Seamen's Union of Australia, New South Wales Branch
Source
Original judgment source is linked above.
Catchwords
Seamen's Union of Australia, New South Wales Branch
Judgment (8 paragraphs)
[1]
R Reitano (applicants)
C Lenehan (respondent)
T Wong (intervenor)
File Number(s): 2017/73554, 2017/73379, 2017/73451, 2017/73583
[2]
Judgment
This matter concerns applications made by the Rail, Tram and Bus Union of New South Wales, the Seamen's Union of Australia, New South Wales Branch and the Electrical Trades Union of Australia, New South Wales Branch ('the applicants') to vary the State Transit Authority Bus Operations Enterprise (State) Award 2015, the State Transit Authority Bus Engineering and Maintenance Enterprise (State) Award 2016, the State Transit Authority Senior and Salaried Officers' Enterprise (State) Award 2015, and the State Transit Authority of NSW Ferries Award. I return below to a particular consideration concerning the Ferries Award.
Summarised, the effect of the variations sought is to introduce into the awards provisions for a transfer payment payable to employees on any transfer of their employment to another employer, a five year employment guarantee following any such transfer, and, in respect of the three first-named awards, a variation to the no extra claims clause presently to be found in those awards to provide that the applicants are not bound by those clauses if there has been a significant change in circumstances. A significant change in circumstances is to include, specifically, what can in summary terms be described as a 'privatisation' of any of the operations presently covered by the awards.
The applications are made in the context of a decision by the New South Wales Government to privatise the public transport services currently delivered by Transport for NSW in the Newcastle area. The privatisation proposal extends to rail, bus, ferry and light rail services and involves the transfer of employment of members of the applicants to a private operator. On the evidence approximately 350 workers are affected by the decision.
On the evidence, the Government's decision is to come into effect on 1 July 2017. With that in view I have set this decision out in concise form so as to provide judgment, and accompanying reasons, to the parties as quickly as practicable.
The applications are also to be seen in this context: on 17 June 2016 the Government made the Government Sector Employment Amendment (Transfers to Non-Government Sector) Regulation 2016 (NSW). That regulation introduced into the Government Sector Employment Regulation 2014 (NSW) a new clause 25A:
25A Transfer of services to non-government sector - no severance or redundancy payments if comparable employment offered or not applied for
(1) A person whose employment in a government sector agency ceases as a result of the transfer to a non-government sector body of any of the services provided by the agency is not entitled to any severance or redundancy payment for that cessation of employment if:
(a) the person is offered employment by the non-government sector body that is comparable with the person's employment as a government sector employee, or
(b) the person fails to apply for any such comparable employment that has been notified to the person as being available.
(2) For the purposes of subclause (1), employment by a non-government sector body (the new employment) is comparable with the person's employment as a government sector employee (the former employment) if:
(a) the person's prior service in the government sector is recognised for the purposes of the new employment, and
(b) the work to be performed by the person under the new employment is similar to the work performed by the person under the former employment, and
(c) the terms of any industrial instrument or agreement (however described) applying to the new employment are substantially similar to, and (when considered on an overall basis) no less favourable than, the terms of any government sector industrial instrument that applied to the former employment, and
(d) the new employment does not involve an unreasonable increase in the person's journey to work…
The awards here sought to be amended will upon any transfer be 'copied' to the federal area of regulation. Accordingly, the current award conditions will continue to apply to the employees if they are transferred.
As the applicants correctly submit, the effect of clause 25A(1) of the Regulation is that, given that award conditions will be maintained by the putative new employer under the 'copied' awards, employees presently covered by the awards will not be entitled to severance payments in relation to the transfer.
As the applicants further submit, the maintenance of award conditions of itself does not mean that employees who are transferred will maintain conditions of employment presently provided to them pursuant to Government policies, nor the general benefits of public sector employment at large, which have been identified as a benefit in a number of long-standing decisions of the Commission and other courts and tribunals.
[3]
Relevant powers
The starting point is necessarily the Commission's power to vary awards. That power is to be found at s.17(3) of the Industrial Relations Act 1996 ('the Act') which relevantly provides that an award may be varied in any of the following circumstances only:
….
(c) during its nominal term if the Commission considers that it is not contrary to the public interest to do so and that there is a substantial reason to do so;
(d) after its nominal term if the Commission considers that it is not contrary to the public interest to do so
It is apparent that the exercise of the power to vary an award is discretionary, but that it is a fettered discretion; where the award is within its nominal term, as in the first three awards with respect to which application is made, the Commission 'may' vary an award if it is not contrary to the public interest to do so, and if there is a substantial reason to do so. In relation to awards outside their nominal term, the discretion is fettered to the extent that the Commission may vary an award if it is not contrary to the public interest to do so.
