Industrial Relations Commission New South Wales Medium Neutral Citation: Australian Workers' Union v Secretary of the Department of Transport [2024] NSWIRComm 1009 Hearing dates: 6 November 2023 Date of orders: 22 February 2024 Decision date: 22 February 2024 Jurisdiction: Industrial Relations Commission Before: Commissioner Muir Decision: 1. Pursuant to s 136(1)(a) of the Industrial Relations Act 1996, the Commission recommends that the parties: (1) meet to consider the circumstances in which higher duties are worked and the rationale for the basis on which the HDA is calculated in light of those circumstances; and (2) work to agreeing amendments to either or both the Wages Award and the Wages HD Procedure so that a provision expressly stating the rationale and basis of calculation can be added to one or both instruments. 2. Pursuant to s 175 of the Industrial Relations Act 1996, the Commission determines that the respondent's Higher Duties for Wages Employees Procedure requires that when employees covered by the Roads and Maritime Services (Wages Staff) Award 2019 are performing higher duties in a position covered by the Roads and Maritime Services (Salaried Staff) Award 2019, the employees should be paid the substantive rate of pay of the salaried role they are acting in, calculated on an hourly basis. Catchwords: EMPLOYMENT AND INDUSTRIAL LAW — Awards and enterprise agreements — Interpretation — Remuneration EMPLOYMENT AND INDUSTRIAL LAW — Industrial Relations Commission — Procedure and powers — Interpretation Legislation Cited: Industrial Relations Act 1996, ss 130, 175 Roads and Maritime Services (Salaried Staff) Award 2019 Roads and Maritime Services (Wages Staff) Award 2019 Cases Cited: Davidson v Commissioner of Police (No 3) [2022] NSWIRComm 1102 NSW Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union and Marrickville Council [2014] NSWIRComm 1006 Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWIRComm 23 Texts Cited: . Category: Principal judgment Parties: Australian Workers' Union (Notifier) Transport Secretary (Respondent) Representation: J Duan (Legal Officer, Australian Workers' Union) with Ms S Doumit (Branch Vice President, Australian Workers' Union) (Notifier) Mr R Hutchinson (Senior Manager Employee Relations, Transport for NSW) (Respondent) File Number(s): 2023/00160317 Publication restriction: Nil decision 1. Pursuant to s 130 of the Industrial Relations Act 1996 (IR Act), the Australian Workers' Union (AWU) notified the Industrial Relations Commission (Commission) of a dispute concerning the correct calculation of a Higher Duties Allowance (HDA) for a particular group of employees of the respondent. 2. The employees in question are those covered by the Roads and Maritime Services (Wages Staff) Award 2019 who are asked to perform higher duties, where the higher duties are covered by a different award of the Commission. The other award is the Roads and Maritime Services (Salaried Staff) Award 2019. The Commission adopts the nomenclature of the parties for those awards, respectively the 'Wages Award' and the 'Salaried Award'. 3. The dispute arises because the awards set a different number of ordinary working hours per week. The Wages Award prescribes 38 ordinary hours per week, and the Salaried Award prescribes 35 per week. 4. It was not in dispute that, when directed to perform the higher duties, the relevant employees should continue to work 38 hours per week. What is in dispute is whether the allowance payable for performing the higher duties should be calculated on a weekly, or on an hourly basis. 5. In the former case the employee performing the higher duties would receive identical remuneration, on a weekly basis, to employees substantively engaged in those duties. However, the employee performing the higher duties would be required to work three hours more than the employees substantively engaged in those duties, for the same remuneration. 6. In the latter case the employee performing the higher duties would receive identical remuneration, on an hourly basis, to employees substantively engaged in those duties. However, the employee performing the higher duties would, over the week, earn more than the employee substantively engaged in those duties, because of the three extra ordinary hours. 7. The parties agree that the question before the Commission is one of interpretation. That is, no new award or variation to an existing award is sought. 8. The notifier asks the Commission to exercise powers pursuant to s 175 of the IR Act to interpret the respondent's policy titled Higher Duties for Wages Employees Procedure (the Wages HD Procedure). The parties each produced a copy of the Wages HD Procedure expressed to commence on 23 March 2020 and setting out on its face a review date of 23 March 2022. 9. There was no evidence before the Commission that the document had been reviewed since it was implemented, and the parties agreed that it continued to operate as published on 23 March 2020. 10. The notifier seeks to have the Commission answer two questions in exercising the Commission's power pursuant to s 175 of the IR Act: 1. does paragraph 3.3 and paragraph 3.7.2 of the Wages HD Procedure mean that when employees under the Wages Award are acting up in a salaried position, they should be paid the substantive rate of pay of the salaried role they are stepping into? 2. does the definition of substantive pay mean "hourly rate of pay" or "weekly rate of pay"? 1. The notifier seeks answers to the questions of: 1. yes; and 2. hourly rate of pay. 1. The respondent asks the Commission to: 1. decline to answer the questions; or 2. in the alternative to find that the substantive rate of pay is that specified in Part B of the Salaried Award, being the annual salary, with the remaining conditions of employment including hours of work as specified in the Wages Award. 