Industrial Relations Commission of New South Wales CITATION : Federated Municipal and Shire Council Employees' Union of Australia, NSW Division v Newcastle City Council [2000] NSWIRComm 86 PARTIES : Federated Municipal and Shire Council Employees' Union of Australia, NSW Division Newcastle City Council FILE NUMBER: IRC 4113 of 1999 CORAM: Harrison DP at 1 CATCHWORDS : Industrial Dispute - progression through salary system - award interpretation - award classification Industrial Relations Act 1996 LEGISLATION CITED : AWARDS Municipal Employees Newcastle (Salaried Division) Award Municipal Employees (Newcastle) Award HEARING DATES: 05/03/2000 DATE OF JUDGMENT: 06/15/2000 APPLICANT Mr Noel Martin Federated Municipal and Shire Council Employees' Union of Australia, NSW Division LEGAL REPRESENTATIVES: RESPONDENT Mr Bill Potocki Local Government Association of NSW JUDGMENT: - 18 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Thursday, 15 June 2000 MATTER NO IRC 4113 OF 1999 Notification under section 130 by Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division of a dispute with Newcastle City Council re progression through salary system DECISION 1 This matter arises by notification pursuant to section 130 of the Industrial Relations Act 1996 ('the Act'), filed by Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division ('the Union') on 2 August 1999. 2 The notification advised of a dispute between the Union and Newcastle City Council ('the Council') concerning the progression of a member through the salary system. The matter was subject to compulsory conference proceedings on 1 October 1999 in which it was established that the matter could not be resolved by agreement. 3 The necessary Certificate of Attempted Conciliation was issued with directions that the Union file and serve an outline of case and specific remedy sought; and that, within 21 days of receipt of the Union's documents, the Council file and serve an outline of defence with a statement of grounds and reasons to be relied upon. 4 The matter was stood over, to be relisted on receipt of documents in accordance with Directions. 5 On 6 December 1999 the Union filed an application with the Industrial Registry for Orders pursuant to s.136 of the Act, seeking specific remedy in the following terms: "B. (The MEU) Seeks orders that Newcastle City Council recognise and pay Mrs H Bingham as being Administrative Assistant Grade 3 (class 15) under Municipal Employees Newcastle (Salaried Division) award 1989, paragraph (g) sub-clause 3 of clause 5 Progression and Study Leave. C. Newcastle City Council backpay Mrs Bingham her entitlements under the Newcastle Award." 6 The matter was subsequently listed for further procedural consideration on 24 February 2000. The parties reiterated their inability to resolve the matter by agreement and provided the Commission with an assessment of two days for arbitration proceedings. 7 The Union sought Orders that further information be made available to it by Council. Mr Welsh, appearing on that occasion for the Council, submitted that orders were unnecessary as the Council had provided to the Union all relevant documentation and information sought by it that in fact existed. On examination of the available documents and the submissions of Mr Welsh, Mr Martin accepted that all relevant and available information sought had been provided. 8 The matter was scheduled for arbitration proceedings on 3 and 4 May 2000. 9 Mr Martin brought evidence from Mr P Marzato and Mr D Peebles, officials of the Union: and Ms H Bingham, the member of the Union subject to the present application. 10 Mr Potocki brought evidence from Mr G McMillan, employed by Council in the position of Personnel Manager from June 1998; and Mr J Graham employed by Council in the position of Manager Health Services from October 1993. 11 The evidence established that Ms Bingham has been employed by Council in an administrative capacity since 2 February 1987. Ms Bingham was employed over the relevant time pursuant to the Municipal Employees, Newcastle (Salaried Division) Award (243 IG 1046) ('the 1989 Award'), until its replacement from 1 May 1996 by the Municipal Employees (Newcastle) Award (294 IG 1338) ('the 1996 Award') with effect from 1 May 1996. 12 The 1996 Award provided for the introduction of a competency based salary system with transition arrangements thereto. The relevant provisions of the 1996 Award are found at 294 IG 1341 and 1342 in the following terms: 4. Salary System 4.1 Operation of the Salary System - A competency-based salary system will operate to recognise and reward staff for the competencies required and used by staff to support the achievement of the Council's organisational objectives. 4 .2 Entry levels - Entry levels for job functions will be determined by the agreed Job Evaluation Process. 