Industrial Relations Commission of New South Wales CITATION : Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award [2004] NSWIRComm 114 APPLICANT New South Wales Teachers Federation RESPONDENT PARTIES : Department of Education and Training TAFE New South Wales INTERVENOR Minister for Industrial Relations FILE NUMBER: IRC3749 of 2003 CORAM: Wright J President; Walton J Vice-President; Boland J; Grayson DP; McLeay C CATCHWORDS : Award - application for increased rates of pay and allowances - teachers in schools and TAFE and related employees - interim relief granted - special case - relevant principles for special cases - quality, productivity and efficiency - shortage of labour - Vinson Report - relativities - finding of special case - work value - work value principle considered - changes to curriculum - finding of significant net addition to teachers' work - inherent requirements of job - professional role of teachers - already partially compensated for changes in work value - ameliorating factors - economic considerations - public interest - variation to award rates approved - work value considerations in government schools and TAFE considered separately - different conclusions in government schools and TAFE - averaging - Year Adviser allowance extended and increased - future salary claims for promotional positions in Leave Reserve clause - No Further Claims clause amended Child Protection (Prohibited Employment) Act 1998 Children and Young People (Care and Protection) Act 1988 Commission for Children and Young People Act 1998 Education Act 1990 LEGISLATION CITED : General Government Debt Elimination Act 1995 Industrial Relations Act 1996 Occupational Health and Safety Act 1983 Occupational Health and Safety Act 2000 Occupational Health and Safety Regulations 2001 Crown Employees (Administrative and Clerical Officers) (State) Award and other Awards (No 2) (1993) 52 IR 243 Crown Employees (Teachers) Award (1964) AR 463 Crown Employees (Teachers) Awards [1980] AR 910 Crown Employees (Teachers) Awards Reference [1981] AR 217 Crown Employees (Teachers - Department of Education) Award (1970) AR 345 Crown Employees (Teachers, Department of Education) Award (1973) AR 742 Crown Employees (Teachers, Department of Education) Award (1974) AR 610 Crown Employees, Teachers, Departments of Education and Technical and Further Education [1980] AR 127 Crown Employees (Teachers and Related Employees - Technical and Further Education Teaching Service) Salaries and Conditions Award (unreported, IRC 1619 of 1989, Fisher P, Bauer and Hungerford JJ, 7 August 1991) Crown Employees (Teachers, Education Teaching Services) Award (unreported, IRC 566 of 1989, Fisher P, Bauer & Hungerford JJ, 12 September 1991) CASES CITED : Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award [2003] NSWIRComm 479 Health and Community Employees Psychologists (State) Award (2001) 109 IR 458 Health Employees Pharmacists (State) Award and other Awards [2003] NSWIRComm 453 Medical Officers - Hospital Specialists (State) Award & Other Awards (1990) 33 IR 79 Pastoral Industry (State) Award Re (2000) 104 IR 168 Public Hospital Nurses (State) Award (No 3) (2002) 121 IR 28 Public Hospital Nurses (State) Award (No 4) [2003] NSWIRComm 442 State Wage Case August 1989 (1989) 30 IR 107 State Wage Case 2003 (2003) 121 IR 446 Teachers (Non-Government) Pre Schools (State) Award and Another Award (2001) 120 IR 3 Teachers (Non-Government Schools) (State) Award and Other Awards (unreported, IRC 161 of 1990, Fisher P, Sweeney J and Varnum DP 17 August 1990) HEARING DATES: 08/08/2003; 09/11/2003; 09/23/2003; 09/24/2003; 09/25/2003; 09/26/2003; 10/16/2003; 10/17/2003; 10/21/2003; 10/22/2003; 10/22/2003; 10/28/2003; 10/29/2003; 10/30/2003; 11/03/2003; 11/04/2003; 11/05/2003; 11/17/2003; 11/18/2003; 11/19/2003; 11/20/2003; 11/24/2003; 11/25/2003; 11/26/2003; 11/27/2003; 11/28/2003; 12/16/2003; 12/17/2003; 12/18/2003; 05/20/2004 DATE OF JUDGMENT: 06/09/2004 APPLICANT Mr S Crawshaw of senior counsel Mr A Hatcher and Mr M Gibian of counsel New South Wales Teachers' Federation Ms B Seymour, Assistant General Secretary Research and Industrial RESPONDENT Mr R Kenzie of senior counsel Mr P Ginters of counsel LEGAL REPRESENTATIVES: Department of Education and Training TAFE New South Wales Mr G Boyd, Solicitor for the Crown Solicitor INTERVENOR Mr P Kite of senior counsel Mr S Prince of counsel Minister for Industrial Relations Mr B Stewart, Assistant Crown Solicitor JUDGMENT: 235 INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: WRIGHT J, President WALTON J, Vice-President BOLAND J GRAYSON DP MCLEAY C DATED: Wednesday 9 June 2004 Matter No IRC 3749 of 2003 CROWN EMPLOYEES (TEACHERS IN SCHOOLS AND TAFE AND RELATED EMPLOYEES) SALARIES AND CONDITIONS AWARD. Application by the New South Wales Teachers' Federation for a new award. DECISION OF THE COMMISSION [2004] NSWIRComm 114 1 These proceedings arose from an application by the New South Wales Teachers Federation ("the Federation") for the making of a new award known as the Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award ("the Award"). The nominal term of the existing award expired on 31 December 2003. The application was opposed by the Director General of the Department of Education ("the Department") and the Managing Director, TAFE New South Wales ("the respondents"), as well as the Minister for Industrial Relations ("the Intervenor"). To the extent that the Award represents a replication of existing provisions, there was no dispute from the respondents. However, as to the changes sought by the Federation, particularly relating to rates of pay and allowances, there was an extensive contest. 2 The Federation's application is a substantial one. The claim for increases in salaries alone is significant, being a claim for a 25 per cent across the board increase in salaries and allowances for teachers in government schools and TAFE over a 2-year period. The application includes three additional claims: a further increase for teachers at the top of the Common Incremental Salary Scale (or alternatively a new step at the top of that scale); extension of the operation of the Year Adviser allowance; and creation of a new allowance for school counsellors. The Federation's application also seeks the inclusion of a Leave Reserved clause in the Award covering other salary related matters not presently pursued by the Federation. However, the magnitude of this matter extends beyond issues of remuneration. 