Secretary of the Treasury v Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales

Background 5The application arises out of a stop work meeting of members of the PSA on 8 October 2012 from 9.00 am to 1.00 pm. The stop work meeting was called by the Executive of the PSA on 27 August 2012, for the purpose of briefing members "on the attacks on wages, jobs and conditions by the O'Farrell Government, on what the PSA is doing and what more we plan to do." In its announcement calling the meeting the PSA Executive stated: Since coming to office the Government has: imposed a cap on pay rises, including passing legislation limiting the role of the industrial umpire, NSW Industrial Relations Commission. This latter part has been challenged in the High Court by the PSA. The hearing is on 5 September. Ordered agencies to cut jobs - 5,000 were ordered in their first budget, and 10,0000 jobs in the latest budget (based on a 1.2 % cut in labour costs). Cuts across the service are being announced on a regular drip-feed of information. Lodged a claim in the NSW Industrial Relations Commission to cut conditions and allowances, some of which will affect all members and others will unfairly impact on groups of members. (see (sic) PSA website at http://www.psa.labor.net.au). And today they have told the PSA and the Commission that they will be lodging awards to strip another hundred public sector conditions awards. This will include awards covering other unions as well as the other PSA conditions awards. 6It was Mr Turner's evidence that prior to the announcement of the matters giving rise to the calling of the stop work meeting, there was limited or minimal consultation by the Government with the respondent despite the changes being significant. The "claim" referred to in the PSA's announcement was an application filed by the applicant's predecessor on 6 June 2012 for a new Crown Employees (Public Service Conditions of Employment) Award ("the Conditions Award"). 7The stop work meeting was State-wide and was arranged to be webcast from the Sydney Town Hall, the site of the main meeting, to 47 metropolitan and regional venues. 8According to the evidence of Mr Bacic, on 27 September 2012 the Minister for Industrial Relations wrote to John Cahill, the then General Secretary of the respondent, inviting him to meet to discuss industrial relations issues, including concerns raised by the respondent regarding the Conditions Award. It was Mr Turner's evidence that the first time the PSA had sighted the letter was as an annexure to Mr Bacic's affidavit in these proceedings. 9It appears that what occurred next on 28 September 2012 was that the applicant notified the existence of an industrial dispute under s 130 of the Act. 10Consequently, Haylen J convened a compulsory conference on 2 October 2012. Arising out of that conference, his Honour made a recommendation that the respondent postpone the stop work meeting and take up the offer of the Minister for further discussions. A meeting took place between Mr Cahill, senior officers of the PSA and the Minister on 3 October 2012. 11There were differing views about what occurred at that meeting. Mr Turner, who attended the meeting, stated that the PSA raised its concerns about the changes to conditions for its members and the imposition of the salary cap. He said the Minister promised to get back to the PSA in relation to its concerns. Mr Turner said that up until the time he made his statement in these proceedings that still had not occurred. Mr Turner stated that: At no point in that meeting did the Minister or anyone else request that the PSA withdraw or postpone its stoppage planned for 8 October 2012. 12Mr Bacic's evidence was that whilst the meeting on 3 October 2012 was for the purpose of discussing the Conditions Award application, the respondent advised it did not intend to enter into negotiations about that matter. Further, in accordance with the Minister's undertaking to get back to the PSA, on 27 October 2012 the Minister wrote to the respondent asking that further discussions take place about the Conditions Award and seeking alternative proposals. Mr Bacic accepted that the stoppage scheduled for the following Monday was not raised in discussions on 3 October 2012. 13At some point on 3 October 2012, Haylen J issued a certificate of attempted conciliation under s 135(2) of the Act. 14Following the meeting on 3 October 2012, which occurred at about 4.00 pm, Mr Bacic emailed Mr Cahill asking him to confirm that the industrial action was postponed and to do this by 10.00 am on 4 October 2012. On the morning of 4 October, Mr Bacic received a reply from Mr Cahill. In that reply, Mr Cahill stated that the industrial action planned for 8 October had not been discussed at the previous day's meeting. Further, that once the PSA received a response from the Minister regarding the concerns it had raised in connexion with the Conditions Award, the respondent would be in a position to "decide on the postponement or otherwise of the industrial action." 15Mr Bacic said that in the evening of 4 October, he received an email notification from the respondent titled "PSA/CPSU News" confirming that the industrial action on 8 October 2012 would proceed. 16On Friday 5 October 2012, the applicant applied under s 136(1)(c) and s 137(1)(a) of the Act for orders directed at averting the stoppage of work on 8 October. At approximately 11.30 am on 5 October, Backman J made the following order and directions: ORDER 1. The Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales, by its officers, employees and members employed in the New South Wales public sector are hereby directed to refrain from taking industrial action on 8 October 2012. DIRECTIONS 1. The Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales and its officers, are hereby directed to take all reasonable steps to ensure that its members employed in the New South Wales public sector comply with Order 1, including notifying its members of Order 1 by posting this Order in a prominent position on its website within 4 hours of receipt of service. 