4.3 Progression Within the Salary System - Progression within the salary system in a job function will be based on the acquisition and use of required competencies as determined through the competency standards development process. It is recognised the salary system does not place artificial restrictions on progression within the salary structure. The number of competencies required within a function and the number of positions available in the Organisation will determine profession opportunities. Competency assessment will be carried out by staff who are trained in competency assessment techniques and methods and by staff with experience in the competency being assessed. As competencies are attained and assessed, the competencies will be used in order to attain and maintain the required standard. Where an employee successfully achieves appointment to a higher position, the minimum rate will be the entry level rate for the position as determined by the job evaluation process. 4.4 Transition Arrangements - It is the Council's objective to place all employees on a salary point in the new system as soon as possible. Current employees will retain existing rates and have access to future organisation-wide increases. The parties agree to co-operate in the transition from the previous classification structure to the new structure in an orderly manner without creating false expectations or disputation. An implementation team comprising union, Management and employee representatives will be established to facilitate the introduction of the new system. This is in recognition of the complex nature of the issues involved and the need to deal with anomalous situations as they arise. Current employees will retain the opportunity to progress through existing scales or to be appointed to positions at salary levels at previous rates of pay, provided such positions are within traditional career expectations. This approach will prevent employees from any disadvantage to real and anticipated career moves. This will operate for the life of the award. New employees will operate under the salary system in this award. 4.5 Transfer to New System - Transition of staff to the new system will not provide immediate pay increases for all staff. Transition rates of pay will either be: (a) at existing rates of pay; or (b) at the entry level or point determined through job evaluation, whichever is the greater; or (c) assessment against competency standards as they are completed. Where the new system indicates that increases in rates are appropriate on implementation, adjustments may be made on a retrospective basis, but only where it is agreed that competencies previously existed. Maximum retrospectivity will be to 31October 1993. ( Emphasis added) 13 The 1989 Award provides a 14 year salary scale for Clerical Staff. 14 Clause 4.4 of the 1996 Award (emphasised above) preserves a right of progression pursuant to the 1989 Award. 15 Sub-clause (g) of Clause 5A Progression and Study Leave of the 1989 Award (243 IG at 1065) provides opportunity for salary movement beyond the 14th year in the following terms: (g) Employees classified as Clerk, 14th year, shall be eligible to be considered for progression to the position of Administrative Assistant, Grade 3 (Class 15) subject to satisfying the following criteria: (i) Three years' satisfactory service as Clerk, 14th year . (ii) Value of work performed meeting Council's requirements for appointment as Administrative Assistant, Grade 3. The Departmental Head will make a recommendation to the Town Clerk in regard to the above matter, such recommendation to be considered by the Town Clerk whose decision shall be final. 16 The evidence established that Ms Bingham had met the requirements of item (i) of sub-clause (g) in that she had performed 3 years satisfactory service as Clerk 14th year by 20 April 1997. 17 In accordance with standard procedures the Personnel section of the Council initiated a salary review in accordance with sub-clause (g), requiring Mr Graham, as the manager responsible, to express a view in respect to item (ii) of sub-clause (g). This procedure was initiated on 13 June 1997 with a requirement that it be completed by 23 June 1997. 18 Mr Graham's conclusion are found in exhibit 4, the Salary Increment Report in respect to Ms Bingham, dated 8 July 1997 in the following terms: " Have discussed progression in old award 14-15 with employee and representatives of Personnel and Employee Relations. Progression based on enlargement of job and given placement of position in new award I can not support class 15 increment." 19 On the basis of this conclusion Ms Bingham was not afforded a salary increase. Ms Bingham challenged this assessment, thus commencing a process of internal appeal advanced on her behalf by officers of the Union. Ms Bingham herself sought further information concerning policy, procedure and explanation for Council's refusal. 20 Ms Bingham asserts that she was denied relevant information, misled by Council officers, and threatened that her position within Council staff would be jeopardised by her pursuit of this matter. These allegations are strenuously denied by the Council officers concerned. 21 The allegations are quite serious and accordingly require a high standard of proof. There is insufficient information before the Commission to allow a conclusion in respect to these issues. 22 I determine that these matters are not relevant to, and form no part of, consideration of the merits of the application before me in this matter. 