3 This matter represents the first assessment by the Commission of the work performed by teachers since 1991, when the Commission gave its decision in Re Crown Employees (Teachers, Education Teaching Services) Award (unreported, IRC 566 of 1989, Fisher P, Bauer and Hungerford JJ, 12 September 1991) (the "Education Teaching Services case"). As such, this matter involved a reappraisal of the work performed by teachers, in a modern context, and encompassed a wide-ranging examination of the complex, challenging and often difficult circumstances which surround, define and impact on the work and role of teachers in government schools and TAFE. In the course of undertaking such an immense review, the Commission has heard evidence from 67 witnesses, conducted inspections of seven schools and TAFE campuses and reviewed a mass of material that was comprised of 169 exhibits. The inspections provided a valuable insight into the current circumstances of work for teachers, and put into proper context the issues relating to their claim that there had occurred a significant change in the value of their work. 4 The proceedings were somewhat unusual in that there was no disagreement between the parties that there had undoubtedly been significant changes in the work performed by teachers since the 1991 datum point and, when considered as a whole, those changes represent a "significant net addition to work requirements" of teachers. We will turn to the nature and scope of those changes in due course. However, given the parties' agreement as to the existence of such change, it is appropriate at this juncture to identify the precise nature of the contest in these proceedings. 5 The Federation's case proceeded on two grounds. First, that there were circumstances warranting the finding of a special case pursuant to Principle 10 of the Commission's wage fixing principles established in the State Wage Case 2003 (2003) 121 IR 446. Secondly, the Federation's claim was brought pursuant to Principle 6, work value changes, on the basis that there have been changes in the nature of teachers' work, skills and responsibilities, as well as changes to the conditions under which teachers' work was performed, such that those changes constituted a "significant net addition to work requirements" warranting the changes in rates of pay sought and accordingly an adjustment of wage rates for teachers on the basis of the work value principle was warranted. At the heart of the matter was a claim that there have been revolutionary changes to curriculum. 6 The respondents denied that the Federation had established that there existed a special case. Further, whilst the respondents acknowledged and accepted that "since 1991 there have been changes in the nature of the work of employees the subject of the Federation's application such as to amount to a significant addition to the work requirements of these employees", the respondents contended that no wage adjustment was warranted, the reasons for which were threefold. First, some of the changes were not new matters. Secondly, some of the changes to work value were the subject of previous claims by the Federation, for which teachers have already received compensation. That is, the rate increases in the awards and agreements relevant to the teachers in question between 1991 and 2000 effectively recognised all increases in work value during that period. Thirdly, teachers are (and were in 1991) highly skilled professionals who undertake a broad range of tasks and responsibilities. According to the respondents, it is an inherent requirement of being a professional that teachers adapt to change. In this regard, the respondents relied on the decision of Fisher P in Re Medical Officers - Hospital Specialists (State) Award & Other Awards (1990) 33 IR 79 (at 84): One of the problems with the application of the "strict test" to professional or managerial employment lies in the nature of change. Change must be accommodated, being an essential part of what professional practice is all about. It does not follow therefore without more, that changes, even spectacular changes, necessarily fall within the work value principle. 7 At the conclusion of the hearing of the Federation's claim, the Commission handed down an interim decision. The Commission there noted the enormity of the Federation's claim and, whilst acknowledging that it had not fully examined the extent to which changes in teachers' work had already been compensated in earlier awards or agreements, or the existence of any other ameliorating factors, the Commission recognised that there had occurred such a profound change in teaching work as would warrant the grant of an interim increase of 5.5 per cent in all salary rates under the existing Award: Re Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award [2003] NSWIRComm 479 ("the Interim Decision"). History of regulation of teachers' salaries 8 There is a considerable history to the industrial regulation of salaries and conditions of employment of school teachers in New South Wales. The early history is usefully described in the decision of the Full Bench of the Industrial Commission in Re Crown Employees (Teachers) Award (1964) AR 463 (at 509): Teachers, in common with all other employees employed under the Public Service Act, were brought within the scope of the Industrial Arbitration Act for the first time on 23rd December, 1919, and there they remained until 24th November, 1922, when a legislative change removed all public servants from the operation of the Act. On 15th April, 1926, however, public servants were again brought within the scope of that Act and they have been subject to its provisions ever since. In 1920, the New South Wales Public School Teachers' Federation obtained from the Court of Industrial Arbitration an award for teachers employed in the Department of Public Instruction (as it was then called) under the Public Service Act. It was known as the Public Service (Teachers) Award and was published on 19 November, 1920 (18 I.G. 1027). It was made for a period of three years from 30th June, 1920. The terms of the award do not matter here and it is only interesting to remark that the basis of salary fixation was quite different from what it has been for a considerable number of years now past at least since 1946. In 1920 salaries were fixed in relation to the type of school in which the teacher worked and the award distinguished between high schools, intermediate high schools and primary schools. The status of the teachers based on the length of training they had received was not then, as it is now, a basic of salary fixation. 9 Two agreements regarding salary levels for teachers were reached subsequent to the events described pursuant to the then Public Service Act: the first on 1 July 1923, which operated for a period of one year, and the second on 1 July 1924, which operated for a period of three years. 