Industrial Relations Commission New South Wales Medium Neutral Citation: Application by Health Secretary for Broken Hill Health Employees' (State) Award (No 2) [2021] NSWIRComm 1000 Hearing dates: 5, 6, 7, 8, 19, 20, 21 and 22 May 2020 and 14 August 2020 Date of orders: 13 January 2021 Decision date: 13 January 2021 Jurisdiction: Industrial Relations Commission Before: Commissioner Sloan Decision: Finding that a special case exists for the making of a new award to apply to employees of the NSW Health Service in the Broken Hill Health Service. Directions that the parties confer with a view to reaching consensus, consistent with this decision, on: (1) the classifications to which the new award will apply; and (2) the terms to be contained in the new award. Recommendation that the effective date of the termination of the current Industrial Agreement be deferred until the date on which the new award is made. Direction that if a party does not accept this recommendation they are to inform the Registry of that fact by 4.00pm on 3 February 2021. Catchwords: EMPLOYMENT AND INDUSTRIAL LAW – Awards and enterprise agreements – Approval and creation – application for a new award – award would have the effect of displacing the exclusion of the County of Yancowinna from 29 other awards of the Commission – legal principles to apply – application of Wage Fixing Principles – question of onus – whether onus discharged by identification of another award of the Commission which would, but for its coverage terms, apply to the employees – whether the County of Yancowinna exclusion in an award is a "condition of employment" – whether the County of Yancowinna exclusion in those awards ought to be overridden – determination of terms and conditions of new award – terms to be derived in part from other awards Legislation Cited: Annual Holidays Act 1944 (NSW) s 3(1) Crown Lands Consolidation Act 1913 (NSW) Fair Work Act 2009 (Cth) s 134(1) Health Services Act 1997 (NSW) ss 115(1), 116(3), Ch 9 Pt 1, Sch 7 cl 41 Industrial Relations Act 1979 (WA) s 7 Industrial Relations Act 1996 (NSW) ss 3, 6, 8, 10, 17, 130, 135(9), 146(2), 146C, Ch 7, Dictionary Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW) cll 5(a), 6, 7 Long Service Leave Act 1955 (NSW) s 4(2) Workplace Relations Act 1996 (Cth) Cases Cited: Application for Crown Employees (Public Sector – Salaries 2020) Award and Other Matters (No 2) [2020] NSWIRComm 1066 Association of Draughting, Supervisory & Technical Employees (WA Branch) v Building Management Authority (1992) 45 IR 381 Australian Tramway Employees Association v Prahran and Malvern Tramway Trust (1913) 17 CLR 680 Award Modernisation – Statement – Full Bench [2009] AIRCFB 865 Broken Hill Commerce and Industry Consent Award [2009] NSWIRComm 1095 City of Sydney Wages/Salary Award 2014 (2014) 247 IR 386; [2014] NSWIRComm 49 Electrical Contractors Association of New South Wales v Electrical Trades Union of Australia, New South Wales Branch and Anor [2003] NSWIRComm 404 Health Employees Pharmacists Award and Other Awards (No 2) [2005] NSWIRComm 264 Health Employees Pharmacists (State) Award and other Awards (2003) 132 IR 244; [2003] NSWIRComm 453 Notification by Construction, Forestry, Mining and Energy Union (New South Wales Branch) of a dispute with Pasminco Broken Hill Mine re Enterprise Agreement [2001] NSWIRComm 215 Notification by the Broken Hill Town Employees' Union of a dispute with the Broken Hill Musicians Club Ltd re negotiations for a new collective agreement [2001] NSWIRComm 213 Public Service Association of NSW and Health and Anor v Broken Hill Town Employees' Union (2003) 125 IR 54; [2003] NSWIRComm 100 Re Corrections Health Services Nurses' (State) Award (No 2) [2001] NSWIRComm 58 Re Liverpool City Council 36 Hour Week (72 Hour Fortnight) Child Care Staff Award 2015 [2015] NSWIRComm 22 Re Pastoral Industry (State) Award (2001) 104 IR 168; [2001] NSWIRComm 27 Re Social and Community Services Employees (State) Award (2001) 113 IR 119; [2001] NSWIRComm 274 Storeworkers - IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156 The Private Hospital Nurses' (State) Award (Industrial Relations Commission of New South Wales, Schmidt J, 16 December 1994, unrep) State Wage Case 2019 [2019] NSWIRComm 1065 Transport Industry – General Carriers Contract Determination (2016) 257 IR 294; [2016] NSWIRComm 3 Texts Cited: SC Taylor, "Industrial Relations in the Broken Hill Mining Industry", The Journal of Industrial Relations, Vol 7, No 2, July 1965 William A Howard, "The Rise and Decline of the Broken Hill Industrial Relations System", Monash University, Management Paper No 34, September 1990 Category: Principal judgment Parties: Health Secretary (Applicant) Broken Hill Town Employees' Union (Respondent) Health Services Union New South Wales (First Intervener) Construction, Forestry, Mining and Energy Union (New South Wales Branch) (Second Intervener) Representation: M Seck with M Whitbread, both of counsel (Applicant) A Knox (Respondent) M Gibian SC (First Intervener) A Kentish (Second Intervener) File Number(s): 2019/77863 and 2019/203622 Publication restriction: No DECISION Background 1. The County of Yancowinna is in the far west of New South Wales, on the border with South Australia. It encompasses Broken Hill and Silverton. 2. The County occupies a unique place in the regulation of industrial relations in New South Wales. Awards of this Commission which otherwise have a common rule application across the State often exclude that County from coverage. The distinctive approach to industrial relations in the County of Yancowinna is at the heart of the matters presently before the Commission. 3. These proceedings relate to employees of the NSW Health Service [1] working in the Broken Hill Health Service ("BHHS"). The BHHS encompasses the Broken Hill Hospital "and its affiliated services in Broken Hill". [2] 4. A number of common rule awards apply to the NSW Health Service throughout the State. However, many do not apply to employees in the BHHS by reason of the awards containing terms excluding the County of Yancowinna from their coverage. 5. The terms of employment for some of the employees of the BHHS are determined by an industrial agreement made in or around 1997 between what was then known as the Health Administration Corporation and the Barrier Industrial Council representing, amongst other unions, the Broken Hill Town Employees' Union ("BHTEU") and the Construction, Forestry, Mining & Energy Union ("CFMEU"). The agreement was titled the "Far West Area Health Service Industrial Agreement". It was referred to in the proceedings as the "1997 Agreement" or the "BIC Agreement". I will refer to it as the "Industrial Agreement". 6. On its terms, the Industrial Agreement was said to operate from 1 January 1997 until 31 December 1999. However, that was a notional term only. Clause 3.3 of the Industrial Agreement was in the following terms: "3.3 If not terminated earlier in accordance with clause 3.2, this Agreement can be terminated only at or after the end of the Term by one of the parties giving at least 3 month's [sic] written notice of intention to terminate to the other parties." 1. The Industrial Agreement was amended, and its period of operation extended, by nine "memoranda of understanding" entered into between the Ministry and the Barrier Industrial Council and its affiliated unions. Those memoranda were entered into, respectively, on 22 December 2000, 17 June 2005, 30 June 2010, 3 May 2012, 23 January 2013 and 8 August 2014 and in June 2016, August 2017 and on an unspecified date in 2018. Each memorandum of understanding was expressed to operate for a defined period. The last memorandum, entered into in 2018, provided that it would expire on 30 June 2019. Again, this is to be regarded as a notional term and the Industrial Agreement continues to apply. 2. The Industrial Agreement confers certain benefits on the employees to which it applies that are in general terms more favourable than those conferred by awards applying to employees in the NSW Health Service outside of the BHHS. The ones which were the subject of particular attention in the proceedings were: 1. five weeks annual leave per annum; 2. a rate of long service leave accrual of 1.3 weeks per annum for the first 10 years of continuous service; and 3. rates of pay incorporating an amount combining a "Broken Hill Town Allowance" and a "Versatility Allowance" ("BHTVA"), to a total of $46.13 per week. 1. It was not in dispute that the Industrial Agreement (as amended) is preserved by cl 41 of Sch 7 of the Health Services Act 1997 (NSW); that as such it is a "public sector industrial instrument" as defined in the Dictionary to the Industrial Relations Act 1996 (NSW); that in turn it is an "industrial instrument" within the definition of s 8 of the Industrial Relations Act; and, as a consequence it is capable of being enforced under Ch 7 of the Industrial Relations Act. It was also common ground that the Industrial Agreement was liable to being terminated in accordance with its terms. The proceedings 1. These proceedings were commenced on 11 March 2019 by the Health Secretary [3] filing with the Office of the Industrial Registrar ("Registry") a notification of an industrial dispute ("Notification") pursuant to s 130 of the Industrial Relations Act. The Notification related to an alleged industrial dispute between the Health Secretary in respect of the Far West LHD and the Barrier Industrial Council. The description of the dispute contained in the Notification included the following: "a. The Broken Hill Barrier Industrial Council ('BIC') is in dispute with the Ministry and the District over a number of claims which have been the subject of ongoing discussion and correspondence, some of which stretch over a number of years. …As far as the Ministry understands, BICs [sic] current issues relate to: a. Allegations of underpayments of casual and permanent part time employees b. The removal of five allowances without consent from the Broken Hill Agreement c. The creation of new classifications in Broken Hill d. Alignment of BIC conditions and rates of pay with the State Awards. b. To date, the parties appear not to have been able to resolve these matters. c. Additionally, the parties have been unable to agree a new industrial instrument since 1997 when the current 1997 Broken Hill Industrial Instrument was implemented. This is despite ongoing attempts over an extended period and numerous correspondence and discussions between the parties. …" 1. The Notification described the "persons affected by or involved" in the dispute as "The Barrier Industrial Council/The Broken Hill Town Employees [sic] Union – Ms Rosslyn Ferry". Rosslyn Ferry is the Secretary of the BHTEU. 2. The Notification was the subject of conciliation by Murphy C. 3. On 28 June 2019 the Ministry filed an application under s 10 of the Industrial Relations Act for a new award to be titled "Broken Hill Health Employees (State) Award 2019" ("Application"). The terms of the award sought by the Ministry went through several iterations after the filing of the Application, with the most recent version being attached to the Ministry's closing submissions filed on 26 June 2020 ("Ministry's Closing Submissions"). That is the relevant version for the purposes of this decision. I will refer to the award sought by the Ministry as the "Proposed Award". 4. The Application was assigned a matter number separate to the Notification, in keeping with the practice of the Registry. However, both matters proceeded and were heard together. 5. Following further unsuccessful attempts by Murphy C to resolve the Notification and the Application by conciliation, both matters were allocated to me by Chief Commissioner Kite on 8 November 2019. 6. During the course of the proceedings the Ministry gave notice of termination of the Industrial Agreement. However, the termination is not conditional on the Proposed Award, or indeed any award, being made. The Ministry intends that the Industrial Agreement be terminated even were I to decline to exercise my discretion to make an award. 7. The Health Services Union New South Wales ("HSU") has members employed in the BHHS across 17 classifications. At least some of those members would be subject to the Proposed Award. The HSU was granted leave to intervene in the proceedings. 8. The CFMEU is an affiliate of the Barrier Industrial Council. It has two members who would be subject to the Proposed Award. The CFMEU sought leave to intervene at a late stage of proceedings. Leave was granted on the basis that the CFMEU be permitted to make submissions only. 9. The matter was heard by videoconference over a total of nine days, excluding interlocutory proceedings. The Ministry was represented by Mr M Seck of counsel, who appeared with Mr M Whitbread of counsel. Mr A Knox appeared for the BHTEU, which in turn represented the Barrier Industrial Council. Mr M Gibian SC appeared for the HSU. The CFMEU was represented by Mr A Kentish. The Proposed Award 1. To provide context to the discussion which follows, I will outline the key features of the Proposed Award, noting that it will be necessary to examine its terms in more detail. There is some inconsistency between the Ministry's submissions as to the intention or effect of the Proposed Award, and the terms of the Proposed Award attached to the Ministry's Closing Submissions. In determining this matter I have had greater regard to the former, primarily as the drafting of the Proposed Award in some respects is unsatisfactory and the Ministry's submissions can be taken as reflecting its claims as to what terms the Proposed Award should contain and how they should operate. 2. In simple terms, the primary aim of the Proposed Award is to put an end to the exclusion of the County of Yancowinna from awards of this Commission which otherwise apply to the NSW Health Service. If awards which apply to the NSW Health Service would have application to the classifications in which employees in the BHHS are engaged, but for the awards excluding operation within the County of Yancowinna, the Proposed Award would: 1. override the County of Yancowinna exclusion in those awards; and 2. result in the terms of those awards applying to employees of the NSW Health Service in the County of Yancowinna. 1. The Ministry's Closing Submissions provided the following outline of the intended operation and effect of the Proposed Award: "48. The proposed award has been prepared so that it can be as simple as possible. It is designed to operate in conjunction with relevant state awards that would otherwise apply but for the county of Yancowinna exclusion clauses. The proposed award covers: i. new employees engaged in the BHHS after it is made (but in positions which, in the past, would have been covered by the 1997 Agreement) (New Employees); and ii. existing employees of the BHHS, including those who are currently covered by the 1997 Agreement and those who are not but that still have an additional annual week's leave as provided for in the BIC agreement (Existing Employees). 49. In relation to New Employees, the proposed award provides that these employees' employment is to be determined by the relevant state award. That is, the proposed award has the effect of ensuring that these New Employees have an industrial instrument which applies to them in circumstances where: i. the 1997 Agreement has been terminated by the Applicant; and ii. other state awards do not apply to the New Employees by reason of their Yancowinna exclusion clauses. 50. If the Commission makes an award on the terms sought by the Applicant, the Applicant intends to make a separate application to vary existing state awards (being those listed at Schedule 2 of the proposed award) to remove the Yancowinna exclusion clauses. The Applicant proposes also to vary the proposed award once made in relation to New Employees. The Applicant anticipates that such a variation would involve: i. the Yancowinna exclusion clauses in the identified state awards clauses being amended such that they note: a) the identified state awards apply to New Employees in the county of Yancowinna; b) in respect of Existing Employees, such employees are covered by the proposed award, which deals with the grandparenting of various entitlements and refers to such identified state awards. ii. once such an amendment to the Yancowinna exclusion clauses is made the proposed award can be varied such that it no longer applies to New Employees, such Employees being employed directly under the identified state awards; and iii. from this point onwards the proposed award will then exist solely to govern terms and conditions of Existing Employees, primarily the grandparenting of their entitlements derived from the 1997 Agreement. 51. In relation to Existing Employees who are currently engaged in classifications covered by the 1997 Agreement, the Applicant intends for the proposed award to operate so that: i. on and from the date it is made Existing Employees will receive an increase in wages such that they are now paid the amounts set out in Schedule 1 of the proposed award; ii. these increased pay rates will be backdated to 1 July 2019 which means that Existing Employees will receive a lump sum payment equal to the amounts that they would have been paid had they been paid at these rates on and from that date; iii. these increased pay rates are calculated in the following way: a) the Existing Employees' current rates of pay plus the weekly value of the Broken Hill Town and Versatility Allowance (BHTVA) are combined together; and b) a 2.5% increase applied to both amounts as at 1 July 2019; iv. these Existing Employees will continue to be employed in the classifications that they worked in under the 1997 Agreement for a period of up to 12 months after the proposed award is made; v. during this 12-month transitional period, the Applicant, Existing Employees, BHTEU and any other representatives who are entitled to represent such employees will attempt to agree on the applicable state award classification that will apply to each of the Existing Employees; vi. a process will be included that addresses how this transition will take place (including how disputes about the transition of any Existing Employees are resolved); vii. so long as they stay in their current position, the Existing Employees will continue to receive the following grandparented entitlements: a) the higher rates of pay in accordance with Schedule 1 of the proposed award; b) five weeks' annual leave; and c) additional long service leave entitlements, such that long service leave is accrued at the rate of 1.3 weeks per annum on completion of 10 years' service (derived from the 1997 Agreement); viii. in relation to allowances (other than the BHTVA which is incorporated into Existing Employees' wage rates and thus will be grandparented indefinitely), during the transitional period Existing Employees will continue to receive the same allowances under the 1997 Agreement, being the allowances identified in Schedules 3, 4 and 5 of the proposed award ix. after the transitional period, the relevant allowances (again, other than the BHTVA which is preserved) will be the allowances contained in the relevant state awards; x. in respect of these grandparented allowances, the Applicant notes that other than the four allowances identified at Schedule 3 of the proposed award (pool allowance, offensive work (sewage allowance), typing qualification and pruning shrub allowance) the remainder of the allowances that the Existing Employees enjoy under the 1997 Agreement are derived from state awards in any event; and xi. the wage rates contained and preserved for Existing Employees in the proposed award will continue to be updated and indexed in accordance with NSW State Wages Policy. 52. In relation to Existing Employees in the BHHS not covered by the 1997 Agreement, such employees are currently employed pursuant to state awards (even though such awards do not apply to them by reason of the Yancowinna exclusion clauses). Such employees also currently receive an additional week of annual leave. Clause 9 of the Applicant's proposed award provides that this additional week of leave will also be grandparented for such Existing Employees." (Emphasis in original) 1. As noted at par 50 of the Ministry's submissions, Pt B Sch 2 to the Proposed Award contains a list of existing awards of the Commission that apply to the NSW Health Service ("Schedule 2 Awards"). The premise of the Ministry's submissions is that those awards do not apply to employees in the BHHS due to the County of Yancowinna being excluded from their coverage, but would otherwise apply. 2. There are 29 Schedule 2 Awards. Of those, 19 contain an express exclusion of the County of Yancowinna. [4] The remaining 10 do not contain such an express exclusion. The basis on which it was said that those 10 awards do not apply in the County was not explored before me. The answer may be that the effect of the awards is to apply to certain employees the terms of other awards that do contain such an exclusion, but in the absence of the issue having been ventilated before me I do not propose to explore the matter further. The case presented by the Ministry assumes that all of the Schedule 2 Awards do not currently have application to the County of Yancowinna. I will proceed on the same assumption, without making a determination to that effect. 3. Before turning to consider the Application, and for completeness, I observe that the BHTEU tendered a document which purported to be an alternative form of award that the Commission might make instead of the Proposed Award. The BHTEU did not, however, make a formal application for an award. During the hearing I had the following exchange with Mr Knox regarding the document: [5] "COMMISSIONER: Lovely, thank you. The other thing I just, again just so that I know what it is that I'm being asked to decide, on 11 October 2019 the BHTEU sent an email to the Commission containing, amongst other things, what is called a Without Prejudice Proposal and what appears-- KNOX: I think that might be what's being called a log of claims now. COMMISSIONER: Or is it an application? Because I think in the submissions for the ministry it is referred to as an application for a new award. So I guess the question I've got is is it being advanced in the nature of a counter application on which the union intends to rely? KNOX: I wouldn't put it that way. It's what we say would be the appropriate solution for the award. In a nutshell, it's the compilation of the old agreement and the State awards into a concurrent document, as it were. So it's not - to call it a log of claims is not right. It's our suggestion and the, if you like, the simply [sic] way forward. COMMISSIONER: But it's not - I just wanted to confirm that it's not being pressed in the nature of a counter application? KNOX: No. I think that just complicates things. COMMISSIONER: I'm glad you think so. KNOX: I think it arose out of a discussion with Commissioner Murphy that a lot of head scratching was going on about how do we actually get these things together. So no, it's a document that we would be asking you to adopt or at least large portions of it. COMMISSIONER: Okay, understood. …" 1. Based on this exchange, and having regard to the case presented by the BHTEU, I will regard the document tendered by the BHTEU as being in the nature of a submission as to how the Commission might exercise its discretion in this case. Applicable legal principles Legislation 1. The Application is made pursuant to s 10 of the Industrial Relations Act. That section empowers the Commission to make awards "setting fair and reasonable conditions of employment for employees". 2. Section 146(2) of the Industrial Relations Act requires the Commission to take into account the public interest in the exercise of its functions. For that purpose, it must have regard to the objects of the Act, and the state of the economy of New South Wales and the likely effect of its decisions on that economy. 3. The objects of the Industrial Relations Act are set out in s 3, which for present purposes relevantly provides as follows: 3 Objects The objects of this Act are as follows— (a) to provide a framework for the conduct of industrial relations that is fair and just, (b) to promote efficiency and productivity in the economy of the State, … (e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments, … (h) to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations. 1. In City of Sydney Wages/Salary Award 2014 (2014) 247 IR 386; [2014] NSWIRComm 49 the Full Bench observed: "19. The terms 'fair' and 'reasonable' in s 10 of the Act import a requirement that the conditions of employment set represent a proper and proportionate balance between the entitlements afforded employees and the interests of those employing them. 20. Consideration of what is fair and reasonable for an employee will necessarily involve a consideration of what is fair and reasonable having regard to the nature and circumstances of the employment afforded to the employee by an employer. That inquiry cannot be made in a vacuum. It must also extend to the broader context in which the employment occurs and ultimately, by effect of s 146 of the Act, the state of the economy in New South Wales. 