Re Liverpool City Council 36 Hour Week (72 Hour Fortnight) Child Care Staff Award 2015 [2015] NSWIRComm 22

Background

1. The award application sought to preserve the working conditions contained in an agreement known as the Liverpool City Council 36 Hour Week (72 Hour Fortnight) Child Care Staff Agreement 2010-2014 ("Council Agreement").
2. The following particulars were set out in support of the application: 1. During 2010-2014, Liverpool City Council had in place a Council Agreement which provided for Child Care Assistants and Diploma qualified child care workers to work for 36 hours per week, across 4 days per week. This Agreement was known as the "Liverpool City Council 36 Hour Week (72 Hour Fortnight) Child Care Staff Agreement 2010-2014". 2. Such Local Council Agreements can be made pursuant to clause 40 of the Local Government (State) Award 2014, and operate pursuant to section 44 of the Industrial Relations Act 1996. 3. The Agreement was scheduled to terminate on 19 January 2015. 4. It is proposed that the Award operate at a date and time declared by the Industrial Relations Commission. 5. The Award will provide for ordinary hours of employment, being 36 hours of work per week, over a 4 day per week period.
3. The application was opposed by the respondent.

Question for determination

1. The applicant confirmed the present award application is premised on satisfying Principle 8 - Arbitrated Cases of the Commission's Wage Fixing Principles as articulated in State Wage Case 2010 (No 2) [2011] NSWIRComm 29; 206 IR 218 and, in particular, subprinciple 8.4 - Special Case Considerations, in conjunction with s 11 of the IR Act.
2. Subprinciple 8.4 is in the following terms: 8.4 Special Case Considerations 8.4.1 A claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the Principles, and which is not based on work value and/or productivity and efficiency pursuant to this Principle, will be processed as a special case in accordance with the principles laid down in Re Operational Ambulance Officers (State) Award [2001] NSWIRComm 331; (2001) 113 IR 384 and the cases referred to therein at [165]-[168]. 8.4.2 All special cases shall be tested against the public interest.
3. The primary question that arose in this matter was whether, notwithstanding any presumption that the current award, being the Local Government (State) Award 2014 ("the industry award"), provides fair and reasonable conditions of employment for the relevant employees, there were special circumstances such that a new award providing different or additional entitlements should be made: see Re Storeworkers - IGA Distribution Pty Ltd New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156; 124 IR 1 ("IGA Distribution") at [42].
4. In determining that question it is necessary also to consider the public interest.

Evidence

1. The applicant relied on the following evidence in support of its application:

• The affidavits of Sandra Morthen, Organiser, sworn 13 and 21 January 2015;
• The affidavit of Stephen Patrick Donley, Manager Metropolitan USU, sworn 16 January 2015;
• Witness statement of Thomas Frederick Neems, outdoor worker and USU delegate, filed 21 January 2015;
• Witness Statement of Brandon Ernest Rhodes, outdoor worker and USU delegate, filed 21 January 2015; and
• Witness statement of Valerie Ann Dexter, Childcare Worker, filed 21 January 2015.

1. Each of the witnesses was cross-examined by the respondent.
2. The respondent relied on the following evidence opposing the application:

• Witness Statement of Leanne Bushby, Childcare Worker, filed 28 January 2015;
• Witness Statement of Kylie Aslanis, Nominated Supervisor, Prestons Early Education and Care Centre, filed 28 January 2015;
• Witness Statement of Joan Garcia, Early Childhood Teacher, filed 28 January 2015;
• Witness Statement of Kylie Davis, Early Childhood Teacher, filed 28 January 2015;
• Witness Statement of Roberta Vitalie, Childcare Assistant, filed 28 January 2015;
• Witness Statement of Marie Daghel, Early Childhood Teacher, filed 28 January 2015;
• Witness Statement of Sandra Pinto, Nominated Supervisor, Cecil Hills Early Education and Care Centre, filed 28 January 2015;
• Witness Statement of Anitha Arul, Early Childhood Teacher, filed 28 January 2015;
• Witness Statement of Kathryn Worlledge, Centre Director, Casula Preschool, filed 28 January 2015;
• Witness Statement of Tina Sangiuliano, Co-ordinator Early Childhood Services, filed 28 January 2015; and
• Witness Statement of Kiersten Fishburn, Director, Community and Culture, filed 28 January 2015.

