Re Crown Employees (Public Sector - Salaries 2011) Award (No 4) [2011] NSWIRComm 130 - NSWIRComm 2011 case summary

Re Crown Employees (Public Sector - Salaries 2011) Award (No 4) [2011] NSWIRComm 130 - NSWIRComm 2011 case summary — Zoe

DECISION OF THE COMMISSION 1On 10 August 2011 the Full Bench made orders varying the Crown Employees (Public Sector - Salaries) Award 2008, the Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Salaries and Conditions) Award 2008 and the Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Salaries) Award 2008 by increasing salaries and salary based allowances by 2.5 per cent from the beginning of the first pay period to commence on or after 1 July 2011: Re Crown Employees (Public Sector - Salaries 2011) Award (No 3) [2011] NSWIRComm 104. 2The parties were directed to confer on the terms of the variations to be made to the awards in accordance with the Full Bench decision. The Full Bench indicated that unless there was disagreement as to the terms, the Commission would make the necessary formal orders in Chambers. 3The Full Bench was subsequently advised that the parties to the awards had agreed to all of the terms of the variations except one matter and that concerned whether the increase of 2.5 per cent should only apply to employees who remained in employment as at the date of the Full Bench's decision, namely, 10 August 2011. In other words, the employer parties (the Director of Public Employment ("DPE") and Roads and Traffic Authority of NSW ("RTA")) proposed that the increase should not apply to employees who had, for any reason, left their employment between 1 July and 9 August 2011. The Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales ("the PSA") opposed that position. 4In summary, the PSA submitted that: (1)the employer parties had not raised in the earlier interlocutory proceedings the issue that they now sought to press despite the fact the opportunity existed for them to do so. It was submitted the issue had been determined and orders made and it was now too late for the employers to seek to, in effect, change the orders made by the Full Bench; (2)there was no material before the Commission that would support the adoption of the employers' position as a matter of merit. On the contrary, to do so would cause significant prejudice to the employees who would, by virtue of that position, be excluded from the benefit of the wage increases. 5In relation to the second point it was submitted, firstly, that there was nothing before the Full Bench to identify there was any administrative difficulty in paying those employees who have left employment between 1 July and 9 August 2011 and no evidence that suggested there was any difficulty in identifying those employees. 6As to the question of prejudice to employees, it was submitted that arose in three ways: (1) as a general proposition, employees whose employment had terminated in the relevant period would lose the benefit of the increase for the purpose of calculating accrued entitlements that may reflect a long period of service in the public sector; (2) employees who retired in the relevant period and who were subject to defined benefit superannuation schemes (State Superannuation Scheme and State Authorities Superannuation Scheme), which paid benefits by reference to final salary at the date of retirement, would lose the benefit of the increase in respect of superannuation payments designed to carry the employees through their retirement; (3)there were approximately 240 employees who accepted a voluntary redundancy offer as a consequence of a government decision to reduce the number of employees excess to requirements and who left employment during the relevant period. The employees were entitled to various payments including payments in lieu of notice, severance payments and "additional payments" if they decided to accept the offer within a given timeframe and leave prior to 1 August 2011. The entitlements were calculated on the employees' wage or salary applicable at the time of termination. 7For the DPE it was submitted: (1) in relation to the earlier interlocutory proceedings, the Full Bench was required to address certain specific issues including: whether it was in the public interest to grant a 2.5 per cent increase; if the increase was to be granted what was to be the vehicle for doing so; what was to be the operative date; and should any award or order contain a no extra claims commitment. Having determined those essential matters the Commission directed the parties to confer on how its decision was to be implemented in the form of award variations. In that context it was open to the employer parties to contend for the position that the increase should not apply to employees who had left their employment between 1 July and 9 August 2011; (2) the Full Bench's decision to award a 2.5 per cent increase from 1 July 2011 was to be implemented in the form of award variations to existing awards (made in 2008). Those awards already contained provisions to the effect that the increases referred to in those awards would only be paid to those employees who were employed as at the date of the making of the award. Awards made in 2004 contained a similar provision. However, it was noted in relation to the 2008 awards there was an agreement between the parties that persons who retired should not be deprived of the benefit of the increase. This was reflected in a circular (C2008-36) issued out of the Department of Premier and Cabinet in relation to the Crown Employees (Public Sector Salaries - 2008) Award, which stated: These increases shall only be paid to those employees who are employed as at the date of the making of the award except for former staff members that retired between 1 July 2008 and 2 October 2008 inclusive, will be entitled to be paid the dollar amount of the increase for the period between 1 July 2008 and their respective retirement date. Please note: this provision is for retired staff members only and payment is not to be made to any other former staff member that left the Public Service between 1 July 2008 and 2 October 2008. (3) in relation to the employees who decided to take a voluntary redundancy prior to 1 August 2011, they did so against the background of the wages and conditions of employment prevailing at the time of their decision and in the knowledge that the PSA was pursuing wage increases, but that based on the provisions of the 2008 award, if they left their employment prior to the making of a new award, they would not be entitled to the benefit of any increase that might operate retrospectively.

