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[2026] NSWIRComm 1049
General information, not legal advice.
Industrial Relations Commission (NSW)
2026-06-16
Commissioner Howell
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Re Local Government (State) Award 2026 [2026] NSWIRComm 1049
Hearing dates: 16 June 2026
Date of orders: 16 June 2026
Decision date: 16 June 2026
Jurisdiction: Industrial Relations Commission
Before: Commissioner Howell
Decision: The Commission makes the following Orders:
(1) The proceedings in Matter No. 2026/88323 and Matter No. 2026/237690 are joined, to be heard and determined together, with evidence in one matter being evidence in the other.
(2) Pursuant to s 10 of the Industrial Relations Act 1996, the Commission makes the Local Government (State) Award 2026 in the terms sought in the Application (Matter No 2026/237690), to operate from the first full pay period on or after 1 July 2026 (noting the award has a nominal term of 3 years).
(3) Pursuant to s 17 of the Industrial Relations Act 1996, the Local Government (State) Award 2023 is rescinded upon the commencement of the Local Government (State) Award 2026.
Catchwords: EMPLOYMENT AND INDUSTRIAL LAW – Awards and enterprise agreements – Approval and creation – Local Government Sector - Remuneration – Equal remuneration – consent award – no issue of principle.
Legislation Cited: Industrial Relations Act 1996 (NSW)
Cases Cited: Re State Wage Case 2024 (No.3) (2024) 337 111
Fire Brigade Employees’ Union v Industrial Relations Secretary (on behalf of Fire and Rescue NSW) [2025] NSWIRComm 1063
State Wage Case 2025 (No 3) [2025] NSWIRComm 36
Texts Cited: Nil
Category: Principal judgment
Parties: Applicant: Local Government NSW
First Respondent: NSW Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union
Second Respondent: Local Government Engineers’ Association of NSW
Third Respondent: Development and Environmental Professionals’ Association (depa)
Fourth Respondent: New South Wales Nurses and Midwives Association
Representation: Applicant: Mr M Nassif
First and Fourth Respondents: Mr L Hutchinson
Second Respondent: Ms A Vasilangos
Third Respondent: Mr I Robertson
File Number(s): 2026/88363 & 2026/237690
Publication restriction: Nil
This decision resolves an industrial dispute (Matter no 2026/88363) and determines an application for a new Award (Matter No. 2026/237690, the Application) notified/made by, Local Government NSW (LGNSW or the Applicant), an employer organisation registered under Chapter 5 of the Industrial Relations Act 1996 (NSW) (the IR Act).
The new Award is made in finalisation of the industrial dispute, and is to be known as the Local Government (State) Award 2026 (the Proposed Award). The Application seeks the Proposed Award be made with the consent of the relevant union parties, namely:
the NSW Local Government Clerical Administrative Energy Airlines and Utilities Union (the USU or the First Respondent);
the Local Government Engineers’ Association of New South Wales (the LGEA or the Second Respondent**)**; and
the Development and Environmental Professionals’ Association (DEPA or the Third Respondent**)**; and
the Nurses and Midwives Association of New South Wales (NSWNWA or the Fourth Respondent).
At the conclusion of a hearing on 16 June 2026, I announced my decision to make the Local Government (State) Award 2026 effective from the first full pay period on or after 1 July 2026, and to rescind the Local Government (State) Award 2023, with reasons to be published in due course. The reasons for that decision are outlined below.
On 26 June 2023, the Commission made the Local Government (State) Award 2023 (the 2023 Award) setting fair and reasonable conditions of employment for the majority of employees and employers in the local government industry in New South Wales [1] . The 2023 Award commenced from the first pay period on or after 1 July 2023 with a nominal term of 3 years (meaning its nominal expiry is 30 June 2026). The last adjustment to salary and salary related allowances under the 2023 Award operated on and from 1 July 2025 [2] .
The 2023 Award was the latest in a very long line of consent arrangements between the central industrial parties in the local government sector extending back more than 30 years to the Local Government (State) Award published in 1992 (272 IG 696).