1. Each of the witnesses, other than Ms Anitha Arul, was cross-examined.

The USU's case

1. In support of its application, the USU contended that it would be industrially unfair for the Council, having achieved the productivity and efficiency benefits which it sought and gained from the Council Agreement, to be permitted now to renege on its side of the bargain.
2. The USU stressed from the outset that the applicant sought "only the preservation of existing conditions with respect to hours of work for Child Care Assistants" and that it was "not a claim for increases in wages and salaries, or changes in conditions of awards." The applicant submitted that it was not seeking to vary the industry award, but to create an island award. Notwithstanding these submissions, the applicant accepted the effect of the proposed award would be to vary the conditions prescribed by the industry award.
3. It was also argued that it would be industrially unfair to permit the Council to unilaterally increase the contracted hours of work of staff employed since the Council Agreement was made. The thrust of this argument by the USU was that the Council had entered into an enterprise agreement with the USU in 2010 and had now determined to withdraw from the negotiated hours arrangement in circumstances where the employees continued to maintain their side of the industrial bargain.
4. The USU submitted that the Council's decision to increase the hours of work of the relevant employees, being exclusively female, and choosing not to increase the hours of work of the outdoor staff, who are predominantly male, is discriminatory and contrary to s 3(f) of the IR Act. The applicant, however, expressly eschewed any reliance on the Equal Remuneration Principle. The applicant relied squarely on the Special Case Principle to justify its claim.
5. The USU's evidence primarily was directed to the making of the Council Agreement and the course of dispute proceedings giving rise to the award application. In particular, Ms Morthen gave evidence as to the events leading up to the Council's decision to terminate the Council Agreement at the end of its nominal term. Evidence was also given as to the achievement of KPIs in accordance with the Council Agreement.
6. Ms Dexter, who was the only employee within the coverage of the proposed award called by the applicant, gave evidence to the effect that she did not understand the Council Agreement was intended to be a "trial" and inferred an expectation that the agreed conditions including the 36 hour week were to be ongoing. She had not seen the precise terms of the Council Agreement. Ms Dexter also gave evidence as to her employment letter (which referred to the industry award and "Liverpool City Council Agreements") and which she understood to contain a promise or entitlement to a 4 day 36 hour working week.
7. Mr J V Murphy of counsel, who appeared for the applicant, contended that the Council Agreement was not intended by Council to be implemented as a "trial". He submitted: … There was never any suggestion it was a trial. The document speaks for itself. The word "trial" doesn't appear. Clearly, as the legislation provides, it was an enterprise agreement which was terminable in accordance with the normal rules. That doesn't mean it was a trial. It did have within it a mechanism for reversion from the 36 hour, four day arrangement to 38 hour, five days, which is what the council is now seeking to implement, if the key performance indicators that had been agreed to, and indeed had been varied during the course of the four years, were not met. The evidence is that they were in fact met and continue to be met. There is some debate about that, which I will come to shortly. But at no time had the council sought to exercise its right pursuant to that provision of the agreement to revert to the 38 hour week on the basis that KPIs not been met. There's a suggestion that the sick leave KPI had not been met, but there is no evidence to support that. The KPI was for a 10 per cent reduction in sick leave in the period prior to the implementation of the agreement in the 2009/2010 period. There is no evidence that that reduction did not occur and has not been sustained. Indeed, the evidence about sick leave suggests the contrary. The council now supports or attempts to support its position by putting that there is some need for consistency with respect to child care workers on site because apparently it is now said that the children in care need to have the same person there five days a week. The learning upon which that proposition is based has been around prior to the implementation of this agreement. If that was a genuine issue, one would not have expected the council to willingly agree to a four day arrangement in the first place. One also has to look at that in context. There are part time child care workers employed who are not there five days a week. Those that are not covered by this agreement, the 36 hour, four day arrangement, have access to flexitime, which can be taken on any day agreed; whereas with the four day arrangement there's a fixed day off each week. So the potential for inconsistency of persons being on site is probably greater in relation to those that have access to the flexitime arrangement than it is for those with a fixed four days a week. We say that the Commission won't be persuaded by that proposition to permit a substantial alteration to long standing conditions of employment. And that is not a matter that has been raised throughout the period of this agreement. It's only something that has come at the end of the period when the decision had been made to attempt to revert back to a five day arrangement. We say that this is simply an argument that has been put forward to strap up that decision that's already been made. Had it been an issue, it could have and should have been raised at any time since 2010.
8. The USU referred to various items of correspondence between it and Council with respect to "renegotiations" of the agreement. In particular, the USU contended that, in the course of renegotiation, the Council made a "firm proposal" to move the relevant employees from a 36 hour 4 day week to a 36 hour 5 day week. This was evidenced in a letter from the Council dated 3 September 2014. The USU did not submit that any such proposal was accepted.
9. The applicant indicated the proposal was "reinforced" in a meeting between the union and the Council on 2 October 2014.
10. On 7 October 2014, the USU sent a letter to the Council invoking grievance procedures under cl 35 of the industry award.
11. By letter dated 16 October 2014, lawyers for the Council wrote to the USU explaining the Council's position in favour of a return to a 5 day working week and referring to an earlier letter (of 3 October) purporting to give notice of its intention to terminate the Council Agreement. The USU disputed ever receiving the 3 October letter.
12. By letter dated 22 October 2014, the Council's lawyers advised (and apologised for) an error in the 16 October letter. The 22 October letter acknowledged that notice had not been given on 3 October 2014. Council however did purport, in this latest letter, to give notice of termination of the Council Agreement to take effect on 19 January 2015. The USU disputed seeing the letter on or about its date and contended the notice to terminate the Council Agreement was first given on 7 November 2014.
13. In cross-examination Ms Morthen indicated the letter dated 16 October 2014 was received by email addressed to the USU's administrative email account and was not seen by industrial staff. Ms Morthen also said the USU could find no evidence of having received the 22 October letter before 7 November 2014 when a copy was handed to the USU during conciliation proceedings before the Commission in related dispute proceedings filed 27 October 2014.