21. The assessment required by s 10 will often involve consideration of collective relations between unions and employers or employer associations and, in appropriate cases, consideration of the history of terms and conditions that the parties chose to apply, formally and informally, to employees who will now be covered by the proposed award. 22. In particular cases, the Commission may be required to take into account not only differences between employers or industries in which employment is undertaken, but relevant differences between employees or classes of employees in a workplace, enterprise, project or industry. What may represent a fair and reasonable condition for one set of employees may not be for another, even where the employees are engaged by the same employer. That particular assessment may depend on the history as well as consideration of the present circumstances of the work to be performed." Wage Fixing Principles 1. The Commission has over the years developed Wage Fixing Principles, which provide guidance as to the making or variation of awards. Those principles, most recently re-affirmed by the Full Bench in State Wage Case 2019 [2019] NSWIRComm 1065 at Annexure A of Annexure 1, relevantly provide as follows: "8. Arbitrated Case 8.1 General Any claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the Principles, will be processed as an Arbitrated Case by a Full Bench of the Commission unless otherwise allocated by the Chief Commissioner. In determining such an application, the Commission shall, subject to the relevant provisions of the Act, do so in accordance with the following criteria: 8.2 Work Value Considerations (a) Changes in work value may arise from changes in the nature of the work, skill and responsibility required or the conditions under which work is performed. Changes in work by themselves may not lead to a change in wage rates. The strict test for an alteration in wage rates is that the change in the nature of the work should constitute such a significant net addition to work requirements as to warrant the creation of a new classification or upgrading to a higher classification. … 8.3 Productivity and Efficiency Considerations Productivity and efficiency measures that have delivered substantial costs savings and/or productivity or efficiency improvements or which have made a substantial contribution towards the attainment of the objectives of the employer (including departments and agencies of the Crown) in seeking to become more competitive and/or efficient, to which employees have made a significant contribution, may constitute the basis for increases to wages and salaries or improvements in employment conditions without the requirement to make out a special case, provided that such measures, savings or improvements have not already been taken into account in previous wage adjustments. 8.4 Special Case Considerations 8.4.1 A claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the Principles, and which is not based on work value and/or productivity and efficiency pursuant to this Principle, will be processed as a special case in accordance with the principles laid down in Re Operational Ambulance Officers (State) Award [2001] NSWIRComm 331; (2001) 113 IR 384 and the cases referred to therein at [165]-[168]. 8.4.2 All special cases shall be tested against the public interest. 8.5 Exclusions 8.5.1 Claims that are based substantially on comparative wage justice, attraction and retention or community standards will not be countenanced except as provided in Re Public Hospital Nurses (State) Award (No 3) [2002] NSWIRComm 325; (2002) 121 IR 28 and Re Health Employees Pharmacists (State) Award [2003] NSWIRComm 453; (2003) 132 IR 244. 8.5.2 There shall be no double counting, provided however, that an Arbitrated Case claim may rely upon a cumulation of the factors referred to in this Principle." 1. There was disagreement between the Ministry and the HSU as the extent to which the Wage Fixing Principles apply in this case. 2. The Ministry argued that the Arbitrated Case Principle was the "most relevant" of the Wage Fixing Principles. [6] In the Ministry's Closing Submissions it submitted: "28. The Applicant seeks that current awards applicable to NSW Health be extended to BHHS employees. In this circumstance, the Commission must start with the presumption that the terms of these awards are fair and reasonable and, accordingly, should be made to cover employees of the BHHS (City of Sydney Wages/Salary Award 2014 [2014] NSWIRComm 49 at [12]). 29. The Arbitrated Case Principle then provides that if there is to be any change in conditions (such as those which the BHTEU include in their proposed award), these should be determined with reference to employees' work value, productivity and efficiency ([8.2]-[8.3] of Wage Fixing Principles). In considering the factors relevant to a claim for increased conditions, such factors cannot be double counted ([8.5.2]). Such work value considerations include the nature of the work, skill and responsibility required and the conditions under which the work is performed ([8.2(a)]). 30. The Arbitrated Case Principle provides (at [8.2(g)]) that 'care should be exercised to ensure that change that were, or should have been, taken into account in … a structural efficiency exercise are not included in any work value evaluation under this Principle'. 31. In relation to such structural efficiency measures, in the State Wage Case August 1989 (1989) 30 IR 107 and State Wage Case August 1988 (1988) 26 IR 24 the Commission adopted structural efficiency principles set out in decisions of the Australian Industrial Relations Commission. These principles provided that 'increases in wages and salaries ... shall be justified ... if the union(s) party to an award formally agree to co-operate ... with a view to implementing measures to improve the efficiency of industry and provide workers with access to more varied, fulfilling and better paid jobs'. This included: i. eliminating impediments to multi-skilling and broadening the range of tasks which a worker may be required to perform; and ii. ensuring that working patterns and arrangements enhance flexibility and the efficiency of the industry. 32. The BHTEU and HSU have not demonstrated any basis upon which a distinction can be made in the work value of the employees of the BHHS (who the award would cover) in comparison to comparable employees in other parts of the FWLHD and throughout the rest of NSW. …" (Emphasis in original) 1. The HSU questioned the extent to which the Arbitrated Case Principle applied to the Application. In Closing Submissions which the HSU filed on 21 July 2020 ("HSU's Closing Submissions") it argued: "29. The 'first award' principle provides the most appropriate model to approach the present application. The 'first award' principle applied to 'any first award or an extension to an existing award'. The principle provided as follows: Any first award or an extension to an existing award must be consistent with the Commission's obligations under Part 1 Chapter 2 of the Act. In determining the content of a first award the Commission will have particular regard to: (a) relevant wage rates in other awards, provided the rates have been adjusted for previous State Wage Case decisions and are consistent with the decision of the State Wage Case 1989; (b) the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which the work is performed; (c) for conditions of employment, other than wage rates, prima facie the existing conditions of employment; (d) that the Award would comply with the requirements of section 19 of the Act. 30. As such, the approach traditionally adopted by the Commission with respect [to] an application for a first award to apply to a group of employees or the extension of an existing award, at least in relation to non-wage conditions of employment, was to prima facie adopt the existing conditions of the employees: Royal Australian Nursing Federation v Private Hospitals and Nursing Homes Association of Australia (1992) 46 IR 219 at 223-224; Construction, Forestry, Mining And Energy Union (New South Wales Branch) v Pasminco Broken Hill Mine Pty Limited (2001) 109 IR 75 at [200]. 31. Although the 'first award' principle has been removed from the Wage Fixing Principles, it remains a useful guide in dealing with the proposed extension of awards to award-free employees. For example, in Health Employees Pharmacists (State) Award and other Awards (2003) 132 IR 244 at [184]-[185], the Full Bench [approached] the determination of conditions of employment for employees who did not fit within the existing classification structure of an award 'on a first award basis or something analogous to it.' Similarly, the existing conditions of employees in Broken Hill are the best initial guide as to the conditions which should be included in any new award. 32. The Ministry also misunderstands the Commission's Wage Fixing Principles. The Ministry refers to and seeks to rely upon the Arbitrated Case Principle, Principle 8: State Wage Case 2019 [2019] NSWIRComm 1065, Annexure A. Principle 8 applies to 'any claim for increases in wages and salaries, or changes in conditions in awards': see Principle 8.1. There is not, in these proceedings, any claim for increases in wages or salaries or changes in conditions [of] employment for the purposes of the principle. Rather, the Ministry's application is to cut conditions of employment and, to some extent, wages and salaries. To the extent the Arbitrated Case Principle applies, it would require the Ministry to demonstrate a special case to justify the changes to conditions it seeks." (Emphasis in original; footnote omitted) 1. In "Reply Submissions of the Applicant to Closing Submissions of Other Parties" filed by the Ministry on 3 August 2020 ("Ministry's Reply Submissions"), it was contended: "22. As is noted in the Applicant's closing submissions, the first award principle was removed from the Commission's wage fixing principles in 2011. It no longer applies and does not, and cannot, apply to this matter. The Commission is obliged to give effect to the Commission's established principles in their current form, not some earlier superseded form: the Act, s 21(2). 23. If the HSU wishes for the Commission to depart from the usual wage fixing principles and apply the no longer applicable first award principle (or otherwise have special consideration to the matter having regard to the history of industrial relations in Broken Hill), it should have done so by seeking that the Commission determine this matter as a special case pursuant to principle 8.4 of the current wage fixing principles. Neither the HSU nor BIC have sought that this matter be heard as a special case and, in any event, a special case can only be determined by the Full Bench of the Commission." 1. While submitting that the Arbitrated Case Principle was the "most relevant" one for present purposes, the Ministry did not articulate which sub-principle should guide the Commission's determination of the Application. Rather, as is apparent from the passages reproduced at [32] and [35] above, the Ministry's submissions were directed to whether the BHTEU or HSU had made out a case, in conformity with the Wage Fixing Principles, for the retention of the more favourable conditions currently enjoyed by employees of the BHHS. This gives rise to the question as to who bears the onus in these proceedings, to which I will return. 2. There is an initial attraction to the HSU's submission that the Arbitrated Case Principle may not apply at all. One of the facts on which the Ministry relies is that the employees to whom the Proposed Award would apply are presently award-free. The Proposed Award would have the effect of bringing them under the coverage of the Schedule 2 Awards, which presently do not apply due to those awards containing a County of Yancowinna exclusion. On the terms of the Application, the Ministry has not brought a "claim for increases in wages and salaries". On one analysis, the Ministry may also be said not to have sought any "changes in conditions in awards", as it has made it clear that any applications to the vary the Schedule 2 Awards to remove the County of Yancowinna exclusion will only be made after the Proposed Award is made. 3. However, such an approach would be to adopt an unduly literal and technical construction of the Arbitrated Case Principle. For reasons which I set out at [54]-[61] below, it is my view that a provision excluding the County of Yancowinna is a "condition" in an award. The Proposed Award would have the effect of varying the operation of the Schedule 2 Awards by extending their coverage, even if the written terms of those awards are otherwise unchanged (for the present). It would seem illogical that an application to vary the Schedule 2 Awards under s 17 of the Industrial Relations Act must be approached in accordance with the Wage Fixing Principles, but an application for a new award which would have the same operational or de facto effect as such a variation need not. 4. I accept the Ministry's submissions that the Arbitrated Case Principle is relevant in determining the Application. However, as already noted, I received little assistance from the Ministry as to how the Principle was addressed in the context of the Application. The Ministry did not seek to make out a case based on work value or productivity and efficiency considerations. I accept the HSU's submissions that the Application should be determined under the Special Case Principle. 5. In Application for Crown Employees (Public Sector – Salaries 2020) Award and Other Matters (No 2) [2020] NSWIRComm 1066 the Full Bench observed: "31. The approach that the Commission should adopt in making or varying awards, including as a special case, has been considered by the Full Bench in numerous decisions. The principles to which we have had particular regard are as follows: … (4) In a contested case, the onus falls on the applicant to make out a case for an alteration to an award: Re Pastoral Industry (State) Award at [77]. (5) In a special case the applicant bears the onus of persuading the Commission that the application satisfies a dual test: that the terms of the award sought constitute fair and reasonable conditions of employment and that the matter in question has 'special attributes' or is 'out of the ordinary' so as to take the matter outside the restrictions which otherwise apply under the Wage Fixing Principles: Re Operational Ambulance Officers (State) Award at [166] and [168]; City of Sydney Wages/Salary Award at [16]. (6) The applicant must meet the ordinary onus to make out its case. In a special case the applicant does not bear a higher onus or standard of proof: Re Pastoral Industry (State) Award at [73]; Re Operational Ambulance Officers (State) Award at [165] and [168]. …" 1. The history of industrial regulation of the relevant employees may be a factor to consider in determining whether a special case has been established: Re Corrections Health Services Nurses' (State) Award (No 2) [2001] NSWIRComm 58 at [31], cited with approval in Re Social and Community Services Employees (State) Award (2001) 113 IR 119; [2001] NSWIRComm 274 at [312]-[313]. 2. I do not accept the Ministry's submission that "a special case can only be determined by the Full Bench of the Commission". Principle 8.1 allows for an Arbitrated Case to be allocated to a single Commissioner by the Chief Commissioner. The Application was allocated to me by the Chief Commissioner on 8 November 2019. There was no objection by any party to the proceedings being determined by a single Commissioner. The question of onus Where the onus lies 1. A question which arises from the passages from the parties' submissions reproduced at [33]-[35] above is where the onus lies in respect of the Application. It is now well accepted that the applicant for a new award, or for a variation to an award, bears the onus of demonstrating that the award or variation ought to be made: Re Pastoral Industry (State) Award (2001) 104 IR 168; [2001] NSWIRComm 27 at [77]. 2. The onus borne by a party was described by Kite AJ (as he then was) in Transport Industry – General Carriers Contract Determination (2016) 257 IR 294; [2016] NSWIRComm 3 in these terms: "34. It has long been recognized that Industrial Tribunals are in a different position to the general courts. The duty of the Commission is to make an award or determination which prescribes fair and reasonable rates and conditions. In doing so the Commission is not bound by the rules of evidence or to act in a formal manner but 'is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.' See s 163 (1)(c) of the Act. 35. The various authorities referring to the 'onus' born[e] by a party are to be understood in that context. There must be information before the Commission which allows it to be satisfied that the determination or award, if made, will provide just and reasonable rates and conditions. The assessment of the adequacy of that material will vary according to the nature of the case, including the degree of consent, before the Commission: see In re Butchers, Wholesale (Cumberland) Award 1971 AR 425 especially at 437- 440." (Emphasis in original) 1. In the Ministry's Reply Submissions it contended: "11. In contrast to the HSU's approach, the Applicant seeks that the Commission start its analysis of what is fair and reasonable in Broken Hill with the presumption that existing NSW health awards which the Applicant seeks to apply in Broken Hill by its proposed award are themselves, fair and reasonable. … 15. The Commission should, in this matter, start with the presumption that existing NSW health awards are fair and reasonable. This presumption can then be deployed also as a basis for the Commission being satisfied that the Applicant's proposed award, in so far as it seeks to apply these NSW Health awards to New Employees, is also fair and reasonable. … 29. Like claims to shorter working weeks historically derived from terminated agreements in Re Liverpool City Council 36 Hour Week (72 Hour Fortnight) Child Care Staff Award 2015 [2015] NSWIRComm 22 and Storeworkers-IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156 (the 36 Hour Cases), additional entitlements to annual leave, long service leave and the BHTVA provided for in the 1997 Agreement should not continue to be provided to employees in an award simply because they have been provided for in the past. The unions must provide evidence justifying the inclusion of such matters in addition to the matters already set out in the fair and reasonable NSW health awards. They have not done so. … HSU submissions on onus 31. The HSU submissions submit that, in these proceedings, an onus lies on the Applicant to justify a change in conditions from those historically provided for in the 1997 Agreement. That is not the correct basis upon which the Commission should approach these proceedings. 32. While the Applicant has made an application for an award to be made, the Commission's task (if it agrees an award should be made) is to determine fair and reasonable terms and conditions for such an award. In doing so, as is noted above, the Commission can start with the presumption that the existing NSW health awards were made by the Commission on fair and reasonable terms. 33. There is no onus on the Applicant in these proceedings to justify departures in any such award from conditions once contained in a terminated industrial instrument." (Emphasis in original, footnote omitted) 1. To my mind the Ministry has misapprehended the question of onus. The Ministry is the applicant for a new award under s 10 of the Industrial Relations Act. The Proposed Award would have significant consequences. New employees of the BHHS would not enjoy the benefits described at [8] above. Existing employees would continue to receive those benefits, but under qualified "grandparenting" provisions. Most significantly, the Proposed Award would override the Schedule 2 Awards to the extent that they exclude the County of Yancowinna from their application. 2. Distilled to its essence, the Ministry's case comes down to these propositions: 1. Employees covered by the Industrial Agreement are presently award-free. 2. Terms and conditions for the employees are prescribed in the Industrial Agreement. 3. Those terms and conditions subsist only while the Industrial Agreement applies. 4. The Industrial Agreement allows for termination on notice. Notice of termination has been given. 5. Once the Industrial Agreement is terminated, employees will no longer be entitled to the benefits it confers. Further, as the employees are award-free, their terms and conditions will be as contained in their employment contracts (about which there is no evidence) or as prescribed by legislation. 6. The Schedule 2 Awards would apply to the employees, but for the existence in those awards of an exclusion of the County of Yancowinna. 7. Those awards are presumptively fair and reasonable. 8. That is sufficient for the Commission to extend the operation of the Schedule 2 Awards to employees of the BHHS. 1. The effect, if not premise, of the Ministry's case is that when making an application for a new award in respect of award-free employees it need do no more than identify an existing award that would, but for that award's coverage provisions, apply to them. Having identified such an award, the presumption of fairness and reasonableness would otherwise appear to discharge the Ministry's onus (and indeed satisfy the Wage Fixing Principles). The existing award could simply be made to apply to the previously award-free employees. The onus would then fall on the unions to demonstrate that the terms of that existing award should be altered, in so far as it now applied to the relevant employees. 2. I do not accept that these proceedings should be approached on that basis. 3. It is worth reproducing again the following extract from the Ministry's Closing Submissions: "28. The Applicant seeks that current awards applicable to NSW Health be extended to BHHS employees. In this circumstance, the Commission must start with the presumption that the terms of these awards are fair and reasonable and, accordingly, should be made to cover employees of the BHHS (City of Sydney Wages / Salary Award 2014 [2014] NSWIRComm 49 at [12])." 1. It is well-established that awards of the Commission are presumed to set fair and reasonable conditions of employment. However, the passage from City of Sydney Wages/Salary Award on which the Ministry relies has to be read in context. In that case the Full Bench was considering an application for a new award to replace one which already applied to the relevant employees. The Full Bench observed: "11. In determining an application to make a new award to replace an existing award, the applicable test, pursuant to s 10 of the Act, is whether the award to be made will set fair and reasonable conditions of employment for employees: Re Club Employees (State) Award [2002] NSWIRComm 362; (2002) 122 IR 272 at [102]. 12. The presumption is that the existing award, covering the same field, already sets fair and reasonable conditions of employment for employees because it was made in conformity with the obligations imposed upon the Commission under s 10 of the Act: Re Pastoral Industry Award [2001] NSWIRComm 27; (2001) 104 IR 168 at [14]. 13. However, that presumption is rebuttable where an applicant for different terms can demonstrate, on the evidence, that the existing award does not provide fair and reasonable conditions of employment: Re Storeworkers - IGA Distribution Pty Ltd New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156; (2002) 124 IR 1 at [42]." 1. The reference in City of Sydney Wages/Salary Award to an "existing award" was clearly to one already applying to the same group of employees to whom the proposed new award would apply. The Schedule 2 Awards do not apply to the County of Yancowinna. On the basis of that exclusion there is presently no award "covering the same field". 2. The Ministry would have "existing award, covering the same field" read as being synonymous with "another award of the Commission which would, but for that award expressly excluding coverage of them, apply to the relevant employees". That is an incorrect reading of the Full Bench's observations. To my mind, City of Sydney Wages/Salary Award does not stand as authority for the proposition that an applicant for a new award need do no more than identify another award of the Commission which might, but which presently does not, apply to the employees who would be covered by the new award. Does the presumption of fairness and reasonableness apply to the County of Yancowinna exclusion? 1. A further question which arises from the approach adopted by the Ministry is why the presumption that each of the Schedule 2 Awards sets fair and reasonable conditions of employment would not extend to any provision of a Schedule 2 Award excluding the County of Yancowinna from its operation. 