The matter before the Commission is a public sector disciplinary appeal pursuant to Part 7 of Chapter 2 of the Industrial Relations Act 1996 (IR Act). The appellant, John Thomas Ward, had been a public servant for in excess of 38 years employed in the NSW Department of Industry and its predecessors. In early 2015 the appellant was the subject of two disciplinary processes. By letter dated 28 May 2015, the Secretary of the Department (respondent), pursuant to section 69 of the Government Sector Employment Act 2013 (GSE Act), imposed disciplinary action on the appellant in the form of a formal reprimand and the discontinuance of his above level temporary assignment to the role of Senior Business Analyst (A&C Grade 9/10). It should be noted that the letter of 28 May 2015 incorrectly refers to the appellant's "above level temporary assignment to the role of Business Analyst (Water)". Business Analyst (Water) was the appellant's substantive role. The role to which he had been temporarily assigned for the previous two years and three months was Senior Business Analyst.
The effect of the latter punishment was that the appellant was returned to his substantive role of Business Analyst (Water) (A&C Grade 7/8). This decision reduced the remuneration paid to the appellant by discontinuing the higher duties allowance he had been receiving for the duration of his temporary assignment. The appeal before the Commission is brought against this decision.
Since 7 June 1993 the appellant has substantively occupied a Clerk Grade 7/8 role although the role title has changed several times during this period.
Between 1 March 2013 and 4 March 2014 the appellant was receiving a higher duties allowance under Division 2 of the Public Sector Employment and Management Regulation 2009 (2009 Regulation) in the role of Clerk Grade 9 Senior Business Analyst. Clause 18 of the 2009 Regulation provided as follows:
18 Allowance for acting or temporary appointments
(1) This clause applies when an officer is appointed to act in another position, or is temporarily appointed to another position, which is vacant or the holder of which is suspended, sick or absent.
(2) Any such officer is to be paid by allowance any difference between the officer's present salary or wage and the salary or wage to which the officer would have been entitled if appointed to that position (other than on an acting or temporary basis).
Between 5 March 2014 and 2 June 2015 the appellant was temporarily assigned under Rule 11 of the Government Sector Employment Rules 2014 (GSE Rules) to the role of Clerk Grade 9/10 Senior Business Analyst. The relevant parts of Rule 11 are in the following terms:
11 Temporary assignments
(1) A person employed in a Public Service agency may be temporarily assigned to another role in the agency (including, in the case of a Public Service senior executive, to another role in another Public Service agency) if:
(a) the person who is usually assigned to that other role is unavailable for any reason, or
(b) there is no person assigned to that other role.
Note: The regulations under the Act provide for an allowance in the case where the temporary assignment involves a higher role.
(4) A temporary assignment under this rule may be terminated at any time by the relevant employer or agency head.
(5) On completion of a person's temporary assignment under this rule, the person, unless assigned to a different role under section 38 or 46 of the Act, continues to have the role assigned to the person under section 38 or 46 of the Act immediately before the start of the temporary assignment.
(6) Sections 38 and 46 of the Act do not apply to a temporary assignment under this rule.
The GSE Rules commenced operation on 24 February 2014.
Pursuant to Clause 20 of the Government Sector Employment Regulation 2014 (2014 Regulation) the appellant was paid an allowance for performing the duties of the role of Clerk Grade 9/10 Senior Business Analyst. The relevant parts of Clause 20 of the 2014 Regulation are in the following terms:
20 Allowance for temporary assignments to higher non-executive roles
(1) A Public Service non-executive employee who is temporarily assigned by the agency head under the government sector employment rules to another non-executive role in the agency is entitled to be paid an allowance under this clause if the other role is at a higher classification of work than the employee's current classification of work.
(2) Subject to this clause, the amount of the allowance to be paid to the employee who is temporarily assigned to another role is the difference between the salary of the employee's usual role and the point in the salary range of the other role that the agency head determines is appropriate having regard to the employee's capabilities, knowledge and experience.
(3) The amount of the allowance to be paid is proportionate to the duties to be performed by the employee in the other role and is to be determined by the agency head before the employee starts the temporary assignment.
………………………
The 2009 Regulation (Clause 18(2)) used the term "such officer is to be paid by allowance". The 2014 Regulation (Clause 20(1)) uses the term "is entitled to be paid an allowance". It appears that, for the entire period from 1 March 2013 until 2 June 2015, the quantum of the allowance paid to the appellant was 100% of the difference between the rate of pay applicable to his substantive role and the rate of pay applicable to the role of Senior Business Analyst.