The Council's case

1. The respondent's evidence focussed on the operational difficulties associated with the 36 hour over 4 day week arrangement and the relevant considerations of Council in deciding to terminate the agreement.
2. The respondent relied on the presumption that the industry award, which covers the field sought to be covered by the proposed award, already sets fair and reasonable conditions of employment for employees. Council submitted the industry award was made in conformity with the obligations imposed upon the Commission under s 10 of the IR Act and cl 8.4 of the Wage Fixing Principles.
3. The respondent submitted that Council's decision to terminate the Council Agreement had two main drivers: 1. Efficiency and business reasons; and 2. Quality, including continuity, of care.
4. The latter of these drivers was said to be the most important as evidenced in the 16 October 2014 letter which stated Council's view that a 5 day week was in the interests of staff, the children, the centres and the parents due to: "Continuity of care for children leading to better outcomes for children; Shorter [daily] hours for staff who work in a tiring working environment, therefore improving the quality of care and education they are able to give, as well as being better for staff overall health and welfare; and Consistency across operations bringing all staff onto a five day working week - this not only assists with rostering but also means that staff are available to work on planning, project delivery and other such initiatives. This will further improve the child care service the Council is able to provide."
5. The respondent contended the Council Agreement was a "trial", or at least not a permanent feature of the terms of employment, relying on clause 6 of the Council Agreement. Council also submitted that there was no misapprehension by employees that the Council Agreement was a trial and that the arrangement could be reviewed and changed back to the industry award after the expiration of the agreement.
6. Further, the respondent contended the terms of the Council Agreement, which the applicant was seeking to convert to an award, were not justified as being "fair and reasonable" conditions within the context of s 10 of the IR Act. Rather the applicant sought to accommodate the personal preferences of some employees having regard to their own personal circumstances.
7. The respondent also submitted that the KPI's identified in the Council Agreement had not been achieved.
8. Ms Sangiuliano stated the overall disadvantages of the agreement as including: 1. Long shift staff feel very tired at the end of the day; 2. Inconsistency of staffing arrangement within rooms which particularly disadvantaged 0-3 age group where attachment and consistency is primary; 3. Communication with staff and overall team collaboration time was difficult due to days off; 4. Other staff included casuals, nominated supervisors and Early Childhood Teachers who were required to cover longer shifts, and 5. Restricted flexibility and movement of roster which caused problems within the workplace.
9. Ms Fishburn gave evidence, among other matters, of the cost to council of providing child care and education services and the need to find efficiencies to reduce the level of subsidies council provided to users of those services.
10. The majority of the respondent's employee witnesses gave evidence in support of the Council's decision to revert the working hours to those prescribed in the industry award, citing quality of care as their principal reason. It is unnecessary to traverse in detail the evidence of the various employee witnesses. It is enough to say that they impressed as caring and dedicated employees wanting the best possible care for the children whom they educate and for whom they care. Some of course, including Ms Dexter, had committed to personal arrangements (relating to education and child care for example) which required consideration in the event of a reversion to a five day week.
11. The respondent submitted the evidence demonstrated that the public interest militated against the industry award due to the perceived impact on continuity and consistency of care.