2. During oral submissions I had the following exchange with Mr Seck: [7] "COMMISSIONER: Well, let me put it this way. One of the terms and conditions is that the county of Yancowinna is excluded. That must also be presumed to be fair and reasonable, mustn't it? SECK: Well, I wouldn't agree, commissioner, because terms and conditions deals with the benefits which regulate the employment relationship. The county of Yancowinna extension is not a term and condition per se. What it is is a machinery clause which deals with coverage. So I think a distinction would need to be made when one looks at the expression 'terms and conditions' as it's used in s 10 of the Industrial Relations Act to talk about matters which govern the employment relationship and when one looks at the definition of 'conditions of employment' in the dictionary and I suppose we need to go back to the statutory expression as it's used in the Industrial Relations Act, I think conditions of employment means any industrial matter and I don't have the case law at my fingertips, but I think when one looks at the case law it usually means things which affect the employment relationship and govern benefits and rights and responsibilities so in my respectful submission-- COMMISSIONER: But could that not extend to a decision not to confer certain rights and conditions on a particular group of employees? Would that not be an industrial matter? SECK: No, because that would deal with - I would characterise that more as a coverage issue as to whether or not it should apply or not apply and there could be various reasons for why it should and shouldn't apply, but I think the question of whether or not the terms and conditions apply is an interior or different question to what those terms and conditions so I would seek to make that distinction, commissioner." 1. With respect, I disagree that the distinction described by Mr Seck ought to be drawn. Section 10 of the Industrial Relations Act empowers the Commission to make awards "setting fair and reasonable conditions of employment for employees". The term "conditions of employment" is defined in the Dictionary of the Industrial Relations Act to include "any provisions about an industrial matter". Section 6 of the Industrial Relations Act provides as follows: 6 Definition of industrial matters (1) General definition In this Act, industrial matters means matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry. (2) Examples Examples of industrial matters are as follows— (a) the employment of persons in any industry (including the employment of minors, trainees, apprentices and other classes of employees), (b) the remuneration (including rates of pay, rates for piece-work and allowances) for employees in any industry, (c) the conditions of employment in any industry (including hours of employment, qualifications of employees, manner of work and quantity of work to be done), (d) part-time or casual employment (including part-time work agreements), (e) the termination of employment of (or the refusal to employ) any person or class of persons in any industry, (f) discrimination in employment in any industry (including in remuneration or other conditions of employment) on a ground to which the Anti-Discrimination Act 1977 applies, (g) procedures for the resolution of industrial disputes, (h) the established customs in any industry, (i) the authorised remittance by employers of membership fees of industrial organisations of employees, (j) the surveillance of employees in the workplace, (k) the mode, terms and conditions under which work is given out, whether directly or indirectly, to be performed by outworkers in the clothing trades. 1. In Electrical Contractors Association of New South Wales v Electrical Trades Union of Australia, New South Wales Branch and Anor [2003] NSWIRComm 404 the Full Bench observed: "148 The definition of 'conditions of employment' in the Act is in the following terms: 'conditions of employment' includes any provisions about an industrial matter. 149 Section 6(1) of the Act defines an 'industrial matter' as 'matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry'. Subsection (2) 'extends' the definition by identifying some specific examples of what is to be included within the definition: see Campbells Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 53 NSWLR 393. 150 We note that conditions of employment merely 'include' provisions about an industrial matter; that is, 'conditions of employment' include 'matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry'. The expression is not, on a plain reading of the statute, limited to industrial matters; the word 'includes' normally being interpreted as a term of extension: see Wright J, President in Campbell's Cash & Carry Pty Limited v National Union of Workers', New South Wales Branch Award (2001) 104 IR 385 (at [18] - [19]), expressly adopted by the Full Bench of the Commission on appeal Campbell's Cash & Carry Pty Limited v National Union of Workers', New South Wales Branch Award (No.2) (at [15]). So much was emphasised by the Full Bench in Re Review of Principles for Approval of Enterprise Agreements 2002 where, having acknowledged that there was some 'circuitousness' in the relevant definitions, stated at [20]: As against this, however, we note that, unlike the majority of definitions contained within the Dictionary to the Industrial Relations Act , the definition of conditions of employment is an inclusive one rather than exclusive and that s 6(2) provides examples only of industrial matters. All of this leads on a prima facie basis to a conclusion that the expression 'conditions of employment' should be construed according to its ordinary meaning within the context of legislation which is directed in general terms to providing a framework for the conduct of industrial relations and to enhance, in general terms industrial relations throughout New South Wales. This much is clear from s 3 of the Act which sets out its objects. 151 The Full Bench in that decision noted the term 'conditions of employment', 'may convey different meanings depending upon the context in which it is used' (at [22]), before continuing to emphasise the 'breadth' of the definition as it is used in the Act by reference to R v Booth; Ex parte Administrative & Clerical Officers' Association (1978) 141 CLR 257 and Australian Tramway Employees Association v Prahran and Malvern Tramway Trust (1913) 17 CLR 680 at 693. 152 Whilst the Full Bench prefaced these observations by stating it was unnecessary to deal with the definition of 'conditions of employment', 'in a determinative manner' and emphasising that it 'should not do so, in the absence of a relevant factual matrix' (at [20]), we consider that the prima facie conclusion, there expressed, is correct. It is also instructive to have regard to decisions that have adopted the observations in either R v Booth or Tramways: see for example, Ives DP of the Australian Industrial Relations Commission, in National Union of Worker's v Graincorp (2002) 117 IR 136 at [34] - [41], and the Full Bench of the West Australian Industrial Relations Commission in Metals And Engineering Workers' Union — Western Australia Branch v Robe River Iron Associates (1995) 63 IR 243." (Emphasis in original) 1. In Australian Tramway Employees Association v Prahran and Malvern Tramway Trust (1913) 17 CLR 680, to which the Full Bench in Electrical Contractors Association referred with approval, Isaacs and Rich JJ observed (at 692-693): "…So that the first consideration for us is whether the claim is an 'industrial matter' within the meaning of the Act. A great wealth of argument was expended to show it was not, but notwithstanding the ingenuity and force with which the contention was pressed, we are unable to perceive any room for doubt. The statutory definition (sec. 4) of 'industrial matters' includes, inter alia, all 'privileges' and 'rights of employés,' and the 'terms and conditions of employment,' and 'all matters pertaining to the relations of employers and employés.' … Then, as to the phrase 'terms and conditions of employment or non-employment.' Read secundum subjectam materiam, as words in every document must be, the word 'employment' in relation to industrial disputes has a large meaning. It certainly includes in this place, the state of employment, the acts of service rendered by an employé during his engagement, the performance of his part in the industry. The 'terms' of employment are the stipulations agreed to or otherwise existing on both sides upon which the service is performed. The 'conditions' of employment include all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting the employment." 1. In Association of Draughting, Supervisory & Technical Employees (WA Branch) v Building Management Authority (1992) 45 IR 381 the Full Bench of the Industrial Relations Commission of Western Australia considered the meaning of the term "industrial matter" as it appeared in s 7 of the Industrial Relations Act 1979 (WA), a provision which bears some similarity with s 6 of the Industrial Relations Act 1996 (NSW). In comments which I consider to be apposite to a consideration of the NSW legislation the Full Bench observed (at 386): "This Commission is a tribunal to which employers and employees can resort to have a decision upon all issues which can legitimately be regarded as industrial issues decided. Thus, it would be inconsistent with the policy and objects of the Act to place a restrictive interpretation upon the naturally wide meaning of the words 'affecting or relating to' in the definition of 'industrial matter' in s 7 of the Act. Thus, a wide interpretation should be placed upon the definition of 'industrial matter' (see Re Cram; Ex parte NSW Colliery Proprietors' Association Ltd (1987) 163 CLR 117 at 135; 21 IR 165 at 172 and FCU v Victorian Employers' Federation (1984) 154 CLR 472 at 493-494; 8 IR 157 at 493." 1. It is a common feature of awards of this Commission that they contain an "Area, Incidence and Duration" clause, which, in simple terms, provides where, to whom and for how long the award will apply. Each of the Schedule 2 Awards has such a provision. To my mind, a term which determines the coverage of the award – who will or will not be entitled to the terms and conditions it prescribes – must be regarded as one which "affects or relates to" work done or to be done in an industry. It would make no difference if that coverage is defined by way of inclusion, exclusion or both. Such a result would seem consistent with the extracts from Electrical Contractors Association and Australian Tramway Employees Association reproduced above. 2. I find that a provision which determines the coverage of an award is a "condition of employment" within the meaning of s 10. It follows that the presumption that the Schedule 2 Awards set fair and reasonable terms and conditions extends to any provision excluding the County of Yancowinna from their coverage. 3. It also follows that the Ministry, being the applicant for a new award, bears the onus of demonstrating firstly, that an award should be made, and, secondly, that the award should be in the terms proposed. This entails establishing, in accordance with the Special Case Principle, that such an award would set fair and reasonable conditions for the employees to which it applies, including, but not limited to, making out the case for any provision which displaces or overrides the exclusion of the County of Yancowinna from the Schedule 2 Awards. Should an award be made? 1. The terms of the Industrial Relations Act make it clear that it is a matter within the discretion of the Commission whether to make an award. 2. A significant portion of the Ministry's evidence and submissions addressed the question as to why the Proposed Award ought to be made. Its position in this regard was summarised in the Ministry's Closing Submissions as follows: "70. The 1997 Agreement is an instrument which is no longer appropriate to govern the terms and conditions of employment at the BHHS. The 1997 Agreement should not inform the content of any new award. This is because the 1997 Agreement (either in its express terms or in the custom and practice which has been adopted or asserted by the parties) has three problems: i. its terms are uncertain and inadequate; ii. its terms are inflexible and restrictive; and iii. its operation results in the unjustified inequity of employment conditions between those within the BHHS and those outside of Broken Hill, including those in the FWLHD and the remainder of NSW." 1. As it transpired, it is not necessary to explore in detail the evidence and submissions of the parties on these and related matters. By the conclusion of proceedings, the BHTEU, the HSU and the CFMEU had accepted that a new award should be made. 2. In Closing Submissions filed on 20 July 2020 ("BHTEU's Closing Submissions") the BHTEU submitted: "The first question posed is, 'Should there be a new award that covers health workers in the County of Yancowinna?' Respectfully, the Commission need spend little time pondering this question. The evidence of the Applicant's witnesses, particularly its local HR manager, Ms Lawrance at T38-41 on 8/5/20, sadly ensures there must now be a rigid, single document to accommodate such attitude. But whether that is best for the community health service is moot noting Mr Riley's views on the benefit of regional flexibility versus achieving a 'one size fits all' state wide consensus." 1. In the HSU's Closing Submissions it submitted: "4. The HSU believes that there is merit in clarifying and regularising the conditions of employment of employees working within the Far West LHD, particularly in circumstances in which many of its members are likely to be award-free, by making a new award to apply to those employees. However, the merit in clarifying and regularising the conditions of employment of the relevant employees does not justify stripping away the distinct conditions in Broken Hill that have developed over many decades. 5. The dispute between the parties appears to substantially tum on the content of a new award. Any new award made by the Commission should substantially reflect the existing conditions of employment of health workers in Broken Hill. …" 1. The CFMEU supported and relied on the submissions made by the BHTEU. 2. The broad (if reluctant) consensus between the parties that a new award ought to be made means that there is little need to explore in detail the evidence and submissions put forward by the Ministry justifying the making of an award. However, it has to be observed that there was a degree of exaggeration or hyperbole in the Ministry's evidence. 3. Fiona Lawrance is the Director of People and Culture for the Far West LHD. She deposed at length as to the difficulties that she said she had encountered as a consequence of the terms and effect of the Industrial Agreement. Her evidence, though, has to be viewed in light of the fact that her knowledge as to the full terms of the Industrial Agreement was limited. On the day that she was cross-examined by Mr Knox she disclosed that she had only become aware of the 2018 memorandum of understanding (see [7] above) that morning. She had apparently not seen any of the earlier memoranda of understanding. 4. Ms Lawrance also conceded that some of the examples she had provided of the difficulties she had experienced did not arise from the terms of the Industrial Agreement itself, but more as a consequence of the Far West LHD acceding to the BHTEU's contentions as to how it was to be applied. Other examples were revealed not to be as endemic or material as Ms Lawrance's affidavit suggested. 5. Melissa Welsh is the General Manager of the BHHS. She deposed at length to difficulties that she said arose from the Industrial Agreement. Under cross-examination, however, it became apparent that the document that she regarded as the "BIC Agreement" was in fact a draft agreement from 2012. Further, Ms Welsh provided a number of examples of workplace practices that she stated the BHHS was prevented by the Industrial Agreement from implementing. Under cross-examination, though, she conceded that nothing in the Industrial Agreement operated to preclude at least some of the changes in the manner she described. 6. Dale Coombe (née Sutton) [8] is the Executive Director of Nursing & Midwifery and the Director Clinical Governance for the Far West LHD. She gave quite comprehensive evidence under the headings "Exposure to the BIC Agreement", "Difficulties with the BIC Agreement", "Executive Assistant complications", "Disputed Issues arising from the BIC Agreement" and "Cultural Problems and Inflexibility arising from the BIC Agreement". Once again, though, her evidence has to be viewed in light of the fact that there was significant doubt as to whether she had even seen the Industrial Agreement at any time prior to her affirming her affidavit. 7. Further, examples of the difficulties that Ms Sutton said were experienced by the Far West LHD in dealing with the Industrial Agreement turned out under cross-examination to be less endemic, frequent and attributable to the Industrial Agreement than her affidavit otherwise suggested. 8. In this regard I accept the following contentions in the HSU's Closing Submissions: "51. Thirdly, the asserted difficulties in relation to workplace culture or divisions within the workforce and the difficulties said to be encountered in relation to recruitment, transfer, rostering and other issues referred to in the Ministry's evidence appear to be exaggerated and substantially issues of management or clarity rather than being rationally attributable to the existence of particular conditions of employment. Ms Lawrance and Ms Welsh both gave evidence that the biggest difficulty that they had encountered was the lack of clarity in relation to what the conditions of employment are for particular employees rather than the substantive content of the conditions of employment. 52. It is sufficient to give some examples. A number of the witnesses referred to difficulties in allocating duties to particular positions, particularly in relation to the 'driver' classification. Upon examination, neither Ms Lawrance nor Ms Sutton suggested that any difficulty arose for [sic – from] the actual provisions of the 1997 Agreement as opposed to the simple fact that and [sic] objection by the BHTEU to the change. Ms Welsh asserted in her statement that some difficulty arose in relation to rostering of 'split shift'' for staff covered by the 1997 Agreement. Upon examination, Ms Welsh accepted that the 1997 Agreement contained no constraints on rostering employees with different starting times and her concern was a misapprehension. Similarly, the asserted constraints on filling positions without agreement from the BHTEU appear to be 'practice' rather than being attributable to any particular provision of the 1997 Agreement." (Footnotes omitted) 1. Ms Lawrance, Ms Welsh and Ms Sutton also deposed that their difficulties with the Industrial Agreement were exacerbated by the conduct of the BHTEU, and Ms Ferry in particular. I accept that the relationship between the BHTEU and the Far West LHD leaves a lot to be desired. To the extent that there is dysfunction in the relationship, however, it is not wholly the product of the terms of the Industrial Agreement. Nor can it be attributed solely to the actions of the BHTEU, or of Ms Ferry in particular. It is abundantly clear on the evidence that the current state of the relationship between the Ministry and the BHTEU is one for which both parties must take some responsibility. 2. The Ministry acknowledged, with what I consider to be some understatement, "that in some respects the Applicant's witnesses did not demonstrate a complete understanding of the terms of the 1997 Agreement". [9] The Ministry's witnesses included key management staff of the Far West LHD. If they lacked knowledge of the terms of the Industrial Agreement it is to perhaps to be expected that there might have been disagreements with the BHTEU as to what conditions would apply in a given situation. 3. Having regard to: 1. all of the evidence and submissions led by the Ministry as to why a new award ought to be made, and the evidence and submissions led by the other parties in reply; 2. the history of industrial regulation in Broken Hill, and in particular in relation to the BHHS; 3. the possibility of employees being left without the benefit of coverage of an industrial instrument following the termination of the Industrial Agreement (being cognisant that one of the objects of the Industrial Relations Act is to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments: s 3(e)); and 4. the fact that there is consensus, albeit reluctant, that a new award ought to be made, I find that a special case exists for an award to be made in these proceedings. For ease of reference, in the discussion which follows I will refer to the award to be made as the "New Award". 1. It is therefore necessary to consider the terms on which the New Award should be made. The County of Yancowinna exclusion 1. As already stated, one of the primary aims of the Proposed Award is to bring the BHHS under the coverage of the Schedule 2 Awards, which apply to employees of the NSW Health Service elsewhere in New South Wales. Clause 7(iii) of the Proposed Award is in the following terms: "Where a State Award that applies to the employment of any person employed under this Clause excludes the County of Yancowinna from its operation, the making of this Award shall apply that State Award to the County of Yancowinna." 1. The reference in that provision to "State Award" is to be read as referring to the Schedule 2 Awards. 2. The Proposed Award would operate to override any provision of a Schedule 2 Award which excludes the County of Yancowinna from its coverage. With those provisions having effectively been made otiose, the Ministry would then apply to vary the Schedule 2 Awards to remove them. 3. It was not suggested that the Commission as presently constituted could not make an award to the effect sought by the Ministry, despite being urged by the union parties that it would not. I consider that the jurisdiction exists to make an award containing a provision in the terms of cl 7(iii) of the Proposed Award. Even so, it is not a matter to be approached lightly. 4. The Application seeks in a de facto sense to change the operation of the Schedule 2 Awards in advance of the Ministry making applications to vary them under s 17 of the Industrial Relations Act. Under s 17 the Ministry would bear the onus of demonstrating why each Schedule 2 Award should be varied to remove the County of Yancowinna exclusion. One would expect that interested parties would wish to be heard in respect of the applications, which I would not presume would be limited to the parties in the present proceedings. In bringing the Application before making the s 17 applications the Ministry is in some respects to be seen as pre-empting the outcome of those applications. Indeed, if the Proposed Award is made the s 17 applications might largely become a formality. 5. One of the Ministry's stated aims is to have the Proposed Award preserve (in a qualified sense) particular conditions currently enjoyed by employees in the BHHS. I understand why such an award would be necessary, if the Schedule 2 Awards come to apply to the County of Yancowinna. It was not necessary, however, for the Application to be made in advance of the foreshadowed s 17 applications. They could conceivably have run in tandem. However, that is not the approach that the Ministry chose to adopt. 6. The fact that the Ministry has brought the Application prior to applying to vary the Schedule 2 Awards does not diminish the extent to which I need to be satisfied that the change, even in a practical sense, ought to be made. That is, why the New Award should override any provision of a Schedule 2 Award which excludes the County of Yancowinna from its coverage. The onus is on the Ministry to make out the case for that change. 7. Further, the particular approach to the regulation of industrial relations in the County of Yancowinna is one of long-standing. As many as 55 years ago, in an article by SC Taylor to which the Ministry referred me, that approach was summarised in these terms: [10] "Broken Hill's industrial affairs are regulated almost entirely by agreement. The State Awards exclude the County of Yancowinna and this has been the practice for a very long period. The mining industry in Broken Hill has its own unregistered industrial agreement… All the other industries in the city are regulated in this fashion. It is usual for a member of the Industrial Commission of NSW or a Conciliation Commissioner to attend at Broken Hill when required and assist in the formulation of agreements. Should there be a dispute, particularly if it results in a stoppage or threatened stoppage of work, then the Industrial Commission attends the resultant discussions, usually with substantially successful results. This is a broad general statement of the position but it sufficiently indicates the pattern. Except as indicated the parties in Broken Hill create their own industrial machinery and attend, as a general principle, to its administration." 1. In another article to which the Ministry referred me, and which provides a useful summary of the history of Broken Hill's industrial relations system, William Howard wrote: [11] "Isolation has been a critical factor in Broken Hill's history and in the development of its individual industrial style." 