Re Crown Employees (Public Sector - Salaries 2011) Award (No 3) [2011] NSWIRComm 104 (10 August 2011)

Case Title:	Re Crown Employees (Public Sector - Salaries 2011) Award (No 3)

Medium Neutral Citation:	[2011] NSWIRComm 104

Hearing Date(s):	4 August 2011

Decision Date:	10 August 2011

Jurisdiction:	Industrial Relations Commission

Before:	Boland J, President, Backman J, Tabbaa C

Decision:	The Commission orders that the Crown Employees (Public Sector - Salaries) Award 2008, the Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Salaries and Conditions) Award 2008 and the Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Salaries) Award 2008 are varied to increase salaries and salary based allowances by 2.5 per cent from the beginning of the first pay period to commence on or after 1 July 2011. At this stage, we do not intend that the Crown Employees (Roads and Traffic Authority of NSW - School Crossing Supervisors) Award be varied for the reasons expressed by counsel for the RTA. The parties are directed to confer on the terms of the variations to be made to the awards in accordance with this decision. The DPE and RTA are further directed to file and serve the terms of the variations within 14 days. Unless there is disagreement as to the terms, the Commission will make the necessary formal orders in Chambers. The proceedings are adjourned pending judgment of the Industrial Court in Matter No IRC 1276 of 2011.

Catchwords:	AWARD - Application by Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales ("the PSA") for a new award in relation to public sector salaries - Counter-applications by Director of Public Employment and Roads and Traffic Authority of NSW - Consideration of Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 - Whether Commission should grant 2.5 per cent increase as proposed in counter-applications - Operative date - Whether any variation order should contain a no extra claims provision - PSA application adjourned pending determination of challenge by PSA to validity of Industrial Relations Amendment (Public Sector Conditions of Employment) Act 2011 and Regulation in the Industrial Court - Consideration of no extra claims provisions deferred - Awards varied to provide for increase in salaries and salary based allowances of 2.5 per cent from 1 July 2011.

Legislation Cited:	Industrial Relations Act 1996 Industrial Relations Amendment (Public Sector Conditions of Employment) Act 2011 Industrial Relations (Public Sector Conditions of Employment) Regulation 2011

Cases Cited:	Burden v Walgett Shire Council [2006] NSWIRComm 169 Crown Employees (Public Sector - Salaries 2011) Award [2011] NSWIRComm 84 Crown Employees (Public Sector - Salaries 2011) Award (No 2), Re [2011] NSWIRComm 95 Maan v Minister for Immigration and Citizenship [2009] FCAFC 150; (2009) 179 FCR 581 State Wage Case 2010 (No 2) [2011] NSWIRComm 29

Texts Cited:

Category:	Principal judgment

Parties:	Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (Applicant in Matter No IRC2011/214; Respondent in Matter Nos IRC2011/1238 and 1242) Director of Public Employment and other Government Agencies (Respondent in Matter No IRC2011/214 and 1238; Applicant in Matter No IRC2011/1242) Roads and Traffic Authority of NSW (Respondent in Matter IRC2011/214 and 1242; Applicant in Matter No IRC2011/1238) Minister for Finance and Services (Intervener in all matters)

Representation

- Counsel:	Mr A Hatcher SC with Mr M Gibian of counsel for PSA (Applicant in Matter No IRC2011/214; Respondent in Matter Nos IRC2011/1238 and 1242) W G McNally Jones Staff Mr R Kenzie QC with Mr A Britt of counsel for the Director of Public Employment and other Government Agencies (Respondent in Matter No IRC2011/214 and 1238; Applicant in Matter No IRC2011/1242) Crown Solicitor's Office Mr S Prince of counsel for RTA (Respondent in Matter IRC2011/214 and 1242; Applicant in Matter No IRC2011/1238) Mr S Benson of counsel on behalf of Minister for Finance and Services (Intervener in all matters)Crown Solicitor's Office

- Solicitors:

File number(s):	IRC 214 of 2011IRC 1238 of 2011IRC 1242 of 2011

Publication Restriction:

146C Commission to give effect to certain aspects of government policy on public sector employment

(1) The Commission must, when making or varying any award or order, give effect to any policy on conditions of employment of public sector employees:

(a) that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission, and

(2) Any such regulation may declare a policy by setting out the policy in the regulation or by adopting a policy set out in a relevant document referred to in the regulation.