23 The evidence of Mr Peebles is restricted to his participation in and observation of meetings between Ms Bingham and Council officers and does not go to the issues of merit. 24 The evidence of Mr Graham is that he made his assessment of Ms Bingham's eligibility for progression on the basis of advice obtained from Mr McMillan in his capacity as Personnel Manager. Mr Graham's evidence is set out in his affidavit (exhibit 7) in the following terms: 4 In June 1997, 1 received from Personnel a form which required me to make an assessment and recommendation in relation to Ms Bingham's eligibility for progression from Clerk 14th year to Administrative Assistant Grade 3 (Class 15). The general award criteria for making this assessment were attached to the form. 5 It was my initial view that the general clerical position occupied by Ms Bingham did not justify progression to the graded position of Administrative Assistant Grade 3. However, I sought advice from the Personnel Manager in relation to the Council wide approach to this question, to satisfy myself that a negative recommendation from me was not being unfair to Ms Bingham. 6 Advice received from the Personnel Manager included the following points:- (i) Factors to be taken into account when assessing whether a position was at an Administrative Assistant Grade 3 level included the skills involved, the degree of specialist knowledge required and exercised, the accountabilities and responsibilities exercised, the complexity of tasks to be undertaken and whether supervision of other staff was involved. (ii) Growth and enlargement of the job could be factor but only where it could be established that the position had grown in status from a general clerical position to a level which justified a graded Administrative Assistant Grade 3 position. (iii) A further general guide in the assessment process would be the level of other Administrative Assistant positions as opposed to general clerical positions within the Section and Division . (iv) All employees across the Council were assessed on the same criteria and either satisfied or did not satisfy the criteria. A number of instances existed where employees had remained on Clerk 14th year. (v) The new salary system was not to be used as a factor in assessment. It did however support the fact that Ms Bingham's position was a general clerical position given that she was assessed in the new system at 4/5 and higher level clerical positions (the previous "graded" positions) commenced at pay point 7. 7 The above information supported my initial view that progression was not justified and I recommended accordingly. (emphasis added) 25 This evidence was supported by Mr McMillan in his affidavit (exhibit 6). 26 Both Mr McMillan and Mr Graham were at pains during their evidence to stress that Ms Bingham was and remains a highly valued employee of the Council who is considered to be efficient, reliable, and to demonstrate commendable dedication to the tasks required of her. 27 The evidence of Mr Marzato is that prior to taking up his current position with the Union he was Honorary Branch Secretary to the Council's Salaried Officers' Branch and in that capacity participated in negotiations which led to the introduction of sub-clause (g) of the 1989 Award. Mr Marzato also served on the Grading Committee which dealt with progression under the 1989 Award. 28 Mr Marzato's evidence is that the Administrative Officer, Grade 3 step arose from representations by clerical staff who had reached the top of the scale (class 14), thus eliminating opportunity for any further salary movement unless an alternate position became available within Council. Mr Marzato deposed that the representations made on behalf of those salaried staff were that if they continued to apply themselves and did a good job in their position, there should be some recognition awarded to those persons who had remained in their position for the specified time. 29 Mr Marzato's evidence is that, following much negotiation, the Union and Council arrived at an agreed position of 1 class movement after 3 years on approval of the appropriate manager. Mr Marzato deposed that the issue of criteria was " basically really left to the manager ". Mr Marzato submitted that the Union's view of the outcome of these negotiations was: "…that if somebody was in class 14 for that number of years and they were performing at a high level and they were performing what people would see as duties of a top level clerical incremental scale person, that person should have then the opportunity of being assessed by their manager and either given the okay to move to 15 or not. So that's my recollection of the actual criteria that was used, and as I said, my understanding is that the people who have progressed were basically progressed under those rules." (Transcript p22 ) 30 Mr Marzato's evidence is that during the course of his time as Honorary Branch Secretary, some nine persons were advanced and two people failed to attain progression. 