The local government sector is large (estimated to employ around 50,000 people [3] ) and diverse covering everything from small regional organisations with relatively small workforces, to large complex organisations employing several hundred employees (if not more) in a wide array of professions and occupations, reaching across the entirety of New South Wales. That the Parties have been able to navigate their way to ultimately secure consent arrangements in each award round for more than 30 years is a matter about which they can be rightly proud [4] .
On 4 March 2026, LGNSW notified the Commission of an industrial dispute pursuant to section 130 of the Industrial Relations Act 1996 (the IR Act), designated Matter No. 88363 of 2026. In that dispute notice LGNSW referred to the Parties having exchanged logs of claims and having met “on numerous occasions” since September 2025 with a view to negotiating a new Award to replace the 2023 Award. It recorded the Parties had reached an “impasse” and sought the Commission’s assistance.
Conscious of the Parties collective desire to avoid a delay in finalising adjustments to salaries and conditions of employment in the local government sector beyond the nominal expiry of the 2023 Award, the Commission attempted to expedite the dispute resolution process, listing the dispute for Conciliation on a number of occasions commencing on 12 March 2026.
The dispute notice provided information regarding the various ‘log of claims’ initially advanced by each of the Parties. At the initial Conciliation of the dispute on 12 March 2026, before embarking on the Conciliation proper, Mr Nassif of LGNSW provided a helpful overview of the discussions to date, the significant progress that had been made, identified the matters that had led to the impasse and ultimately the notification to the Commission.
At that time whilst there had been significant progress made in the inter-Parties discussions since September 2025, there were a significant number of issues between the Parties.
“The parties to the Award are obliged to propose a package which is considered fair and reasonable. The Unions pursued the inclusion of a leave reserved clause to accommodate unanticipated spikes in headline inflation. LGNSW did not agree. The Award does not include a “no extra claims” clause and the Industrial Relations Act 1996 (NSW) (at section 17(3)) in conjunction with the Commission’s Award Making Principles allow for an Award to be varied during its nominal term to ensure that the Award remains fair and reasonable. The parties agree the Award may be varied during its nominal term, either by consent of the parties or as a result of an Arbitrated Case.”
“Our task is to set fair and reasonable conditions of employment, including fair and reasonable remuneration for the value of work. It is not a precise mathematical process. It involves a multifaceted approach that weighs up various, often competing factors. Adjusting such rates to have regard to changes in the value of money so that they remain fair and reasonable involves setting increases that are broadly capable of absorbing changes in the cost of living over time. That might in some years mean that the rates in real terms fall a little and in other years increase a little. In other words, the exercise is not one of precisely adjusting wages to reflect the extent to which the previous award in fact accurately predicted inflation along with an amount that precisely reflects the predicated rate of inflation for the balance of the term of the award.”
That approach, in my view, nonetheless accurately captures the essence of the Commission’s task when considering the changing value of money when setting wages generally. In negotiating the Proposed Award, the Parties have no doubt done their best to negotiate a fair and reasonable package of terms and conditions for the nominal term of the Award, including adjustments for salary and salary related allowances. Nonetheless unforeseen events, such as prolonged increased inflation driven by global instability, may impact the fairness of a wages deal done potentially years earlier.
As the Parties joint statement acknowledges, there is no ‘no extra claims’ commitment in the Proposed Award [9] . Subject to being satisfied of the applicable mandatory considerations [10] , an Award, including the Proposed Award, may be varied during its nominal term by consent (s 17(3)(a) of the IR Act) or “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” (s 17(3)(c) of the IR Act). Significant unexpected changes in the economy that operate to materially disturb the ‘fair and reasonable’ balance reflected in a consent arrangement may, in an appropriate case, enable variation under s 17. The Parties, by their joint statement, simply acknowledge that s 17(3), in conjunction with the Commission’s Award Making Principles, potentially facilitate amendment during an Award’s nominal term to deal such an eventuality. That joint statement reflected a sensible and pragmatic approach to addressing the concerns understandably raised by the union parties, given the time and context in which those concerns were raised.