(3) An award or order of the Commission does not have effect to the extent that it is inconsistent with the obligation of the Commission under this section.

(4) This section extends to appeals or references to the Full Bench of the Commission.

(6) This section extends to proceedings that are pending in the Commission on the commencement of this section. A regulation made under this section extends to proceedings that are pending in the Commission on the commencement of the regulation, unless the regulation otherwise provides.

(7) This section has effect despite section 10 or 146 or any other provision of this or any other Act.

(b) a decision to approve an enterprise agreement under Part 2 of Chapter 2, and

(c) the adoption under section 50 of the principles or provisions of a National decision or the making of a State decision under section 51, and

(d) anything done in arbitration proceedings or proceedings for a dispute order under Chapter 3.

(a) the Government Service, the Teaching Service, the NSW Police Force, the NSW Health Service, the service of Parliament or any other service of the Crown, or

(b) the service of any body (other than a council or other local authority) that is constituted by an Act and that is prescribed by the regulations for the purposes of this section.

(1) The following policies are also declared, but are subject to compliance with the declared paramount policies:

(a) Public sector employees may be awarded increases in remuneration or other conditions of employment that do not increase employee-related costs by more than 2.5% per annum.

(b) Increases in remuneration or other conditions of employment that increase employee-related costs by more than 2.5% per annum can be awarded, but only if sufficient employee-related cost savings have been achieved to fully offset the increased employee-related costs. For this purpose:

(i) whether relevant savings have been achieved is to be determined by agreement of the relevant parties or, in the absence of agreement, by the Commission, and

(ii) increases may be awarded before the relevant savings have been achieved, but are not payable until they are achieved, and

(iii) the full savings are not required to be awarded as increases in remuneration or other conditions of employment.

(c) For the purposes of achieving employee-related cost savings, existing conditions of employment of the kind but in excess of the guaranteed minimum conditions of employment may only be reduced with the agreement of the relevant parties in the proceedings.

(d) Awards and orders are to resolve all issues the subject of the proceedings (and not reserve leave for a matter to be dealt with at a later time or allow extra claims to be made during the term of the award or order). However, this does not prevent variations made with the agreement of the relevant parties.

(e) Changes to remuneration or other conditions of employment may only operate on or after the date the relevant parties finally agreed to the change (if the award or order is made or varied by consent) or the date of the Commission's decision (if the award or order is made or varied in arbitration proceedings).

(f) Policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments.

(2) Subclause (1) (e) does not apply if the relevant parties otherwise agree or there are exceptional circumstances.

(3) The relevant parties in relation to a matter requiring agreement under this clause are the employer and any other party to the proceedings that is an industrial organisation of employees with one or more members whose interests are directly affected by the matter.

A Validity of Amendment Act and whether Regulation is a valid exercise of the regulation making power

1. DPE and RTA to file any application and evidence in support by 4.00 pm on 11 July 2011.

The parties agree that, during the term of this Award, there will be no extra wage claims, claims for improved conditions of employment or demands made with respect to the employees covered by the Award or the Awards, Agreements and Determinations listed in Schedule A of this Award, and, further, that no proceedings, claims or demands concerning wages or conditions of employment with respect to those employees will be instituted before the Industrial Relations Commission of New South Wales or any other industrial tribunal.

The terms of the preceding paragraph do not prevent the parties from taking any proceedings with respect to the interpretation, application or enforcement of existing award provisions.

The pay increase in this Award is made on the basis that no party may, during the term of this award up until 30 June 2012, make any extra wage claims, claims for improved conditions of employment or demands made with respect to the employees covered by the award or the awards, agreements and determinations listed in Schedule A of this award, and, further, that no proceedings, claims or demands concerning wages or conditions of employment with respect to those employees will be instituted before the Industrial Relations Commission or any other industrial tribunal.

The terms of the preceding paragraph do not prevent the parties from taking any proceedings with respect to the interpretation, application or enforcement of existing award provisions.

(1) The PSA shall, within 48 hours, file and serve a notice of motion setting out the relief it claims in relation to its challenge to the constitutional validity of the Amendment Act and its contention that the Regulation was not validly made.

(2) The Commission will sit as a Full Bench of the Commission in Court Session on 1 and 2 August 2011 commencing at 10.00am to hear the parties and intervenors on the PSA's motion.

(3) The PSA's application and the cross applications by the DPE and RTA will be the subject of conciliation proceedings before Staff J at 10.00am on 26 July 2011.