1. The exclusion of the County of Yancowinna from awards of this Commission is neither novel nor confined to the NSW Health Service. In The Private Hospital Nurses' (State) Award (Industrial Relations Commission of New South Wales, Schmidt J, 16 December 1994, unrep) her Honour observed: "Common rule awards are a feature of the award system of this State, both under the existing Act and under its predecessor, the Industrial Arbitration Act 1940. Both the current award and that proposed contain an exclusion in relation to those persons employed in the industry to which the award applies, in the geographical location of the County of Yancowinna. That is a very well known and long-standing feature of many current awards and their predecessors. It was an approach to the drafting of awards not sought to be challenged by Mr Warren." (Underlining in original) 1. In Broken Hill Commerce and Industry Consent Award [2009] NSWIRComm 1095 McKenna C observed: "27. I take notice of the fact that, within New South Wales industrial jurisprudence, there has been a long history of arrangements applicable to the County of Yancowinna which have differed from arrangements applying more broadly within the State. For example, it has been a routine aspect of common rule awards of this Commission and its predecessors to have State-wide operation, other than in the County of Yancowinna." 1. In Public Service Association of NSW and Health and Anor v Broken Hill Town Employees' Union (2003) 125 IR 54; [2003] NSWIRComm 100 the Full Bench had to determine an appeal against a decision of the Deputy Industrial Registrar to register the BHTEU. In the course of its decision the Full Bench observed: "26. The industrial history and circumstances of the Broken Hill region are, to a great extent, unique to the region and the BHTEU has played an important role in that history. … … 28. In industrial relations, and perhaps particularly so in the affairs of trade unions, historical circumstances have frequently had great significance and influence. So too, in the history of trade unionism, have traditions of commitment and loyalty to particular organisations. Although trade unions, as do all other organisations, have to adapt to changing circumstances, often in quite dramatic ways, the particular history and traditions of Broken Hill, which have as a feature the very long existence and history of activity and representation of the BHTEU and the fact of its apparent continued viability cannot be disregarded in considering these appeals. This is particularly so when it is recognised that the BHTEU had not previously applied for registration under the applicable industrial statute and thus has not enjoyed the advantages, both practical and legal, of registration. 29. Broken Hill therefore, for the purpose of these proceedings, may properly be said to have special features. …" 1. Federally, the Australian Industrial Relations Commission has recognised "the special nature of industrial relations in Broken Hill and its almost unique place in our industrial history": Award Modernisation – Statement – Full Bench [2009] AIRCFB 865 at [86]. 2. It is against this historical and regulatory context that the Ministry's Application falls to be considered. I had the following exchange with Mr Seck during his closing submissions: [12] "COMMISSIONER: What I'm saying is that your premise is that I should proceed on the basis that the exclusion of the County of Yancowinna is historically redundant or redundant because it's an historical anomaly and I should only look to determine the terms and conditions by reference to what happens elsewhere. My point is that as recently as 2019 your client has consented to the continued operation of awards on the basis that the County of Yancowinna would be excluded. You are now coming before me to say that's not right and I'm saying, 'What's changed?' SECK: What's changed is - well, can I start with this premise, Commissioner. Merely because we consented up to the date 2019 doesn't mean that we will do that in perpetuity. That's the starting proposition. When you're doing that, then it must be implicit in doing that that it's not going to necessarily last forever. And that does invite this question, 'What is the rationale for the county of Yancowinna exception and should the historical arrangements which underpin the 1997 agreement justify the Commission continuing the arrangements in the form of an arbitrated award?'" 1. I have already observed that the onus is on the Ministry to demonstrate that an award in the form of the Proposed Award ought to be made. To the extent that the "arrangements" to which Mr Seck referred include a provision in an award excluding the County of Yancowinna from its coverage, it is necessary to approach the question he posed with that onus in mind. 2. In so far as the BHHS is concerned, the exclusion of the County of Yancowinna from the Commission's awards is not absolute. Awards of the Commission do apply to some employees in the BHHS. Elizabeth Allen, the Director, Industrial Relations and Management in the Workplace Relations Branch of the Ministry stated: [13] "23. Current NSW Health Awards apply to Doctors and Nurses engaged at Broken Hill with NSW Health. 24. The exclusion clause for the County of Yancowinna was removed from the then Public Hospital (State) Nurses Award around 1997. The current Public Health System Nurses and Midwives (State) Award 2019 continues to apply throughout the entire State (and does not exclude the County of Yancowinna." 1. Ms Allen did not explore how the County of Yancowinna exclusion came to be removed from the former Public Hospital (State) Nurses Award in 1997. In any event, there is no evidence that the Ministry at any time prior to filing the Application sought to similarly remove the County of Yancowinna exclusion from any of the Schedule 2 Awards. A review of the Commission's records reveals that of the 19 Schedule 2 Awards which contain an express exclusion of the County of Yancowinna, all were made by the Commission in their current terms as a result of an application by the Ministry for a new award pursuant to s 10 of the Industrial Relations Act. Seventeen of them were made as recently as July 2019, following applications by the Ministry made in or about June 2019. 2. Consistently, the Ministry agreed in 2018 to continue to maintain separate industrial regulation in respect of the BHHS, by entering into the memorandum of understanding extending the operation of the Industrial Agreement to 30 June 2019. Further, the terms of that document reveal the intention of the parties for that separate system of regulation to be maintained. Clause 6 of the 2018 memorandum of understanding relevantly provides as follows: "6. Further Discussions … During the term of the MOU, the parties and Far West Local Health District will continue to review the Barrier Industrial Council Agreement of 1997, with a view to formulate [sic] a new industrial instrument that consolidates the current terms and conditions of the 1997 agreement and associated variations, (eg: through subsequent MOUs). Such discussions shall be within the confines of the No Extra Claims provisions continued [sic – contained] herein." 1. The memoranda of understanding referred to at [7] above made since 2016 have contained a similar provision. Nothing appears to have been done by any party since 2016 to give effect to these commitments. However, there is no suggestion that prior to the filing of the Application the Ministry ever took issue with, much less sought to change, a separate system of industrial regulation for the BHHS. What, then, is the Ministry's case for change? 2. Ms Lawrance deposed that having lived and worked in Kalgoorlie and Mt Isa, she was "very familiar with living and working in a remote regional town that was underpinned by the operations of a mine". [14] She stated that she had "had employees complain to [her] of the inequity of BHHS employees receiving additional leave and entitlements". [15] Under cross-examination Ms Lawrance was asked by Mr Gibian how many employees had complained, to which she answered "Probably at least four". [16] To put this in context, Ms Lawrance stated that there were 963 employees in the FWLHD, with 790 being employed in Broken Hill and 213 being covered by the Industrial Agreement. 3. Ms Lawrance further stated: [17] "43. Because I have worked at hospitals in a range of rural areas since 1979, I am familiar with the conditions that rural hospitals operate under, as well as the issues faced in the delivery of health services in rural communities. Based on my experience working in rural health services, I do not believe that Broken Hill is unique with respect to its community, health or social issues or working conditions as compared to hospitals in other rural and remote areas in NSW, Western Australia and Queensland in which I have previously worked or in respect of the other towns in the FWLHD. 44. With respect to other hospitals within the FWLHD that I have attended, and based on my interactions and discussions with the District Manager for the health services outside of BHHS and the managers of each of those health services, I have observed that each hospital in the district faces similar social, community and health issues that impact on the ability to provide healthcare in their respective communities. In fact, I have observed while visiting the other hospitals and health services with FWLHD, that in some respects, other towns within the FWLHD, such as Menindee and White Cliffs are more remote than Broken Hill and for smaller populations, fewer social services, limited accessibility and larger aboriginal populations, these deal with more challenges than are seen in Broken Hill, both in respect of living conditions as well as the health challenges that arise from such isolated communities." 1. Ms Welsh deposed to having grown up in Broken Hill and having lived there all her life, other than for the period 1993 to 2007. She stated: [18] "14. I have seen changes in Broken Hill from when I grew up to when I returned, and I can also observe the differences in living in a regional town like Broken Hill from a capital city such as Adelaide. Broken Hill has various social, economic and political challenges, as with anywhere in Australia, but in my experience, there is a view among some residents in Broken Hill that the problems faced here are particularly unique, especially in circumstances where much of the town has revolved around the mines which have gone through periods of boom but also significant closures. In reality, and again based on my experiences in outreach in smaller communities in the FWLHD, there are many towns, particularly in the FWLHD facing a lot of similar challenges, even those which do not operate around mines. … 22. I have been told, but I do not recall by whom, that the BIC Agreement is necessary to address unique issues faced in Broken Hill. One of the unique issues supposedly faced by Broken Hill is its remoteness. However Broken Hill is not more remote than other smaller towns in the FWLHD such as Wilcannia, Tiboobura and Ivanhoe. 23. On the ABS Remoteness Index, Broken Hill is classified as 'remote' but places such as Tiboobura, which is four hours away from Broken Hill, is considered to be 'very remote'. When it rains you are completely cut off in Tiboobura because the roads are not properly sealed and therefore cannot be accessed. Wilcannia is two hours away from Broken Hill, White Cliffs three hours, and Ivanhoe five hours and these towns are all classified as 'very remote'. All of these towns must be driven to or accessed by small plane or helicopter (such as the Royal Flying Doctor Service) and none of them are serviced by the regional airline REX. Due to the quality of the roads, the travel time to some of these towns can increase two or three fold, thereby compounding their remoteness." 24. Towns like Ivanhoe, White Cliffs and Tiboobura have low population numbers. They are mainly agriculturally based whereby the properties are all suffering in recent years as a result of the drought. There are extremely limited employment opportunities with each of those towns having only the health service, maybe a small school (not all committees) and a few shops, fuel station and pub. There is a prison in Ivanhoe but this is set to close soon. In White Cliffs many of the residents live underground to deal with the extreme heat. This is not something that we face in Broken Hill where although still a desert climate, the temperatures are not as extreme. These towns do not have services like mechanical, dental and commercial the same way that Broken Hill does." 1. Ms Sutton also deposed as to "the inequity which arises from the existence of more than one arrangement for employees doing the same work in different parts of the FWLHD". [19] During the hearing I had the following exchange with Ms Sutton: [20] "Q. A couple of other questions. You were asked by Mr Knox earlier today some questions and you expressed the view that it's unfair that nurses in Wilcannia and other places do not get the same benefits as those in Broken Hill and that you said that some employees outside of Broken Hill have complained to you about Broken Hill employees getting five weeks annual leave. Do you recall that? A. Yes. Q. And that included employees in Menindee and like places, correct? A. Yes. Q. Do they complain about any other entitlements that the Broken Hill staff get that they do not receive? A. No. I've only been - they've only discussed with me that they're familiar that in Broken Hill you get five weeks annual leave. Q. And is their position, when they have spoken to you about it, has their position been that the staff at Broken Hill should lose that entitlement or that those in Menindee and like places should get it? A. I think in reality they think they should get it. Q. Yes, thank you. A. I haven't - they haven't expressed that they believe Broken Hill should lose it. They believe it's unfair and obviously would like to enjoy five weeks annual leave. Q. Yes, and the unfairness you talk about, to pick up on that last point, could just as easily be rectified by giving all of the employees the same benefit rather than taking it away from those that have it, correct? A. Yes, it could." 1. The HSU read an affidavit of Ms Darriea Turley AM, who is employed as the Manager Community Engagement for the Far West LHD. She is also the Mayor of Broken Hill. Ms Turley deposed that she was born in Broken Hill and has lived there all of her life. She has been employed in the NSW Health Service in Broken Hill for more than 40 years. 2. In large part, Ms Turley's evidence went to the need, in her view, to maintain an entitlement to five weeks annual leave. In doing so she deposed to "Broken Hill's geographical and social isolation, and declining and ageing population". [21] 3. Under cross-examination, Ms Turley had the following exchange with Mr Seck: [22] "Q. And given that you've lived there for 40 years, certainly during the course of your lifetime comparing to a time when you were a child to now, there's been in your observation a decline in the economy of Broken Hill, not meaning any disrespect but-- A. Yeah, and I think it goes back to that point in 26 about, you know, the declining population, the aging community, how our workforce is changing, you know. It represents that and, you know, how the education is because, you know, it is - I haven't lived at Broken Hill for - I've just realised I've worked in health for 40 years. I've lived in Broken Hill for 60 years next week and so when you look at the issues about the workforce, the workforce used to be very different and, you know, nurses were trained in Broken Hill. They don't anymore, you know. A lot of the courses that traditionally were hospital based has changed. Now you have to go to universities for them. So, you know, there are big changes and why all rural towns do not have those population basis like we used to have. Q. And I think implicit in that paragraph there's a change in demographics within Broken Hill as well, correct? A. Absolutely, yes. Q. And the younger people are leaving Broken Hill? A. Well, the younger people are looking - need to access education and for most people when they're looking at training in jobs, they leave. They will go to university. They'll probably get a student placement close by to the university so they can access that and then when Broken Hill is looking at recruiting, they will probably look at a lifestyle and think it's better on the coast than it is in the outback and so a strategy, you know, that's why I'm really keen to maintain this one week's particularly around that, to ensure that we do look at our recruitment and retention. Q. And do you find that a lot of people who used to live in Broken Hill and grew up there return to Broken Hill? A. No. Otherwise we'd have our population increase and we'd all be happy. So no but, I mean, I think there's an age and stage for everything and so for some people they may look when they're older but not, you know, when they're looking at developing a career you really have to put something out to attract them back. Even for the mining industry, they will do that. Q. And so just to summarise it, it's actually quite a complex situation as to what attracts people to work in Broken Hill and what leads people to leave Broken Hill. Would you agree? A. I would agree. Q. And there are going to be a complex range of different factors in trying to get people to move to Broken Hill or stay in Broken Hill? A. It's interesting, I was thinking about this the other day, that I was at the airport at late January, early February and there was a couple there and I was chatting, as at the airport I always chat to people, and I asked them what they were doing and they said that they'd just been interviewed for positions in Broken Hill and I said, 'That's interesting,' and I said, 'Are you going to take it?' and they said, 'Your housing is very cheap and we found out that we have that extra week that we can move where we'll have some flexibility.' So, you know, it is complicated, it is challenging and for all of us, you know, it's not just Broken Hill, it's these remote towns we should be looking at. Q. And so you just mentioned one factor. So one factor which you think might be an attractive factor to move to Broken Hill or to remain in Broken Hill is cheap housing? A. Yes. If you can afford a house." 1. In the Ministry's Closing Submissions it contended: "96. Existing inequalities between the BHHS and the rest of the FWLHD and NSW arise because of the unique industrial history of the county of Yancowinna and the negotiated industrial instruments which the BHTEU and BIC were able to enter into with the FWLHD. 97. Historically, industrial arrangements in the county of Yancowinna have been negotiated between employers and the BHTEU or other trade unions. 98. Through this negotiation process, and as a consequence of the historical prosperity of the mining industry in Broken Hill, negotiated agreements fixing conditions for workers other than mining workers also saw increased remuneration in line with the increased remuneration of mine workers, resulting in higher costs of commodities and services in Broken Hill such that standard wage rates in other industries were of less value to local employees (Re Industries other than Mining and Smelting (Broken Hill) Conciliation Committee 1936 AR 368 at 372). 99. There is no principled justification for the unique preferential unique [sic] treatment of non-mining workers in Broken Hill. Additionally, as the Mayor of Broken Hill, Ms Darriea Turley, acknowledged in cross-examination, the mining industry has declined significantly in Broken Hill over recent history. When asked 'if one wanted to earn money, the mining industry would be the place to work in Broken Hill?' Ms Turley answered 'it use to be but it is not anymore'. Ms Turley explained that the mining industry, and the economy in Broken Hill generally, had declined over the last 40-60 years, which she attributed to declining population, an aging community and young people moving to cities and other areas to pursue education and other opportunities. …" (Emphasis in original; footnotes omitted) 1. For completeness I observe that the Ministry's submissions proceeded to make reference to and draw conclusions from data said to have been obtained from the Australian Bureau of Statistics relating to the 2016 census. That information was not in evidence and the HSU objected to reliance being placed on it. I have afforded little weight on the Ministry's submissions in this regard. 2. The Ministry further contended that "Broken Hill is no different to any other remote location in NSW, such as Wilcannia, Tibooburra or Balranald". [23] 3. The BHTEU's Closing Submissions stated: "4. The third 'confusion' arises from the Applicant's witnesses [sic] view of alleged 'inequity' arising from the existence of the BIC 1997 agreement. It was a 'theme' expressed by the Applicant's four witnesses in their sworn statements. The thrust of that 'theme' was the majority of workers in Broken Hill must face reductions in their leave, wages and allowances because their few colleagues working outside the County of Yancowinna do not have the same benefits. At the same time the Applicant's witnesses saw no inequity arising from new employees working side by side with 'grandfathered' employees in identical roles but on inferior pay and conditions." 1. In the HSU's Closing Submissions it was contended: "53. Fourthly, the Ministry relies on alleged 'inequity' in the conditions of employment applying to employees in Broken Hill. The evidence in support of the assertion [sic – asserted] inequities or any adverse consequences arising from the asserted inequity was weak. For example, the Ministry relies upon the existence of staff grievances caused by inequities which arise from health workers having different terms and conditions of employment at different locations. Upon examination, Ms Lawrance indicated that concerns had been expressed to her by maybe a total of four employees. The evidence does not support the proposition that any distinction in the conditions of employment in Broken Hill has produced any particular practical difficulties. … 55. Fifthly, the Ministry contends that there are not distinctive features to Broken Hill which justify the existence of different conditions of employment for employees working within Broken Hill. The Ministry's submissions in this respect are primarily based on reference to Australian Bureau of Statistics information comparing certain income and housing cost data in Broken Hill and Bankstown. That information is not in evidence and the relevance of a comparison between Broken Hill and Bankstown is unclear. The Ministry further relies on a text entitled The Rise and Decline of the Broken Hill Industrial Relations System which is also not in evidence. Submissions based on material not in evidence must be disregarded. 56. In any event, the Ministry's submissions are misconceived. Some of the distinctive terms and conditions afforded to employees in Broken Hill have, no doubt, traditionally been derived from the remoteness of the town and associated disabilities for employees and attraction and retention issues as well as the distinctive history of the mining industry in the town. The Ministry cannot justify the removal of those conditions, such as the additional provision of annual leave and allowances, simply by pointing to other locations which are as remote or more remote. Broken Hill is unarguably a remote location irrespective of comparison with any other location. The logic of the Ministry's submissions support the extension of those conditions to other remote locations and not their removal in Broken Hill. 57. For these reasons, the rationale advanced by the Ministry in support of changing the substance of the conditions of employment afforded to health employees in Broken Hill is unpersuasive and should not be accepted by the Commission." (Emphasis in original; footnotes omitted) 1. At the risk of oversimplification, the Ministry's submissions can be distilled into two broad propositions. Firstly, that the County of Yancowinna exclusion is an historical anomaly. The unique features that might once have justified the exclusion no longer exist and there is no basis on which it should be maintained. 2. The case presented by the Ministry did not in any substantive way explore why the County of Yancowinna was initially excluded from awards of the Commission, let alone specifically from the Schedule 2 Awards. Without that context, I obtained little assistance from high-level evidence as to the ways in which Broken Hill has changed in the last 10 to 20 years. That is, the existence of change in Broken Hill was presented without a basis from which to discern the case for changing the current industrial arrangements. 3. Secondly, the Ministry relied on the alleged "inequity" of employees in the County of Yancowinna enjoying more favourable conditions of employment to those provided to employees of the NSW Health Service elsewhere in the State. My particular attention was drawn to even more remote and less well-serviced locations in New South Wales where the employees do not enjoy, for example, five weeks annual leave per annum. 