10 The Full Bench in Re Crown Employees (Teachers) Award gave the following further history (at 510 - 511): As we have said, public servants were again brought within the provisions of the Industrial Arbitration Act on 15th April, 1926, and the same legislation of that year established the system of conciliation committees as award-making tribunals. In 1929 the Crown Employees (Teachers) Conciliation Committee made an award for teachers which was published on 6th September, 1929 (36 I.G. 415). This award was made for three years. No date of commencement was specified in the award and it, therefore, took effect fourteen days after publication, that is to say, on 20th September, 1929. Again the basis of the salaries fixed was the type of school where the work was done, teachers in high schools being rated differently from teachers in primary schools. We are not able to say when this award ceased to be effective in reality. The records show that it was rescinded by an order of the conciliation committee published 30th June, 1944 (73 I.G. 438), the rescission being effective as from 15th May, 1944. We suppose that it regulated the salaries of teachers until it was superseded, as it appears to have been, by a s14B agreement in 1943. In the period from 1943 to 1954 teachers had their salaries regulated by s14B agreements, the several agreements being expressed to be operative as follows: for two years from 1st July, 1943; for three years from 1st April, 1946; for three years from 1st April, 1949; for the period from 2nd April, 1952, to 30th June, 1954; for three years from 1st July, 1954. The last-mentioned agreement was still current when, on 3rd May, 1955, the Board, pursuant to its statutory powers under s14A of its Act, made a determination fixing the salaries of teachers with effect from 4th February, 1955. As is always the case, no period of duration was set for the Board's determination. The determination was quickly followed, on 23rd July, 1955, by a s14B agreement, which was made operative from 1st July, 1955. It varied the 1954 agreement as affected by the determination mentioned. It will be observed that the 1954 agreement was thus affected twice during its currency. Each time saw a betterment of salaries. Next came a s14B agreement, which was made on 3rd December, 1957, with effect for three years from 1st July, 1957. It thus made up for the leeway between the expiry date of the 1954 agreement and the date of its own making. Notwithstanding that the 1957 agreement had been made for a period of three years, it was replaced by a new agreement made on 24th December, 1958, with effect from 1st April of that year, and this new agreement was expressed to remain in force until 30th June, 1960, that being the date on which the 1957 agreement was to have expired. However, before the 1958 agreement had run its period of currency, the Board, on 14th April, 1960, made a further determination under s14A and the salaries then fixed operated as from12th February, 1960. Thus during the period for which the 1957 agreement had been made salaries were altered twice. On each occasion there was a salary increase. The last-mentioned determination was still operative when the Crown Employees (Teachers) Award was made by this Commission in 1961, with effect for three years from 7th October, 1960. As we have mentioned, the 1961 award was affected by a further s14A determination of the Board made on 19th July, 1963. By that determination salaries were increased, the new salaries being payable from 1st May, 1963, which was prior to the date when the 1961 award was due to expire. 11 In 1964, a Full Bench of the Commission in Re Crown Employees (Teachers) Award made an award which prescribed, inter alia, minimum salaries for two-year and four-year trained "certificated assistants". 12 In 1970, a Full Bench of the Industrial Commission in Re Crown Employees (Teachers - Department of Education) Award [1970] AR 345 conducted a review of teachers' salaries. That matter, like the present one, involved a comprehensive examination of the work performed by school teachers. The Commission awarded an interim increase of between seven per cent (in the case of an assistant teacher two-years trained in the first year of service) to 10.3 per cent (in the case of the maximum rate for a high school principal), and a final increase of 14 per cent. 13 In the joint judgment of Beattie J, President and Cook J it was observed (at 514 and 515) as follows: We are very conscious of the vital importance to the community of the teaching profession and of the need to ensure that the members of the profession are accorded a proper standard of remuneration. While it is not part of the function of a salary-fixing tribunal to attempt to alleviate a shortage of workers in a particular calling by fixing rates designed to attract new workers, we are aware that there are not sufficient teachers at present available to meet the needs of the Department of Education particularly in the fields of science and mathematics and we are conscious of the fact that an erroneous judgment on our part could result in a deterioration of the present staffing problems either because more teachers resign or because insufficient recruits are attracted to the Teaching Service. We are also not unmindful of the fact that an award which increases the salaries of teachers in a substantial degree cannot but be very costly to the State. These various matters are in our minds because we regard it as our duty, as members of this Commission always have, to pay regard to the public interest. 14 Their Honours found a substantial change in the work of teachers and that there existed a "special case" as follows (at 518): The present case has undoubtedly involved the most searching inquiry into the work of members of a profession that has ever been undertaken in this jurisdiction. We have recorded at perhaps undue length the views which we have formed concerning the work of the various grades of teachers and we think that it makes an impressive story. It would be pointless to attempt to recapitulate here what we had said concerning the quality of the work and the depth and variety of the responsibilities which it involves, but the facts are all very fresh in our minds as we approach the question of what the new rates should be. We bear in mind, too, as an important factor which should influence our assessment the case which, as we have found, the Federation has succeeding in making out that significant changes have occurred increasing the demands on teachers and lifting the quality of their work to a higher professional plane. That very fact makes the present a special case. 15 Sheldon J made the following observations (at 520 and 521): I believe that we have undertaken the most comprehensive review of the work of teachers by an industrial tribunal or any other wage-fixing authority. I also believe that every day we have spent has been worthwhile. In this judgment we have tried to convey the effect of what we have heard but above all of what we have seen because it is only by going to schools and seeing what happens to children in and out of class from the time they leave home in the morning (and these days apparently there is less creeping like snail unwillingly to school) until they return towards evening that a really complete picture