Consideration

1. The relevant test in determining an application to make a new award is set out in City of Sydney Wages/Salary Award 2014 [2014] NSWIRComm 49 ("City of Sydney Case") at [11]-[18]. The Full Bench stated: [11] In determining an application to make a new award to replace an existing award, the applicable test, pursuant to s 10 of the Act, is whether the award to be made will set fair and reasonable conditions of employment for employees: Re Club Employees (State) Award [2002] NSWIRComm 362; (2002) 122 IR 272 at [102]. [12] The presumption is that the existing award, covering the same field, already sets fair and reasonable conditions of employment for employees because it was made in conformity with the obligations imposed upon the Commission under s 10 of the Act: Re Pastoral Industry Award [2001] NSWIRComm 27; (2001) 104 IR 168 at [14]. [13] However, that presumption is rebuttable where an applicant for different terms can demonstrate, on the evidence, that the existing award does not provide fair and reasonable conditions of employment: Re Storeworkers - IGA Distribution Pty Ltd New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156; (2002) 124 IR 1 at [42]. [14] Factors constituting a proper basis for the rebuttal of the presumption will include whether the conditions in the current award are no longer fair and reasonable having regard to changed circumstances, including changes in the respective positions or conduct of the parties; developments in a business, industry or the economy generally, and where changes have occurred in the factors which underpinned the conditions found in the current award, the subject of review: IGA Distribution at [44]. [15] The application must meet the threshold requirements of the principles promulgated in the State Wage Case 2010. Where a claim results in arbitral proceedings for changes in conditions of employment which exceed those allowed elsewhere in the principles (see, for example, Principle 2), the applicant will need to satisfy the Arbitrated Case Principle: see State Wage Case 2010 at [230]. In particular, the applicant may need to satisfy the special case component of that principle which is in the following terms: 8.4 Special Case Considerations 8.4.1 A claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the Principles, and which is not based on work value and/or productivity and efficiency pursuant to this Principle, will be processed as a special case in accordance with the principles laid down in Re Operational Ambulance Officers (State) Award [2001] NSWIRComm 331; (2011) 113 IR 384 and the cases referred to therein at [165]-[168]. 8.2.4 All special cases shall be tested against the public interest. [16] The requirements of the Special Case Principle will be met where the applicant for a proposed award or particular provisions within it persuades the Commission that the application satisfies a dual test: that the provision or provisions of the award sought constitute fair and reasonable conditions of employment and that the matter in question has special attributes or is 'out of the ordinary' so as to take the matter outside the restrictions which otherwise apply under the principles: Social and Community Services Employees (State) Award [2001] NSWIRComm 247 at [24]; Operational Ambulance Officers (State) Award [2001] NSWIRComm 331; (2001) 113 IR 384 at [166]; IGA Distribution at [45]. [17] The onus lies on a party arguing for a special case to persuade the Commission that the terms it seeks should be made: Re Pastoral Industry at [77] and Club Employees at [102]. [18] The evidentiary requirement to establish a special case is, however, no more strict than in an ordinary matter, except that the applicant for a special case will need to establish an adequate evidentiary foundation for the factors which are relied upon as demonstrating special case attributes: Operational Ambulance Officers at [168]; Pastoral Industry Award at [73] and [74].
2. We propose to consider these matters in turn, that is: 1. Are the terms and conditions fair and reasonable? 2. Does the application meet the Special Case Principle?