4. As noted by both the BHTEU and the HSU, the evidence as to the disquiet that any such inequity causes to employees in the Far West LHD was relatively sparse, if not overstated. It is perhaps not surprising that employees outside of Broken Hill would want to enjoy the greater benefits received by their colleagues, but the evidence falls short of demonstrating the level of grievance and potential for unrest that the Ministry's written evidence sought to portray. 5. Further, the Ministry sought to equate difference with inequity. That is, its submissions were premised on the proposition that it is necessarily inequitable for one group of employees to receive greater benefits than others. The Ministry's submissions essentially invited the Commission to proceed on that assumption. For the reasons set out at [135]-[139] below, I do not make that assumption. This is a matter about which the Ministry must satisfy the Commission, consistent with its onus. 6. Further again, and as the HSU submitted, the fact that there are locations in New South Wales at which NSW Health Service employees work which are more remote and less well serviced than Broken Hill is not of itself an argument that the employees in Broken Hill should no longer enjoy their current terms and conditions. Rather than justifying a reduction in existing terms, "[t]he logic of the Ministry's submissions support the extension of those conditions to other remote locations and not their removal in Broken Hill". I note also the observations made below at [123]-[126] concerning issues of comparative wage justice. 7. In short, the Ministry did not properly put the case as to why the County of Yancowinna exclusion should be displaced in respect of the BHHS. It placed too great a reliance on the premise that it was sufficient to identify another award of the Commission that could apply to the employees, on terms that are presumptively fair and reasonable, if the County of Yancowinna exclusion no longer applied. Its evidence and submissions do not reflect any appreciation that it bore the onus of demonstrating why the exclusion should no longer apply. 8. In Notification by the Broken Hill Town Employees' Union of a dispute with the Broken Hill Musicians Club Ltd re negotiations for a new collective agreement [2001] NSWIRComm 213 Sams DP observed: "33. It is relevant to note that the unique industrial history of Broken Hill has been predicated on a distinction between conditions applying in Broken Hill and common rule conditions applying under state awards. If there is any desire by individual parties to alter this historic precedent then an appropriate application should be filed with the Commission. It will then be tested according to the provisions of the Act and the requirements of the State Wage Fixing Principles." (Emphasis added) 1. The change sought by the Ministry would overturn many decades of industrial practice of this Commission. Further, a finding that the County of Yancowinna exclusion should no longer apply to the BHHS is likely to have ramifications beyond the NSW Health Service. This is particularly so given that the Ministry's case is predicated, at least in part, on the proposition that changes to Broken Hill's socio-economic situation have the effect that the County of Yancowinna exclusion is anomalous and ought to be removed. This is not a proposition which the Ministry has sought to confine to the BHHS. 2. In those circumstances, I would require a far more robust case for change to have been presented than the one on which the Ministry relies. Such a change is not safely to be made on the basis only of the opinions of lay witnesses and high-level statements as to the equity or otherwise of the existing industrial arrangements in the County of Yancowinna. 3. For these reasons, I find that the Ministry has not discharged its onus to demonstrate that the New Award ought to displace any provision in a Schedule 2 Award which excludes coverage of the County of Yancowinna. I am not satisfied that it would be fair and reasonable for the New Award to contain a provision in the terms, or to the effect, of cl 7(iii) of the Proposed Award as reproduced at [80] above. Other terms of the award 1. I will turn now to consider the terms that might otherwise be included in the New Award. In doing so I have been guided in particular by the observations of the Full Bench at [21]-[22] of City of Sydney Wages/Salary Award reproduced at [30] above. Matters of general application Comparative wage justice 1. Consistent with its position in relation to the County of Yancowinna exclusion, the Ministry relied heavily on the contention that the conditions of employees of the BHHS – or, to be more accurate, those to whom the New Award will apply – should be aligned to those afforded to employees of the NSW Health Service elsewhere in NSW. In rejecting this contention, in the HSU's Closing Submissions it contended: "54. In any event, the Ministry's approach wrongly assumes that it is for the unions to justify existing and long-standing conditions of employment, rather than for the Ministry to justify their removal or alteration. The Ministry's reasoning appears to be that the Commission should remove conditions of employment if it is possible to identify to other employees who do not receive those conditions who perform comparable work in the health system. Such an approach endeavours to engage in a form of reverse comparative wage justice. Claims based on comparative wage justice have always been treated with great caution by the Commission: see, for example, Health Employees Pharmacists (State) Award (2003) 132 IR 244 at [69]. No different approach would be adopted when an employer application is seeking to reduce conditions." 1. Wage Fixing Principle 8.5.1, reproduced at [31] above, provides that claims that are based substantially on comparative wage justice will generally not be countenanced. In Health Employees Pharmacists (State) Award and other Awards (2003) 132 IR 244; [2003] NSWIRComm 453 the Full Bench observed: "69. On balance, we consider that the contentions by the HSU as to appropriate wage adjustments based on comparable classifications should be treated with great caution, and with a need to avoid any notion of 'comparative wage justice' found in past wage fixing regimes." 1. Observations to the same effect were made by the Full Bench in Health Employees Pharmacists Award and Other Awards (No 2) [2005] NSWIRComm 264 at [24]. 2. While they are not a complete answer to the Ministry's Application, there is force to the HSU's submissions. Consistent with the authorities referred to, I will similarly approach with caution any features of the Ministry's case that are based on notions of comparative wage justice. Recognition of existing terms and conditions 1. Other than possibly in relation to long service leave, there is no evidence that prior to the filing of the Application the Ministry at any stage sought to vary, much less remove, the more generous entitlements contained in the Industrial Agreement. This is notwithstanding the fact that, as will be seen, the terms of the Industrial Agreement providing for five weeks annual leave and the payment of the BHTVA are of long standing. They pre-date by decades the making of the Industrial Agreement in 1997. 2. The Ministry submitted: "38. In making an award following the termination of a historical industrial agreement (in accordance with one party's right to do so), consistent with its general approach to making an award, the Commission should not, without sufficient evidence justifying such entitlements, make an award that preserves historical above award entitlements previously contained in terminated agreements." 1. In support of this proposition the Ministry cited Re Liverpool City Council 36 Hour Week (72 Hour Fortnight) Child Care Staff Award 2015 [2015] NSWIRComm 22 and Storeworkers - IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156. Each of those cases involved a union applying to vary an existing award so as to reflect terms which had previously been contained in industrial agreements. In each case the Full Bench rejected the application. I accept the Ministry's submissions that these authorities support the proposition that a party seeking to amend an existing award to include "historical above award entitlements previously contained in terminated agreements" bears the onus of making out the case for that variation. 2. However, I do not see that the authorities take the Ministry that much further. The employees to whom the Industrial Award applies are presently award-free. It is inapt to refer to the conditions they enjoy as being "above award entitlements". Further, as noted by the HSU, conditions such as five weeks annual leave and the BHTVA "have existed for generations and were superintended by the Commission". [24] They are a different category to the terms that the unions sought to maintain in Re Liverpool City Council and Storeworkers - IGA Distribution. Finally, the Ministry's reliance on those authorities reflects what I consider to be its flawed approach to its onus in these proceedings, which I dealt with at [43]-[62] above. 3. The Ministry's case is predicated at least in part on the proposition that in the absence of the New Award, following the termination of the Industrial Agreement the employees would no longer be entitled to the benefits which it confers, despite the employee is having receive those benefits for years prior to its creation. Whether the employees would have an entitlement to those benefits outside of the Industrial Agreement was a matter that was raised, but not adequately explored, during the proceedings. 4. Ultimately, it is not necessary to find such an entitlement. What is required under s 10 of the Industrial Relations Act is that the New Award set fair and reasonable conditions of employment. 5. As stated by the Full Bench in City of Sydney Wages/Salary Award at [21], reproduced at [30] above, the assessment required by s 10 will often involve consideration of the history of terms and conditions that the parties chose to apply, formally and informally, to employees who will now be covered by the proposed award. In Public Service Association of NSW and Health and Anor v Broken Hill Town Employees' Union the Full Bench observed, at [28], that in industrial relations "historical circumstances have frequently had great significance and influence". 6. In determining what terms should be included in the New Award so as to establish fair and reasonable conditions of employment, it is appropriate to consider the benefits enjoyed by the employees over time. This requires a broader examination of the history of those benefits than focussing only on the document in which they have most recently been reflected. That is, to consider only the Industrial Agreement, and to work solely on the basis that those benefits will lapse on its termination, would be to ignore the full history as to how they came to be applied in the first case. The maintenance of parity of terms and conditions of employment 1. The need to maintain parity in the terms and conditions afforded to employees was relied on by both the Ministry and the BHTEU. The Ministry's case was that the fact that employees in the BHHS were receiving greater benefits than their counterparts elsewhere in the Far West LHD was causing unrest. More significantly, the Ministry relied heavily on the proposition that there was no longer a need for Broken Hill to be treated differently to the rest of the State, and that therefore the terms and conditions applicable to the BHHS should, subject to particular grandparenting provisions, be brought into line with those applying to the NSW Health Service generally. 2. The BHTEU opposed any changes to the current terms and conditions of employment. To the extent that a distinction was sought to be drawn between new and existing employees, it argued that it would be inequitable for employees doing the same work to receive different terms and conditions. 3. In Notification by Construction, Forestry, Mining and Energy Union (New South Wales Branch) of a dispute with Pasminco Broken Hill Mine re Enterprise Agreement [2001] NSWIRComm 215 Sams DP observed: "224. …Just because one group of employees enjoys benefits superior to those enjoyed by another group at the same workplace, doesn't automatically mean the benefits should be applied to all employees. …" 1. In City of Sydney Wages/Salary Award the Full Bench considered it appropriate to "grandparent" an entitlement to a redundancy and redeployment policy. In doing so, it made the following observations: "68. 'Employees' to be covered by a given award do not comprise a homogeneous group of people. A given body of employees to be covered by a newly-made award might, and in this case will, include employees who have worked for the employer for 30 years as well as employees who commenced last week or who will commence tomorrow. 69. That being so, it is apparent that the setting of fair and reasonable conditions of employment does not necessarily mean that those conditions, even within one award, will be identical for each employee. So much is routinely recognised in awards by the provision of incremental scales of salary, for example. … 71. For these reasons it is appropriate to protect the agreement that was made by an award clause of the kind generally referred to as 'grandparenting'. That is, we propose to maintain the entitlement to the R & R Policy provisions for those employees who, in our view, reasonably believed that they had those conditions for as long as they worked with the City and acted out of that belief. … 75. This approach will not mean that employees who work side-by-side will receive different payment for their work, nor will they perform the work under different conditions. The difference is only that those employees who were effectively promised these conditions which appeared in the R & R Policy will, as a matter of fairness, maintain an entitlement to them in the event that they may be required. Those who are not so promised do not. That ought not, in our view, give rise to any friction or sense of unequal treatment." 1. Having regard to these authorities, it is clear that the provision of fair and reasonable conditions of employment is not predicated on all employees being treated in exactly the same manner. In some cases it may be appropriate to "grandparent" particular entitlements. However, this will require an assessment of the rationale for any difference in treatment, and the possible consequences of the employees being treated differently. Jurisdictional constraints? 1. The HSU contended that there are jurisdictional constraints on the Commission making the Proposed Award, to the extent that it would reduce existing entitlements to annual leave and long service leave in the absence of agreement. Its submissions relied on the interaction between s 146C of the Industrial Relations Act and the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW) ("Regulation"). 2. Section 146C(1) of the Industrial Relations Act is in these terms: 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 (b) that applies to the matter to which the award or order relates. 1. The policies "required to be given effect to by the Commission" are declared in the Regulation. Clause 5(a) declares that a "paramount policy" is that "public sector employees are entitled to the guaranteed minimum conditions of employment (being the conditions set out in clause 7)". Clause 7 relevantly provides as follows: 7 The guaranteed minimum conditions of employment … (2) The guaranteed minimum conditions of employment also include the following— (a) Long service or extended leave (being the minimum leave prescribed under the Government Sector Employment Act 2013 or the Long Service Leave Act 1955, whichever Act is applicable to the employment concerned). (b) Annual leave (being the minimum leave prescribed under the Annual Holidays Act 1944). … 1. Clause 6 of the Regulation relevantly provides as follows: 6 Other policies (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, but only if employee-related costs in respect of those employees are not increased by more than 2.5% per annum as a result of the increases awarded together with any new or increased superannuation employment benefits provided (or to be provided) to or in respect of the employees since their remuneration or other conditions of employment were last determined. (b) Increases in remuneration or other conditions of employment can be awarded even if employee-related costs are increased by more than 2.5% per annum, but only if sufficient employee-related cost savings have been achieved to fully offset the increased employee-related costs beyond 2.5% per annum. … … (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. … 1. In the HSU's Closing Submission it contended: "40. The effect of clause 6(1)(c) of the Public Sector Regulation is that the 'existing condition' in excess of the minimum condition, relevantly with respect to annual leave and long service leave, may only be reduced with the agreement of the parties to any proceedings. Furthermore, the intent of the Public Sector Regulation is that any such reduction in conditions should be for the purposes of deriving employee-related cost savings which will be available to offset other increases in wages or conditions of employment. 41. To give effect the policy contained in clause 6(1)(c), the Commission cannot arbitrate to reduce existing conditions of employment dealing with annual leave or long service leave. The Ministry accepts this, but suggests that the policy in clause 6(1)(c) is given effect to by grandparenting annual leave and long service leave conditions for existing employees and that clause 6 'does not affect or restrict the terms which can be contained in the award in respect of New Employees.' That submission could not be accepted and cannot be reconciled with the Public Sector Regulation. 42. The 'conditions of employment' dealt with in clause 6 are conditions applying to 'public sector employees' generally. The cap on increases in remuneration or conditions of employment in clause 6(1)(a) and (b) must be a reference to the costs applying to the employment of public sector employees, or a group of public sector employees, generally and not to particular individual employees consistent with the purpose of the Regulation: Secretary of the Treasury v Public Service Association (2014) 89 NSWLR 688 at [37]-[38] and [78]-[79]. If it were otherwise, the Commission could award increases in remuneration or conditions of employment for future employees in a manner that increased employee-related costs by more than 2.5%. 43. Similarly, the reference to 'existing conditions of employment' in clause 6(1)(c) can only be read as referring to the conditions applying to public sector employees generally or a group of public sector employees. That is also consistent with the reference to 'guaranteed minimum conditions of employment' in clause 7 and 'employee-related cost savings' in clause 9. Both refer to conditions of employment applying generally. It is plain that the conditions of employment of a kind but in excess of the guaranteed minimum conditions of employment applying to public sector employees, or a group of public sector employees, generally can only be reduced by agreement for the purposes of achieving employee-related cost savings." [Footnote omitted] 1. In the Ministry's Closing Submissions it contended: "115. The Applicant acknowledges that the Regulation may require the grandparenting of those entitlements for Existing Employees. The Applicant's proposed award seeks to give effect to this objective. In fact, the proposed award goes beyond this goal and also grandparents wages and allowances. However, clause 6 of the Regulation does not affect or restrict the terms which can be contained in the award in respect of New Employees. 116. Any such New Employees, if they commence in an environment where the 1997 Agreement is terminated, will only be entitled to the guaranteed minimum terms and conditions of employment applicable to award free health employees. In cross examination Ms Ferry contended that when the 1997 Agreement was terminated, 'common law' entitlements remained. That may be so for Existing Employees who may have contractual entitlements (of which there is no evidence). However, for New Employees, once the 1997 Agreement is terminated there is no industrial regulation which applies to such employees and nothing preventing the FWLHD offering employment at rates of pay and conditions which are less beneficial than those contained in the state awards. 117. Accordingly, the BHTEU's position that New Employees would 'lose' their entitlements is misleading. Rather, by making the proposed award the Commission would be ensuring that New Employees have the benefit of entitlements contained in the state awards when they otherwise would not." 1. In the Ministry's Reply Submissions it was further submitted: "17. The HSU's construction is incorrect because when New Employees are first employed (after the termination of the 1997 Agreement) they do not have any 'existing conditions of employment' which can either be increased or reduced. Such employees, employed after the termination of the 1997 Agreement and otherwise award free, are only entitled to terms which they agree upon in their contracts of employment. Whether those terms and conditions differ to those previously contained in the 1997 Agreement is not relevant to the operation of the Regulation. 18. Further, if the HSU's proposed construction of the Regulation is adopted, the Regulation would operate to make the FWLHD's right to terminate the 1997 Agreement futile. The HSU's proposed construction would have the effect of preventing all NSW public sector employers from terminating existing industrial instruments which contain additional annual leave, parental leave, long service leave, sick leave, public holiday or part-time work entitlements - even where such agreements (like the 1997 Agreement) contain an express right to terminate. This would have the unintended effect of preserving in perpetuity all terms and conditions in unregistered industrial agreements. That cannot be correct." 1. I am not entirely convinced that the Regulation properly allows for the distinction between existing and new employees in the manner for which the Ministry contended. Certainly, the Ministry's submissions do not appear to recognise the status of the Industrial Agreement as an industrial instrument, as set out at [9] above. The Ministry's submissions also do not adequately reflect the history of the entitlement to additional annual leave across the broader BHHS (see [153]-[162] below) and whether it is a benefit which is properly to be seen as emanating only from and dependent on the continued operation of the Industrial Agreement. 2. It is, however, unnecessary to explore these matters in greater detail at this point as I am not satisfied that the Regulation, and in particular cl 6(1)(c), operates to restrict the jurisdiction of the Commission in the manner asserted by the HSU. 3. The HSU's submissions at par 40, reproduced at [144] above, fail to read cl 6(1)(c) in the context in which it appears. Read as a whole, cl 6 of the Regulation limits the jurisdiction of the Commission to award increases in "remuneration or other conditions of employment". The Commission cannot award increases that would result in employee-related costs increasing by more than 2.5% per annum, unless sufficient employee-related cost savings have been achieved to fully offset any increase in employee-related costs beyond 2.5% per annum. 4. The opening words of cl 6(1)(c) – "for the purposes of achieving employee-related cost savings" – have to be viewed in this context. They are not properly to be construed, as the HSU contended, as evidencing an intention that a reduction in particular conditions of employment may only be for the purpose of deriving employee-related cost savings. Rather, the provision operates to prevent a party from purporting to achieve employee-related cost savings through the unilateral reduction in those conditions of employment. 5. In these proceedings the Commission is not asked to award increases in remuneration or other conditions of employment that would result in employee-related costs increasing by more than 2.5% per annum. Rather, the effect of the Application would seem to be to achieve an overall reduction in employee-related costs in the BHHS. It follows that there has been no case presented that requires the Commission to examine the extent to which any particular change has achieved employee-related cost savings. In the circumstances, I do not accept that cl 6(1)(c) has any application to the present proceedings or that it operates to limit the jurisdiction of the Commission to make an award, even if that were to result in a reduction in annual leave and long service leave entitlements which currently exist. 