emerges. It is a picture which in its detail is of necessity not revealed to parents and even their secondhand impressions are limited as children are inclined to be non-committal, if not positively uncommunicative, about their day at school. Thus the opportunity afforded to the Commission as outsiders in this case has probably been unique. We have seen a range of pupils from those verging on adulthood to those in the fascinating chrysalis between infancy and childhood. We have seen the brilliant, the bright, the average and the slow. Except where we were brought into contact with the pathetically handicapped, this experience would have been for me one of unalloyed pleasure in a renewal of long-vanished youth if its purpose had been less serious and the responsibility less heavy. For this has been no sabbatical among children. It has been an anxious and I believe thorough investigation into the bread and butter of teachers. Primarily the visits to schools were to observe teachers at work and we saw them in all their human variety from principals matured by years of experience to eager young probationers fresh from college. We saw them in classrooms, playgrounds, school assemblies, functions and presentations. We tried to get to know as many teachers as possible through informal conversations during and at the end of lessons and particularly during recess and lunchbreaks. While the children must often have wondered what on earth we were about, the teachers of course were well aware. But they proceeded about their business naturally and normally without any attempts to distort problems or conceal compensations. They let their work speak for itself. As to this, the views we formed are recorded throughout the judgment but in this final word it is proper to state that my lasting impression was one of satisfaction and gratitude. This should be said because, while disputes concerning teachers are news, the unobtrusive public service rendered in the routine of their daily work is not. Teachers are certainly the biggest professional career industry group in the community. Their numbers are so large that any award materially increasing their salaries must necessarily involve a great sum of money but this fact is not a legitimate barrier to their right to receive remuneration commensurate with their work and its contribution to the welfare of the community. Education is the concealed mainspring in national development and, more importantly, a vast contributor to the spiritual betterment of society. The heart of education is teaching. Buildings, equipment, high level planning and new educational philosophies are essential in an efficient and progressive system of education. But all this is meaningless waste unless it bears fruit in the classrooms where today thousands of individual teachers communicate with hundreds of thousands of individual children. All the departmental planning, organization and academic groundwork are channelled towards this personal relationship and in the end education is made or broken on the anvil of the human efforts, qualities and ideals of these teachers. It must follow that, great as may be the cost of placing the salaries of teachers at a reasonable level, this is something which the conscience of the community must face. To do otherwise would be to exploit one section of the community in the supposed interest of all. Such an approach, originally based on the conception that some work is so vital that those who make it their vocation can be expected partially to live off their dedication, is today completely outmoded. It is certainly shortsighted. In truth the cost of providing reasonable salaries for teachers is, I believe, less a public burden than a public investment which must return very real dividends although, not being based on material values, they can never be quantified. The validity of the views I have formed must be judged less on general sentiments such as I have expressed than on the facts established in this case. The evidence, analysed in the preceding sections of this judgment, proves that the salaries of teachers, even allowing for the interim award, need substantial reappraisal. Assuming these salaries were at their proper level after the 1964 review and recognizing that teachers shared equally in the national economic increases applied to award wages generally in this jurisdiction since 1967, the findings made in this judgment must lead to present standards being elevated. It has been shown that the work of teachers has been affected materially by changes in its quality which have occurred or been accelerated in recent years. We have indicated the nature and significance of those changes. They are very real, although probably not generally understood. It is sufficient to say here that in the result teaching as professional work has moved to a higher plane and this must now be reflected in salaries. 16 In 1973, the Full Bench in Re Crown Employees (Teachers, Department of Education) Award [1973] AR 742 (the "1973 Teachers Award case") awarded further increases: teachers' salaries were increased by between 12.1 and 13.6 per cent; salaries for promotions positions were increased by 14 per cent; and allowances were increased by 12 per cent. 17 In 1974, the Commission in Re Crown Employees (Teachers, Department of Education) Award [1974] AR 610 (the "1974 Teachers Award case") awarded increases of 20 to 25 percent for promotions positions and 14 per cent plus $500 to school teachers. 18 In March 1980, the Commission in Re Crown Employees, Teachers, Departments of Education and Technical and Further Education [1980] AR 127 (the "1980 Departments of Education and TAFE case") was again required to conduct an assessment of changes in the value of work performed by teachers. In that matter, Dey J awarded an interim increase of all salaries and allowances of 4.3 per cent. 19 In December 1980, the Commission delivered its decision in Re Crown Employees (Teachers) Awards [1980] AR 910 (the "1980 Teachers Awards case"), in which Dey J awarded a further salary increase of 2.5 per cent. Having regard to the interim increase of 4.3 per cent, teachers' salaries were increased by a total of 6.8 per cent in 1980 based on changes in work value. His Honour made the following remarks during the course of his decision: There is no gainsaying the earnestness, enthusiasm and dedication of the teachers who were called to give evidence. Furthermore, the importance of the work of teachers has been alluded to in previous judgments of the Commission and is obvious. However, in this instance, the Commission is restricted to dealing with changes which constitute not only something new, but which constitute a significant net addition to the work value of the teacher in the industrial sense, not merely its value to the community educationally. Many of the teachers conceded that the changes made their work more challenging and rewarding, but even although the results of the change may constitute important contributions to the improvement of education, they do not satisfy the specific criteria unless in addition they require the exercise of skills which are not only new and different, but also of a higher level or which involve greater responsibility than previously. 