Fair and Reasonable Conditions of Employment

1. Consistent with this authority the respondent submitted, and we accept, there is a rebuttable presumption that the industry award provides fair and reasonable conditions of employment on the basis that the award was validly made pursuant to s 10 of the IR Act: City of Sydney Case at [12]-[13].
2. There were two key elements to which the USU pointed in seeking to rebut that presumption.
3. Firstly, the USU submitted that the hours provision of the industry award had not applied to the relevant group of employees, that is child care assistants, since 2010 and had not applied to outdoor staff since 2006. Counsel for the USU referred to cl 36(ii) of the industry award, which is set out in the following terms: 36. Council Agreements ... (ii) The terms of any agreement reached between the parties shall substitute for the provisions of the award provided that: (a) the extent of the agreement shall be limited to award's Clause 10, Payment of Employees; Clause 13 subclauses (ix) and (x), Travelling and Camping Allowances; Clause 16, Hours of Work; Clause 17, Overtime; Clause 18, Holidays; Clause 21, Part time Employment; Clause 23, Job Share Employment; and Clause 26, Performance Evaluation and Reward. (b) the agreement does not provide less than the entry level rates of pay; (c) the agreement is consistent with the NSW Industrial Relations Act 1996 and current wage fixing principles; and (d) the agreement shall be processed in accordance with subclause (iii) of this clause. Provided that, where the agreement proposes to vary award provisions other than those nominated in paragraph (a) above, the agreement shall be processed in accordance with the Enterprise Arrangement Principle.
4. It was in this context that it was submitted the claimed award did not seek a "reduction" in hours. It simply sought award recognition of existing hours. We observe immediately that the submission appears to contradict s 22(3) of the IR Act which refers to the reduction in hours "by an award". It is also inconsistent with the authorities referred to below. We consider the proposition that the application does not seek a reduction in award hours unsustainable. It is at best an exercise in semantics.
5. To the extent the USU submitted, albeit faintly, that the Council Agreement was given award status by cl 36 of the industry award, we make clear our rejection of the proposition. The fact that the industry award provides recognition of agreements in relation to certain subject matters does not have the effect of elevating those agreements to award status. They remain agreements not awards.
6. We observe also that the Council Agreement is not an Enterprise Agreement within the meaning of Pt 2 Divs 1 and 2 of the IR Act. The USU acknowledged that fact during submissions. Thus, the contention that the Council Agreement operates in accordance with s 40 of the IR Act is not correct. The Council Agreement is, by its terms, made under cl 36 of the industry award and is terminable in accordance with its terms.
7. Secondly, the USU submitted the proposed application would be fair and reasonable to the relevant employees on the basis that the hours sought, that is 36 hours per week, had been worked by "all other staff" since 2006. The applicant submitted that it would be discriminatory and industrially unfair to deprive the affected employees of working 36 hours per week in circumstances where the majority of other staff work those hours.
8. In the City of Sydney Case, the Full Bench outlined at [19]-[22] the requirements of s 10 of the IR Act in considering what constitutes "fair and reasonable" for the purposes of the Act: [19] The terms 'fair' and 'reasonable' in s 10 of the Act import a requirement that the conditions of employment set represent a proper and proportionate balance between the entitlements afforded employees and the interests of those employing them. [20] Consideration of what is fair and reasonable for an employee will necessarily involve a consideration of what is fair and reasonable having regard to the nature and circumstances of the employment afforded to the employee by an employer. That inquiry cannot be made in a vacuum. It must also extend to the broader context in which the employment occurs and ultimately, by effect of s 146 of the Act, the state of the economy in New South Wales. [21] The assessment required by s 10 will often involve consideration of collective relations between unions and employers or employer associations and, in appropriate cases, consideration of the history of terms and conditions that the parties chose to apply, formally and informally, to employees who will now be covered by the proposed award. [22] In particular cases, the Commission may be required to take into account not only differences between employers or industries in which employment is undertaken, but relevant differences between employees or classes of employees in a workplace, enterprise, project or industry. What may represent a fair and reasonable condition for one set of employees may not be for another, even where the employees are engaged by the same employer. That particular assessment may depend on the history as well as consideration of the present circumstances of the work to be performed.
9. The broader context adverted to above requires consideration of the general policy approach to awarding ordinary hours below 38 per week. The starting point is the Wage Fixing Principles.
10. When the current Wage Fixing Principles were established the Commission decided to delete the "Standard Hours Principle"; State Wage Case 2010 [2010] NSWIRComm 183; 201 IR 155 at [102] and State Wage Case 2010 (No 2) at [17[-[18]. Up until 2010 that Principle (Principle 7) had provided: "Claims for reduction in standard weekly hours below 38 will not be allowed unless by consent."
11. The Commission considered the Principle obsolete and unnecessary. In deciding to delete it the Commission said in State Wage Case 2010 (No 2) at [18]: "We consider the proposed Principle unnecessary. However, we should make it clear that the removal of the existing Principle 7 should not be seen as an invitation to pursue shorter hours claims."
12. The context, we think, makes clear that the deletion of the Standard Hours Principle did not reflect a change in policy. To the extent the USU regarded the deletion of the principle as lowering the hurdle before it, we think its confidence was misplaced.
13. The attitude of not allowing reduced hours below 38 by arbitration had persisted for some years prior to 2010.
14. IGA Distribution involved applications for an award seeking to regulate employment of storeworkers engaged at two distribution centres. The facts of the case are reasonably complex and do not require detailed exposition here. It is necessary to note however that an award was made in 1998 which prescribed ordinary hours at 38 per week. That prescription replaced one contained in an enterprise agreement which had prescribed 36 hours as the maximum ordinary hours per week. The otherwise applicable award for the industry prescribed 38 hours. In 2000 the relevant Union made application for a new award by which it sought reinstatement of the prescription contained in the enterprise agreement.
15. The Full Bench in IGA Distribution stated at [122]-[123]: [122] In our view, a 36 hour week is not generally available in arbitrated proceedings and, to the extent that it might be so in special and exceptional circumstances, we are not convinced that hours should be reduced as sought by the NUW. [123] The case for the NUW did demonstrate that there had been a real deprivation of an entitlement in 1998. The 1997 enterprise agreement was clearly relevant in this respect. Those circumstances, of themselves, do not constitute, however, a sufficient basis to now reduce the hours of work under the existing award. Nor do examples of other workplaces experiencing a 36 hour arrangement. We do consider that the circumstances of the removal of this condition requires rectification in the context of the setting of wages to which we will now turn.