It is in that context the Commission is asked to make the Proposed Award.
The Applicant, LGNSW, is the peak body for local government in New South Wales, representing general purpose councils, county councils and other related local government entities such as joint organisations and local government owned/controlled corporations. In support of the Application LGNSW relied upon:
an affidavit of Mr Mahrous (Ross) Nassif, Manager, Workplace Relations for LGNSW, dated 9 June 2026 (Ex 4);
A Table detailing the schedule of changes to the Local Government (State) Award 2023, showing the changes made in the creation of the Local Government (State) Award 2026 (Ex 2); and
A “marked up” copy of the Local Government (State) Award 2023, showing the changes made to create the Local Government (State) Award 2026 (Ex 3).
Mr Nassif was directly involved in the negotiations surrounding the Proposed Award, including in the context of the dispute proceedings before this Commission (I note he has been directly involved in the renegotiation of every iteration of the Local Government (State) Award since 2007). He gave evidence of the process of negotiation following the notification of the dispute to the Commission in March 2026, resulting in LGNSW making a formal offer for a new Award to rescind and replace the 2023 Award, to be known as the Local Government (State) Award 2026 on and from the first full pay period on or after 1 July 2026 [11] .
In his affidavit and in oral submissions made on 16 June 2026, Mr Nassif addressed the various mandatory considerations for approval of a consent Award (reflecting the requirements of rule 6.8 of the Industrial Relations Commission Rules 2022, and Practice Note 6), and highlighted many of the “key features” of the Proposed Award including (but not limited to):
The provision of a more generous parental leave entitlement for employees in connection with the birth, adoption, surrogacy arrangements or placement of a child on or after 1 July 2026 (see subclause 23G). Employees with at least 12 months' continuous service will be entitled to 14 weeks' paid parental leave and the entitlement is associated with:
(a) the birth of a child of the employee or the employee's partner; or (b) the adoption of a child; or (c) the ongoing placement of a child with the employee or the employee's partner; or (d) the issuing of a parentage order in relation to a surrogacy arrangement.
(a) A 4% increase in rates of pay and wage-related allowances to operate from the commencement of the first full pay period on or after 1 July 2026; (b) A 4% increase in rates of pay and wage-related allowances to operate from the commencement of the first full pay period on or after 1 July 2027; (c) A 4% increase in rates of pay and wage-related allowances to operate from the commencement of the first full pay period on or after 1 July 2028.
Mr Nassif also highlighted a number ‘joint statements’ the parties have agreed to publish to the workforce, that in different ways recognise and/or resolve concerns highlighted during the negotiations. In particular:
A joint statement on Reproductive Health and the Local Government (State) Award (marked Ex 8 in the proceedings); and
A joint statement on the use of Term Contracts under the Local Government (State) Award (marked Ex 9 in the proceedings), being an issue of particular importance to the members of the LGEA.
Turning then to the Respondents, each of the Respondent’s confirmed the Proposed Award is advanced with their consent. In the case of the Fourth Respondent, the NSWNWA, Mr Hutchinson appeared on behalf of that organisation at the hearing and confirmed their consent to the making of the Proposed Award.
In support of the Application the Respondents read and relied upon the following affidavits:
The First Respondent, the USU, read and relied upon an affidavit of Mr Luke Hutchinson (Ex 5), an Industrial Officer who has been in the employ of the USU since 2007 (and was a member and delegate of the First Respondent for some time prior to that), and was personally involved in the negotiations that led to the Proposed Award and the current consent Application. I think it uncontroversial to observe the USU has easily the largest membership within the Local Government sector in New South Wales. Mr Hutchinson observed the USU represents more than 25000 individuals in the local government sector, the majority of whom are covered by the Proposed Award [12] . In Ex 5 and otherwise in oral submissions on 16 June 2026, Mr Hutchinson described:
(a) the USU having sought input from its membership in the lead up to commencing negotiations for a new Award, and from that input developing and serving the USU log of claims. Then followed a negotiation process involving the Parties having met “on more than twenty occasions to discuss the various proposed changes to the Award”, including a number of conferences before the Commission in the context of the dispute [13] ; (b) an offer having been made by LGNSW on 28 April 2026; (c) an extensive consultation process between the USU and its members (including the preparation of a “suite of materials to members explaining the terms of the Offer” and the USU facilitating some 467 meetings with its membership), culminating in a vote in which just shy of 90% of those that participated voted in favour of approving the Proposed Award [14] ; and finally (d) a number of changes to the Proposed Award being discussed and agreed following the member vote, albeit changes that did not “substantively alter the Proposed Award or negatively impact USU members”. (e) Mr Hutchinson confirmed the Proposed Award provided a “significant” enhancement to the terms and conditions of the USU’s membership, and that the USU supported the making of the Proposed Award.