2. Service of this Order may be effected by sending a facsimile copy to the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales or by handing a copy of this Order to an officer or employee of the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales as soon as possible upon its receipt. 3. The Order shall take effect immediately and shall remain in force until 9 October 2012. 17Mr Bacic said in his evidence that on 5 October, and after the making of the Order and the Directions, the respondent emailed a bulletin to its members and posted a notice on its website headed "STOP WORK TO GO AHEAD ON MONDAY". The posting included the Order, followed by the words: "The PSA Senior Officers have determined that the meetings on Monday 8th October will go ahead as planned." 18Mr Bacic also stated that on 5 October, the respondent posted a notice on its website headed "Public sector workers will stand up for jobs". The posting included the words: "Protests by public sector workers will go ahead on Monday, as thousands face jobs cuts and cuts to conditions under the NSW Liberal Government..." "Many thousands of our members feel they have no choice but to take a stand against the massive cuts to the public sector, to protect jobs and services. They feel a responsibility to the public of NSW to fight these cuts," Mr. Cahill said." 19Mr Bacic described the impact of the stoppage on government departments and agencies. This included the following: 913 Correctional Officers and 51 Community Offender Services staff participated in the stoppage with 3,884.96 working hours lost; the following Courts were closed or services affected due to staff taking action: (i) Newcastle, Newtown, Wagga Wagga and Griffith Courts sat but the Registries were closed for the morning. (ii) Sydney Central Court sat but with limited Sheriff services. (iii) Broken Hill and Penrith Courts did not sit until 2pm. Mount Druitt, Muswellbrook, Scone, Moruya, (iv) Nowra, Kurri Kurri, Junee, Narrandera, Glenn Innes, Inverell, Macksville, and Cobar Courts did not sit. 1,142 employees across the Department of Family and Community Services participated in the stoppage with an estimated 3,800 working hours lost; in Ageing, Disability and Homecare: (i) Case management, psychology, and therapist services were unavailable at some centres for short durations. (ii) Some day-programs at Metro Residences (residential facilities for aged clients and people with disabilities who require nursing care) were unavailable for half a day. (iii) At Riverside Centre, some clients were moved to alternative units where staffing was limited. (iv) At other centres, contingency plans were put in place to ensure continuity through skeleton staffing, and use of casual nursing staff at additional cost to support client supervision ratios and to ensure medications, feeding and personal hygiene priorities were met. in Education and Communities: (i) 38% of non-teaching staff in schools participated in the stoppage with significant impacts on the provision of care and management of students with disabilities and behaviour disorders. Some of the assistance provided by school learning support officer, required to assist teachers in school and community settings that was affected included: direct food preparation and assisting students with eating and drinking; the implementation of travel training programs; the supervision of students on excursion, work experience and travel training programs; and supervision of students with severe and/or multiple, physical and/or intellectual disabilities. (ii) A number of Schools for Specific Purposes and some special units in mainstream schools were closed because of the stop work meeting. in Transport: (i) The Roads and Maritime Services Registry in Broken Hill was closed until 1pm. 20In defence of the PSA's decision to proceed with the stoppage of work, Mr Turner said in his statement: The stop work meeting on 8 October 2012 went ahead as planned. The PSA did not cancel the meeting as it had been advertised by the PSA as a major event dealing with significant issues affecting its membership for in excess of two months. As The PSA did not believe it could cancel this long-planned event on the final business day before it was to occur in circumstances in which the membership felt very strongly about the underlying issues that lead (sic) to the calling of the meeting and members were greatly concerned about the attacks of (sic) their job security, salaries and conditions of employment which were the focus of the meeting. The PSA formed the view it would be very difficult to effectively cancel the event on Friday afternoon in circumstances in which members were likely to have already made travel and other arrangements in order to attend the meeting, the PSA had entered contractual arrangements to hire venues and secure webcast facilities which could not be undone and many members were likely to be uncontactable on 8 October 2012 as a result of it being the final day of the school holidays. The PSA had no confidence that it could fully inform its members that the meeting had been called off and believed that an attempt to call off the meeting at the stage was likely to cause confusion amongst the membership. During the duration of the stop work meeting no animal, person or building was put at risk. As a matter of general practice, the PSA will always ensure that any stop work meeting is conducted in a manner which does not cause risk to person or property. For example, the PSA ensures that skeleton staffing is maintained in correctional centres, juvenile justice centres and aged care and disability facilities. 21Mr Turner also stated that the PSA regretted that its actions led to its contravention of the dispute orders. 22I note that in January 2013, the PSA confirmed that it would not be seeking increases in salary and allowances in excess of 2.5 per cent except in accordance with the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011. What followed was that the applicant withdrew its application for a new Conditions Award.