16. The Full Bench went on to determine that a wage increase was warranted, in part, in order to adjust for the loss of the 36 hour provision: see IGA Distribution at [135]-[138].
17. The USU sought to distinguish its application from the approach taken in that case. The applicant submitted the present circumstances are distinct from the circumstances in IGA Distribution to the extent that the present application did not include a claim for a wage increase. Rather, the USU framed the application on the basis that it sought a "preservation of existing conditions" found in the Council Agreement. We do not accept the submission constitutes a convincing basis for distinction.
18. The making of an agreement as to reduced hours is consistent with the philosophy of the Wage Fixing Principles and is quite different to an arbitrated reduction. The applicant was responsible for the content of its claim and it cannot rely upon a limitation in that claim to force a result which it seeks, but which does not represent a "proper and proportionate balance between the entitlements afforded employees and the interests of those employing them". Nor is it sufficient to meet the public interest requirements of the Special Case Principle.
19. We note in this respect as to wages, Council gave an undertaking to maintain the hourly rate of pay so that employees would receive some compensation for the alteration in hours. The above award amount was to be absorbed by the following two annual increases in the industry award rate.
20. Bearing this authority in mind, we are not satisfied that the fact there had been, for a limited time, an agreement for these employees to work 36 hours over 4 days renders the industry award standard not "fair and reasonable".
21. The ordinary hours of work for Council employees are prescribed under cl 18A of the industry award. Under that clause, the ordinary hours of work for all employees in the sector is 38 hours per week, save as to the exceptions under sub-cl 18A(ii) which prescribes 35 hours per week as the ordinary hours of work for employees engaged in a range of functions, including but not limited to Community Services employees in the Professional/Specialist Band 3.
22. We conclude firstly that the hours prescription in the industry award conforms to the general arbitrated standard and from that perspective can be regarded as fair and reasonable. The industry award does prescribe 35 hours for some employees however and in that sense it may be thought to provide support for the USU's contention that requiring these employees to work a 38 hour week is industrially unfair and discriminatory.
23. The Local Government Association of New South Wales ("LGANSW"), which was granted leave to intervene in the proceedings, made submissions supporting the respondent's case against the USU's proposed application. Its submissions were particularly relevant to the USU's submission as to the discriminatory effect of the termination of the Council Agreement.
24. LGANSW submitted with respect to the difference in hours of work: The difference that currently exists between the ordinary hours of work prescribed for child care employees in Bands 1 and 2 as opposed to child care employees in the Professional/Special Band 3 stems from a consent application made under the Equal Remuneration Wage Fixing Principle, to reduce the working hours for professional employees engaged in the community services sector: Re Local Government (State) Award 2001 [2004] NSWIRComm 24.
25. In Re Local Government (State) Award 2001 [2004] NSWIRComm 24 a consent application was made by the parties to vary the Local Government (State) Award 2001 (the predecessor to the current industry award) so that ordinary hours of work for approximately 500 employees in senior community positions in Professional/Special Band 3 grades were to be 35 hours per week.
26. The Full Bench noted at [5]: The applicant, the United Services Union, has also given a number of acknowledgments or concessions which are of significance. They include: "2(v) The USU agrees that a Council may apply to the IRC to temporarily or otherwise, reduce, postpone, and/or phase in the application of any increase in labour costs associated with this variation on the ground of very serious or extreme economic adversity. Such applications will be processed in accordance with section 18 of the Industrial Relations Act 1996. 3(i) The USU agrees that the variation to the award rectifies the disparity in hours experienced by employees engaged in community services and children's services positions evaluated in Band 3 of the Award. (ii) The USU acknowledges that there is no undervaluation on a gender basis of positions covered by the functions of community services and children's services evaluated as Band 2 of the Award with respect to hours of work. (iii) The USU will not use this variation as precedent for pursuing claims for a reduction in hours for other employees under the Award. (iv) The USU acknowledges that the Award establishes processes whereby the value of work is assessed including the Award skill descriptors and the operation of the relevant council salary systems." (Emphasis added)"
27. LGANSW submitted: "[I]t is now disingenuous for the USU to claim…the requirement for child care employees to work 38 hours per week pursuant to the provisions of the 2014 Award would be discriminatory. In this regard the USU is advancing an argument that contradicts the acknowledgement that it gave in Re Local Government (State) Award 2001 that there is no under evaluation on a gender basis of Band 2 evaluated positions with respect to the hours of work provisions of the Award. Similarly, it is the contention of the LGNSW that the Applicant Union has used the fact that child care employees in the Professional/Specialist Band work less hours to pursue a claim for a reduction in hours for other employees under the Award. The fact that other employees work 35 hours per week is not a relevant consideration and in this regard LGNSW submits that the approach of the USU in this matter is contrary to the undertaking provided in Re Local Government (State) Award 2001 not to use the 2004 variation as precedent for pursuing claims for a reduction in hours for other employees under the Award."
28. We are satisfied that it is not open to the USU to argue discrimination on the basis of a simple comparison with the more senior community service positions given its undertaking. Similarly the detail of the position in relation to the agreement by which outdoor staff at the Council work a 36 hour week is unknown to us and cannot provide a basis for making the award sought.
29. In this respect we note also the evidence of Ms Fishburn, who gave evidence that there are other employees of the Council who work in excess of 36 hours per week including rangers, parking patrol officers, childcare trainees, kiosk staff and car park attendants. Ms Sangiuliano also gave evidence that, from her interaction with other councils and not for profit organisations providing child care services, she was aware of none which operated on a four day week basis.
30. We therefore reject the submission that the existence of agreements for other employees to work less than 38 hours per week makes the application of the industry award prescription to the subject group of employees of the respondent unfair or unreasonable in this case.
31. We agree with the Council's and LGANSW's submissions that the USU's evidence does not rebut the presumption that the industry award provides for fair and reasonable conditions of employment with respect to hours of work notwithstanding the circumstances of the case. The undertaking by Council to maintain current hourly rates until the award rate catches up also provides support for that conclusion as it provides a balanced transition in respect of this particular group of employees back to the industry award standard.