(a) the LGEA position in the Award round being guided by a survey of members that ultimately informed a log of claims endorsed by the LGEA Committee of Management in August 2025 [15] ; (b) a process of “extensive award negotiations”, involving meetings between the Parties on more than 20 occasions (including Conciliation processes before this Commission), ultimately culminating in the offer made by LGNSW on 28 April 2026 as a package in settlement of all claims [16] ; (c) the offer was endorsed by the LGEA Committee of Management and then put to a vote of LGEA members [17] . Prior to the vote, the LGEA provided explanation of the Proposed Award and “key changes” to its membership. The LGEA membership “enthusiastically accepted” the offer “with 96% of voters choosing to accept the proposed Award” [18] . In this latter connection, Ms Vasilangos identified the LGEA was particularly pleased with the outcome providing the largest pay increase since the Local Government (State) Award was first made, as increases in salaries was the LGEA memberships first priority in this bargaining round.
(a) a process of consultation with DEPA’s membership prior to the service of its log of other interested parties in September 2025, and an extensive process of consultation thereafter (as he described it “the most conciliated Award” [19] in his long experience); and (b) an endorsement process from both DEPA’s committee of management and its membership, resulting in what he described as ‘unanimous’ feedback supportive of accepting the LGNSW offer [20] .
Each of the Parties confirmed their support for the making of the Proposed Award, and that in their respective views the Proposed Award:
Sets fair and reasonable conditions of employment. In that connection the parties noted the Proposed Award took the 2023 Award, approved by the Commission as setting fair and reasonable conditions at that time, as its starting point and made changes that would, on balance, operate to improve conditions of employment for employees [21] . In that connection, LGNSW [22] , the LGEA [23] , and the USU identify the Proposed Award as providing “the highest increase of an award in the thirty-four-year history of the Local Government (State) Award” [24] .
Provides equal remuneration and other conditions of employment for men and women performing work of equal or comparable value [25] . In that connection the parties emphasised (amongst other things) that the rates of pay in the Proposed Award, like its predecessors, are grounded in skills based classifications, with progression based on the acquisition of skills; and that part-time employees have pro-rated entitlements of full-time employees [26] . I note the Proposed Award also records an express commitment by the Parties to prevent and eliminate discrimination in the workplace, including in the context of dispute resolution [27] . It also includes an enhanced paid parental leave entitlement [28] .
Contains the mandatory dispute resolution clause [29] .
Would, having regard to the Objects of the IR Act, the state of the New South Wales economy and the likely effect approving the Proposed Award would have on that economy, operate in the public interest [30] including by:
(a) Operating to stimulate the New South Wales economy, particularly in remote and regional areas [31] where the Local Government sector is said to be “the largest single employer [32] ; (b) Assisting to attract and retain employees to work in the local government sector, addressing a matter identified as being of strategic priority in the Local Government sector [33] , and thereby improving the quality of service to the community [34] ; and (c) In various ways operate to facilitate achievement of the Objects of the IR Act [35] .
The Proposed Award provides for increases to salaries and salary related allowances of 4% in July 2026, 4% in July 2027 and 4% in July 2028 (effective the first full pay period on or after 1 July each year), being the highest rate increase across the nominal term of the Award since it was first made more than 30 years ago. Conscious of the most recent forecasts on headline and trimmed mean CPI over the coming years, I am satisfied that the package of terms and conditions contained in the Award will, on balance, set fair and reasonable conditions of employment.