20 In 1981, the Full Bench (Beattie P, Cahill and Macken JJ) in Re Crown Employees (Teachers) Awards Reference [1981] AR 217 (the "1981 Teachers Awards Reference case") awarded a further 2.7 per cent increase to that previously awarded by Dey J in the 1980 Teachers Awards case. In the course of their decision, the Full Bench made the following observations regarding the evidence before them: But, although we have been able to do no more than sample the voluminous material, we have been left with a strong impression that the last six years have seen the emergence of really substantial changes in the responsibilities of teachers. We could attempt to describe those changes in our own language but we think we can do better in relation to secondary education by borrowing from an eloquent statement of one of the Federation's witnesses, Mr J.F. Hardgrove, Social Science Master at Dulwich High School, who said: In the last six years education has undergone considerable change. These changes have been brought about by: · Changes in the nature of school populations; · Changes in society and society's attitudes about schools and teachers; and · Changes in school and in the education system itself. These changes have enormously increased the workload of teachers. They have also necessitated teachers developing additional skills and they have forced teachers to shoulder additional responsibility. Changes in the Nature of the School Populations The retention rate of secondary pupils is now much greater than in the past. Secondary schools now contain a much larger proportion of pupils who are under-achievers, low achievers and/or who lack interest in their own education. These pupils would, in the past, have left school as soon as possible. Teachers have the responsibility to develop teaching programmes and strategies to stimulate and develop these pupils. To fulfil this responsibility teachers have had to develop additional skills and have been required to do additional work. A greater proportion of secondary school pupils are migrants or come from migrant backgrounds. Whilst the Education Department provides specialist teachers to assist these pupils, the normal classroom teacher requires special skills to facilitate the educational development of these pupils. Additional time must be spent on lesson preparation and on the marking of the written work of these pupils. Because of the high rate of unemployment and the escalating rate of marriage breakdowns, a greater proportion of pupils are socially or economically deprived. This adds to the workload and responsibility of teachers and requires them to have greater skill. Changes in Society and Society's Attitudes about Schools and Teachers "Today, educating children is a highly complex task of wide range and responsibility. It has become this because the community at large has ascribed to schooling many roles that were once undertaken almost exclusively by the family, the church and related social groups. Society has looked more and more to schooling for the panacea to the problems that at times beset it". ("Managing the School- 1979"; a Memorandum issued on 12 April 1979 by the Director General of Education, page 1.) Society, or large sections of it, have abrogated their responsibility. This is particularly so in the areas of sex education, manners, values development, and in the development of socially responsible behaviour. This has created new responsibilities for teachers. It has made their job much more difficult. If teachers do not accept these responsibilities it will be to the detriment of today's pupils and tomorrow's society. The employment situation is such that many pupils, particularly in areas of high unemployment, are apathetic towards the whole educational process. Teachers could once stimulate pupils by saying "work hard, get a good pass in your exams and you will get a good job". If I were to say that to my pupils today, they would only laugh. Teachers have had to adjust to this situation and find other ways to stimulate the apathetic pupil. Today's secondary students have not known a world without television. They are no longer automatically stimulated and entertained by an education[al] film. Teachers no longer have to be only vessels of knowledge – they have also to be entertainers. Society now demands that schools and teachers take account of the individual and special needs of pupils. Teachers have had to develop greater skills in devising individualised teaching/learning strategies. These not only require greater skill but also result in a greater workload. Society now demands, as it should, greater accountability by schools and teachers. This often necessitates the preparation of printed material for parents and the attendance by teachers at meetings held with parents in and out of school hours. Parents no longer accept, without question, everything the school does. Teachers now have much more personal contact with parents. This contact occurs either in or out of school hours or in time that the teacher would have used in lesson preparation. There is increasing pressure from society or by pressure groups in society for schools to introduce new subjects or to incorporation additional work into existing programmes. In the social sciences this is particularly the case with legal education, career education and consumer education. Whilst this pressure from society is often justified, it requires teachers to extend their knowledge and to do additional work. Changes in Schools and in the Education System Perhaps the greatest change that has occurred in secondary education in recent years has been the movement towards school-based curriculum development. The document "Managing the School" states "…each school will provide a curriculum which is designed to meet the needs of particular children within the context of the immediate community and the wider society." (page 2) The 1971 Commerce Syllabus stated quite clearly what had to be taught and in what order it was to be taught. 