Special Case Principle

1. The terms of the principle have been earlier set out. Our citation from the City of Sydney Case at [16] includes a passage specifying how the requirements of that Principle may be met. There are essentially two elements. The first is whether the terms and conditions sought are fair and reasonable. The second is whether "the matter in question has special attributes or is 'out of the ordinary' so as to take the matter outside the restrictions which otherwise apply under the principles".
2. The arguments relied on by the USU to suggest that, for these employees, the industry award conditions are not fair and reasonable essentially form the bases of the argument that the conditions sought are fair and reasonable. We reject that submission for the same reasons.
3. It is strictly therefore unnecessary to consider the question of "special attributes". For completeness however we observe that the same propositions are relied upon to constitute the special attributes. In our view there is nothing special or out of the ordinary about these factors.
4. While it was the case that the relevant employees enjoyed the benefit of a 36 hour week during the period of the Council Agreement, the Council has for substantive reasons determined, as the agreement permits it to do, to terminate the agreement. We find no substance in the argument that Councils "unilateral" decision to terminate had the effect of depriving the employees of the benefits of the agreement while maintaining the benefits council derived from it. Once the Council Agreement was terminated no party had a continuing benefit under it. That is not to suggest that both sides may not have gained benefits or made contributions during the life of the agreement. It is unnecessary to pretend that the Council Agreement never existed.