Mr Nassif expressed the view the Proposed Award “provides an innovative package to the benefit of employees and employers alike particularly when viewed as an attraction and retention piece for the Local Government Sector”. I agree. The changes made between the 2023 Award and the Proposed Award are conveniently summarised in Exhibits 2 and 3, and need not be exhaustively set out here [36] . There are two aspects of the agreement reflected in the Proposed Award that I consider warrant particular mention. They are:
The new entitlement for a flexible form of leave, to be known as “MyLeave”; and
The repeated recognition of the potential impact of the adoption and use of artificial intelligence in the workplace, as a matter warranting specific attention.
In that latter connection, the Proposed Award:
Identifies “benefits and challenges” associated with the adoption and or use of artificial intelligence in the workplace as a function of the Consultative Committees established by cl 33 [37] ;
inclusively recognises “changes arising from the adoption of artificial intelligence systems/technologies” as something that may, in an appropriate case, trigger an obligation to consult around “major changes in the composition, operation of size of the employer’s workforce or in the skills required” [38] ; and
as part of the Award Implementation Committee established by cl 44 to “facilitate a cooperative approach to award implementation”, the Parties have agreed to establish subcommittees for the consideration of issues that are of industry wide significance, including the benefits and challenges associated with the adoption and/or use of artificial intelligence in the workplace [39] .
There are many predictions on the impact of the impending (perhaps inevitable) wide scale adoption of ‘artificial intelligence’ (in all its various guises) on the modern workforce. The one commonality is that the adoption of artificial intelligence systems will, on any view and regardless of the industry, likely lead to a radical reformation in the way work is undertaken and the way human knowledge and experience is valued in our evolving systems of work. The Local Government Sector will not be immune to these developments.
26 Minimum sick leave entitlements
(1) Sick leave when set by an award must include provisions under which—
(a) each employee is entitled to not less than one week of sick leave on full pay for each year of service with an employer, and
(b) sick leave accumulates from year to year for at least 3 years, that is, sick leave not taken in each year of service will be available to the employee for a period of at least 3 years from the end of each such year.
(2) Nothing in this Division prevents the Commission from making or varying awards relating to the conditions under which sick leave may be taken or imposing limitations on the amount of sick leave that may be accumulated by an employee.
There is no statutory prohibition on the making of an Award that provides two weeks of paid sick leave per year of service that accrues for year to year, with an additional week of paid leave available more generally (albeit paid leave that may be used to cover an absence due to illness or injury) that does not accrue from year to year.
The creation and deployment of MyLeave as a separate form of leave to sick leave (providing a genuine means of facilitating a short-term absence without the need for a disingenuous ‘sickie’), in conjunction with an education campaign designed to address concerns around the misuse of sick leave, may well assist employers in addressing the ‘cultural issues’ around sick leave highlighted by LGNSW. It may also operate over time to reduce high levels of accrued sick leave towards the end of an employee’s career, thereby disincentivising the potential disingenuous use of sick leave for ‘retirement planning’.
Workers, given the overwhelming support reflected in the votes described above, it would appear saw value in trading a week of their generous 3 week per annum sick leave entitlement for two weeks of sick leave (which will continue to accrue from year to year if unused), coupled with a week of flexible leave that is available more generally (including to cover absences for illness or injury if needed), albeit a form of leave that does not accrue from year to year and is not paid out upon termination (noting sick leave is also not paid out on termination: s 27 of the IR Act prohibits the ‘cashing-in’ of paid sick leave, including upon termination of employment). To the extent workers may have preferred to keep their sick leave entitlement at 15 days per year, that personal preference can be achieved by the individual adopting the election mechanism provided in cl 23L(v) and (vi) of the Proposed Award, permitting employees a one off opportunity each year to make an irrevocable election in writing to have some or all of their MyLeave converted to accrued sick leave.