[4]
No extra claims clauses
In that context I turn first to the existence of the no extra claims clauses in the relevant industrial instruments. It will immediately be seen that the applications here brought, which are without doubt claims in relation to award conditions, are brought in the face of the appearance of the first three awards a 'no-extra claims' clause, which in each award is identical in terms:
The parties agree that, during the term of this Award, there will be no extra wage claims, claims for improved conditions of employment or demands made with respect to the employees covered by the Agreement and, further, that no proceedings, claims or demands concerning wages or conditions of employment with respect to those employees will be instituted before the Industrial Relations Commission or any other industrial tribunal.
Employees who were covered by the Ferries Award, the nominal term of which has expired, are now covered by Enterprise Agreement EA 15/5, State Transit Authority Newcastle Ferry General Purpose Hand Enterprise Agreement 2015. That Agreement does not expire until 31 December 2017. It provides in terms that while it is to be read 'in conjunction with' the Ferries Award, where there is a conflict between the Ferries Award and the Ferries Agreement, the Ferries Agreement shall prevail: Ferries Agreement cl. 7.3.
The Ferries Agreement contains a no extra claims clause sufficiently similarly worded to those in the first three mentioned awards that it is unnecessary to set it out here.
It follows that in each case the instant applications to vary the awards are brought squarely in the face of a current 'no extra claims' clause.
Submissions in the application touched on a number of issues but in my view the first and primary issue is the existence of the 'no extra claims' clauses either in, or affecting in the case of the Ferries award, the industrial instruments sought to be varied.
No extra claims clauses do not and cannot of themselves oust the Commission's jurisdictional power to vary an award under s 17(1) of the Act; so much is apparent from a proper reading of s.17 itself, and is supported by authority: Public Service Association and Professional Officers Association Amalgamated Union of New South Wales v Roads and Maritime Services [2015] NSWIRComm 16.
Such clauses, rather, fall to be considered in the context of the public interest test prescribed in subs. 17(3), which applies to all four of the applications before the Commission.
[5]
Consideration
Having made the point that no extra claims clauses are not of themselves a jurisdictional barrier to varying award, it is apparent that the Commission has, on any analysis of the authorities, always given very significant weight to the existence of no extra claims clauses; see for example Re: Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award [2008] NSWIRComm 209. ('the Teachers in Schools Case')
In this context is it correct to say, as the respondent submits, that considerations surrounding no extra claims clauses go well beyond the terms of particular agreements or bargains the fabric of which they form a part. Those considerations go to matters of fundamental principle essential to the operation of, and practical viability of, the industrial relations system recognised and codified by the Act. In a passage adopted with approval by the Full Bench in the Teachers in Schools Case, Wright J (as President) made the following observations in Re Corrections Health Service Nurses (State) Award (1999) 90 IR 235 at 245:
It should be emphasised that the Commission must ensure the integrity of not only its own wage fixing principles but also the strict observance of agreements and undertakings given by parties compliance with which, properly considered, are important and indeed essential to the integrity to the principles. Undertakings such as no extra claims provisions are crucial parts of the integrity of the system of wage fixation which occurs in the New South Wales system of industrial regulation...
That passage was also cited with approval by a differently constituted Full Bench of the Commission in Health Services Union and Director-General, NSW Department of Health (2010) 193 IR 359 at [40].
In support of the proposition that the existence of a no extra claims clause does not necessarily prevent an award variation relevantly being made, the applicants called in aid Australian Co-operative Foods Limited & Transport Workers' Union of Australia New South Wales Branch re Industrial Bans [2002] NSWIRComm 1052, in which McLeay C held:
[6]
There may be a substantial reason to vary an award despite a No Extra Claims provisions if the evidence showed that a party to the enterprise award was deliberately deceived or misled during or prior to the enterprise negotiations which led to the making of the agreement. There is no evidence to support such a claim.
Importantly, McLeay C did not go on to make any award variation over the top of the no extra claims clause in that award.
That case makes clear the very narrowness of the range of circumstances in which a party may - not will, but may - not be held to the undertakings it gave in a no extra claims clause. McLeay C referred to a level of deliberate deception which would, it should be noted, be likely to vitiate a contract at common law.
It was not ultimately submitted that in this case there had been any such deliberate deception, and the evidence in no way supports such a suggestion.
In Health Professional and Medical Salaries (State) Award [1999] NSWIRComm 348, the Commission varied an award in the face of no extra claims clause, because it was found by Wright J that the intention of the applicant and the respondent to the award was in fact to permit the applicant to pursue those claims in conformity with an earlier agreement. His Honour held:
...but for [the no extra claims provision] of the current award, the PSA would have been able to advance a claim along the lines that the applicant is now seeking to advance. Therefore, the effect of the making of [the no extra claims provision] was apparently to preclude the advancing of the claim and that preclusion occurred as a result of an award being made the particular object of which was to embody agreed demarcation arrangements.