Other Matters

1. The applicant submitted that the council could only terminate the agreement if the required KPI's were not met. While the enforcement of the agreement is a matter for a court or declaratory proceedings in the Industrial Court, it seems to us there is no substance in that argument. The Council Agreement provides for a nominal life of four years and allows for termination or variation on three months written notice. The nominal term has expired and on one view that is sufficient to bring the agreement to an end. Council however gave notice and has acted on that notice to terminate the agreement.
2. It was also suggested that special circumstances arose from a "firm proposal" made during conciliation. Again we find nothing special about parties advancing proposals during conciliation. There was never any suggestion that such a proposal was accepted. Rather it is reasonable to infer rejection of it on the basis that the USU elected to pursue a more advantageous outcome.
3. The USU also submitted that there was no suggestion that the Council Agreement was not a "trial". We accept that the word "trial" is not used in the document. On the other hand, the Council Agreement provided for a review after six months and it also provided for Council to elect to revert to 38 hours per week within the term of the agreement if the KPI's were not met for 2 consecutive periods. Whether these elements of the agreement justify it being referred to as a "trial" need not be determined. What is clear is that the Council Agreement made no provision for its continuation after the term and did allow for termination on three months' notice. We reject the suggestion that the failure to describe the agreement as a trial meant that it was a permanent feature of the terms and conditions of employment. Nor does it give the matter special attributes.
4. It was also contended that the employees, or some of them, had contractual rights to a 36 hour/4 day week. The respondent denied that was the case but rightly submitted that if they do it was open for the individuals to enforce those contractual rights in court. On the evidence before us it seems unlikely that such rights were created as contended by the USU. For the reasons advanced by the respondent we do not consider that the submission justifies a conclusion that the matter is special or out of the ordinary, although we should not be taken as suggesting that such factors might not attract attention in an appropriate case.
5. The respondent submitted there were technical difficulties in converting the Council Agreement into an award obligation. We consider there is substance in the argument but in the circumstances we do not need to consider it further.

Public Interest

1. The USU argued that there was an 'ongoing benefit' in the achievement of the KPIs under the Council Agreement. The USU inferred from the submission that the achievement of the KPIs was inextricably linked to a public interest consideration. It was submitted: The countervailing public interest is that there should be discouragement to employers, and in particular Local Government employers, from entering into these agreements, getting the benefit and then pulling out…
2. We have already dealt with this contention in the context of fair and reasonable conditions and special attributes. It is unnecessary to comment further.
3. The respondent submitted various reasons in support of its argument that it is in the public interest not to introduce a new award. Those reasons included: 1. Strong business reasons to terminate the Council Agreement; and 2. Improvement to quality care, which is inextricably linked to continuity of care.
4. LGANSW submitted that the USU's award application was contrary to the public interest because: 1. were it to succeed it would create a precedent that would discourage the making of agreements at the enterprise level; and 2. the making of an award in these circumstances effectively denied employers in the local government sector their right to terminate an expired arrangement at the end of its nominal term.
5. It is unnecessary, in light of our conclusions as to other matters to say anything beyond observing that we find substance in the submissions advanced by the respondent and, in the particular circumstances of the case, the LGANSW.
6. Accordingly, we are not satisfied it is in the public interest that the proposed award be made.

IRC 69 of 2015

1. During the course of the hearing the Full Bench moved of its own motion and instituted industrial dispute proceedings under s 130 of the IR Act. The subject matter in that dispute involved a dispute at the time with regard to the preservation of the status quo as to the working hours of the relevant employees in the award application.
2. After the Full Bench announced its ex tempore decision refusing the award application, the dispute proceedings were heard before the Full Bench on any outstanding issues. One of the particular issues raised by the USU on 11 March 2015 was the issue of the Council having made representations to certain employees, namely Ms Dexter, as to the permanency of the 36 hour 4 day working week arrangement where there is an application for study leave.
3. At the conclusion of the matter, the Council undertook to approve and permit employees to work 36 hours over 4 days in circumstances where affected employees made an application to the Council in accordance with ordinary arrangements to obtain study leave for the balance of the affected employee's study.
4. His Honour Walton J, President, granted liberty to apply for the parties to return to the Commission in the event any residual issues remained. Given the time which has passed since the matter was last before the Commission, and no application having been made in connection with the liberty extended, it seems to us reasonable to conclude that there are no residual issues requiring the Commission's attention. Accordingly, the proceedings in Matter IRC 69 of 2015 are terminated.

Orders

1. The Full Bench makes the following orders: 1. The application by the New South Wales Local Government Clerical, Administrative, Energy, Airlines and Utilities Union for the Liverpool Council 36 Hour Week (72 Hour Fortnight) Child Care Staff Award 2015 is dismissed. 2. The dispute proceedings in Matter IRC 69 of 2015 are terminated. .********** 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: 19 April 2016