The MyLeave concept may need some reworking over time (recognised by its inclusion in the functions of the Award Implementation Committee: cl 44(v)), but MyLeave stands as a good illustration of how industry participants may come together to innovatively address employee claims and industry concerns by re-tooling existing entitlements (not ‘trading off’ entitlements) to strike a better balance of interests between employers and employees.
Having reviewed the Proposed Award and in light of the position of the Parties articulated in the affidavits and their oral submissions, I am satisfied that the Proposed Award:
Will set fair and reasonable conditions of employment over its nominal term.
Is in the public interest, taking into account the Objects of the IR Act, the state of the NSW economy and the effect making the Proposed Award will likely have on that economy. In that connection the evidence demonstrates it would likely have a beneficial stimulatory effect on the economy.
(a) I am satisfied that the Proposed Award, being a skills-based award, will provide equal remuneration and other conditions of employment for men and women doing work of equal or comparable value. (b) Includes not only the mandatory dispute resolution clause (cl 36 of the Proposed Award), but a number of other provisions that would:
(i) likely facilitate achievement of other Objects including “participation in industrial relations by employees and employers at an enterprise or workplace level” and “to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations” [41] (including the Workplace Consultative Committees in cl 33, the Award Implementation Committee in cl 44, and the Workplace Change mechanism in cl 41); and (ii) likely facilitate the Object of encouraging “participation in industrial relations by representative bodies of employees and employers…” [42] (in addition to cll 33, 41 and 44, cl 3 entitled “Participation in Industrial Relations by Representative Bodies of Employees and Employers”, and the repeated acknowledgment of the right of employees to be assisted by their union, including dealing with disputes and grievances and disciplinary contexts: cll 36 and cl 37A(iv)).
In those circumstances, the Commission makes the following Orders:
The proceedings in Matter No. 2026/88323 and Matter No. 2026/237690 are joined, to be heard and determined together, with evidence in one matter being evidence in the other.
Pursuant to s 10 of the Industrial Relations Act 1996, the Commission makes the Local Government (State) Award 2026 in the terms sought in the Ex 1, to operate from the first full pay period on or after 1 July 2026 (noting the award has a nominal term of 3 years).
Pursuant to s 17 of the Industrial Relations Act 1996, the Local Government (State) Award 2023 is rescinded upon the commencement of the Local Government (State) Award 2026.
**********
There are some long standing exceptions from the coverage of the 2023 Award and its predecessors outlined in its Area, Incidence and Duration clause (cl 47), that can be ignored for present purposes.
Clause 7 of the 2023 Award, read with Part B, cl 7 Rates of Pay
Ex 4 at [19(a)]; Ex 5 at [2]
As was noted by the Full Bench in Re State Wage Case 2024 (No.3) (2024) 337 111 at [174]. I note it was “the industry’s successful history of award negotiation” that resulted in local government awards securing an exemption from the “paid rates adjustment” mechanism established in Principle 6 of the 2024-2025 Award Making Principles (part of the Commission’s concern to ensure that principle would not operate to “remove incentives to reach consent positions on appropriate pay increases through bargaining: at [98] - [99])
Ex 4 at [10]
LGEA – Ex 6 at [12], DEPA – Ex 7 at [15] – [17]
See Fire Brigade Employees’ Union v Industrial Relations Secretary (on behalf of Fire and Rescue NSW) [2025] NSWIRComm 1063 at [73] to [95]
Being a case pressed under Principle 9 of what is now found in the 2025-2026 Award Making Principles established by State Wage Case 2025 (No 3) [2025] NSWIRComm 36
Noting the existence, and if present the terms of any no-extra claims commitment in a consent Award is a matter for the parties: as noted by the Full Bench Re State Wage Case 2024 (No.3) (2024) 337 IR 111; [2024] NSWIRComm 19 at [187]