1. The alternative outcome sought by the respondent is a different way of giving "weekly rate of pay" as the answer to the notifier's second question. Evidence 1. The notifier tendered a witness statement from John Hugo. Mr Hugo's relevant evidence was that: 1. his substantive role is that of a Works Assistant under the Wages Award; 2. he had been acting as a Work Support Officer since August 2021 and this is a higher duty than his substantive role. The Work Support Officer position is covered by the Salaried Award; 3. his day-to-day duties as an Acting Work Support Officer are the same as those who are substantively appointed to that role and paid under the Salaried Award; 4. because of the way the respondent has calculated the HDA when performing high duties he is paid $45.10 per hour for a 38 hour week. Employees substantively appointed as Work Support Offices and paid pursuant to the Salaried Award are paid $48.97 per hour for a 35 hour week; 1. Mr Hugo attached two pay advices, one for him while performing higher duties, and one for an unnamed colleague substantively performing the same work. 2. Mr Hugo's pay advice sets out his substantive classification, includes an award rate, which the parties agreed was a weekly rate and then detailed his earnings. This included setting out the number of hours worked, specifying an hourly rate for those hours and an additional amount, for the same hours, set out as a higher duties allowance. The sum of the hourly rate and HDA was $45.10. 3. The other payslip set out that employee's classification, specified an award rate which the parties agreed was an annual rate and then detailed that employee's earnings, again including setting out a number of hours worked, specifying an hourly rate for those hours. That rate was $48.97 per hour. 4. The respondent tendered a witness statement from Elaine Keenan. Ms Keenan's relevant evidence was that: 1. she is the Manager, Employee Relations at Transport for New South Wales (TfNSW) and has held that position since June 2017; 2. she has degree and postgraduate qualifications in industrial relations and is responsible for, inter-alia, advising TfNSW management as to the interpretation of industrial instruments; 3. the interpretation pressed for by the respondent has been the one used by the respondent to calculate HDAs as long as she has been employed by the respondent; 4. an earlier procedure of the respondent, predating the Wages HD Procedure, provided the same approach to calculation of an HDA as the Wages HD Procedure. A copy of the earlier procedure was attached to her statement; 5. the Wages HD Procedure was the result of consultation with a range of unions during 2019 and 2020. Copies of the minutes of these consultations were attached to her statement; 6. she is unaware of any prior objection to the calculation of an HDA in similar circumstances to the one now before the Commission; 7. she reviewed the HR system data for the period July 2019 to June 2023 and ascertained that there had been 1029 instances of higher duties performed during that period. Just over half of all higher duties periods were between one and five days, with 72% of those higher duties periods being up to 10 days; and 8. it was her understanding that the short-term nature of the higher duties arrangements are a significant factor for the Wages HD Procedure, stating: "25 … It is impractical to move onto the Salaried Award in full for a few days and then back to the Wages Award. 26. When a worker moves completely to a role covered by another award, payroll needs to perform a conversion. This includes converting all leave balances. Leave balances are shown in hours, because sometimes an employee takes less than a full days leave. However the entitlement is based on 4 weeks per year. 4 weeks per year is more hours under the 38 hour week Wages Award that it is for the 35 hour week Salary Award. It is impractical to do this conversion for a few days or weeks of high duties." 1. Ms Keenan set out various matters as to the way in which the Wages HD Procedure should be interpreted and these have not been extracted above. This is because the Commission considers that these were submissions and are accordingly address below in relation to the submissions of the respondent. 2. Ms Keenan's statement set out responses to the notifier's submissions that the Salaried Award has superior conditions to the Wages Award. The substance of her response was that working 38 hours a week averaged over a four-week cycle created a nine-day fortnight arrangement, which was superior to the 19 day four week cycle in the Salaried Award. 3. The Commission is far from persuaded that working 38 hours for a given weekly pay can be described as beneficial to an employee when compared with working 35 hours for the same weekly pay. The applicable instruments 1. As the employee in question, and any other who might eventually be in the same circumstances, are employed pursuant to the Wages Award, that award should be the starting point. 2. Clause 25 of the Wages Award provides that: "25. Higher Duties 25.1 Subject to the provisions contained in this subclause, Employees are entitled to the payment of higher duties when they are directed to perform the duties of a position graded higher than theirs. 25.2 The Higher Duties Allowance (HDA) is payable for a minimum period of one day. 25.3 To be eligible for HDA, an Employee must satisfactorily perform the major functions of the position. The Employee is not eligible for the HDA payment if they are learning the critical aspects of the higher graded position. 