21 In 1991, the Commission in Court Session delivered its decision in the Education Teaching Services case. The Education Teaching Services case involved arbitration of rates of pay for executive staff below principal level. It was determined in accordance with the wage fixation principles promulgated in the State Wage Case August 1989 (1989) 30 IR 107 and was pursued as a special case "in the context of the Structural Efficiency changes available for implementation in schools". The Education Teaching Services case saw rates of pay for teachers increased by 18.25 per cent (for executive teachers other than deputy principals), by 23.25 per cent (for primary school deputy principals) and by 20 per cent (for both leading teachers and deputy principals in secondary schools). Those increases were granted following an agreement that was reached between the parties, which was approved by the Commission, whereby teachers' rates of pay increased by between 9 per cent and 13 per cent (for teachers on the Common Incremental Salary Scale), between 20 per cent - 25 per cent (for secondary school principals) and around 29 per cent (for primary school principals). The agreed increases were based upon: the various Structural Efficiency changes agreed between the parties, including a review of the promotions structure for principals, the structure and career paths for school counsellors, a review of recruitment and retention procedures, the development of policy and guidelines for dispute handling and grievance resolution, childcare facilities, interim promotions procedures, multi-skilling, teacher appraisal and evaluation and the introduction of the AST classification. 22 The agreement reached in respect of salaries in the Education Teaching Services case reflected the rates granted by the Commission in its 1990 decision in Teachers (Non-Government Schools) (State) Award and Other Awards (unreported, IRC 161 of 1990, Fisher P, Varnum DP and Sweeney J, 17 August 1990) (the "Independent School Teachers case"). 23 The decisions of this Commission, parts of which are extracted earlier, recite with perspicuity and incisiveness the importance of teachers to the future of our children and our society. There is little more we can say in that regard which has not been capably said by our predecessors, all of which remains true in the present day. It is not merely rhetoric, but a truth which forms the cornerstone of our findings, that "education is made or broken on the anvil of the human efforts, qualities and ideals of these teachers". 24 The respondents made submissions in relation to the considerations relevant to the Commission's assessment of work value vis a vis Principle 6(e), which is in the following terms: Care should be exercised to ensure that changes which were or should have been taken into account in any previous work value adjustments or in a structural efficiency exercise are not included in any work value evaluation under this principle. 25 According to the respondents, many of the matters relied upon by the Federation in the present matter were also the basis for previous claims for increases in teachers' rates of pay. The respondents submitted that the Commission must have regard to a number of the decisions discussed earlier which increased teachers' rates of pay by way of arbitration, namely: (a) the 1980 Departments of Education and TAFE case; (b) the 1980 Teachers Awards case; (c) the 1981 Teachers Awards Reference case; (d) the Independent School Teachers case; (e) the Education Teaching Service case; and (f) Re Crown Employees (Teachers and Related Employees - Technical and Further Education Teaching Service) Salaries and Conditions Award (unreported, IRC 1619 of 1989, Fisher P, Bauer and Hungerford JJ, 7 August 1991) (the " TAFE case"). 26 Similarly, the respondents submitted that the Commission should have regard to the matters that the parties took into account "either expressly or implicitly" in setting teachers' rates of pay in the agreements reached since the datum point. Those agreements relevantly are: (a) The 1993 Teachers and Related Employees Enterprise Agreement ("the 1993 Schools Enterprise Agreement"); (b) The 1996 Crown Employees (Teachers and Related Employees Salaries and Conditions) Award ("the 1996 Schools Award"); (c) The New South Wales TAFE Commission Teachers and Other Educational Staff - Salaries and Conditions Award 1996 ("the 1996 TAFE Award"); (d) The NSW TAFE Commission Enterprise Agreement ("the TAFE Enterprise Agreement"); and (e) The 2000 Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award ("the 2000 Award"). 27 We shall examine these propositions in greater detail in the section of our decision dealing with work value changes. The respondents, correctly in our view in the particular circumstances of these proceedings, accepted it was necessary for them to demonstrate, in order to make out their general contentions as to double counting, that the claims relied upon by the Federation had been compensated for or adequately compensated for by previous wage adjustments. 28 The changes which occur within those areas may vary in their significance at any point in time, but, as we consider is well demonstrated in the history of the review of teachers' salaries, the mere fact that the change occurs within a common descriptor of educational reform does not, by that fact alone, diminish its significance. We consider that the respondents' submissions tended on occasions to blur this distinction, although the point was well made by them that it is important that the Commission avoid any prospect of double-counting of factors which have been previously taken into account. It is also important to ensure that unions adhere fully to the terms of bargains earlier made when pursuing salary adjustments. 29 On balance, we consider that the respondents have demonstrated that there should be some reduction in any salary increase given based on some aspects of earlier awards or bargains (which we shall later refer to), but that the amount of any such reduction is relatively minor when compared with the true extent of the changes experienced in teachers' work since the datum point. Special Case - Relevant Principles 30 In the State Wage Case 2003, the special case principle (Principle 10) was expressed in the following terms (at 469): Except for the flow on of test case provisions, 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 a special case before a Full Bench of the Commission, unless otherwise allocated by the President. This principle does not apply to applications for awards consented to by the parties, which will be dealt with in the terms of the Act, or to enterprise arrangements, which will be dealt with in accordance with the Enterprise Arrangements principle. 31 The principles relevant to determining whether a particular case will warrant the Commission's intervention as a 'special case' were discussed at length in a recent decision of a Full Bench of the Commission in Re Health Employees Pharmacists (State) Award and other Awards [2003] NSWIRComm 453 at [25] - [30]: 25 The principles relevant to determining whether a particular case is a 'special case' are now well settled. We refer to our decision in Re Operational Ambulance Officers (State) Award (2001) 113 IR 384. In that decision we considered a number of authorities regarding the application of the special case principle, (including Re Social and Community Services Employees (State) Award (2001) 113 IR 119, Re Transport Industry (State) Award (1996) 95 IR 126 and Re Crown Employees (Administrative and Clerical Officers) (State) Award (No 2) (1993) 52 IR 243). 