As they are described in Principle 2 of the 2025-2026 Award Making Principles established by State Wage Case 2025 (No 3) [2025] NSWIRComm 36
Ex 4 at [7] – [11]
Ex 5 at [2]
Ex 5 at [5] – [6]
The oral submission updated the position of the vote expressed in Ex 5 at [10], where it was said of those that participated “approximately 93% of members voted in favour of the Proposed Award being made, with 6% voting against the Proposed Award and 1% abstaining from voting”
Ex 6 at [6]
Ex 6 at [8] – [9]
Ex 6 at [10]
Ex 6 at [11]
Ex 7 at [3]
Ex 7 at [8] – [15]
Ex 4 generally; Ex 5 at [14.1]; Ex 6 at [20]; Ex 7 at [19]
Ex 4 at [22]
Ex 6 at [21(e)]
Ex 5 at [15.4.5]
See s 23 of the IR Act
Ex 4 at [14] – [15]; Ex 5 at [14.3]; Vasilangas at [17] – [19]; Ex 7 at [21]
Proposed Award, cl 4
In cl 23G, see Ex 4 at [14(f)]
See cl 36, and Ex 4 at [18] – [23] ; Ex 5 at [14.2];
A mandatory consideration under s 146(2) of the IR Act; see Ex 4 at [16] – [23]; Ex 5 at [15]
Ex 5 at 15.3, and the report of Professor O’Brien of the University of Wollongong entitled “Local Government Needs a Pay Rise: Economic Analysis of NSW Local Government Wags in 2026, at LH4 part 6; Ex 4 at ; Ex 6 at [22]; Ex 7 at [24]
Ex 4 at [17(e) and (f)], [19(a)], [28];
Ex 4 at [20] MN3 pg 5
Ex 5 at [15.1]; Ex 6 at [21(e)]; Ex 7 at [22], [24]
Ex 4 at [17], [23]; Ex 5 at [15.4]; Ex 6 at [21]; Ex 7 at [25] – [29]
See Ex 1, cl 33C(i)(l)
See Ex 1, cl 41(i)(a)
See Ex 1, cl 44(v)
Section 3(a), (d) and (e) of the IR Act
IR Act subs 3(c) and (h)
IR Act, subs 3(d)
Further Conciliation was held on 19 and 27 March 2026. At the conclusion of the Conciliation on 27 March 2026 the parties had reached an ‘in-principle’ agreement on the most contentious terms of the Proposed Agreement, save for any headline adjustment to salaries and salary related allowances.
Leaving aside salary adjustments, perhaps the most contentious term under discussion at that time was a proposal with respect to what is now cl 23L of the Proposed Award, entitled MyLeave. Further conciliation directed primarily to that issue occurred on 1 and 7 April 2026. Agreement continued to prove elusive and so on 8 April 2026 the Commission published a Recommendation to the parties with respect to MyLeave.
At a further Conciliation on 9 April 2026 the Parties advised they had reached agreement on a proposal for MyLeave, reflecting what is now in cl 23L of the Proposed Award. That left headline increases to salaries and salary related allowances as the main outstanding matter between the Parties. At the conclusion of proceedings on that day the matter was programmed for what was anticipated to be a consent application for a new Award, after the parties finalised their negotiations regarding salary and salary related allowances, and had otherwise gone through their respective endorsement processes (including, for LGNSW a vote of its Board, and for each of the union parties, a voting process of their relevant management committees and ultimately their respective membership).
A further Conciliation to iron out remaining drafting issues took place on 20 April 2026, at which time the program for hearing was confirmed.
On 28 April 2026, following endorsement by the LGNSW Board on 24 April 2026 [5] , LGNSW put a final proposal for a new award to the Parties (reflecting the consent position on terms and conditions, and otherwise providing for increases in salary and salary related allowances of 4% in July 2026, 4% in July 2027 and 4% in July 2028), as a ‘total package’ in settlement of all claims.
On 5 May 2026, the Reserve Bank of Australia published its latest Statement on Monetary Policy. That Statement revised the outlook for headline inflation materially upwards in the near term, reflecting (amongst other things) significant and sudden increases to fuel and fertiliser prices (largely due to global disruptions, particularly the war in the Middle East), and the knock-on consequence for such increases as they pass through the economy. In broad terms, the Statement indicated headline inflation was expected to peak at 4.8% in the June 2026 quarter and ease to a low of 2.25% in mid-to-late 2027, before picking up to 2.5% by mid-2028. Trimmed mean inflation was expected to remain above 3% until mid-2027, before easing to 2.5% by early 2028.