(4) Subject to the outcome of the conciliation proceedings, the Full Bench of the Commission will sit on 4 August 2011 and the necessary number of days following to hear and determine any issues between the parties that remain outstanding from the conciliation proceedings.

(a) The PSA claims increases in salaries and allowances in excess of 2.5% as justified having regard to the Commission's wage fixing principles. An increase of 2.5% would not even maintain the real value of salaries and allowances provided for under the award.

(b) The figure of 2.5% is an arbitrary figure selected by Government. There is no basis upon which the Commission would restrict the capacity of the PSA to pursue a greater increase or other claims in circumstances where the PSA's contention that the Amendment Act and/or the Regulation are invalid is currently the subject of consideration before the Industrial Court in these proceedings. The proposed "no extra claims" provision constitutes a clumsy attempt to render this critical issue moot.

(c) If the Amendment Act and Regulation are valid, the proposed "no extra claims" provision serves no practical purpose whatsoever, since the Regulation (in any event) restricts the capacity of the Commission to grant any claims which would result in an increase in employee-related costs of more than 2.5% per annum.

(d) The PSA currently has on foot proceedings brought pursuant to s 106 of the Act which concern the contractual salaries and conditions of public sector employees: see Matter No. IRC 1277 of 2011. There is no proper basis for a "no extra claims" clause to be brought which might prejudice those proceedings.

[The] Commission simply is not invested with jurisdiction to entertain claims for matters which are precluded by law, and expressly stated to be beyond the capacity of the Commission to entertain. The Respondent would be bound to object to the introduction of any evidence which was sought to be introduced for this purpose, or to accommodate a different view of the law to that which exists.

The [position] proffered by the PSA is obviously contrary to the legislation and the Commission would not countenance an approach to the proceedings (proceedings which are of considerable dimension as currently sought to be run by the PSA) on a basis that would compel the Respondent to come to grips with such a proceeding (in the absence of any evidence called by the Respondent directed to meet such a case).

[A]n attempt to compel the Respondent (and the Commission) to come to grips with an evidentiary case based on something other than the law as it stands - without regard to the relevance of any of the vast amount of material tendered by the PSA to the law as it currently stands - and indeed in circumstances where it is conceded that such material has no such relevance to the matters mandated by the Regulation.

It would be unthinkable for the Respondent, and the Commission, to be required to be involved in a proceeding which was contrary to law and driven by evidence which was adduced for purposes foreign to the legislation.

[51] Although the expression ' exceptional circumstances ' is not defined in the Regulations it has been the subject of consideration in numerous cases. Assistance in interpreting the expression can be found in comments of Lord Bingham of Cornhill CJ in R v Kelly (Edward) [1999] UKHL 4; [2000] 1 QB 198 at 208 as follows:

We must construe " exceptional " as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered . (emphasis added)

Reference was also made to Burden v Walgett Shire Council [2006] NSWIRComm 169 where Haylen J (at [42]) referred to authorities that treated a requirement for there to be "exceptional circumstances" as permitting a court to intervene in a case which appears to it to be "out of the ordinary".

(a) The PSA notified an intention to commence a major industrial case in accordance with Practice Direction 8A in January 2011 and in March 2011 commenced proceedings seeking the making of new awards providing for increases in salaries and allowances, with the first of such increases to operate from 1 July 2011.

(b) The PSA's applications were subject of directions in March 2011 providing for the preparation of evidence for a hearing from 1 August 2011 to 26 August 2011 in accordance with the existing powers of the Commission and the Commission's wage fixing principles, including the capacity to order increases in salaries retrospectively.

(c) The Amendment Act inserting s 146C into the Act received royal assent on 17 June 2011 and the Regulation was promulgated on 22 June 2011. These events occurred well after the PSA's case had commenced and after the PSA was committed to a course of seeking increases in salaries and allowances in a case set down for hearing in August 2011. Consequently, the prima facie restriction on the Commission's capacity to award retrospective increases was imposed well after the parties had committed to a procedural course which involved the PSA's claim not being heard until a month after the expiry of the current award.

(d) Further, the employees covered by the existing awards have not had any increase in salaries and allowances since July 2010. The employees have not received increases in salaries and allowances in circumstances in which inflation is currently running at in excess of 3% and an increase of 2.5% will not even maintain the real value of wages: see the discussion in State Wage Case 2010 [2010] NSWIRComm 183 at [48]- [56].