Under the Crown Employees (Public Sector - Salaries 2015) Award the salary for a Clerk Grade 10 Thereafter is $110,560 per annum. The salary for a Clerk Grade 8 Thereafter is $97,426 per annum. The difference between the two salary rates is $13,134 per annum or approximately $500 per fortnight, which the Public Service Association of NSW (PSA) asserts, on behalf of the appellant, constitutes a reduction in the pay of the appellant. It is also asserted that this reduction in pay will negatively impact upon the appellant's accrued extended and recreation leave entitlements as well as upon his superannuation entitlements.
There is no suggestion that the appellant's temporary assignment to the role of Senior Business Analyst was for a specified or limited period of time. It was ongoing in nature. Further, there is no suggestion that, but for the disciplinary action taken against the appellant by the respondent on 28 May 2015, his temporary assignment would have otherwise been terminated at that time.
The respondent has challenged the jurisdiction of the Commission to hear and determine this appeal on the ground that the decision which is the subject of the appeal is not an "appealable decision" as defined in Part 7 of Chapter 2 of the IR Act. Section 98 of the IR Act provides a public sector employee with a right to appeal to the Commission against an "appealable decision" of his or her employer. The immediate issue which requires determination is whether or not the decision to discontinue the appellant's temporary assignment, with the reduction in the appellant's remuneration, is an "appealable decision" as defined in section 91 of the IR Act by reference to section 97(1).
The classes of decisions which give rise to a right of appeal are set out in section 97(1) of the IR Act, the relevant parts of which are set out below:
97 Notice of certain decisions etc
(1) This section applies to the following decisions made by a public sector employer in relation to a public sector employee:
(a) …………
(b) a decision to reduce the rank, classification, position, grade or pay of the employee,
………….
Initially, the respondent submitted that the action to discontinue the appellant's above level assignment and return him to his substantive role is not appealable because it does not reduce the appellant's pay below his substantive grade and salary at the A&C Grade 8, 2nd year rate. The immediate difficulty with this submission is that section 97(1) is couched in broader terms than these. Relevantly, a "decision to reduce the … pay of the employee" is an appealable decision. The word "substantive" does not appear in the provision.
In its written submissions filed on 7 October 2015 the respondent put the proposition that the appellant was paid the rate of pay attaching to the role of Senior Business Analyst by way of an allowance. The loss of this allowance on the cancellation of the appellant's temporary assignment did not, according to the respondent, constitute a "reduction in pay" because an allowance is not "pay".
It was said that this proposition was supported by the judgement of the Federal Court in Kucks v CSR Ltd (1996) 66 IR 182. In that matter Madgwick J considered an award clause providing for the payment to an employee of "an allowance in lieu of afternoon and night shift allowances, weekend penalty rates and payment for any rostered overtime". The issue was whether or not this "allowance" should be considered as part of the employee's "ordinary rate of pay" for long service leave purposes in circumstances where the long service leave provision of the award excluded from the employee's "rate of pay … [o]vertime, commissions, bonuses, allowances or the like."
In the context of the relevant award provisions Madgwick J held that the "allowance" paid in lieu of shift allowances, weekend penalties and overtime was not part of the employee's "ordinary rate of pay". Given the particular award provisions under consideration in that case, this decision is unsurprising, but is of little assistance in determining whether or not the discontinuance of the payment of a higher duties allowance to the appellant here constitutes a "decision to reduce the … pay of the employee" in the context of section 97(1) of the IR Act.
The respondent also drew support from the judgement of Marks J in Munro v Chubb Security Holdings Australia Ltd [2000] NSWIRComm 215 at [107]-[108]. In that matter Marks J expressed the view that the payment of a "one-off" bonus to an employee should not be taken into account as part of the employee's "ordinary pay" as that term is defined in the Annual Holidays Act 1944 and in the Long Service Leave Act 1955. Each of those statutes has a lengthy and complex definition of the term "ordinary pay". Those definitions import notions such as "ordinary time rate of pay fixed by the terms of the worker's employment." Again, it is unsurprising that Marks J expressed the view that a "one-off" ex gratia payment, to which the employee had no contractual or award entitlement, was not part of the employee's "ordinary pay" as defined in the two statutes. His Honour may well have formed a contrary view if he had been considering whether the payment of a higher duties allowance consistently over a period in excess of two years should be considered as part of an employee's "ordinary pay" for annual and long service leave purposes.
In any event, the term under consideration in the present matter is not "ordinary pay" as defined in Annual Holidays Act or in the Long Service Leave Act. The relevant term is "the … pay of the employee" in section 97(1) of the IR Act, which is a clearly broader term than "ordinary pay".