At least two of the union parties acknowledged that during their consultation and endorsement processes with their membership, concern was raised that the pay increases provided for by the Proposed Award were (at least for a time) below current and forecast inflation [6] .
Those concerns ultimately resulted in the dispute being relisted for further Conciliation before the Commission on 26 May 2026. In the course of that Conciliation, DEPA, supported by all the other union parties, advanced a proposal for further amendment to the draft of the then proposed Award so as to provide an additional ‘leave reserved’ clause to permit further discussions during the nominal term of the Proposed Award in the event inflation continued to remain at elevated levels beyond present forecasts. No agreement could be reached on the terms of a proposed ‘leave reserved’ clause. However, the Parties were able to agree the terms of a joint statement in the following terms:
The Parties recognition of that likelihood and the commitment to approach the “benefits and challenges” potentially arising in that connection through these various consultative processes using industry and workplace consultative committees and specific consultation obligations to deal with specific change proposals (where appropriate), reflects a sensible and pragmatic approach that will, in my view, likely lead to less uncertainty, anxiety and hopefully less disputation as this wave of change meets the Local Government sector.
As for MyLeave, the proposal for MyLeave was initially advanced by LGNSW as a means of balancing some of the concerns of employers in the industry on the one hand, and (to a greater or lesser extent) a number of claims made by the unions (via their various logs of claim) on the other.
Broadly described, MyLeave provides employees (other than casuals) an entitlement to 1 week of paid leave each service year (determined by reference to the employee’s employment anniversary), to be taken for any purpose or activity. It would be able to be taken flexibly in blocks of single or multiple hours or single or multiple days. More than one consecutive day of MyLeave requires agreement of an employer, but agreement cannot be unreasonably withheld. Unlike sick, annual or long service leave, MyLeave will not accrue from year to year, and (like sick leave) will not be paid out on termination of employment. The introduction of MyLeave is balanced by a reduced annual sick leave entitlement (via an amendment of the three weeks annual sick leave in cl 23A of the 2023 Award to two), and an amendment to the existing Health and Wellbeing condition in cl 26 of the 2023 Award (cl 25 in the Proposed Award).
The primary claim of employees to which MyLeave was relevant related to leave to better enable an employee to balance work and reproductive health. The concerns of the industry represented by LGNSW included what were politely referred to as ‘cultural issues’ regarding the use of sick leave, including frequent ‘sickies’ and the wrongful use of accumulated sick leave in retirement planning.
Dishonestly claiming an entitlement to sick leave when an employee is not genuinely unable to attend for duty due to illness or injury is not only serious misconduct, it would likely amount to fraud contrary to s 192E of the Crimes Act 1900 (NSW) (dishonestly obtaining a financial advantage by deception). Addressing ‘cultural’ issues around the misuse of sick leave requires an education campaign to ensure employees understand the seriousness of such dishonesty (that I would hope would be supported by the unions collectively), and appropriate investigation and disciplinary action by employers (just as has been done in industry more generally in attempting to stamp out discrimination, bullying and sexual harassment in recent years).
Employers do not need any additional power or authority to address issues of that kind. That, however, does not mean that refashioning the suite of entitlements provided by the 2023 Award so as to reduce the generous paid sick leave entitlements to a level reflecting general industry standards (of 10 days per year: see s 96(2) of the Fair Work Act 2009 (Cth)) in conjunction with granting a more flexible type of paid leave (which of course may be used to cover absence due to illness or injury), albeit one that does not accrue from year to year or get paid out upon termination, is not a good idea in its own right, or will not provide fair and reasonable conditions of employment.
A key object of the IR Act is “to provide a framework for the conduct of industrial relations that is fair and just”. Others include “to encourage participation in industrial relations by representative bodies of employees and employers…” and “to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments” [40] . Section 26 of the IR Act, part of that fair and just framework, provides:
Is consistent with all other relevant statutory requirements. In that connection I note specifically: