure A to the Short Minutes of Order filed with the Department's Application for a New Award filed on 3 August 2022 subject to the following: 1. the award will commence on 15 July 2022, with any increased salaries and salary-related allowances payable from the first full pay period on or after 15 July 2022; 2. the award will have a nominal term of one year, expiring on 14 July 2023; 3. clause 23.1 is to be amended to replace "30 June 2024" with "14 July 2023"; and 4. the award contain a clause in the terms contained in the Recommendation of Commissioner Webster made on 9 September 2022, as referred to at [6] above; and 1. pursuant to s 17(3)(a) of the Act, the Crown Employees (School Administrative and Support Staff) Award 2019 is rescinded.
2. We direct that the Department file and serve draft Short Minutes of Order giving effect to our orders by 4.00pm on 22 September 2022.

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: 15 September 2022