The respondent argues that, unless its approach is adopted in this case, every cancellation of a temporary assignment where an allowance was payable would be regarded as an appealable decision under the IR Act and that this would be plainly inconsistent with the unfettered discretionary power to cancel a temporary appointment "at any time" (r. 11(4) of the GSE Rules). This argument is plainly wrong. Part 7 of Chapter 2 of the IR Act is concerned only with "disciplinary appeals". Where the termination of a temporary assignment and discontinuance of a higher duties allowance occurs otherwise than as part of a disciplinary process, no appeal will lie. In the present case it is clear that the decision to discontinue the appellant's temporary assignment and allowance, which he had been receiving for in excess of two years, was taken as part of the disciplinary action imposed upon him by the respondent for his misconduct.
The respondent also argues that the appellant's "position" did not change when he was temporarily assigned to another role. Whether or not this is so is beside the point. The issue for determination is whether or not the disciplinary action taken by the respondent against the appellant was a decision to reduce the pay of the appellant.
Further, the respondent relies upon rules 16 and 17 of the GSE Rules to support its submission that any change to the appellant's rank, classification, position or grade must be merit-based. Again, this proposition misses the point. The initial temporary assignment of the appellant to the role of Senior Business Analyst, and the payment to him of a higher duties allowance, did not require the application of any merit-based assessment. Any decision which may be made by this Commission to reverse the respondent's decision to discontinue the appellant's higher duties allowance, assuming that such decision of the respondent is an appealable decision, will similarly not be contrary to the GSE Rules concerning merit-based employment, just as the original decision to temporarily assign the appellant and to pay the higher duties allowance was not contrary to those rules.
The PSA, on behalf of the appellant, contends that the Commission does have jurisdiction to hear and determine this appeal. It is submitted that the term "pay", as used in section 97(1)(b) of the IR Act is not defined but must be given its ordinary meaning having regard to the context and legislative purpose.
The issue of whether or not a "special responsibilities allowance" paid to a TAFE teacher, for accepting additional responsibilities of a supervisory or administrative character, was part of the employee's "pay" for the purposes of section 23(1)(b) of the Government and Related Employees Appeal Tribunal Act 1980 (GREAT Act), the predecessor provision to section 97(1)(b) of the IR Act, was considered by the Court of Appeal in Rogan v Director-General of Technical and Further Education (1987) 10 NSWLR 348.
Section 23(1)(b), which was in Division 2 of Part 3 of the GREAT Act dealing with disciplinary appeals, relevantly provided as follows:
23 Notice of certain decisions etc
(1) Where, in relation to an employee, an employer makes a decision:
(a) ………………
(b) to reduce the rank, classification, position, grade or pay of the employee,
……………….
the employer shall, except as may be otherwise provided by an order made under subsection (3), give the employee notice, in writing, of the decision as soon as practicable after the decision is made.
In Rogan the Court of Appeal heard an appeal against a decision of the GREAT Tribunal that it had no jurisdiction to hear the appeal brought against a decision of the Director-General of the Department of Technical and Further Education. The appellant, Mr Rogan, had accepted additional responsibilities to enable a more senior officer, Mr Roberts, to complete a teacher education programme. Pursuant to clause 5 of the Crown Employees (Teachers, Technical and Further Education Teaching Service) Award approval was given for the payment to Mr Rogan of a special responsibilities allowance for the duration of the first semester of 1984. He continued to undertake the additional duties until 23 July 1984 when the employer requested that Mr Roberts undertake the additional responsibilities which Mr Rogan had performed during the absence of Mr Roberts. The employer did not continue to pay the allowance which Mr Rogan had been receiving.
Before the Tribunal Mr Rogan, the appellant, contended that the special responsibilities allowance which he had received in the first part of 1984 was part of his pay and that consequently the decision to withdraw the allowance in July 1984 was a decision "to reduce the … pay of the employee" within the meaning of section 23(1)(b) of the GREAT Act. The Tribunal held that the allowance was not part of the employee's pay. It said:
His 'pay' was the amount payable to him in respect of his office of Teacher of Welding. That 'pay' was never varied throughout the period under consideration. All that happened was that for a time he accepted responsibility for administration of the Welding section and was paid an allowance for that work. When he ceased doing that work he was no longer paid the allowance.
Accordingly, the Tribunal held that it had no jurisdiction to hear the appeal. This reasoning is very much in line with the submissions of the respondent in the present matter.
However, the Court of Appeal disagreed and held that the allowance was part of the "pay of the employee". McHugh JA (with whom Kirby P and Samuels JA agreed) stated (at 350):
The pay of an employee is a wider concept than that of the salary applicable to the office which the employee holds. It covers every payment made to the employee in his character as an employee in respect of the performance of the duties of his office or position. The allowance in this case was paid to the employee in his capacity as an employee in respect of duties performed by him on behalf of his employer. That is sufficient to make the allowance part of 'the pay of the employee'.