26 In Re Operational Ambulance Officers , it was stated (at [166]): In order to satisfy the requirement for a special case, the applicant must demonstrate that the case has "special attributes" or is "out of the ordinary" so as to take it outside the restrictions which may otherwise apply under the wage fixing principles. In Re Social and Community Services Employees (State) Award [2001] NSWIRComm 274, a Full Bench stated (at par 24): "Thus it can be seen, … that strict compliance with the wage fixing principles generally or with the work value principle and the structural efficiency considerations in particular is not required where as here a case is advanced as a special case. In saying that we should not be taken to mean that such considerations will necessarily be excluded from the special case. As much is clear from the Crown Employees case. It is however appropriate to observe … that the present special case principle unlike its 1990 predecessor does not require that cases be considered 'in accordance with the structural efficiency and other relevant principles'. It requires, as was said in the Transport Industry case, that special attributes exist which warrant approval by the Commission despite the restrictive considerations imposed generally by the principles of wage fixation and that is the essential basis upon which the Commission will approach the determination of the present application". 27 In the Crown Employees case, it was stated (at 376 - 377): In our view, the special case section of the principles provides a mechanism whereby a claim for enhanced wages or conditions beyond those normally allowed under the principles may be brought before the Commission. The hearing of such a claim is to be conducted by the Full Commission (formerly the Commission in Court Session) thus emphasising the special nature of the case. It will be a matter for the Full Commission, after hearing the evidence and submissions, particularly relating to the matters relied on to take the case 'out of the ordinary' and thus to make it 'special', to decide whether the claim, in part or in whole, should succeed. Some of the cases brought under the special case provisions have relied, it is true, on the work value principle, a principle which is not relied on here. But other cases, some of which have earlier been identified, have substantially been brought on the basis that developments in workplace reform of a structural efficiency kind, in which employees have participated or to which they have contributed, have been such as to justify wage increases beyond those normally allowable under the principles. 28 Having considered those authorities, the Full Bench concluded that an applicant to a special case needs to establish an "adequate evidentiary foundation" to establish the special factors which warrant an award variation in order to set fair and reasonable conditions of employment. It was held (at [168]): In order to make out a special case the applicant is required to make out that the variation is necessary to establish fair and reasonable conditions of employment and that the matter has special attributes. In doing so, the applicant is not required to meet a higher onus or standard of proof. The evidentiary requirements of a special case are no more strict than would apply in an ordinary matter, although the applicant to a special case will need to establish an adequate evidentiary foundation for those factors which are relied upon as showing the special case attributes of the case. Whilst respect will be afforded earlier decisions of the Commission or its predecessors, the conditions of employment earlier established need to be ultimately tested against the requirements of s 10 of the Act and that which we have discussed as being applicable to making out a special case. Where, as here, the former decision involved a test case, particular care should be taken to ensure that the factors relied upon by an applicant in support of its claim do not replicate factors which were taken into account by the Commission or its predecessors in establishing the general standard emerging from such case. In any event, the basis for and circumstances under which the conditions in the award were established will be significant considerations in the Commission's deliberations in order to assess whether the factors relied upon by the applicant in support of a special case have already been accommodated by the earlier made award (in which case the present prescription may adequately compensate for those factors). 29 This decision has been subsequently followed in other Full Bench decisions. In Re Public Hospital Nurses (State) Award (2002) 115 IR 183, a Full Bench held (at [13]): We respectfully agree with the observations of the Full Benches in the Social and Community Services Employees case and the Operational Ambulance case. We emphasise the need to "establish an adequate evidentiary foundation for those factors which are relied upon as showing the special case attributes of the case". Further, although there is no general requirement that a special case must, to succeed, satisfy other specific principles ( Employers First and NSW/ACT Independent Education Union (2002) 115 IR 8 at par 8) other principles may have relevance; for example, because of the way in which the case is advanced: see also the passages cited above from the decisions in the Social and Community Services Employees case and the Operational Ambulance case. 30 Further, a Full Bench of the Commission in Re Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (2002) 116 IR 361 held (at [38]): We would further observe, as was recently recognised by the Full Bench in Re Operational Ambulance Officers (2001) 113 IR 384, the "primary test" for evaluating whether an award should be altered is whether the conditions of employment in the award are "fair and reasonable". Whilst made in the context of a special case, a consideration which may not be relevant in consideration of these proceedings, it was there recognised that conditions in an existing award are to be treated as "presumptively fair and reasonable" (although it must at once be recognised that it is sufficient to rebut that presumption by evidence sufficient to satisfy the ordinary civil standard of the balance of probability: see Public Hospital Nurses (State) Award (2002) 115 IR 183 and Re Operational Ambulance Officers ). 