25.4 The Employee's manager or supervisor must approve the period of higher duties prior to the Employee commencing in the higher graded position. Prior approval is also required before any period of acting in higher duties is to be extended. 25.5 HDA is not applicable to positions that are multi-graded (e.g. HDA is not applicable if you are a Roadworker Grade 2 working as a Roadworker Grade 3). 25.6 Higher Duties Allowance (HDA) is only payable when: (a) the Employee fills an existing position during casual absences of the incumbent, including absences due to leave; (b) approval is given to create and place the Employee in a temporary position that is intended to exist for a limited-duration (for example, for specific projects); (c) the Employee is directed to perform certain functions for the purposes of maintaining accreditation; or (d) the Employee is directed to perform the duties of the higher graded position while on call-out or overtime because the regular person is unavailable. In such cases, HDA is paid at an hourly rate only for the period of the overtime or call-out. 25.7 If the required period of relief in a higher graded position is for six months or more, expressions of interest must be sought from the local work area. 25.8 If the higher duties position is a salaried position, the HDA is paid in accordance with RMS Policy." 1. It is, to say the least, curious that there is no provision in clause 25 which sets out how the HDA is to be calculated. 2. Relevant to the current circumstances, clause 25.8 of the Wages Award refers to the Wages HD Procedure. Although the calculation of the HDA in the Wages HD Procedure is far from straightforward, there is at least text which can be analysed. 3. For completeness, clause 3 of the Wages Award, the definitions clause of that award, provides that "HDA means Higher Duties Allowance", and then circuitously references cl 25 of the Wages Award. 4. The parties agreed that no other provision of the Wages Award affords any assistance. 5. Two clauses of the Wages HD Procedure are of particular relevance, being 3.3 and 3.7.2, although other clauses are relevant in context. Specifically, the Commission considers clauses 3.3.1 and 3.7.1 are also of relevance. The clauses provide: "3.3 Decide payment for higher duties The higher duties allowance amount is the difference between your wage and the wage paid at the first step of the higher graded role you are asked to work in. The allowance is always paid at 100% of the higher duties wage. Higher duties is paid for all work of one day or more in a higher graded role, except when: • the work is part of some on-the-job training to learn critical aspects of the higher graded role (see 3.7.1), or • you work in a multi-graded role for example, if you're a Roadworker Grade 2 working as a Roadworker Grade 3) as outlined in the Wages Classification System Multi-Grade Role Progression Procedure. 3.3.1 Higher duties on call-out or overtime If you're asked to work higher duties during a call-out or overtime, for example because the regular employee is unavailable, the allowance is paid at the hourly rate only for the period of call-out or overtime, which may be for less than one day. … 3.7 Other information you should know 3.7.1 Training or work experience in a higher graded role If you are being trained or receiving work experience under supervision in a higher graded role, you are not paid a higher duties allowance for that work. 3.7.2 Higher duties in a non-Wages Award role If you work higher duties in any non-Wages Award role: • the information in this procedure (not the other Higher Duties Procedure) applies to the higher duties work • the higher duties allowance is paid for periods of 1 day or more, and • your conditions of employment continue to be governed by the Wages Award and your wages are paid under the Wages Award system." [Emphasis in original.] Power of the Commission to interpret the instruments 1. The first question which must be addressed is whether the Commission has the power to make the interpretations sought. Section 175 1. Section 175 of the IR Act provides: 175 Powers of interpretation The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument). 1. Consistent with the reasoning of the Full Bench in Davidson v Commissioner of Police (No 3) [2022] NSWIRComm 1102, the power of the Commission pursuant to s 175 of the IR Act is not a power that may be exercised for its own end. That is, the power may only be employed to support the exercise of a function of the Commission, other than s 175 itself. 2. Further, the power of the Commission pursuant to s 175 is expressed to be discretionary and it is a matter for a party seeking the exercise of that power to persuade the Commission that it is appropriate for the Commission to exercise that power. Submissions of the parties 1. Responding to questions from the Commission, Ms Duan submitted that the notifier sought a recommendation as to the future payment of the HDA. As a basis for the exercise of the Commission's interpretation powers, the notifier's submission was circular. 2. While the respondent formally submitted that the Commission should decline to make any interpretation, in substance the respondent's submissions were that the Commission should interpret the disputed Wages HD Procedure, but provide a different interpretation from that sought by the notifier. Consideration 1. It is apparent on a cursory review, as observed above at [24-27], that the Wages Award does not set out how the HDA is to be calculated. In the circumstances of the dispute now before the Commission, the Wages Award at least provides that the HDA is to be paid in accordance with the RMS Policy. 