This statement directly contradicts the submissions of the respondent in the present matter.
However, the Court of Appeal in Rogan dismissed the appeal on the basis that the cessation of the payment of the special responsibilities allowance occurred as a consequence of the employee being no longer required to perform the additional duties. That is not the case in the present matter where the discontinuance of the allowance occurred as part of the disciplinary action taken by the respondent against the appellant for misconduct. McHugh JA further stated (at 350):
A decision to reduce pay is a compound conception. In its context in s 23, it means a decision to take away from an employee a payment which he had a legal right or entitlement to receive. Ordinarily, a reduction will be made pursuant to a power conferred on the employer by contract, statute or award. An employer does not have a common law power to reduce the pay of an employee while the contract of service continues; the power must be given by a statute or an award or by the contract itself. If the employer, pursuant to such a power, reduces the amount which the employee would otherwise receive, then the case comes within s 23(1)(b). But, in my opinion, a case is not within that paragraph when no more has occurred than that the employee is no longer eligible to obtain a payment which he earlier enjoyed.
In Rogan the cessation of the payment of the special responsibilities allowance to the appellant ceased upon the return of Mr Roberts and the resumption by him of the duties for which the appellant had been receiving the allowance. This was simply part of the administrative arrangements put in place within the Department. That is not the case in the present matter where the disciplinary action against the appellant was taken by the respondent pursuant to a power given by statute, namely section 69 of the GSE Act and resulted in the reduction of the appellant's pay.
At the hearing of the respondent's jurisdictional objection, Ms E Raper, counsel for the respondent, submitted that the relief sought by the appellant was "return to position" and that, given the fact that the appellant had been dismissed from the public service on 11 December 2015, this appeal could not proceed. The form of relief specified in the appellant's initiating application does not limit the jurisdiction of the Commission to hear and determine this appeal if jurisdiction otherwise exists to grant some form of relief, such as an order for compensation pursuant to section 100D(1)(b) of the IR Act.
I reject the submission that section 100D(3) prevents the Commission from making an order for compensation in this case because the appellant "is not reinstated or does not continue in employment". If any compensatory order is made it would necessarily be limited to the period when the appellant was employed.
Further, counsel reiterated that the allowance paid to the appellant was not part of his pay and that the decision of the Court of Appeal in Rogan was distinguishable from the present matter because "the source of the entitlement as it exists under the current Government Sector Act and the Regulations and Rules ….., that here is a clear delineation between temporary allowance and allowances and pay and by virtue of that, to the extent that the Court of Appeal was persuaded of a broad - of payment of broad import in that circumstance, you're not bound by it."
I am unable to see how an allowance paid pursuant to an award provision for performing additional duties is so qualitatively different from a higher duties allowance payable pursuant to a regulation, so as to render the former part of an employee's pay but not the latter. It seems to me that the source of the entitlement is less relevant than the basis upon which it is paid which, in both instances, is the performance of duties above and beyond those attaching to the employee's substantive rank, classification, position or grade.
In a brief supplementary written submission the respondent again contended that there was no decision made to reduce the appellant's pay. The decision made, so it was said, was to end the appellant's temporary assignment. The fact that he no longer received an allowance was a consequence of this decision, not a decision in and of itself.
I am unable to accept this submission. The decision made by the respondent was made in the context of a disciplinary process. It followed the issuing of a Letter of Charge to the appellant dated 1 May 2015 in which the Secretary of the respondent stated:
I am now at the stage where I am required to consider imposing disciplinary action. In accordance with the Government Sector Employment Act 2013, I have the following options:
The Secretary then listed the range of disciplinary measures that may be imposed pursuant to section 69(4) of the GSE Act in the event that a finding of misconduct is made. Those options included: "Reduce the remuneration currently paid to you;" and "Issue a reprimand;". Ultimately, it was these two disciplinary punishments which were imposed upon the appellant.
I regard it as an artificial exercise in semantics to put that the discontinuance of the allowance previously paid to the appellant was a "consequence" of a decision and not a "decision in and of itself". In the context of imposing a disciplinary punishment, an employer's decision to discontinue a temporary assignment which entitled an employee to receive a higher duties allowance, is, for all intents and purposes, a decision to reduce the employee's pay. The decision made was a decision to reduce the appellant's pay by discontinuing his temporary assignment and it was made for disciplinary purposes.
I reject the respondent's submission that the Commission lacks jurisdiction to hear the appeal. I also reject the respondent's submission as to the lack of utility in proceeding with this appeal, given the subsequent dismissal of the appellant from the public service.
I reject the respondent's application to have this appeal struck out.
I intend to program the matter for a hearing as to the merits of the appeal.
[4]
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Decision last updated: 04 March 2016