31 Mr Marzato deposed that his recollection of the negotiation process was that Council required higher duties to be a requirement for advancement and that this was opposed by the Union as inappropriate and inconsistent with their perception of the grading structure and did not form part of the negotiated outcome. 32 Mr Marzato deposed that his recollection of the agreed position was that where an employee at the top of the clerical scale continued to carry out duties commensurate with that level and if they continued to perform at a high level and management was so satisfied that they should be rewarded. 33 In cross examination Mr Marzato conceded that assessment was left to the manager as it was considered the manager had a better knowledge of the type of duties the subject employee was required to perform. 34 Mr Potocki challenged Mr Marzato on the wording of item (ii) of sub-clause (g), which he put provided absolute discretion to management. Mr Marzato acknowledged the openness of item (ii), which he contended was drafted on the basis of agreement and understanding between the parties that the provision was a vehicle for advancement not an obstacle to progression. 35 Mr Marzato's evidence of the negotiations and the intent of the outcome arising therefrom is found at pages 25 and 26 of transcript in the following terms: "…. Well, all I can say is, with the absence of anything defined in that paragraph, I fall back on our negotiations; and the intent of the negotiations were to have the people who were in that position, if they've reached the top of the level of the clerical scale and everybody - in normal circumstances people who have reached the top of the clerical scale have been doing work commensurate with that level, that people were rewarded for continuing to do that work in a high performance sort of - with the attitude of a high performer." "… … it was the intent to have the movement as I explained it but possibly it wasn't prescribed in any way because that allows the flexibility for managers to progress their people." 36 The evidence of Mr Marzato concerning the negotiations and intent of the parties in the inclusion of sub-clause (g) was not challenged. 37 The evidence of Ms Bingham details her representations to various Council officers seeking a reclassification dating from April 1997, and her lack of success therewith. Ms Bingham notes that her eligibility for increment pursuant to item (i) of sub-clause (g) occurred on 20 April 1997, prior to the introduction of the competency based salary system developed pursuant to the 1996 Award for her classification. The Commission was not taken to the 1996 Award or the salary system arising therefrom by either of the parties. 38 Ms Bingham deposed that she was informed by Mr Graham that in order to satisfy item (ii) of sub-clause (g) to progress to class 15, her job had to drastically change and that his view was that Ms Bingham's job had not. It is Ms Bingham's evidence that Mr Graham put to her: "I know that you give 100%, no 150% to your job. Don't get me wrong we're good friends, its nothing personal, there is no one being upgraded from 14 to 15. The new assessment criteria has determined that your job has actually been devalued." 39 Ms Bingham deposed that her duties and the way in which she was required to carry them out had altered over time; the most significant difference being the introduction of computerisation and electronic document management systems, requiring her to undertake specific training. In referring to change in the level of complexity of her duties, Ms Bingham deposed that she has assisted in the introduction of new systems, including involvement on a working committee for that purpose. Ms Bingham further deposed that reduction of staff within Council over the relevant time required her to take on more responsibilities and more tasks, necessitating the acquisition of additional skills. 40 Ms Bingham deposed that her perception was that progression to class 15 was a natural progression and cited an example of another staff member, identified as Ms Jackie Copetti, who had been progressed in that way. 41 The evidence of Mr Graham is that he is one of three managers in the Development and Environment Division of Council. Mr Graham is the Manager of Health and Environmental Services, the others are the Manager of Development and building services and the Manager of Policy and Programs. Mr Graham deposed that each of these areas is staffed with an administrative assistant reporting to the Manager, and a number of general clerical staff. 42 Mr Graham described his particular management area as one of quite diverse functional responsibility made up of five individual units; and that his immediate staff is comprised of his administrative assistant and three general clerical support staff, one of whom is Ms Bingham. Mr Graham deposed that this structure had been in place prior to 1992. Mr Graham deposed that the administrative assistant undertook a high level role requiring particular skills, responsibilities and knowledge; with some responsibility for staff co-ordination issues, and as such is placed above the clerical assistants in the hierarchical structure. 