2. The relevant RMS Policy, the Wages HD Procedure, is capable of at least two obvious interpretations. On a cursory review, each of these interpretations is open on a reasonable reading of the words of the policy. Moreover, at a high level, each would find support within both the Wages Award and the Wages HD Procedure as to why, as a matter of public policy, that interpretation is the intended interpretation. 3. It is, accordingly, readily apparent to the Commission that the Wages Award and the Wages HD Procedure, separately and in combination, are ambiguous, as well as lacking a clear expression of the rationale for the basis on which the HDA should be calculated. 4. In such circumstances, it appears obvious to the Commission that a recommendation should be made for the parties to discuss the circumstances in which higher duties are worked, the rationale for the basis on which the HDA is to be calculated in light of those circumstances, and that the parties then work to agreeing amendments for either or both of the Wages Award and the Wages HD Procedure. 5. Further, the Commission considers that interpreting the Wages Award and the Wages HD Procedure as they are currently expressed would assist the parties to understand both the starting point for those discussions and the issues which have led to the ambiguity. The Commission considers this will assist in resolving the industrial dispute before the Commission, as well as significantly reducing the prospect of further disputation concerning the calculation of the HDA under the Wages Award. 6. Having reached these conclusions, it is properly open to the Commission to exercise powers pursuant to s 175 of the IR Act for the purpose of exercising the Commission's functions. Is the Wage HD Procedure an instrument under section 175 1. One further issue should be addressed for completeness. 2. The parties did not address specifically whether the Wages HD Procedure was an instrument falling within the scope of s 175 of the IR Act. 3. Section 175 provides that the Commission may "… determine any question concerning the interpretation, application or operation of any relevant law or instrument …". It further provides that instrument includes "the industrial relations legislation and any industrial instrument". 4. Presumably the use of the phrase "industrial relations legislation" rather than Industrial Relations Act, and particularly given that the words are not capitalised, encompasses at least delegated legislation such as regulations and rules of the Commission. The phrase clearly does not extend to industrial instruments, as these are expressly additional as the inclusive definition in s 175. 5. Because it is expressed to include both types of instruments, the definition of "instrument" clearly extends beyond "industrial relations legislation" and "industrial instruments". 6. For current purposes it is not necessary to exhaustively consider the limits of "instrument". The Wages HD Procedure is clearly of a similar character to an industrial instrument. Importantly it is referenced in the Wages Award. Indeed, on one view might be considered to have been incorporated into the award by that reference. 7. The Commission concludes that determining a question concerning the interpretation, application or operation of the Wages HD Procedure falls within the power given to the Commission by s 175 of the IR Act. Principles of interpretation 1. The parties were substantially in agreement as to the principles to be applied when interpreting awards and industrial instruments. 2. As already observed, the Wages HD Procedure is neither an award nor an industrial instrument as defined in the Act. The Wages HD Procedure is a policy document of TfNSW, albeit one given more official status through cl 25.8 of the Wages Award. 3. The parties agreed that, and particularly in the absence of any other applicable principles, it was appropriate to interpret the meaning of the Wages HD Procedure using the principles developed for interpreting the meaning of industrial awards. The Commission agrees. 4. The fundamental character of the Wages HD Procedure, and the fact that, in the current context, it derives some authority pursuant to the Wages Award, makes use of the award interpretation principles appropriate in interpreting the Wages HD Procedure. 5. The notifier took the Commission to a decision of Newell C in NSW Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union and Marrickville Council [2014] NSWIRComm 1006, in which, it was submitted, the Commissioner came to the same conclusion. 6. The decision of Newell C is not of assistance, as Newell C set out that the document which he was interpreting was an "industrial instrument" within the definition set out in s 8 of the Act: "17. The Agreement, while not a creation of the Commission, is an industrial Instrument; Act, s.8." 1. The respondent summarised the award interpretation principles as: "5. The principles for constructing provisions of an Award are reasonably well settled. They have been recently summarised by a Full Bench of the Commission in NSWNMF v Health Secretary of Western NSW Health District [2019] NSWIRComm 1025 at [21]-[25]. To summarise: a. construction is the process by which the Commission interprets the objective intention of the authors of the award, as demonstrated by the text; b. the text must be understood in context and with regard to the purpose of the particular clause and the instrument as a whole. However, the text remains central and is both the starting and finishing point, and c. 