Whether contravention admitted 23Whilst not directly admitting there had been a contravention of the dispute order, it is abundantly clear from Mr Turner's statement that he accepted the contravention occurred. Mr Turner acknowledged the stop work meeting went ahead as planned, despite the dispute order having been made, and he stated that the PSA regretted that "its actions led to its contravention of the dispute orders." 24The evidence of Mr Bacic, not challenged, also supports a finding that the contravention occurred. 25In any event, counsel for the PSA admitted the contravention occurred. Accordingly, the Court finds that the contravention, as alleged in the application, occurred.

Relevant principles 26 There was no issue about the relevant principles to be applied by the Court where a contravention has occurred. In Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) [2005] NSWIRComm 210 the Court referred to the following principles: (a) the circumstances in which the relevant contravention took place (including whether the contravention was undertaken in deliberate defiance or disregard of the dispute order); (b) whether the person found to have been in contravention of a dispute order has previously been found to have engaged in conduct in contravention of an earlier dispute order (in this respect see s 139(4)(b), which provides for higher maximum penalties where there has been an earlier contravention); (c) the consequences of the conduct found to be in contravention of the dispute order; (d) the need, in the circumstances, for deterrence; (e) any relevant subjective factors including undertakings regarding future conduct. 27In considering the circumstances in which the contravention took place, amongst any other relevant considerations the Court should have regard to whether the dispute that generated the industrial action was the subject of any conciliation proceedings before the Commission, whether the Commission made any recommendation or direction under s 134(2) of the Act, the nature of the recommendation or direction and whether there was compliance with the recommendation or direction. 28A further matter to be considered is whether the subject matter of the dispute was amenable to conciliation and arbitration under Pt 1 of Ch 3 of the Act, that is, the matters were "industrial matters", and the Commission had made itself available to deal with the underlying issues that generated the dispute if the planned industrial action were not to proceed: see for example, Director General, NSW Department of Education and Training and the Managing Director of TAFE v NSW Teachers Federation [2010] NSWIRComm 77; Director-General of the NSW Department of Education and Communities and Managing Director of TAFE NSW v New South Wales Teachers Federation [2012] NSWIRComm 58. In other words, whether there was a "sophisticated and civilised" regime available for dealing with the grievance that rendered entirely unnecessary any resort to industrial action: Fire and Rescue NSW on behalf of Department of Premier and Cabinet v New South Wales Fire Brigade Employees' Union [2012] NSWIRComm 76 at [35]. 29In considering any subjective factors the Court will have regard to whether the contravener has expressed genuine contrition and remorse for the contravention.