6. Having made these observations, I turn now to consider the particular terms which ought to be contained in the New Award. Annual leave The entitlement 1. The Industrial Agreement confers an entitlement to five weeks annual leave per annum. It was common ground that this is an entitlement which is more favourable than that applying generally to employees in the NSW Health Service outside of Broken Hill. 2. For example, and by way of comparison, one of the Schedule 2 Awards is the Health Employees' Conditions of Employment (State) Award 2019. Clause 16(i)(a) of that award provides that employees, other than those who might generically be referred to as shift workers, will receive annual leave in accordance with the Annual Holidays Act 1944 (NSW). Section 3(1) of that Act confers an entitlement of four weeks annual holiday for each year of employment. 3. The annual leave entitlement in the Industrial Agreement appears to have been introduced following a recommendation made by Cahill J of the Industrial Commission of NSW on 6 March 1974. His Honour's recommendation was "that the basic annual leave entitlement be increased from the present four weeks and two days to five weeks". [25] 4. Importantly, the entitlement to five weeks annual leave is not confined to employees covered by the Industrial Agreement. It is a benefit enjoyed by all employees of the NSW Health Service in Broken Hill, including management. 5. Ms Welsh deposed: [26] "63. One entitlement which affects all employees in the BHHs [sic] is the entitlement to an additional week of annual leave. This exists under the BIC Agreement and although it is not provided for in the State Award or the relevant nursing or medical practitioner awards and agreements, its application has extended to all NSW Health employees in the BHHS. No other employee within the FWLHD receives the additional week of annual leave. I believe this is a good recruitment incentive (and in effect it is our primary recruitment incentive), but it should be available to all in the FWLHD, not just Broken Hill." 1. There was the following exchange between Ms Welsh and Mr Knox during cross-examination: [27] "Q. And it's your view that the conditions in Broken Hill should be reduced to those in Wilcannia, Tibooburra, White Cliffs? That's your submission to this Commission? A. Not necessarily, no. Q. What is the submission you would wish to make on it? A. Well, I think somewhere in my statement later on I do comment that something like the five weeks annual leave is actually a recruitment incentive for us and it should apply across the district." 1. There was the following further exchange: [28] "Q. Ms Welsh, if, upon this new award, new employees will not receive five weeks annual leave, but rather four weeks annual leave, will that impede recruitment in your view? A. I don't know if it will impede recruitment but it will be one less incentive I can offer. Q. And that incentive, the fifth week annual leave, is applied to nurses in the Broken Hill Hospital as well? A. Well, as far as I'm aware, yes, the additional time, yes. Q. So the fifth week or the extra week, because some nurses get six weeks because of their continuous rosters and the like, but the additional week is something that is applied to nurses within the Broken Hill Hospital to your knowledge? A. To my knowledge, yes. Q. And if that were to be removed, would that make it more difficult to get nurses to apply for work in the Broken Hill Hospital? A. I don't know. Q. You don't know. So if the new award was to be made, one of the matters that you would like retained is the five weeks annual leave? A. Yes. Q. And you would then still apply it to nurses? Yes? A. As it applies now, yes." 1. Ms Sutton deposed that the "additional week of annual leave per year…is given to all Ministry of Health employees based in Broken Hill, although it is only formally provided for in the BIC Agreement and no other relevant State Award". [29] She stated that throughout the 40 years she had been involved in nursing in the district all staff had been given five weeks annual leave. 2. Stuart Riley was the Chief Executive of the Far West LHD between January 2011 and July 2017. He had been employed in the Far West LHD (or the Far West Area Health Service as it was previously called) since April 1996. He was called to give evidence by the BHTEU. He deposed that he received five weeks annual leave on commencement of his role as Chief Executive. 3. Ben Lyons is an Industrial Officer employed by the HSU. He deposed that the HSU has between 35 and 40 members employed in the BHHS across 17 classifications. With the exception of those members employed in Radiography and some Administration Officers, the HSU members are employed in classifications that are not covered by the Industrial Agreement. Those members outside the Industrial Agreement are award free but, despite this, "these members are paid in accordance with and receive the conditions, entitlements and allowances provided for by the corresponding State Awards, with the exception that they also receive 5 weeks' Annual Leave." [30] The Ministry's case for change 1. The Ministry seeks to reduce the annual leave entitlement for new employees, and "grandparent" the entitlement for existing employees. 2. In respect of new employees, the Ministry contended that the Proposed Award would provide "access to the same community standards applicable to other FWLHD workers (who historically were not covered by the 1997 Agreement) and the rest of NSW". [31] The Ministry further submitted: "120. This approach reflects that such conditions, for New Employees: i. are aligned with those contained in existing state awards that are made on fair and reasonable terms; and ii. provide guaranteed minimum safety net entitlements, not more beneficial entitlements derived from negotiated positions; and iii. in respect of annual leave, that such an entitlement is for rest and recreation (see Four yearly review of modern awards – Annual leave [2015] FWCFB 3406) and is not to operate as a recruitment incentive (being something which the Applicant does, and properly should, address independently through policy outside of its industrial instruments). … 125. Similarly, the Applicant submits that historical conditions applying in the BHHS (the additional week of annual leave and BHTVA) should not be mandated as applying to New Employees in the proposed award. The proposed award should set out the guaranteed minimum terms and conditions of employment for such New Employees, on terms which are fair and reasonable and consistent with terms that exist across the rest of NSW and the FWLHD. The existing terms of the state awards are fair and reasonable and there is no reason to supplement them for employees working in the BHHS." 1. There are three points to note about the Ministry's submissions. Firstly, they do not adequately recognise the evidence as to the longstanding practice under which all employees in the BHHS receive five weeks annual leave per annum, regardless of whether the Industrial Agreement applies to them. Ms Allen deposed that awards of this Commission apply to "Doctors and Nurses engaged at Broken Hill with NSW Health" [32] . It follows that the enhanced annual leave entitlement extends to categories of workers covered by, to use the Ministry's language, "existing state awards that are made on fair and reasonable terms". 2. Secondly, the overwhelming impression left by the evidence is that the Ministry has recognised for many years that five weeks annual leave is a "community standard" in Broken Hill. The fact that the entitlement is reflected in the Industrial Agreement is an insufficient basis on which to contend that it is purely a "negotiated position", when all of the evidence demonstrates that the Industrial Agreement simply reflects the accepted standards. This is borne out by the fact that the enjoyment of the additional annual leave across the BHHS is not subject to the existence of, and in some cases is inconsistent with, an applicable industrial instrument. 3. I observe for completeness that the suggestion in par 120(ii) of the Ministry's submissions that the Proposed Award would "provide guaranteed minimum safety net entitlements" seems to confuse the task of this Commission under s 10 of the Industrial Relations Act with that of the Fair Work Commission under s 134(1) of the Fair Work Act 2009 (Cth). Section 134(1) provides that the Fair Work Commission must ensure that "modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions". Setting fair and reasonable conditions of employment under s 10 of the Industrial Relations Act is not synonymous with providing a "minimum safety net" within the meaning of the Fair Work Act. In Re Pastoral Industry (State) Award the Full Bench, in comparing the provisions of the Workplace Relations Act 1996 (Cth) with the Industrial Relations Act, observed: "29. …It follows that the objectives of the two pieces of legislation in relation to award making nowadays are substantially different. The emphasis in the WR Act upon awards providing a safety net, as opposed to the requirement of the Act that awards fix fair and reasonable conditions of employment, illustrates the different approaches which the two tribunals are required to pursue under their respective legislative regimes. The upshot is that the Commission's award making powers under the Act are, at this point in time, considerably broader than those of the AIRC pursuant to the WR Act and are substantially directed to considerably different purposes." 1. These comments need to be borne in mind when assessing the Ministry's reliance on the approach taken by either the Australian Industrial Relations Commission or the Fair Work Commission to making awards as informing the approach that ought to be taken by the Commission in these proceedings. 2. Thirdly, as deposed by Mr Riley and submitted by the BHTEU, the provision of five weeks annual leave is not unique to employees in the BHHS. Clause 77.1.2 of the Crown Employees (Public Sector Conditions of Employment) Reviewed Award 2006 provides as follows: "77. Recreation Leave … 77.1.2 Additional recreation leave, at the rate of 5 days per year, accrues to an employee, employed in terms of the Act, who is stationed indefinitely in a remote area of the State, being the Western and Central Division of the State described as such in the Second Schedule to the Crown Lands Consolidation Act 1913 before its repeal." 1. I will not reproduce the convoluted provisions of the Second Schedule to the Crown Lands Consolidation Act 1913 (NSW). Suffice it to say, the Central and Western Divisions of NSW encompass a significant swathe of the State. 2. I also observe that cll 27 and 28 of the Broken Hill City Council Consent Award 2018 can be said to be premised on a "base" entitlement of five weeks annual leave per annum. 3. There is no evidence that other than through the Proposed Award the Ministry intends to reduce the entitlement to annual leave of employees of the BHHS. It follows that of all of the employees in the BHHS, including management, only new employees under the Proposed Award would not enjoy five weeks annual leave per annum. 4. The BHTEU relied on statements from 12 existing employees of the BHHS, who are engaged in a variety of positions. They all provided evidence as to their understanding as to the effect that the Proposed Award would have on them. Only four of them made reference to annual leave in their statements. In short: 1. Sally McDonald is a Patient Services Assistant. She stated that under the Proposed Award "existing employees might keep their higher rate of pay, and annual leave entitlement, for a limited period of time but will eventually be moved onto the State Award". [33] 2. Shaun Podnar is a Labour/Gardener. His understanding of the Proposed Award is that "[his] wages would be reduced at [he] would also lose a week's annual leave as well as a month's long service leave". [34] 3. Christopher Jones is a Radiographer. His understanding is that under the Proposed Award his leave entitlements "will immediately be permanently reduced". [35] 4. Marshall Kelly is a Board Services Officer. He stated that under the Proposed Award his entitlements "including annual leave and long service leave, would be reduced to the rates and conditions of the State Award". [36] 1. Leaving to one side the question of whether the witnesses' understanding of the effect of the Proposed Award (in the form as it existed at the time they made their statements) on their annual leave entitlements is accurate, this is the extent of the BHTEU's evidence on the issue of annual leave. Even then, the witnesses do no more than depose as to the potential loss of the additional week's leave. It can be inferred that they oppose losing that entitlement, but none of them offer any evidence as to the effect that this would have on them. 2. Ms Turley, who was called by the HSU, deposed as follows: [37] "16. Broken Hill is very remote, with large distances for anyone to travel to or from Broken Hill. We are 1200km from Sydney, 800km from Dubbo, 500km from Adelaide, and the nearest town is 270km from Broken Hill, as is our water supply. 17. Our isolation is not just geographical, but social. To access services that are outside Broken Hill, or to visit family, residents and workers in Broken Hill need to travel great distances to get anywhere else. No matter what direction you go, it is a full day's travel. 18. There are limited flights to and from Broken Hill. There is only one airline, and flight schedules can change at short notice. Flights are often fully booked far in advance and are a significant expense. A one-way flight to Sydney can cost in excess of $500. 19. Members of our community who need specialist health services are referred to Adelaide, Dubbo, or Sydney and often need to access their leave to travel to and from appointments. 20. Whether someone wants to go on holiday, visit family, or needs to access specialist health services, this extra travel is significant both in time and cost. … 23. The additional week of annual leave is important to workers' mental health and emotional well-being, knowing that they have additional time to travel to and from Broken Hill, whether for recreation or other reasons. … 26. Broken Hill's geographical and social isolation, and a declining an ageing population, means we have a limited skilled workforce for the health and welfare sector to draw upon and it is challenging to recruit from outside our community to fill positions. 27. In my experience, our isolation is the key determinant of whether someone accepts a position in Broken Hill. 28. When recruiting staff from outside Broken Hill or outside of NSW, the additional week's leave is an important part of recruitment strategies and is advertised as a benefit of accepting employment in Broken Hill." 1. In light of all of the evidence and submissions, I find that it would not be fair and reasonable for new employees in the BHHS in the classifications under the Proposed Award to receive a lesser annual leave entitlement than that which applies generally across the BHHS. 2. Further, at [135]-[139] above I dealt with the question as to whether it was necessary to maintain parity in the terms and conditions offered to employees. The Ministry seeks to remove the greater entitlement to annual leave on the basis that it is causing friction outside of the BHHS that other employees in the Far West LHD do not enjoy the same benefit. It could reasonably be inferred that such unrest would also exist if employees working side-by-side in the BHHS received different levels of annual leave, particularly where it would seem that the new employees would be the only ones in the BHHS not to receive the additional week's leave. This further argues in favour of the maintenance of the entitlement to five weeks annual leave for new employees. Grandparenting provisions 1. The Ministry seeks that the Proposed Award "grandparent" the annual leave entitlement for existing employees of the BHHS. It draws a distinction between, firstly, those employees already covered by the Industrial Agreement and, secondly, those who are not but who would be covered by the Proposed Award and who currently receive the additional leave entitlement. 2. In relation to the first category, cl 8(iv)(a) of the Proposed Award provides that the employees would retain their annual leave entitlements and would continue to do so "if promoted". In contrast, the Ministry's submissions state that existing employees would only continue to receive five weeks annual leave "so long as they stay in their current position". [38] 3. As to the second category of existing employees, cl 9(ii) of the Proposed Award provides that the entitlement to five weeks annual leave will be maintained "while ever they are engaged in the Classification in which they were employed on the date this Award was made". 4. For the reasons already stated, the Ministry has for many years acted as if it recognised that five weeks annual leave is a community standard for employees in Broken Hill. It would be inconsistent with my finding at [176] above to make an award which would potentially deprive existing employees of such an entitlement if they are promoted or otherwise move to another position in the BHHS. 5. In any event, I have reservations about an entitlement being maintained only for as long as an employee remains in their current position. At the very least, this might act as a disincentive for an employee to seek out transfer and promotion opportunities. At its most cynical, it is a provision that could be open to abuse. 6. I find that the Ministry has not made out its case that it would be fair and reasonable for an award to contain provisions that would involve "grandparenting" of annual leave entitlements for existing employees of the BHHS, whether on the terms set out in the Proposed Award or at all. Long service leave 1. The Industrial Agreement confers an entitlement to 13 weeks long service leave after 10 years' service. 2. By way of comparison, cl 17(i)(a) of the Health Employees' Conditions of Employment (State) Award – which for clarity I reiterate is one of the Schedule 2 Awards – provides that employees to which it applies will be entitled to two months long service leave after ten years of service. This rate of accrual is consistent with that in s 4(2) of the Long Service Leave Act 1955 (NSW). 3. The Proposed Award would provide that new employees of the BHHS would accrue long service leave at the rate set out in the relevant Schedule 2 Award, presumably that referred to at [185] above. Subject to the same qualified "grandparenting" arrangements as dealt with above in relation to annual leave, existing employees to whom the Industrial Agreement applies would retain their current entitlements. 4. There was no evidence adduced as to when and in what circumstances employees in the BHHS came to enjoy a greater entitlement to long service leave than applies elsewhere in NSW. The BHTEU tendered a document titled "Far West Health Service – Industrial Agreement" which was executed in 1995 ("1995 Agreement"), which was apparently the predecessor to the Industrial Agreement. Clause 13.1 of the 1995 Agreement provided for long service leave to accrue at the rate of two weeks per year of service. 5. By contrast, cl 12.1 of the Industrial Agreement is in the following terms: "Long service shall be granted to employees who have completed 10 years continuous service, such to be taken at the discretion of the employer and employee and to accrue at the rate of: From signing of this agreement 1.6 weeks per annum From 1 January 1999 1.3 weeks per annum" 1. Mr Riley deposed that he led the negotiations for the Industrial Agreement on behalf of the NSW Health Department. He expressed his understanding that the Industrial Agreement "provided for" the "[a]lignment of long service leave arrangements with state-awards [sic]". [39] 2. Under cross-examination, Mr Riley had the following exchange with Mr Seck: "Q. Then you talk about alignment of long service leave arrangements with State awards? A. Mm hm. Q. Were you talking about long service leave as it applied to the balance of employees in the State of New South Wales in the New South Wales health system? That's what you were talking about? A. We were looking to move the long service leave arrangements in Broken Hill back towards the State arrangement. Q. And if you go to clause 12? A. Of? Q. Of the agreement? A. Just a moment. … Q. Look at clause 12 paragraph 1. Do you see 'long service leave shall be granted to employees' et cetera. Do you see that? A. Yes. Q. And so there's what would seem to be a gradual reduction in the accrual of long service leave-- A. Yes. Q. --from 1.6 to 1.3. So that tells me that after 10 years' service you get 13 weeks? A. Mm hm. Q. But it's post 1999, correct? A. Yep. Q. But clause 2 says 'and a further two weeks per year to be taken every five years or pro rata for the time worked in excess of 10 years'. Do you see that? A. Yes. … Q. It was your understanding that that's in line with the State standard? A. It was a matter of moving back. The view was that the agreement would be negotiated every three years and that over time it would normalise. Q. But just looking at clause 2, that doesn't seem to be in accordance with the State standard, do you agree? A. Given it's transitionary, no, it didn't accord. Q. Well, it's not transitionary. It provides it as an entitlement. It doesn't say it's going to be phased in. As I read it, that's something that just continues to apply? A. No, the term of the agreement was three years when it was drafted. Q. And so it was your intention then that that clause would be removed after three years? A. That it would be a matter for negotiation after three years. Q. And so when you use the word 'transition', what you really mean is it will be negotiated after the expiry of the agreement and one of the issues you'd be looking to do is to remove that clause, if possible, to move to the State standard? A. To modify it, yes." 1. The terms of cl 13 of the 1995 Agreement and cl 12.1 of the Industrial Agreement reflect an apparent reduction in the rate of long service leave accrual over time. This is consistent with what Mr Riley described as an intention to align the Industrial Agreement with long service leave provisions applying generally in NSW. 2. Further and significantly, there was no evidence to suggest that the entitlement to a higher rate of long service leave accrual was enjoyed by employees of the BHHS outside the coverage of the Industrial Agreement. It is noteworthy that in his evidence summarised at [162] above, Mr Lyons of the HSU made no reference to those members of the union outside the coverage of the Industrial Agreement receiving the more generous rate of long service leave accrual. 3. The BHTEU's submissions raised only two issues in relation to long service leave: the potential for employees to lose the more beneficial entitlement under the proposed "grandparenting" arrangements; and, the inequity of having employees doing the same work on different terms and conditions of employment. 4. The HSU submitted that all employees, whether existing or new, "should retain the historical long service leave entitlement". [40] 5. When it comes to exercising my discretion under s 10 of the Industrial Relations Act, different considerations arise in respect of long service leave than dealt with above in regard to annual leave. Firstly, there is no evidence as to the history of the long service leave provisions before 1995 or that they reflect a broader community standard in Broken Hill. Secondly, it can be accepted that it is far less certain that an employee will accrue an entitlement to take long service leave than is the case with annual leave. 6. These reasons also suggest that it would be less likely for any difference in treatment regarding long service leave to give rise to the possibility of friction that I took into account at [177] above in respect of annual leave. Further, consistent with the discussion at [135]-[139] above, I do not accept the BHTEU's submissions that it is necessarily inequitable for employees doing the same work to be employed on different terms and conditions. 7. In the circumstances of this case, I find that it would be fair and reasonable that the New Award contain a provision to the effect that employees first employed in the BHHS after the New Award is made will accrue long service leave at a rate consistent with the terms otherwise applying to the NSW Health Service outside of Broken Hill. For the avoidance of doubt, an employee should be regarded as a "new employee" even if they commence employment in the BHHS having previously been employed elsewhere in the NSW Health Service. That is, on commencement with the BHHS their rate of long service leave accrual should remain unaltered. 