'narrow and pedantic' interpretation should be avoided, and a generous construction is preferable, notwithstanding that the Commission cannot depart from the text to implement its own idea of a desirable policy." [Reproduced verbatim. Footnotes omitted.] 1. The notifier, in more detail and extracting from the decision of Walton J, Pres, sitting as the Industrial Court of New South Wales, in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWIRComm 23 at [115] submitted: "C.1 Rules for interpretation of awards 7. The relevant statement of principles for award interpretation is as follows: (a) The legal meaning of 'a provision of an award' is to be ascertained through a process of construction by which the intention of the provision is deduced. It is the duty of the court to give the words of the award a meaning that the authors of the award are taken to have intended them to have; (b) The process of construction must begin with a textual analysis of the words of the provision, that is, a consideration of the ordinary and grammatical meaning of the words; (c) Whilst the surest guide to the meaning of an award provision is language used in a provision of an award, the meaning of the text may require consideration of the context (which includes, inter alia, consideration being given to the instrument as a whole). Thus, the initial step to construction may involve construing the words of an award provision in context; (d) The consideration of the words of the provision of an award in context includes examining the general purposes and the policy of the provision derived from a statement of policy in the award or from the terms of the award. Thus, the legal meaning may be ascertained by reference to general purpose, consistency and fairness, although, again, the purpose of a provision derives in its text and structure. A relevant consideration in this respect is the mischief remedied by a provision. (See Alcan (NT) Alumina Pty Ltd o Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47].); (e) An examination of the purpose of an instrument is very much part of the traditional approach to award interpretation. It was accepted by Kelleher J in Re Dispute between Broken Hill Pty Co Ltd and the Federated Ship Painters and Dockers' Union of Australia, New South Wales Branch, Re Tank Tops [1961] AR (NSW) 312 at 314 that it is proper to pay regard to 'the purposes for which a provision is intended' (as quoted in Bryce v Apperley at 452 and Kingmill at [63]). An application of this approach may be found in the judgment of Hill J in Australian Workers Union (NSW) v Pioneer Concrete (NSW) Pty Ltd (1991) 38 IR 365 at 380, where it was stated that provisions in awards must be construed reasonably and realistically, 'having regard to their purposes and objectives'. I will add further to this consideration when returning to the notion, developed in the dicta of Street and French JJ, that a generous construction should be adopted in the interpretation of awards; (f) The determination of the purpose or intention of a provision of an award neither permits nor requires a search for what those who drafted or made the award had in mind when the award was made: see Construction, Forestry, Mining and Energy Union (NSW Branch) v Delta Electricity [2003] NSWIRComm 135; (2003) 146 IR 360 at [44] and NSW Fire Brigades at [47]. Further, it is not for the court to construct its own idea of a desirable policy, import it to the award maker and then characterise it as the purpose of the provision: see Brown at [40] (Bathurst CJ)." [Emphasis in original. Footnotes omitted.] Application of the principles The notifier's case 1. Extracted from its written submissions, the following summarises the case of the notifier: "D. Application of rules 14. Paragraph 3.3 of the Higher Duties Procedure stipulates that the higher duties allowance is paid at 100% of the higher duties wage. Paragraph 3.7.2 of the Higher Duties Procedure also states, 'your wages are paid under the Wages Award system'. 15. For these two paragraphs to be consistent with each other, the reference of 100% of the higher duties wage is necessarily the hourly wage of the higher duties wage. This is because paragraph 3.7.2 of the Higher Duties Procedure establishes the Wages Award system, not the substantial wage itself. 16. This interpretation would allow for the two clauses to be read harmoniously and without conflict. If, as the Department argues, paragraph 3.7.2 of the Higher Duties Procedure means that an employee stepping up in a salaried role would have a rate of pay based on a weekly rate of pay rather than an hourly rate of pay, then they would not be paid 100% of the higher duties wage. … … D.1 Ordinary and Grammatical Meaning of Words … 19. 'Substantive rate of pay' is identically defined in both the Wages and Salaried Award, i.e., as the rate an Employee is paid on an hourly basis. 'Substantive Rate of Pay' means the rate an Employee is paid on an hourly basis, paid according to the Employee's contract hours of work and the weekly wage for Employees classification. 20. On an ordinary and grammatical analysis of the meaning of this sentence, the substantive rate of pay is clearly in reference to a hourly rate of pay. That there is reference to the substantive rate of pay as being paid in accordance with the Employee's contract hours of work and the weekly wage for the employee's classification also does not support the Department's interpretation that the substantive rate of pay should be a weekly rate of pay, especially since it is paid in accordance with the employee's contract hours of work. D.2 Purpose of Policy, Consistency and Purpose 21. The Department contends that if the Union's interpretation were adopted, Mr Hugo would be working at above 100% higher grade rate of pay. This would only be the case if the rate of pay is yearly or weekly and therefore divorced from the number of ordinary hours worked either per week or per cycle as dictated by the patterns of work by employees. 