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Consideration 8It might first be noted that the DPE and RTA quite properly conceded it would be open to the Commission to follow the precedent of the 2008 and 2004 awards by providing access to any increase to employees who retired between 1 July 2011 and 9 August 2011. 9We also note the DPE and RTA did not contend there was any jurisdictional bar to the Commission applying the increase to persons who left their employment between the operative date of the increase and the date of the Commission's decision and orders granting the increase. It is a matter for the Commission's discretion. This must be right: by virtue of the retrospective order, the award variation was in force from 1 July 2011 and must be taken to apply to employees in employment as at that date (see s 15 of the Industrial Relations Act 1996 ). 10Turning to the employers' grounds for excluding former employees from receiving the increase of 2.5 per cent where the employment ceased prior to 10 August 2011, one of these grounds was that it was entirely proper to contend for this position after the Full Bench had determined the in-principle issues. The fact the position was not raised in the earlier interlocutory proceedings was no bar to it now being pressed. 11It is plainly the case that no party in the earlier interlocutory proceedings raised the matter now in contention. Whilst we, nevertheless, accept that it is open for the Full Bench to now consider whether it should accede to the employers' position prior to final orders being made, it would have been preferable for the issue to have been raised earlier. The question of retrospectivity was a live issue; both parties had taken positions regarding retrospectivity. Indeed, by 15 July 2011 the employers had made an offer for a 2.5 per cent increase operative from 1 July 2011, but subject to the condition that there be a no extra claims provision inserted in the relevant awards. The PSA rejected the offer because of the condition attached to it. 12In those circumstances, there was every prospect the Full Bench would grant an increase retrospectively to 1 July 2011, either with or without a no extra claims commitment. Given retrospectivity was in prospect and especially given the 2004 and 2008 precedents of which the employer parties must have been aware, it necessarily invited the question of whether employees who had left their employment after 1 July should receive the benefit of the increase. The issue not having been raised, the Full Bench applied the increase retrospectively without any qualification being placed on it regarding employees who had left their employment. The question is whether that should remain the position. 13Obviously, the employer parties contend it should not and referred to the 2004 and 2008 awards. Those awards were made by consent and, accordingly, do not constitute a sound precedent to be followed on this occasion. Simply because there was an agreement to exclude certain employees from receiving the increase - the result of the give and take of the bargaining process - that is not proper grounds, without more, upon which to base an arbitrated outcome. Whilst it is not always wrong to follow or otherwise extend a provision in a consent award by arbitration, consent provisions will not extend to unconsenting parties unless the provisions in question are fair, proper and reasonable in all the circumstances: Municipal Officers' Association v Melbourne and Metropolitan Board of Works 165 CAR 478. See also Re Application by Transport Workers Union of Australia to vary the Transport Workers (Northern Territory) Award (Australian Industrial Relations Commission, Full Bench, Print E3390, 15 July 1980). 14In respect of those employees who retired between 1 July 2011 and 9 August 2011, it seems to us there are proper grounds upon which it may be concluded these employees should receive the increase. First, it seems to have been the practice of the parties, by agreement, to pass on the increase to these employees and on this occasion the employers do not appear to have any real objection to the practice being repeated. Secondly, employees who retired may have had little choice about the retirement date. Thirdly, as the PSA submitted, if the increase was not passed on, the employees would lose the benefit of the increase in respect of superannuation payments designed to provide them with income throughout their retirement. In such a circumstance, it would appear to be unfair to deprive them of that increase. 15The next consideration is whether the same approach taken in respect of retired employees should apply in respect of those employees who accepted the voluntary redundancy package. Although it was open to employees to decline to accept the package and, indeed, there were employees who did so decline, the package would have proved quite attractive to many (indeed, most). This would be so given that if they did not accept the voluntary package, they faced uncertainty in respect of their future employment prospects. Further, if they were not to secure a permanent appointment they might be later made compulsorily redundant on a significantly less generous redundancy package. 16There would have been strong pressure on employees to accept the package and in doing so they were required to leave by 1 August 2011. Thus, it was not simply a matter for these employees deciding to leave their employment at a time of their own choosing on the basis of an informed decision that they would be forfeiting an increase in their redundancy package of 2.5 per cent. 17It seems to us that it would be unfair to distinguish between employees who remained in employment as at the date of the decision and orders granting the 2.5 per cent increase and those who left employment, for whatever reason, before that date. The Commission determined that the increase should apply from 1 July 2011 and the increase should apply to persons who were employed as at that date and for any subsequent period. 18In Re Crown Employees (Land Surveyors) Conciliation Committee [1930] AR 278 a Full Bench of the Industrial Commission (Piddington J, President, Street and Cantor JJ) considered "the proper way of applying an award which is retrospective to the case of employees who have left the service in which they were after the date of the application for the award but before the award fixing retrospectivity was made" (at 278-279). In agreeing with Piddington J, Street J held (at 280): I think it follows necessarily, as a matter of logic, that if the award is made retrospective - and it was agreed in this case that the award should be given retrospective operation - then it must be given its full operation as from the agreed date. I can see no reason why a dividing line should be drawn between those who managed to survive in the Service until an award is made, and those who, from age or other reasons, leave the Service before the award is made. It seems to me as a matter of logic that they must be placed in the same position as those who were in the Service on I July 1927, and are still in the Service. Cantor J took the same view. See also Re Breadcarters (Metropolitan and Collie) Award (Western Australian Industrial Appeals Court, 26 May 1975) 1975 AILR Rep 530. 19We do not see any basis upon which we should depart from this 81-year-old principle in these proceedings. The DPE and RTA conceded that there would not be any real administrative difficulty in identifying the employees concerned and in making the necessary payments. 20Accordingly, we propose to amend the schedule of the variations to the Crown Employees (Public Sector - Salaries 2008) Award filed by the DPE on 21 September 2011 by deleting paragraph 4 of that schedule. In respect of the Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Salaries and Conditions of Employment) Award 2008 and the Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Salaries) Award 2008, the RTA filed the proposed variations on 26 August 2011. We propose to amend the schedule of variations by deleting cl 1(iii) of the schedule relating to cl 3(iv) of the Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Salaries and Conditions of Employment) Award 2008.

Re Crown Employees (Public Sector - Salaries 2011) Award (No 4) [2011] NSWIRComm 130

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