8. However, I am not satisfied, including for the reasons set out at [182] above, that it would be fair and reasonable for the New Award to contain provisions that would involve "grandparenting" of long service leave entitlements for existing employees of the BHHS, whether on the terms set out in the Proposed Award or at all. Broken Hill Town Allowance/Versatility Allowance 1. The rates of pay contained in the Industrial Agreement incorporate the BHTVA. As at the date of the proceedings, the total of those allowances was $46.13 per week. 2. Under the Application: 1. new employees would not receive these allowances. Their wages would be determined by reference to the relevant Schedule 2 Award and they would instead receive the climatic and isolation allowance provided for in cl 5 of the Health Employees' Conditions of Employment (State) Award, which as at the date of the proceedings was $9.18 per week; and 2. existing employees would continue to receive their present rates of pay. Clause 8(iv)(a) of the Proposed Award provides that if an existing employee is promoted they will either retain their current wage or receive the rate of pay applicable to the new position to which they have been promoted, whichever is the higher. 1. The Ministry's Closing Submissions clarified its intentions regarding the proposed grandparenting arrangements as follows: "57. The proposed award will apply such that Existing Employees who are promoted in the future (being employees who seek new positions in a merit-based process or who are moved into more senior positions) upon moving into such a new classification will receive the higher of: i. the rate of pay grandparented in Schedule 1 of the proposed award; or ii. the rate of pay applicable to the new position to which they have been promoted." 1. There was little evidence provided as to the origins and history of either the Broken Hill Town Allowance or the Versatility Allowance. Annexed to the statement of Elizabeth Allen was a statement made by Cahill J of the Industrial Commission of NSW in matter number 152 of 1973, dated 18 April 1974. [41] In reference to a "Broken Hill allowance", his Honour referred to having "had further research undertaken in relation to it with reference to such matters as when it was first introduced, its history and the factors which were influential in the minds of the various conciliators who have considered it over the years". His Honour did not, regrettably, provide the fruits of that research. 2. Also annexed to the statement of Ms Allen was a judgement of Cahill J in matter number 95 of 1972, dated 13 June 1972. In that judgement, in a passage that would seem to reflect the genesis of the Versatility Allowance, his Honour observed at pp 22-23: "Under the Agreement, as I have mentioned previously in this judgment, there is one common rate for tradesmen which is calculated according to an averaging principle and which is directly influenced by variations of the Crown Employees (Skilled Tradesmen) Award. There is also a component in the rate, originally $1.30 per week but which is now increased to $1.38 because of subsequent adjustments on economic grounds, which had its origin in a decision given by me on 2nd April, 1969. As that decision indicates, the amount of $1.30 was granted in order to rectify some uncertainty as to the proper rate for tradesmen arising out of a previous decision of mine dated 22nd November, 1967. In the decision of 2nd April, 1969, after stating that the amount of $1.30 in question should be paid to the tradesmen at the Broken Hill Hospital, I said this: I realise that, leaving aside the Broken Hill loading, the granting of this amount will mean that the wages of the Broken Hill Hospital tradesmen will move ahead of the rates in the Crown Employees (Skilled Tradesmen) Award. This fact is not unduly disturbing, however, as it is recognised, I think, that the Broken Hill tradesmen are versatile, cooperative, and tend to perform a greater variety of work than might be expected of an average tradesman at some other hospitals in the State. The extra amount can be taken as reflecting a recognition of that position." 1. If it is assumed that the passage reproduced at [203] above refers to the Versatility Allowance, and the "Broken Hill allowance" referred to by Cahill J is one and the same as the Broken Hill Town Allowance, it would seem that both would date to the late 1960s at least. The Versatility Allowance appears to date from a decision of Cahill J dated 2 April 1969. By 1974, the "Broken Hill allowance" had been the subject of consideration "over the years". 2. The evidence does not disclose how and when these allowances came to be paid to employees under the Industrial Agreement (or its predecessors) and when they became incorporated into the rates of pay contained in the Industrial Agreement. All that can be stated with certainty is that by 1994 the two allowances had been "combined" and that by the time of the 1995 Agreement the combined allowances had been incorporated into the rates of pay under that agreement. 3. In the Ministry's Closing Submissions it contended: "127. Further, in relation to the BHTVA, the Health Employees' Conditions of Employment (State) Award 2019 provides a climatic and isolation allowance to persons employed in hospitals or health institutions situated upon or to the west of two lines set out in that Award. Broken Hill falls within the part of the state which receives the greater climatic and isolation allowance, currently $9.18 per week, which is lower than the current value of the BHTVI [sic], which is $46.13 per week. Broken Hill is no different to any other remote location in NSW, such as Wilcannia, Tibooburra or Balranald. 128. Allowances in awards can operate to compensate employees for disabilities associated with isolation and the harsher climates. There is no precise mathematical formula or approach which the Commission should take to setting such allowances. The Commission is to set award terms and conditions which are fair and reasonable and in a manner which is consistent with the Act and its Wage Fixing Principles. 129. To the extent that the BHTVA existed to compensate employees for the exigencies associated with living in a remote town like Broken Hill, with a harsher climate than other parts of NSW, this is adequately addressed by the climatic and isolation allowance provided for in the state awards. As it is part of an existing award made by the Commission under the Act and consistent with the Wage Fixing Principles, the climatic and isolation allowance is presumed, prima facie, to be fair and reasonable. 130. As in Amalgamated Engineering Union v Metal Trades Employers' Association; Re National Oil Pty Ltd (1942) 47 CAR 209, where O'Mara J at [214] refused to make isolation allowances for workers at a shale oil operation in Glen Davis, in the NSW Central Tablelands, any claims made by the BHTEU / HSU that a higher isolation allowance should be made for BHHS workers must be supported by evidence (and not just an assertion) that the current climatic and isolation allowance is not fair and reasonable. 131. To the extent that the BHTVA exists to compensate employees for their 'versatility', such a concept is outdated and inconsistent with the Commission's wage fixing principles and nothing in the 1997 Agreement provides for or guarantees that employees work flexibly. Indeed, it is inconsistent with the evidence, which demonstrated that employees covered by the 1997 Agreement are not providing such 'versatility'. Rather, the BHTEU is obstructing efforts to improve versatility, flexibility and efficiency in the BHHS. 132. Also, consistent with wage fixing principle 8.2(g), any increase in efficiency now caused by the implementation of structural efficiency principles in the BHHS which should have already been implemented should not be taken into account in evaluating work value considerations relevant to setting the wages. Accordingly, any alleged 'versatility' offered by workers previously covered by the 1997 Agreement is not a factor relevant to the setting of wages (and the value of allowances) in the proposed award (this is also reflected in the labour flexibility clause in clause 33 of the Health Employees Conditions of Employment (State) Award). 133. The BHTEU and HSU may submit that rather than bringing the BHHS in line with the rest of the FWLHD pursuant to the terms of existing state awards, the more generous entitlements previously provided in Broken Hill should be extended throughout the FWLHD where the effects of isolation and a climate are as significant (if not more significant) than those that exist in Broken Hill. 134. The Commission's task in this matter is not to consider whether the terms contained in existing state awards are adequate. In circumstances where the Applicant is seeking to have the existing state awards apply to BHHS employees as noted above, there is a presumption that the terms of these awards are fair and reasonable (City of Sydney Wages / Salary Award 2014 [2014] NSWIRComm 49 at [12]). The Commission's task is to determine the terms of an award that should be made to cover employees of the BHHS who will, without the Commission's intervention, have no industrial instrument that guarantees minimum terms and conditions of employment." 1. These submissions in large part reflect what I have found to be a flawed approach by the Ministry to these proceedings. The fairness and reasonableness of the climatic and isolation allowance in the Health Employees' Conditions of Employment (State) Award 2019 can only be presumed in the context of that award and the employees to whom it applies. It is for the Ministry to establish that an award which replaced the BHTVA with the climatic and isolation allowance for new employees in the BHHS, and "grandparented" the entitlement to the BHTVA for existing employees in the BHHS, would set fair and reasonable conditions of employment. 2. The BHTEU relied on the "challenge of recruitment and retention of employees in the Far West of New South Wales" and the costs associated with isolation and living in that region. [42] The evidence it called did not, however, directly address those issues. The employees of the BHHS which it called to give evidence largely confined their evidence to what they understood to be the financial impact on them of the Proposed Award (as at the time they prepared their statements). 3. This evidence needs to be treated with some caution. Almost all of the BHHS employees called by the BHTEU relied on what Ms Ferry had allegedly told them as to the operation and effect of the Proposed Award. It is apparent that the witnesses' understanding of the Application and the Proposed Award (in the form it existed at that time) was imperfect, if not misguided. The evidence also disclosed that the calculations as to the financial impact on them of the Proposed Award on which each of the witnesses relied were performed by Ms Ferry. It follows that while I have taken this evidence into account, I have afforded it limited weight. 4. The Ministry has not sought to positively establish why it would be fair and reasonable for new employees of the BHHS to have no entitlement to the BHTVA which is presently received by employees under the Industrial Agreement and which has apparently been received by employees since the late 1960s. Its submissions largely rest on the identification of an alternative award entitlement which, being presumptively fair and reasonable, ought to be extended to the BHHS. For the reasons set out at [43]-[62] above, I am not satisfied that this discharges the Ministry's onus. 5. To the extent that they rely on Broken Hill being no different to other remote locations in NSW, the Ministry's submissions convey connotations of comparative wage justice. In this regard I rely on the observations made above at [123]-[126] above. 6. I am also cognisant that the effect of the Proposed Award would be that employees working in the same classification might be paid at different rates. Taking into account the discussion at [135]-[139] above, and noting in particular the observations of the Full Bench in City of Sydney Wages/Salary Award at [75], such a disparity might give rise to friction and a sense of unequal treatment. 7. Overall, I am not satisfied that the Ministry has discharged its onus of demonstrating that it would be fair and reasonable for the New Award to limit payment of the BHTVA to existing employees under "grandparenting" arrangements. It follows that in setting rates of pay the New Award should not differentiate between new and existing employees. Other allowances 1. Ms Allen gave evidence that in approximately 2011 an agreement was reached between the Ministry and the BHTEU under which allowances payable to employees under the Industrial Agreement would largely be aligned to those payable under the Health Employees' Conditions of Employment (State) Award and the Public Health Employees Skilled Trades (State) Award. Some would, however, remain payable under and be peculiar to the Industrial Agreement. 2. In the Ministry's Closing Submissions it was contended: "62. The allowances that are set out in clause 8(ii), Schedules 3, 4 and 5 of the proposed award reflect those which were agreed and have applied since this agreement in 2011. 63. Accordingly, the proposed award in respect of allowances, like wage rates, grandparents all those that are currently available to existing employees. Unlike the wage rates though, these allowances are only grandparented for the 12-month transitional period (per clause 8(iv) of the award which provides that only wage rates, annual leave, long service leave and public holiday entitlements continue after this occurs). This does not apply to the BHTVA which is now incorporated into the proposed awards' wage rates in Schedule 1 and which the Applicant proposes will be grandparented indefinitely. 64. Once existing employees move into state award classifications, they will have available to them all allowances contained in the applicable state awards." 1. Ms Ferry deposed that in approximately mid-2018 she identified "at least six allowances that were 'missing' from the allowance schedule" to the Industrial Agreement. [43] This in part gave rise to the dispute between the Ministry and the BHTEU which was the subject of the Notification. 2. In its submissions, the BHTEU made reference to five "missing" allowances, being Footwear, Uniform, Cardigan, Technical Tool and Overtime Travel. It also identified some errors in the schedules to the Proposed Award. 3. The CFMEU submitted that, to the extent that a New Award was made, the preservation of entitlements should include an indefinite or longer period for the maintenance of allowances should they contain higher rates than those payable under the applicable Schedule 2 Award. 4. In its reply submissions the Ministry largely accepted the BHTEU's submissions regarding the errors in the schedules to the Proposed Award. It provided amended schedules containing the necessary corrections. It disputed, however, that the allowances described by the BHTEU as "missing" should be added to the schedules. 5. Annexed to Ms Allen's statement as attachment EA11 is a document that she described as a "business record" titled "Copy of Alignment of BIC Allowances 2011". [44] That document discloses that out of a total of approximately 58 allowances that could become payable, 10 were peculiar to the Industrial Agreement. Of the allowances described by the BHTEU as "missing" all but the Cardigan allowance are referred to in document EA11. 6. In its Closing Submissions the Ministry relied on document EA11 as reflecting the agreement reached in 2011. However, in its reply submissions the Ministry stated that its Closing Submissions were in error and that it did not accept that document EA11 was a record of an agreement between the parties regarding the alignment of allowances with State awards. Rather it was "merely a document provided by the BHTEU during the conciliation proceedings". [45] 7. Document EA11 was presented as part of the Ministry's evidence. Ms Allen did not expressly state that document EA11 was provided by the BHTEU, although perhaps this can be inferred. Importantly, however, she did not challenge the accuracy of the document. As her reference to the document followed immediately after her evidence as to the agreement reached in 2011, it can also be inferred that it was presented as reflecting that agreement. That said, I recognise that Ms Allen was not employed by the Ministry until 2016. 8. Also attached to Ms Allen's statement are copies of "information bulletins" published by NSW Health setting out increases over time to the rates of pay and allowances to rates in the Industrial Agreement. The first reflects changes to take effect from the beginning of the first pay period to commence on or after 1 July 2011. In its list of allowances payable, it makes no reference to the allowances claimed by the BHTEU to be "missing". The same can be said for each subsequent information bulletin issued by the Ministry. 9. There is no evidence on which I could find that a Cardigan allowance was payable to employees under the Industrial Agreement. It does not appear to be referred to in any of the relevant documentary evidence. In relation to the other four allowances sought to be included by the BHTEU, the evidence does not provide me with a sufficient basis on which to conclusively determine whether they are properly to be described as "missing" from the Industrial Agreement, much less that they ought to be included in the New Award. 10. That being said, the Ministry has not demonstrated why allowances provided for in the Industrial Agreement but, presumably, not in the Schedule 2 Awards ought no longer to be payable. That is, why it would be fair and reasonable that the Ministry no longer be required to pay the allowances it agreed in 2011 that it would continue to pay (and has continued to pay). 11. Consistent with the presentation of its case generally, the Ministry relies on the Schedule 2 Awards setting presumptively fair and reasonable conditions of employment, including in respect of allowances. For the reasons already given, I do not accept that this discharges the Ministry's onus in these proceedings. Rates of pay 1. Under the NSW Government's Wages Policy, employees covered by the Industrial Agreement had available a 2.5% increase in their salaries and salary-related allowances from the first full pay period on or after 1 July 2019. The evidence of Ms Allen and Ms Ferry was to the effect that this increase was not awarded to the employees, for reasons including that the BHTEU declined to include a no extra claims commitment in the memorandum of understanding that would have given effect to the change. 2. The unwillingness of the Ministry to pass on the increase in the absence of that commitment gave rise to conflict between the parties and culminated in employees taking industrial action. Those circumstances comprised part of the dispute to which the Notification related. 3. The Proposed Award anticipates that it incorporates the rates of pay contained in the Industrial Agreement, increased by 2.5% from the first full pay period on or after 1 July 2019. This is appropriate. 4. In Application for Crown Employees (Public Sector – Salaries 2020) Award and Other Matters (No 2) the Full Bench determined that salaries and salary-related allowances in 41 awards be increased by 0.3% with effect from the first full pay period on or after 1 July 2020. That determination applied to 21 of the 29 Schedule 2 Awards. The Full Bench decision is the subject of an application to the Supreme Court of NSW for judicial review. However, despite that and pending the outcome of any such review, I consider that the rates of pay to be contained in the New Award should include the same increase. Other terms to be derived from Schedule 2 Awards 1. I have found at [78] above that a special case exists for the making of a New Award. I am satisfied on the evidence that the history and drafting of the Industrial Agreement has created disputes arising out of confusion and disagreement as to both what terms the Industrial Agreement contains and as to how those terms are to be interpreted and applied. For this reason, coupled with a history of conflict between the Ministry and the BHTEU as to what provisions go to make up the Industrial Agreement, I do not consider that it would be appropriate to use the Industrial Agreement as a template for the New Award. To do so is only to invite further conflict. 2. I have found at [121] that the New Award ought not to contain any provision that is designed to displace or override the term of any Schedule 2 Award that excludes the County of Yancowinna. That is not to say, however, that the terms of employment for the relevant employees cannot be determined by reference to a relevant Schedule 2 Award. 3. By way of example, the Health Employees Dental Prosthetists and Dental Technicians (State) Award 2019 is one of the Schedule 2 Awards. It provides as follows: "6. Salaries and Allowances Full time Dental Prosthetist and Dental Technician employees shall be paid the salaries and allowances as set out in the Health Professional and Medical Salaries (State) Award 2018, as varied or replaced from time to time. 7. Conditions of Service The Public Hospitals (Professional and Associated Staff) Conditions of Employment (State) Award 2018, as varied or replaced from time to time, shall apply to all persons covered by this award. In addition, the Health Industry Status of Employment (State) Award 2018, as varied or replaced from time to time, shall also apply to all relevant employees." 1. In light of my earlier findings, a provision in the terms of cl 7 of that award should not be contained in the New Award, as by making the named awards "apply" to the employees it would have a similar effect to cl 7(iii) of the Proposed Award (overriding the County of Yancowinna exclusion in any Schedule 2 Award). However, a provision such as cl 6 does not have that effect but rather does no more than set particular terms and conditions by reference to another instrument. 2. Another example from the Schedule 2 Awards is to be found at cl 5 of the Teachers' (NSW Health Early Childhood Service Centres) Salaries and Miscellaneous Conditions Award 2019, which provides as follows: "5. Conditions of Employment 5.1 Directors and Teachers employed under this Award will have all other conditions of employment established by those contained in the Public Hospitals (Professional and Associated Staff) Conditions of Employment (State) Award 2018, as varied or replaced from time to time." 1. Similar examples from the Schedule 2 Awards are to be found in cl 7 of the Health Employees' Oral Health Therapists (State) Award 2019, cl 2 of the Hospital Scientists (State) Award, cl 6(d) of the Public Hospital (Training Wage) (State) Award and cl 22 of the Public Hospitals Dental Assistance (State) Award. 2. I am mindful that if such an approach is adopted in respect of the New Award, it will not in itself be a comprehensive repository of the conditions of employment for the employees to which it applies. However, it is not necessary that it be so, as the examples at [233], [235] and [236] above demonstrate. The difference between the New Award and those examples, perhaps, is that terms for the classification under the New Award may have to be derived from up to 29 awards, not one or two. There are two observations to make in that regard. 3. Firstly, that would have been the effect of the Proposed Award in many respects. That is, the BHHS would have had to identify which Schedule 2 Award covered each classification and applied its terms accordingly. 4. Secondly, it would be open to the parties to analyse the terms of the Schedule 2 Awards, with a view to determining the extent to which they could be consolidated into a single cohesive whole for the purposes of the New Award. This would obviate the need to "call up" terms from other awards. There was no evidence that such an analysis has been attempted. To be candid, however, given the nature of the relationship between the Ministry and the BHTEU in particular, I would hold out little hope of the parties being able to reach any form of consensus. 5. For these reasons I consider that the more effective approach, being the one more likely to result in the creation of a New Award in a timely manner, is simply that it call up the relevant terms of the Schedule 2 Awards for the classifications to which it applies. The New Award need not, and should not, seek to reproduce all of those terms. I am satisfied that this approach would give effect to the objects set out in s 3 of the Industrial Relations Act, and in particular the provision of a framework for the conduct of industrial relations that is fair and just (s 3(a)), the promotion of efficiency and productivity in the economy of the State (s 3(b)) and the encouragement and facilitation of cooperative workplace reform and equitable, innovative and productive workplace relations (s 3(h)). 6. On this basis I determine that, subject to this decision, the terms and conditions for classifications under the New Award will be set by reference to the Schedule 2 Awards which would otherwise apply to each classification. Classifications To whom will the New Award apply? 1. There was some conflict on the evidence as to whether the classifications in the Proposed Award accurately reflected the coverage of the Industrial Agreement. Ms Ferry deposed that in or about 2018 she became aware that from 2012 the classification schedules to the Industrial Agreement did not contain seven classifications which had been "removed without consent". [46] She expressed her understanding as follows: [47] "15. To be clear, all NSW Health positions in the County of Yancowinna, expressly excluded from the State Awards, are classified and covered under the Industrial Agreement." 