22. This is clearly not the case as USS 6/1 employees are being paid $48.96645 hourly with an annual salary of $89,425. Mr Hugo's hourly pay, on the other hand, is paid at $45.10079 per hour with the same annual salary of $89,425. This is reflected in his payslips. 23. This construction is clearly not equitable and results in an employee, whose day-to-day duties are the same as other Work Support Officers, receiving a lower hourly rate of pay. 24. The 'hourly wage' construction adopted by the Department is not consistent with the purpose of the stated objectives of the Act, namely of providing a framework for the conduct of industrial relations that is fair and just, and to promote efficiency and productivity in the economy of the State. 25. It has been established that fairness necessarily has a number of aspects: fairness to employees, fairness between employees, fairness to employers, fairness between employers, and fairness between employees and employers. The notion of fairness encompasses fair treatment as between employees according to their ordinary hours of work, regardless of the pattern in which those hours are worked. 26. The practical effect of the department's position is that Mr Hugo and other employees are working an extra 3 hours for no extra pay when compared to employees already in a Salaried role." [Emphasis in original.] The respondent's case 1. Extracted from his written submissions, the following summarises the case of the respondent: "A. Introduction … 2. The Respondent considers the proceedings to relate to a dispute between the parties concerning the application of Clause 25.8 of the Roads and Maritime Services (Wages Staff) Award 2019 (Wages Award), and of the Respondents Higher Duties for Wages Employees Procedure (Procedure) 3. The Respondent submits that its approach to payment of higher duties is correct because: a. The Award provides that Higher Duties will be paid according to RMS Policy, that is, as stated in the Procedure. The meaning of the Procedure is clear. b. The application before the Commission is to interpret the existing provisions of the Award and the Procedure. It is not open to the Commission on this application to determine what may be considered desirable. c. While it is not necessary to justify the Procedure given a. and b. above, it is the case that the surrounding facts and circumstances of higher duties arrangements illustrate the appropriateness of the Procedure and its historic application. d. The historic application of the Procedure, and consultation with the AWU regarding the Procedure, demonstrates that the approach was known and accepted. It would be unreasonable to reinterpret that now. … C. Provisions of the Award and the Procedure …. 8. The Procedure at 3.3 provides that the employee performing higher duties receives the wage of the role they are performing. This is expressed as an allowance above the employees normal rate, because the employee remains employed and paid under the Wages Award as stated in 3.7.2. 9. Construction must start with the ordinary meaning. The Macquarie Dictionary defines 'wage' as 'that which is paid for work or services, as by the day or week; hire; pay'. It is not accepted industrial usage to define wage as being on an hourly basis. 10. Mr Hugo performed a role covered by the Roads and Maritime Services Consolidated Salaried Award 2019 (Salaried Award). Rates of pay in the Salaried Award are specified as Annual Rates. That is the 'wage' for the purposes of clause 3.3 of the Procedure. 11. Clause 3.3 of the Procedure states that employees are 'paid at the first step of the higher graded role you are asked to work in.' and 'The allowance is always paid at 100% of the higher duties wage'. These words clearly refer to the actual rate stated in Part B of the Salaried Award. The Notifiers interpretation would see an employee receiving more than that rate. That is clearly not intended by the plain words of the Procedure. 12. The Notifier seeks an interpretation of 'wage' that suits the outcome the Notifier desires to now have apply, rather than interpreting the provisions as they stand. 13. The Wages Award defines payments on a weekly basis and the Salaried Award on an annual basis. All that is required to apply the Procedure is to divide the Annual rate under the Salaried Award to a weekly rate. Where the higher duties are for less than a week, a daily rate may be required. 14. Clause 3.7.2 of the Procedure states that 'conditions of employment continue to be governed by the Wages Award'. 15. 'Conditions of Employment' is not defined in the Procedure … . 16. Here 'conditions of employment' is a broad term, capturing all non-financial terms of the Award. Conditions of employment is similarly used with regard to Apprentices and Trainees and employees on limited duration contracts. The word 'conditions' on its own is used in the Wages Award to include the ordinary hours of work for part time employees, and arrangements for shift work including hours worked." [Emphasis in original.] The notifier's response 1. In reply the notifier submitted that: "C. DISTINCTION BETWEEN AN 'ANNUAL RATE' AND AN 'ANNUALISED SALARY' 6. There is an accepted industry distinction between a wages worker and a salaried worker. Where a salaried worker receives an 'annualised' salary, this may be in compensation for amounts in excess of their base hourly rate. On the other hand, the salaried award does not refer to an inflated rate, rather it sets outs an annual rate in compensation for the 35 ordinary hours worked weekly. 