Circumstances in which the contravention took place 30Having accepted there had been a contravention of the dispute order, the respondent submitted there were a number of mitigating factors the Court should take into account. These factors were expressed in the following terms: (a) The stop work meeting subject of the contravention was of short duration (up to four hours) and the purpose of the meeting was to brief members in relation to matters which (on any view) were of great seriousness to the members of the PSA, including job security, pay and threatened reductions in conditions of employment. (b) The stop work meeting was scheduled more than two months (sic) in advance, thus permitting Government departments and agencies to prepare and implement contingencies. This is not a case in which a union took industrial action so as to cause maximum disruption and damage to the employer. The action was responsibly planned. (c) The dispute order was made as the consequence of a dispute notification filed more than two months (sic) after the announcement of the action. The delay bringing the matter to the Commission and, ultimately, seeking the making of dispute orders caused the PSA to be placed in a position of being ordered to cease the long-planned action on the final business day before it was to occur. (d) Some of the significant matters which were subject of the stop work meeting held on 8 October 2012 have subsequently been resolved between the PSA and the Government, including the withdrawal of the proposed changes to the Public Sector (Conditions of Employment) Award and the acceptance of the operation of the Government wages policy. 31I accept that the industrial action taken by the PSA and its members on 8 October 2012 was not of the worst kind or anywhere near it. It was not a lengthy stoppage or one of a 'wildcat' nature designed to inflict severe damage on, or disruption to, the operations of government or to inconvenience the public to any significant degree. 32Counsel for the PSA submitted that agencies and departments had six weeks' notice of the PSA's intentions regarding the stoppage. Six weeks would have been ample opportunity for the applicant to meet early with the respondent to address the respondent's concerns and/or to bring the matters in dispute to the Commission in a timely way. This would have provided the Commission with a reasonable amount of time to explore with the parties a means of resolving the issues or to use its best endeavours to have the stoppage called off whilst conciliation continued. 33Indeed, a Directive of the Department of Premier and Cabinet to all departments and agencies makes it mandatory "to seek the assistance of the Industrial Relations Commission (IRC) at the earliest opportunity and where appropriate, seek Orders from the IRC to cease or refrain from taking industrial action." 34As it was, it took the applicant five weeks to invite the respondent to meet over the issues of concern to the respondent and at about the same time the applicant notified the existence of a dispute to the Commission. That there may have been a change in the nominal employer is no reason why action could not have been taken in accordance with the Directive referred to immediately above. 35That left four days for the Commission to set in motion a process to address the respondent's concerns - which for an industrial organisation of employees were serious issues - and to attempt to avert the stoppage. This was against a background where the applicant (or his predecessor) was intending to remove Award conditions and entitlements without any prior consultation with the respondent regarding his intentions. 36To underline the benefit of allowing more time to address the respondent's concerns, some of the matters that prompted the stop work meeting on 8 October 2012 were subsequently resolved between the parties, including the withdrawal of the proposed changes to the Conditions Award and the acceptance by the PSA of the operation of the Government's wages policy. In other words, had the applicant acted promptly in addressing the respondent's undoubtedly genuine concerns, the stoppage may well have been averted. 37To contribute to circumstances whereby the application for a dispute order was left until the Friday before Monday 8 October when the stop work meeting was scheduled to occur, only served to increase the difficulty for the PSA, at least logistically, be able to call off what was a large scale stop work meeting without creating confusion amongst its membership. For instance, the PSA's membership in schools accounted for a large percentage of those that attended the stop work meetings. Friday 5 October 2012 was the last day of the school vacation period and so school assistants and the like would not have been in attendance at school and many may not have received any advice the stop work meeting had been cancelled. 38These considerations lessen the seriousness of the contravention. However, by no means do they exculpate the respondent. There is no reason why the PSA could not have brought its concerns (or at least those in respect of which the Commission could have assisted by way of conciliation) to the tribunal by way of a dispute notification as early as August 2012. It is on the cards that in the time available the Commission could have achieved at least a partial settlement of the issues in dispute on the same basis as the parties were eventually able to accomplish themselves. It is a reasonable expectation that if this had occurred, the stoppage would have been averted. 39Moreover, even if the Commission had not been successful in achieving a settlement or partial settlement of the issues in dispute before 8 October, if there had been compliance with the dispute order the process of conciliation could have continued. It seems inevitable, if that were the case, the parties, with the Commission's assistance, would have resolved the matter on the same basis as what, in fact, occurred or on some other mutually acceptable basis, or as a consequence of a recommendation by the Commission. 40What is more, despite the dispute order having been made, the PSA resolved to proceed with the stoppage. Although Mr Turner stated that the PSA formed the view it would be very difficult to effectively cancel the stoppage and had no confidence that it could fully inform its members that the meeting had been called off, it made no effort to comply with the order. In my view, regardless of the logistical problems associated with calling off the stoppage on such short notice, the respondent had a primary obligation as a responsible organisation registered under the Act to comply with the Commission's order and to do its best to deal with any problems that arose from that compliance. 41The fact that the respondent posted the order on its website was an empty gesture rendered entirely nugatory by the statement posted at the same time that, "The PSA Senior Officers have determined that the meetings on Monday 8th October will go ahead as planned." 42There may be circumstances where strike action is not amenable to the Commission's jurisdiction because it does not relate to an industrial matter. That was not contended by the PSA in this case and properly so because at least part of the PSA's grievance concerned an application by the employer to cut award-based conditions of employment. 43Thus, where an industrial organisation takes a decision to deliberately flout an order that it shall not engage in industrial action in circumstances where it does not avail itself of well established and highly effective mechanisms to deal with its industrial grievance, the organisation does so in the knowledge that it is highly probable there will be consequences adverse to the organisation.