I therefore hold that it was not the intention of the parties to alter in this important respect the arrangements between them...I accept the intention of the parties in adjusting their award arrangements was to, in effect, have the applicant "put in the shoes" of the PSA for all relevant award purposes including in relation to "no extra claims".
When one also considers the quite exceptional situation, possibly unparalleled in industrial relations terms, as to the history of the demarcation of psychologists, the circumstances led me to consider that it is appropriate to vary clause 5 of the "no extra claims" provision. I also consider that the requirements of s 17(3)(c) of the Act are met.
In other words, neither party to the award actually expected that the no extra claims clause would prevent the application which was made. That is very clearly not the situation here. Those 'exceptional' circumstances find no parallel in the facts of the current matter. There is nothing in the above passage that suggests any relaxation of the views the Commission, per Wright J, earlier expressed in the Corrections Award decision expressly referred) going to the fundamental importance of ensuring strict observance of no extra claims provisions.
I go to those cases at some little length because they emphasise two points: first, that the Commission has power to vary an award in the face of a no extra claims clause, and second, that it has consistently, absent extraordinary circumstances not at all in play here, held that it would not be in the public interest, within the meaning of subs.17(3), to do so.
That has remained so in the face of a very fluid and changing workplace environment over, particularly, the last two decades. It was submitted for the applicants that nobody could have foreseen that there would be privatisation of the parts of the public transport system here affected. I am not at all sure that that is so, given that the ferries system was privatised some six years ago, but even if I were quite wrong about that, and nobody did or could have foreseen such a change, it is not within any degree a circumstance which permits, on the consistent authority of decisions of the Commission, a party to succeed in obtaining an award variation granting further benefits in the face of a no extra claims clause.
I accept that privatisation is a very substantial matter. I am obliged to consider it under 17(3)(c) and I do so, in relation at least to the three first-named awards. The two elements contained within subs.17(3)(c) are conjunctive; that is, both issues must be addressed in a way that permits variation. There must be 'a substantial reason' to vary the award and, even if there is such a reason, it must also not be contrary to the public interest to do so.
There is no doubt that the no extra claims clauses here under consideration embrace the present claims. Indeed, that is recognised by that part of the applicant's application which seeks to vary the no extra claims clauses to include reference to particular circumstances of the kind arising here, that is, the privatisation. Patently those circumstances are comprehended by the no extra claims clauses as they stand.
In my view to permit a party to step around the undertakings contained in a no extra claims clause would be contrary to the public interest. It would be so generally, and it would certainly be so in this case. I am not persuaded that there is a substantial reason to vary the awards, but even if I were, it would still be contrary to the public interest to do so in the face of the undertaking given in the no extra claims clauses, therefore preventing, because of the provisions of subs.17(3) of the Act, any variation. That is because it would be contrary to the public interest to allow a party to an award to avoid undertakings on which the other parties to the award and the Commission have unquestioningly relied, and in exchange for which benefits have almost always, if not always, been received.
In my view the existence of the no extra claims clauses, and my firm conclusion that to permit the applicants to step around the undertakings within those clauses would be contrary to the public interest, provides a complete basis to determine the applications before the Commission. It follows from my conclusion about those matters that the applications must be refused, and I propose to so order.
There was significant debate in the proceedings about the effect of s.146C of the Act and the regulations made pursuant to it, and to the decisions of the Full Bench of the Commission in Re Crown Employees Wages Staff (Rates of Pay) Award 2011 (2015) 249 IR 414 and Child Protection (Working with Children) Award 2014 (2015) 249 IR 420.
It is unnecessary to address those matters to resolve the present applications, and in my view, whatever may have been any earlier practice, it is inappropriate to burden parties to proceedings with comments which are no more than obiter dicta. The Commission is not empowered to give advisory opinions, and it is generally unsound to purport to give opinion on matters which a court or tribunal does not have to decide: Rebenta Pty Ltd v Wise [2009] NSWCA 212 at [12]. Further, to devote time to address matters which are not required to be dealt with to resolve the proceedings would be contrary to the rationale underlying s 57 of the Civil Procedure Act 2005.
[7]
Orders
The order I make in each of the applications before me is:
1. Application for award variation dismissed.
PETER NEWALL
Commissioner
[8]
Amendments
03 July 2017 - Amendments to paragraphs 1, 2, 10, 11, 13, 17, 29.
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: 03 July 2017
Parties
Applicant/Plaintiff:
Rail, Tram and Bus Union of New South Wales & ors
Respondent/Defendant:
Secretary for Transport
Legislation Cited (2)
Government Sector Employment Amendment (Transfers to Non-Government Sector) Regulation 2016(NSW)