1. This evidence is difficult to reconcile with that of Mr Lyons, who stated that of the 35 to 40 members of the HSU employed in the BHHS, only those employed in Radiography and some Administration Officers were covered by the Industrial Agreement. 2. Ms Lawrance stated that of the 790 employees of the NSW Health Service in Broken Hill, only 213 were covered by the Industrial Agreement. She did not state whether those who are not covered by the Industrial Agreement are otherwise covered by an award of this Commission. 3. Without suggesting any criticism, Ms Allen's evidence as to the coverage of the Industrial Agreement was equivocal. 4. It would be difficult on the evidence to form a concluded view as to precisely what classifications are covered by the Industrial Agreement. Ultimately, however, it may not be necessary to do so. 5. It would be consistent with my observations at [231] above and my determination at [241] above for coverage of the New Award to be set by reference to the Schedule 2 Awards rather than by the historical coverage of the Industrial Agreement. On that basis I determine that the New Award will apply to those classifications to which the Schedule 2 Awards would apply, but for those awards excluding the County of Yancowinna from their operation. Any classifications existing under the Industrial Agreement which do not have a reasonably equivalent counterpart under a Schedule 2 Award will be dealt with on an exceptions basis. Matching existing classifications to the Schedule 2 Awards 1. As a consequence of the determinations at [241] and [247] above, it is necessary that it be possible to identify which of the Schedule 2 Awards will apply to each classification presently contained in the Industrial Agreement. This will require a process by which classifications under the Industrial Agreement are "matched" to those under the Schedule 2 Awards. The separate development and operation of the Industrial Agreement over time has meant that the classifications to which it applies do not necessarily reflect those in the Schedule 2 Awards. 2. It is for this reason that the Ministry sought to have the Proposed Award contain transitional arrangements. Leaving aside the fact that the Proposed Award was premised on the Schedule 2 Awards coming to apply to the relevant employees, the need for transitional arrangements remains. 3. The transitional arrangements contemplated by the Proposed Award would essentially entail a two-step process. The first would involve the Ministry performing, in effect, an interim translation of classifications under the Industrial Agreement to (what it considers to be) the appropriate classifications under the relevant Schedule 2 Awards. The second would involve the establishment of a committee containing Ministry and union representatives, which would seek within 12 months after the making of the New Award to create a "final classification matching table". In the event of disagreement a "special meeting" of the committee would be convened, chaired by a member of the Commission "exercising its conciliation powers". Any disputes remaining unresolved after this process could be referred to the Commission for determination pursuant to the Industrial Relations Act. 4. As stated above, one of the grounds on which the Ministry relied to justify the making of a new award was a history of confrontation and disputes between it and the BHTEU. I have commented on the fact that the relationship between those parties leaves a lot to be desired, which is a matter for which both parties bear responsibility. 5. However, it would be naive to disregard that history when determining appropriate transitional arrangements, particularly when there was disagreement between the parties as to the classifications to which the Industrial Agreement currently applies. However well-intentioned the Ministry might be in effecting any interim matching of classifications under the Industrial Agreement to those in Schedule 2 Awards, I cannot help but see disagreements and disputes arising. This would only serve to distract from the final determination of the matching contemplated in the second phase of the process proposed by the Ministry. 6. The better approach would be to avoid the initial or interim matching of positions by the Ministry, and have instead a time-limited approach under which any necessary translations of existing classifications to those under the Schedule 2 Awards can be conducted. Any classifications in respect of which no agreement can be reached can be referred to the Commission for resolution according to the Industrial Relations Act. 7. I am not attracted to the concept of a member of the Commission effectively becoming a member of the proposed committee by chairing any "special meeting". This seems to create a conciliation "stream" outside of that provided for under the Industrial Relations Act. If nothing else, this may result in a duplication of processes and the inefficient use of the Commission's resources. It may also serve only to protract the resolution of any intransigent issues. 8. The Notification and the Application are currently before the Commission as presently constituted. If the parties cannot reach agreement on the matching of classifications between themselves, or on any other matters that remain to be resolved as a result of this decision, the Commission can exercise its jurisdiction in accordance with the Industrial Relations Act. This could include the exercise of conciliation powers, notwithstanding that the Commission's arbitration powers have been exercised: s 135(9) Industrial Relations Act. Other conditions 1. In its Closing Submissions the HSU stated: "70. There are a range of other differences between the award sought by the Ministry and the alternative proposal advanced by the BHTEU which do not appear to be subject of particular submission including the following: (a) Wording differences in the hours of work provisions (clause 3); (b) Rostering provisions (clause 4); (c) Part-time and casual employee provisions (clause 6); (d) Retention of leading hand allowance (clause 8); (e) Meal breaks (clause 9 and 14); (f) Overtime provisions (clause 11); (g) Retention of various allowances (clause 12); (h) Sick leave paid on termination (clause 18); (i) Termination of employment (clause 20); (j) Provision of uniforms (clause 23)." 1. I recognise that the differences between the parties are not limited to the matters I have considered in this decision. The proposal advanced by the BHTEU was said to incorporate terms from the Industrial Agreement and awards applying elsewhere in the NSW Health Service. As already observed, though, the BHTEU did not make its own application for an award. 2. Of the matters listed by the HSU, I have dealt with the question of allowances. In the absence of the parties having raised particular issues with me for determination, I do not propose to traverse the other provisions identified by the HSU. Dispute Orders 1. One of the grounds on which the Notification was made was that from 11 February 2019 members of the Barrier Industrial Council had been engaging in industrial action, in the form of not collecting monies relating to staff meals and not collecting private patient billing information. The Notification stated that the Ministry had been advised that that industrial action was to continue. 2. In her affidavit, Ms Ferry deposed: [48] "40. Industrial action was imposed and, as the Ministry would not give any assurances regarding any intention to try to resolve the growing list of issues, or to even agree to enter into negotiations for a new agreement, the industrial action remained in place." 1. Under cross-examination Ms Ferry had the following exchange with Mr Seck: [49] "Q. I don't think this document is exhibited anywhere and we'll come back to marking it, but it's a letter on 8 February from yourself on behalf of the Barrier Industrial Council to Ms Allen. Do you see that? A. Yes. Q. And you were advising that there was going to be a mass meeting of members on 7 February 2019 to consider taking industrial action. Do you see that? A. That we advised her on 7 February, yes. Q. And you were advising that that industrial action would take place from 11 February 2019 until further notice, in the second paragraph? A. You've broken up a little bit there but I think I understand what you're asking. Q. I can repeat it, if necessary, Ms Ferry, so I apologise. A. I was advising-- COMMISSIONER: I think she should-- WITNESS: I was advising that's when it would take effect. SECK Q. You say there was a resolution at the mass meeting for that industrial action, correct? A. Yes. Q. Did, to the best of your recollection, the Barrier Industrial Council and the Broken Hill Town Employees' Union recommend that the industrial action take place? A. The Barrier Industrial Council called a mass meeting. It was attended by the Broken Hill Town Employees' Union and the CFMEU. Q. Did - let me put the question again. Did the Barrier Industrial Council and the Broken Hill Town Employees' Union recommend to its members that industrial action take place? A. Yes. … Q. Do you agree the disputes resolution procedure in clause 27 of the 1997 agreement required you to refer any disputes to the Commission? A. It doesn't state which party refers to the Commission. Q. But you, nonetheless, decided to recommend to your members to take industrial action, correct? A. That's correct, because - yes. Q. You could've referred the matter to the Industrial Relations Commission, in fact you were required to under clause 2, correct? A. We weren't required to. We were trying to resolve matters between the parties. Q. It says, 'Failing settlement of an issue at this level, the matter shall be referred'. There's no discretion there. A. Yes. Q. It's mandatory, do you agree? A. 'Shall be referred'. It doesn't say by which party. Q. And if you were in dispute and it wasn't resolved, then the next step for you was to refer it to the Industrial Relations Commission? A. It's not necessarily our role to refer it to the Industrial Relations Commission. Q. And it says in clause 3: 'Whilst these procedures are continuing, no stoppage of work or any form of ban or limitation of work shall be applied.' Do you see that? A. I see that, yes. Q. Given there was a dispute between the parties, there could not be any stoppage of work, could there? A. That's correct. Q. And the Barrier Industrial Council and the Broken Hill Town Employees' Union, by recommending the industrial action, was breaching clause 27 paragraph 3 of the agreement. Do you agree? A. No. Q. If you believed that the dispute hadn't been adequately resolved with the ministry, it was certainly open to you to seek the assistance of the Commission before recommending industrial action to your members. Do you agree? A. It was open, yes. Q. And do you agree that taking industrial action without referring to the Industrial Relations Commission, the matter to the Industrial Relations Commission is not a desirable or preferred course of action? A. Under other circumstances, yes, I would agree. Q. When you say 'under other circumstances', what made these circumstances so special where you believed the Commission shouldn't have been notified the dispute to bring the parties to resolve the issue? A. The parties were ignoring requests from the union to meet to solve these issues. Q. And the Commission could conduct a compulsory conference requiring for there to be a meeting, correct? A. The Commission could do that, yes. Q. And that should've been the step ..(fault in audio visual link).. recommending to your members to take industrial action? A. That could've been a step, yes." 1. In its Closing Submissions the Ministry sought dispute orders pursuant to s 137 of the Industrial Relations Act to the effect that: 1. the industrial action currently engaged in by BHTEU members cease; 2. such members refrain from engaging in industrial action in the future relating to the terms and conditions of employment prior to these proceedings being determined; 3. the BHTEU and Barrier Industrial Council cease and refrain from recommending to its members that they engage in such industrial action; and 4. the BHTEU and the Barrier Industrial Counsel also cease and refrain from making any threats to the BHHS, the Far West LHD and the Ministry that their members will engage in any such industrial action. 1. During closing submissions I had the following exchange with Mr Seck and Mr Knox: [50] "COMMISSIONER: Okay. I will hear from the others. It would seem to me that, just like any other application for dispute orders, Mr Seck, it would be for the applicant to put forward the evidence to demonstrate that there is actually a need for them and I would have to hear from the parties on that. I think that would have to be dealt with separate to my determination of the award question. SECK: I understand, Commissioner, and perhaps the way it's to be dealt with is that once you hand down your decision we can then have regard to the decision and, if there's continuing industrial action taking place at the time the decision is published and any award is made, we can then seek to have the matter relisted and programmed in the appropriate way. I'm hopeful that perhaps the industrial action will have ceased by then and, if it hasn't ceased, then we will take the appropriate steps to bring that to the attention of the Commission. COMMISSIONER: It may well be that Mr Knox can get some instructions as to whether-- KNOX: Commissioner, if it assists, I'm happy to say at this stage that Mr Seck used the term that there is to be under the agreement no interruption of work. The industrial action that was taken in early 2019 and then in - 2018 and then in 2019, the latter relating to the 2.5% non-payment, was of irritant value only. There is no effect upon the working of the hospital. It is just if you put it teeing off the applicant because they are not able to collect for meal payments for staff meals and the like. Nothing at all impinges upon the operation of the hospital, the patients or anything else. I'm just receiving a message, and there's a prepayment for pharmaceuticals and private billing is disrupted. So as far as the disruption to work, there is none, sir. COMMISSIONER: But there's no dispute that it is industrial action? KNOX: It's industrial action of a fairly benign basis though. COMMISSIONER: Well, we can argue at the appropriate time about whether the benign or other nature of the industrial action makes a difference but, be that as it may, what you have confirmed on instructions from Ms Ferry is that there is industrial action continuing to take place and there is no, it would appear, no intention by the BHTEU to recommend to its members that that industrial action cease. Is that a fair summary? KNOX: Those are my instructions at this stage, sir, yes. COMMISSIONER: Thank you, Mr Knox. Mr Seck, just back to you for a moment. You're not seeking orders today, I understand. SECK: No. We wouldn't be expecting orders, Commissioner, necessarily until you publish your decision." 1. In keeping with the position advanced by Mr Seck, I propose to grant the Ministry liberty to apply if it wishes to be heard on the question of whether dispute orders ought to be made. Directions and Recommendation Directions 1. I direct the parties to confer with a view to agreeing on the classifications to which the New Award will apply. Consistent with this decision: 1. the classifications in the New Award will be those contained in the Schedule 2 Awards and any additional classifications which presently exist under the Industrial Agreement for which there is no reasonably equivalent classifications under a Schedule 2 Award; 2. the parties should seek to reach agreement on matching each classification under the Industrial Agreement to the nearest equivalent classification under a Schedule 2 Award; and 3. for any classifications under the Industrial Agreement for which there are no reasonably equivalent classifications under a Schedule 2 Award, the parties should seek to reach agreement on the appropriate classifications for inclusion in the New Award. 1. I further direct the parties to confer with a view to agreeing, to the extent possible, on the terms to be contained in the New Award having regard to this decision. In particular, the New Award: 1. should be limited in its application to the classifications agreed between the parties pursuant to the direction at [265] above, or as determined by the Commission; 2. must provide for five weeks annual leave per annum to all employees to whom it applies; 3. must provide that employees who are employed in the BHHS as at the date on which the New Award is made ("Existing Employees") will accrue long service leave at the rate of 1.3 weeks per year of service for as long as they are employed under the New Award. Employees who first commence employment in the BHHS after the date on which the New Award is made ("New Employees") should accrue long service leave at the rate presently applicable to employees of the NSW Health Service not covered by the Industrial Agreement. In this regard: 1. New Employees include employees who are employed in the NSW Health Service, but not in the BHHS, as at the date on which the New Award is made; and 2. the entitlement to long service leave for New Employees may be reflected in the New Award either by a provision explicitly describing that entitlement or through the calling up of relevant provisions of the Schedule 2 Awards; 1. must draw no distinction in the rates of pay to be paid to Existing Employees as opposed to New Employees. That is, the rates of pay should continue to include the BHTVA for all of the employees to which the New Award applies. The salaries and salary-related allowances in the New Award should reflect a 2.5% increase from the first full pay period on or after 1 July 2019 and a 0.3% increase from the first full pay period on or after 1 July 2020; 2. should provide for Pool, Offensive Work (sewerage works and grease traps), Typing Qualification (45 words per minute), Sterilising Certificate and Pruning Shrubs allowances in the same amount and subject to the same conditions as presently provided for in the Industrial Agreement; and 3. should provide that in respect of each classification the conditions of employment will otherwise be established by reference to the relevant Schedule 2 Award. 1. The proceedings will be listed for report back on a date to be advised, but no earlier than three months after the date of this decision. At that time I expect the parties to be in a position to inform the Commission: 1. of their progress in respect of the matters referred to at [265]-[266] above; 2. whether any areas of disagreement have arisen which remain unresolved; 3. whether it is anticipated that the assistance of the Commission will be required to resolve those issues, either through conciliation or arbitration; and 4. if so, the directions that they would seek to have the Commission make. 1. Notwithstanding the directions made, I grant the parties liberty to apply on reasonable notice. This includes but is not limited to the Ministry having liberty to apply if it wishes to be heard on the question of whether dispute orders ought to be made. Recommendation 1. In its Closing Submissions the Ministry contended: "20. By making its application for an award, the Applicant has given notice of the termination of the 1997 Agreement pursuant to its paragraph 3.3 (which provides that can be terminated by either party on three months' notice). The Applicant considers that the termination will take effect on and from the date of the Commission's decision in this matter." (Footnotes omitted) 1. In an earlier submission filed on 17 April 2020 the Ministry referred to its intention to terminate the Industrial Agreement "on and from a date when the proposed award is made". 2. As is apparent, the effect of this decision is not to make an award, but rather to establish the basis on which a New Award will be made. The New Award can only be made once the parties have complied with the directions set out above and the Commission has determined any matters that cannot be agreed between them. 3. On a literal application of the Ministry's Closing Submissions, the Industrial Agreement will come to an end as at the date of this decision. That creates the possibility of a lacuna in coverage of the relevant employees until the New Award is made. That is to be avoided. 4. In all of the circumstances, it is appropriate that the existing arrangements be maintained until the New Award is made. This will not only ensure that employees maintain the terms and conditions of employment under an industrial instrument, but also offers some incentive for the parties (and especially the Ministry) to move quickly to finalise the terms and coverage of the New Award. 5. For these reasons I recommend that the effective date of the termination of the Industrial Agreement be deferred until the date on which the New Award is made. This is consistent with the Ministry's position as at 17 April 2020. 6. I direct that if a party does not accept this recommendation they are to inform the Registry of that fact by 4.00pm on 3 February 2021. I will then list the matter for the purposes of making directions so that the parties can be heard on whether an interim award ought to be made preserving the terms of the Industrial Agreement pending the making of the New Award. Damian Sloan Commissioner ********** Endnotes 1. By s 115(1) of the Health Services Act 1997 (NSW) , the NSW Health Service consists of those persons who are employed under Ch 9 Pt 1 of that Act by the Government of New South Wales in the service of the Crown. 2. Affidavit of Melissa Welsh, 20 February 2020, at par 1. 3. The applicant to these proceedings is the Health Secretary exercising on behalf of the Government of New South Wales the employer functions of the Government in relation to the staff employed in the NSW Health Service, pursuant to s 116(3) of the Health Services Act. For ease of reference, and for consistency with the terminology of the parties' submissions, I will in this decision refer to the respondent as "the Ministry". 4. Clause 49(iii) of the Health Employees' Conditions of Employment (State) Award purports to exclude the "Country of Yancowinna". It is safe to assume that this is a typographical error. 5. Tcpt, 5 May 2020, p 16(39)-17(19). 6. Ministry's Closing Submissions at par 27. 7. Tcpt, 14 August 2020, pp 11(34)-12(10). 8. At the hearing Ms Sutton stated that she goes by the name "Sutton" as opposed to "Coombe". I will refer to her accordingly. 9. Ministry's Reply Submissions at par 35 10. SC Taylor, "Industrial Relations in the Broken Hill Mining Industry", The Journal of Industrial Relations, Vol 7, No 2, July 1965 at p 101 11. William A Howard, "The Rise and Decline of the Broken Hill Industrial Relations System", Monash University, Management Paper No 34, September 1990 at p 2 12. Tcpt, 14 August 2020, p 16(5-23). 13. Statement of Elizabeth Allen, 21 February 2020. 14. Affidavit of Fiona Lawrance, 20 February 2020 at par 12. 15. Affidavit of Fiona Lawrance, 20 February 2020 at par 43. 16. Tcpt, 8 May 2020, p 79(25). 17. Affidavit of Fiona Lawrance, 20 February 2020. 18. Affidavit of Melissa Welsh, 20 February 2020. 19. Affidavit of Dale Louise Coombe (née Sutton), 20 February 2020 at par 58. 20. Tcpt, 20 May 2020, p 31(14-43). 21. Affidavit of Darriea Turley, 3 April 2020 at par 26. 22. Tcpt, 22 May 2020, pp 118(39)-119(47) 23. Ministry's Closing Submissions at par 127. 24. HSU's Closing Submissions at par 35 25. Statement of Elizabeth Allen, 21 February 2020, Attachment EA22 26. Affidavit of Melissa Welsh, 20 February 2020 27. Tcpt, 19 May 2020 41(22-30) 28. Tcpt, 19 May 2020, pp 43(42)-44(16) 29. Affidavit of Dale Louise Coombe (née Sutton), 20 February 2020 at par 15 30. Affidavit of Ben Lyons, 3 April 2020 at par 9 31. Ministry's Closing Submissions at par 119 32. Statement of Elizabeth Allen, 21 February 2020 at par 23 33. Statement of Sally Elizabeth McDonald, 30 March 2020 at par 16 34. Statement of Shaun Louis Podnar, 30 March 2020 at par 12 35. Statement of Christopher Philip Jones, 30 March 2020 at par 7 36. Statement of Marshall Scott Kelly, 2 April 2020 at par 13 37. Affidavit of Darriea Turley, 3 April 2020 38. Ministry's Closing Submissions at par 51(vii) 39. Statement of Stuart Thomas Riley, 31 March 2020 at par 7 40. HSU's Closing Submissions at par 64 41. Statement of Elizabeth Allen, 21 February 2020, Attachment EA22. 42. BHTEU's Closing Submissions at par 7.1 43. Affidavit of Rosslyn Ann Ferry, 3 April 2020 at par 35 44. Statement of Elizabeth Allen, 21 February 2020 at par 43. 45. Ministry's Reply Submissions at par 55. 46. Affidavit of Rosslyn Ann Ferry, 3 April 2020 at par 35 and Annexure RF3 47. Affidavit of Rosslyn Ann Ferry, 3 April 2020 48. Affidavit of Rosslyn Ann Ferry, 3 April 2020 49. Tcpt, 21 May 2020 pp 46(13)-49(11) 50. Tcpt, 14 August 2020 pp 29(28)-30(25) Amendments 11 January 2022 - Amendments made 22 February 2022 - Amendment to cover sheet. 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: 22 February 2022