7. Employees under the Salary Award are still entitled to penalty rates for Shift Work at Claus 24.3 and overtime worked at Clause 48.3 which is not encapsulated within this annual rate. … … H. HISTORY OF THE PROCEDURE 24. There is nothing in the history of the Procedure as set out by the respondent which points to the existence of a common understanding amongst the parties, not least because there were many individuals involved in the actual drafting of the policy, and many more consulted. Nothing in the minutes annexed to Ms Keenan's witness statements give any hint as to how the phrase '100% of the higher duties wage' should be interpreted; presumably because each party had assumed their own interpretation of this phrase to be self-evident. Unless two employees doing the same work compare their hourly rates, the difference in hourly rate would never become evident. An error that was not picked up remains an error." [Emphasis in original.] Consideration of the Wages HD Procedure 1. The principles to apply are not controversial and are: 1. determine the intention of the provision, as the authors of the provision intended; 2. begin with the ordinary meaning of the words of the provision, which may involve consideration of: 1. other parts of the instrument; and 2. the purpose of the provision, and the any 'mischief' it is intended to remedy; and 1. interpretation is not a means for imposing notions of what the provision should, as a question of merit, provide. 1. As set out above at [24], the Wages Award does not include any provision which sets how to calculate the HDA. It merely provides that employees are "… entitled to the payment of higher duties when they are directed to perform the duties of a position graded higher than theirs." 2. There is very little in the Wages Award which could constitute an implied means for calculating the HDA. Perhaps, referencing the award as a whole, including that the award provides a graded classification structure and sets out wage rates for each position in that structure, it might be inferred that the HDA is the difference between the rate for employee's substantive position and the rate for the higher duties position the employee is temporarily performing. 3. There are obvious public policy reasons why this might be the way to calculate the HDA, being the expectation that a person performing duties at a particular classification should receive the pay set out in the award for that classification. 4. There are also public policy reasons why that rate might not be the correct rate, at least not in all cases. These reasons include that an employee may act up largely to gain experience for their own benefit, or may do so on the basis that they can perform only some of the duties of the higher position to the required standard. 5. In light of clause 25.3, whereby an employee must satisfactorily perform the major functions of the higher position, the Commission concludes that the Wages Award intends that the HDA is the full difference between the employee's wage for their classification and the wage set for the classification in which they are acting up. 6. Clause 25.2 of the Wages Award provides that: The Higher Duties Allowance (HDA) is payable for a minimum period of one day. 1. It seems to the Commission that the most obvious meaning to be given to clause 25.2 is that an employee is only entitled to be paid the HDA when they are acting up in a higher position for at least a whole day. 2. For completeness, the Commission observes that an alternative interpretation is available, pursuant to which an employee is entitled to be paid the HDA for an entire day, even if they only acted up for (say) one hour. This interpretation appears to the Commission less likely to be correct. Largely this is because this would be inconsistent with other awards, many of which expressly provide for payment of a HDA only when acting up for periods of at least five days. 3. That cl 25.6(d) makes provision for hourly payment of the HDA in certain emergency situations reinforces the Commission's view that cl 25.2 should be read as a general requirement that an employee act up for at least one day prior to being eligible for the HDA. 4. In the circumstances of the dispute before the Commission, clause 25.8 provides that the HDA is to be paid in accordance with the Wages HD Procedure. Clause 25.8 does not set out whether that procedure wholly displaces the provisions of clause 25, nor whether if both apply, which one should have primacy in the event of inconsistency. 5. Given the substance of the dispute before the Commission, and in light of the Commission's earlier conclusion that the position of both parties can be rationally advanced, it is clear that what is set out in clause 3.3 of the Wages HD Procedure as to the rate of the HDA is ambiguous. 6. Clause 3.7.2 of the Wages HD Procedure includes a statement that Wages Award employees performing higher duties, where those duties are outside the Wages Award classifications, have the Wages HD Procedure apply to them and "not the other Higher Duties Procedure". Presumably "the other" means the procedure specified by clause 25 of the Wages Award. 7. The statement in clause 3.7.2 of the Wages HD Procedure may, on its face, answer the question as to which document is to prevail. That said the Wages HD Procedure gains force largely by virtue of the Wages Award and so it is questionable whether such a statement in the delegated instrument could be capable of establishing the precedence as between the two instruments. 