43 Mr Graham deposed that he had made Ms Bingham aware of this structure and the responsibility levels during the course of several discussions around July 1999 concerning her application for progression and the decision making process involved therewith. 44 Mr Graham deposed that from 1992 Ms Bingham had occupied the position of Health Services Clerk, moving to the position of Food Surveillance Clerk in approximately 1997. Mr Graham conceded that there had been changes in the role and functions carried out by Ms Bingham, which he put were no more than the changes experienced by all staff across Council. Mr Grahame expressed the view that the function of supporting a number of professionals is, in general clerical terms, in essence the same. 45 Mr Graham deposed that he was at pains to ensure that he brought an objective approach to Ms Bingham's application, consistent with Council-wide application of the Award provisions, and accordingly had sought advice from Mr McMillan and had encouraged Ms Bingham to seek the advice of the Human Relations Department. Mr Graham's evidence is that he and Ms Bingham agreed to disagree on the proper application of the Award. 46 Mr Graham conceded that there was no documented policy within Council for assessment of increment to class 15 pursuant to the Award. Mr Graham deposed his perception of the distinction between the responsibilities of an administrative assistant and a clerical support person. Mr Graham described the process of consideration he employed to arrive at his decision to deny the progression to Ms Bingham, emphasising that Ms Bingham's performance was not a consideration: GRAHAM: A: I was trying to explain obviously that in comparison to how I arose at my decision, I sought professional advice, my own management advice, and the advice that also occurs within the organisation. I am well aware of the differences in the roles and responsibilities of my staff, particularly that of an administrative assistant and that of a general clerical support person. So I guess I'm well aware that at the end of the day I made a decision. I was very conscious that in making that decision that I'd sought professional advice and was aware of the organisational approach to these matters. The last thing I needed to do, as a professional manager, was make an ad hoc, on the run decision, that would disadvantage Heather, a long term employee of the organisation. It needed to be fair and equitable. I did, in our meetings on and around 8 July, everything that I possibly could to explain how arrived at that decision and encouraged Heather to seek the same avenues. At the end of the day, I guess it's obvious Mr Martin, the decision was made and we agreed to disagree. MARTIN: Q: During your discussions - or I may take you to point 8 of page 2 of your statement Mr Graham, you emphasised that the recommendation had nothing, to do with her performance? A: I emphasised, and I'll say on record, that Heather is a very professional and committed employee of Newcastle City Council, as I would like to think, so am I. But certainly, in relation to the criteria, in relation to the progression, that she unfortunately didn't make that criteria and in my assessment the progression could not be recommended." ( Transcript pp62 - 63) SUBMISSIONS 47 Mr Martin relied upon the evidence of Mr Marzato, going to the intent and purpose of the 1989 Award provision, submitting that Council had departed therefrom in its assessment of Ms Bingham. Mr Martin submitted that the intent of this provision was to provide long term clerical employees with an additional increment where those people were long standing, high performing employees. 48 Mr Martin further relied on the evidence of Mr Graham which confirmed that Ms Bingham was a high level performer in her position, submitting that Ms Bingham met the 1989 Award requirements for progression. Mr Martin submitted that reference by Mr Graham to assessment of the position pursuant to the 1996 Award was inappropriate. 49 Mr Martin further relied on the evidence of Mr Graham that the work requirements of Ms Bingham had in fact changed, which further reinforced the argument for progression. 50 Mr Potocki reiterated that Ms Bingham's performance had never been in question, submitting that this was an irrelevant criteria. Mr Potocki relied upon the Award, submitting that literal interpretation should be applied, emphasising that the decision of the Town Clerk (now General Manager) shall be final. 51 Mr Potocki conceded that the intent of the 1989 Award was difficult to establish, submitting that the consenting parties had the opportunity to express themselves more clearly, if indeed the intent was as advanced by Mr Marzato. Mr Potocki submitted that the intent of sub-clause (g) was not to provide automatic progression and that such progression was dependent upon the requirements of the organisation as determined by management be met. Mr Potocki emphasised the systemic approach adopted by Mr Graham, who took advice as to the Council's Award application of the provision and acted accordingly. 52 Mr Potocki categorised this claim as application to the Commission to establish an extra administrative position and to assume the role of the employer and establish an additional position within the Council's structure which Council regard as unwarranted. 