Whether any prior penalty 44It was common ground that a penalty had not previously been imposed on the respondent for a contravention of an earlier dispute order: s 139(4)(b) of the Act. In that case the maximum penalty is one not exceeding $10,000: s 139(4)(a) of the Act.

Consequences of the contravention conduct 45According to Mr Turner's evidence, which was not effectively challenged: During the duration of the stop work meeting no animal, person or building was put at risk. As a matter of general practice, the PSA will always ensure that any stop work meeting is conducted in a manner which does not cause risk to person or property. For example, the PSA ensures that skeleton staffing is maintained in correctional centres, juvenile justice centres and aged care and disability facilities. 46Nevertheless, there was some disruption to correctional centres and court services, there was the closure of two Housing NSW offices until 1.00 pm, case management, psychology and therapist services were unavailable at some ageing or disability centres for "short durations", a "number" of Schools for Specific Purposes and "some" special units in mainstream schools were closed until 1.00 pm and one Roads and Maritime Services Registry was closed until 1.00 pm. Given the size and scope of the public sector in New South Wales, and the potential disruption that 44,000 members of the PSA could have wrought, one would have to regard the disruption as minimal. 47Furthermore, agencies and departments had six weeks' notice of the possibility of a stoppage and more than sufficient time to put in place contingency arrangements to mitigate the effect of any stoppage of work.

Deterrence 48As it was observed in Fire and Rescue NSW on behalf of Department of Premier and Cabinet v New South Wales Fire Brigade Employees' Union at [41], one of the objectives of imposing a penalty under s 139 is to deter the offender from contravening the Act in future as well as others that might contemplate similar offences. 49It has previously been observed by the Court in other proceedings that the incidence of contraventions of dispute orders is rare or almost non-existent. In those circumstances, any element for general deterrence must be small at most: Bluescope Steel (AIS) Ltd v AWU & Anor (No 2) [2005] NSWIRComm 210 at [53]; Bluescope Steel Ltd (formerly known as BHP Steel Ltd) v The Australian Workers' Union, New South Wales [2006] NSWIRComm 338 at [34]; Director-General, NSW Department of Education and Training v NSW Teachers Federation [2010] NSWIRComm 44 at [47]. 50In relation to specific deterrence, it was conceded for the applicant that this would not constitute a significant element of the penalty. This is so because the respondent has a good record in terms of industrial behaviour over a very long period of time and there is no evidence of any propensity to contravene dispute orders of the Commission. What is more, the respondent has expressed regret for its actions.

Subjective factors 51The PSA has admitted the contravention. Accordingly, there is a saving of costs and time whereby the applicant was not put to the task of proving the contravention. The respondent should have the benefit of that saving taken into account in the penalty. However, I would note the case against the respondent was strong. 52As to other subjective factors, I have already acknowledged the respondent is a good industrial citizen and has expressed regret for its action in contravening the dispute order.

Penalty 53The applicant quite fairly submitted any penalty should be at the low end of the range between $0.00 and $10,000. The respondent submitted there should be no penalty: see s 139(3)(a) of the Act. 54The applicant appeared to submit that the matters that led to the calling of the stoppage had been resolved and, therefore, there was no need for the Court to take any action with respect to the contravention in order to assist in resolving the industrial dispute. That is to say, there was no necessity for a penalty to be imposed to restore "industrial order" or prevent the escalation of the dispute. 55The penalty under the Act for contravention of a dispute order is a civil penalty: BHP Steel Ltd v The Australian Workers' Union, New South Wales [2003] NSWIRComm 151. Civil penalties have been broadly defined as "punitive sanctions that are imposed otherwise than through the normal criminal process": Gillooly M and Wallace-Bruce NL, "Civil Penalties in Australian Legislation" (1994) 13(2) U Tas LR 269 at 269-270. The purpose of the civil penalty provided for in s 139 of the Act, it seems to me, at least in part, is to punish for conduct that is non-criminal in nature. 56Therefore, regardless of whether there is any need to restore order or resolve a dispute, it is open to the Court to impose a penalty as punishment for contravention of the dispute order. 57All things considered, I have decided the penalty in this case should be $2,500.

Orders 58The Court makes the following orders: (1) The Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales is guilty of contravening the dispute order made by Backman J on 5 October 2012 in Matter No IRC 1029 of 2012. (2) The Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales is fined an amount of $2,500 in relation to the contravention that occurred on 8 October 2012. (3) The penalty imposed by order (2) hereof is payable within 28 days of the date of this judgment.

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: 12 April 2013