8. For current purposes this question need not be definitively answered as the Wages HD Procedure specifies a means of calculating the HDA, and the Wages Award does not. 9. The respondent points to the use of the phrases "your wage" and "the wage paid at the first step of the higher grade role", and to the provision that when a person is entitled to the HDA their "conditions of employment continue to be governed by the Wages Award and [their] wages … paid under the Wages Award system", as the basis for asserting that a weekly wage, pro-rated per day in appropriate cases, and not an hourly rate of pay, is the correct way to understand the HDA. 10. Their submission is rational and is open from the words of the procedure. 11. The Commission has also had regard to the respondent's submissions concerning the length of time TfNSW's interpretation has been in use, and that the Wages HD Procedure was the subject of at least two periods of consultation. 12. The Commission considers the latter of these provides little or no assistance, as the minutes of those consultations do not reflect any, even indirect, consideration of the relevant provisions of the Wages HD Procedure. 13. The first of these gives some support to the respondent's position, but not significant support. There is some evidence the respondent's interpretation has been in use for some years, but it is not clear for how many. There is no evidence that it was in place by any kind of considered agreement between the parties. An interpretation in use for even a lengthy period may still be wrong. 14. The notifier submits that the overarching purpose of a higher duties payment is to compensate an employee for performing duties at a classification above their substantive appointment. They submit that this can only mean that if an employee continues to be obliged to work 38 hours when acting in a higher duties role for which ordinary hours are set at 35 hours the employee should be paid a total wage at the hourly rate to which the substantively appointed employee would be entitled. Otherwise, they submit the employer receives the benefit of three extra hours labour for which they do not pay. There is of course force to this argument. 15. The Commission concludes that either interpretation is rationally open, and that neither interpretation is more obvious than the other. 16. Awards of the Commission are intended to provide benefits and protections to the employees covered by those awards. Awards should be read without unnecessary technicality and, within the bounds of the words of the instruments, interpreted beneficially to the relevant employees. 17. Accordingly, the Commission concludes that the correct interpretation of the totality of the Wages Award and the Wages HD Procedure is that the relevant employees should receive the same hourly remuneration when acting up in a salaried position as would the substantively employed person in that position. 18. In such circumstances, the Commission concludes that the interpretation pressed for by the notifier is the correct interpretation. 19. The Commission is reinforced in this interpretation by two further factors. 20. Firstly, both the Wages Award and the Wages HD Procedure allow for hourly payment of the HDA in specific circumstances. It appears to the Commission that these provisions should properly be read so that an employee acting up in those circumstances would receive the same hourly pay as an employee substantively appointed to the higher role. It would therefore be odd for the employee to receive a lesser hourly rate when employed for longer in the higher duty. 21. Secondly, even if the employee acting in the higher duty role was paid at the hourly rate for the higher duty, the employer would still be gaining a financial advantage because the employee acting in the higher duty performs that duty for three further hours at the ordinary rate of pay. Had an employee substantively employed in the position worked 38 hours, the last three of these would have been required to be paid at over time rates. 22. As has been set out above, there are public policy reasons why the interpretation pressed for by the respondent could have found its way into an award made by this Commission, or an enterprise agreement approved by this Commission. However, no such policy reasons are articulated in the Wages Award or the Wages HD Procedure. Outcome 1. The Commission answers the two questions asked by the notifier as: 1. Yes; and 2. Hourly rate of pay. Orders 1. Pursuant to s 136(1)(a) of the Industrial Relations Act 1996, the Commission recommends that the parties: 1. meet to consider the circumstances in which higher duties are worked and the rationale for the basis on which the HDA is calculated in light of those circumstances; and 2. work to agreeing amendments to either or both the Wages Award and the Wages HD Procedure so that a provision expressly stating the rationale and basis of calculation can be added to one or both instruments. 1. Pursuant to s 175 of the Industrial Relations Act 1996, the Commission determines that the respondent's Higher Duties for Wages Employees Procedure requires that when employees covered by the Roads and Maritime Services (Wages Staff) Award 2019 are performing higher duties in a position covered by the Roads and Maritime Services (Salaried Staff) Award 2019, the employees should be paid the substantive rate of pay of the salaried role they are acting in, calculated on an hourly basis. C Muir Commissioner ********** 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 2024