53 Mr Potocki submitted that the application for orders should be dismissed. CONSIDERATION 54 The principle issue between the parties is whether the requirements of 5A(g)(ii) of the 1989 Award are met by continued satisfactory performance; or by growth in the skills responsibilities and value of the work performed or the way in which it is performed. 55 There is little or no support for the latter contention. There is no written policy or procedures applied by Council to test this job growth. There is no evidence in these proceedings of comparable positions and the criteria used by Council to determine the fact. There is further a lack of logic in the approach. In circumstances where the duties required of a clerical officer "grow" or are added to by managerial requirement to a level above that at which the clerical officer is classified and paid, a review process can and should be initiated to bring the rate of pay in line with the duties and responsibilities of the job. 56 This review process is found at clause 22 of the 1989 Award in the following terms: 22. Grading Allotment of grades and classes covered by this award shall be made by a Grading Committee comprising of the members of the Municipal Employees (Newcastle) Conciliation Committee, and any of such members may nominate an alternate member of the Conciliation Committee to act on the Grading Committee on his/her behalf. In the event of a disagreement of the members of the Grading Committee as to the grade and class to which an employee is to be allotted, either party may refer the matter to the Conciliation Committee. The Grading Committee shall meet at least twice a year in the months of June and November, if required. 57 There is no argument from management that Ms Bingham satisfies the first contended criteria of continued satisfactory performance. Management concede some change in duties, the issue being of degree; management contending that change is not sufficient to satisfy the second contended test. 58 I do not accept the submission by Mr Potocki that the Commission is asked to place itself in the role of the employer and create an additional position within Council which Council deems unnecessary. The Commission is asked to review management's implementation of the provisions of Clause 5A(g) of the Award in respect to Ms Bingham against the principles of equity, good conscience and substantial merits of the case. 59 The principle issue is whether management have erroneously or unfairly withheld approval for progression by Ms Bingham. 60 The evidence of Mr Mazarto that the provisions of Clause 5A(g) of the 1989 Award were intended to be facilitative is not challenged, and so is accepted. 61 This evidence suggests that management have sought to introduce a higher test for progression than that agreed between the parties at the time the current provisions of the Award were made. 62 The evidence of Mr Graham that "nobody is being progressed" is disconcerting as it is indicative of a freeze by Council on progression pursuant to the 1989 Award and is contrary to the preserved right of progression found in clause 4.4 of the 1996 Award. This concern is fuelled by Mr Graham's reference to the grading under "the new Award" in his report recommending against progression. 63 It is not necessary to make a positive finding in respect to these matters. If this were the case, it is a course not open to Council and indeed denied by it. There is, however some justification for the view that Council's actions were coloured by the events of the time. 64 The argument that to be successful pursuant to the provisions of Clause 5A(g)(ii) duties and responsibilities must have "grown" to that of Administrative Assistant Grade 3 is further undermined by the absence of a definition of this position in the Award. Neither party took me to a definition of Administrative Assistant Grade 3 either in the Award or elsewhere. The best evidence is that led by Mr Potocki from Mr Graham that Mr Graham's personal assistant so qualified and Ms Bingham undertook a role of lesser responsibility. However, this falls significantly short of an objective definition or value statement to be universally applied. 65 I find that the appropriate test for satisfaction of Clause 5A(g)(ii) is that advanced by the Union, and that Ms Bingham satisfied this criteria. Accordingly, the relief sought by the Union is substantiated. 66 I find that Ms Bingham was entitled to hold a traditional career expectation as described in Clause 4.4 Transition arrangements of the 1996 Award. 67 I find that Ms Bingham was entitled to progression to Class 15 on and from 20 April 1997 and so order and award. ORDERS 1. Newcastle City Council recognise and pay Mrs H Bingham as being entitled to the classification Administrative Assistant Grade 3 (class 15) on and from 20 April 1997 pursuant to the Municipal Employees Newcastle (Salaried Division) Award 1989 as varied. 2. Newcastle City Council make payment to Mrs Bingham of her entitlements to Class 15 with effect from 20 April 1997 within 28 days of this decision. oo0oo 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.