32 We consider that this distillation of the principles relevant to special cases by the Full Bench in Health Employees Pharmacists (State) Award represents an apposite statement of the principles governing special cases and we adopt it. Consideration of special case 33 In the Interim Decision we summarised the respective cases for the parties concerning the special case principle. The summary in that respect was as follows: [18] In broad terms the Federation contended that the following 'special case' factors supported its salary claim: The need for an economic adjustment. Teachers are entitled to an economic adjustment which will maintain the real value of their rates of salary over the nominal term of the proposed award. It should be noted that teachers are not entitled to State Wage Case adjustments under the provisions of the Wage Fixing Principles; accordingly, no question of double counting arises here. Productivity, efficiency and quality of work improvements. Improvements in the productivity, efficiency and quality of work of teachers is readily demonstrable. On a weighted average basis, the State Government's employee-related costs per student declined over the period 1997/8 - 2002/3 once such costs are properly deflated in accordance with the wage costs index. The high standards of productivity, efficiency and work quality of NSW teachers has been confirmed in a number of reports, and by the responsible Minister, who has described NSW public schools as leading the world in literacy, numeracy and science. A significant risk of a future teacher shortage. Although recent years have seen in general terms a balance in teacher demand and supply in New South Wales, this is expected to turn to a shortfall in the near future. Public schools will feel the effects of this shortfall disproportionately, because private schools are attracting increasing government and other funding and are consequently better equipped to pay "market" salaries to their employees. Within the public school system, those schools which already have problems attracting staff because of geographic or socio-economic considerations will find themselves in an even worse position. One factor linked to the impending shortage is a low retention rate of experienced teachers. Average attrition rates of school teachers over a fifteen year period are about 44%, with the figure being over 50% for secondary teachers. Teachers shortages have a direct effect on the quality of education, particularly at disadvantaged schools, because they mean high staff turnover, a lack of teachers in specialist areas, and a higher use of casual teachers. There is also a direct effect on the workload of teachers. An increase in rates of salary in order to ensure that teachers are attracted to and retained in the NSW system is accordingly justifiable. A decline in the relativity of teachers' salaries to both average earnings for employees generally and average earnings for professionals . Associated with the low retention rates of experienced teachers has been a long-term and ongoing decline in the relativity of teachers' salaries compared to average total earning of both male and female employees, and average total earnings for other professional occupations. This decline is both unjustifiable having regard to increases in the work value and productivity of teachers and a cause of teachers leaving the system for other careers. The statistics demonstrating this decline in relativities provides objective justification for the widespread feelings amongst teachers that their salaries are unsatisfactory and that they are undervalued by the community. The Vinson Report; Inquiry into the Provision of Public Education in NSW; Report of the 'Vinson Inquiry' 2002. An independent inquiry into the provision of public education in NSW, which was chaired by Professor Tony Vinson, issued a report in 2002 recommending, inter alia, a "catch-up" increase in teachers' salaries of at least 5%. This increase was seen as necessary to give proper recognition to the social value of the role performed by teachers, to signify support for a new level of professionalism amongst teachers, and to attract quality new recruits to the profession. Changes to the qualifications of teachers. It was contended that the qualifications held by teachers are now at a higher level than they were in 1991. [19] The respondents' response to the Federation's special case factors was, in general terms that, firstly, in respect of an economic adjustment the respondents have offered a six per cent increase over two years designed to maintain the real value of wages but this has been rejected by the Federation. Secondly, as to the productivity, efficiency and quality of work improvements relied upon by the Federation: (a) These appear to traverse the same or similar ground as is relied upon by the Federation in the work value changes aspects of its case. (b) To the extent that there have been productivity, efficiency and quality of work improvements by employees the subject of the Federation's application these matters have been compensated for by the salary increases received since 1991. (c) Further, in addition to the above, to the extent that productivity, efficiency and quality of work improvements are taken into account by the Commission in its assessment of the Federation's work value changes application it would be erroneous (and amount to double counting) for those matters to be taken into account in the Federation's special case application. Equally, to the extent that productivity, efficiency and quality of work improvements are taken into account by the Commission in its assessment of the Federation's special case application it would be erroneous for those matters to be taken into account in the Federation's work value application. [20] Thirdly, as to the risk of a future teacher shortage: (a) The Commission would not overturn the well-established industrial principle that wage rates should not be set on the basis of shortages (even in the case of important professions). To increase rates on the basis of a labour shortage would be contrary to the public interest: Re Public Hospital Nurses (State) Award (No 3) (2002) 121 IR 28 at [90]. (b) In considering the issue of a shortage of teachers the Commission would follow the long-standing principle that it is not appropriate to set rates to address shortages because that would cause rates to be set other than on the basis of the true value of the relevant work: Equal Remuneration Case (2000) 97 IR 177 at 214.7 – 215.3 at [151] – [152], particularly the reference to Local Courts Anomaly Case [1989] AR(NSW) 638 at 645.9 – 646.1; see also Mills and Sorrell, Federal Industrial Law , 5th Edition, 1975 at [173]; In re Academic Officers (University of Technology) Award [1958] AR(NSW) 55 at 57.7 - .8 ; Re Railways Professional Officers Award (1958) 89 CAR 40 at 48.02 – 49.5; Re Metal Trades Award; Re State Electricity Commission of Victoria (1964) 106 CAR 535 at 564.09 – 566.07; In re Crown Employees (Teachers) Awards [1980] AR(NSW) 910 at 930.9 and Re Australia Nursing Federation – s 170MX Arbitration [PR931289] (Australian Industrial Relations Commission) at [59]. (c) There are strong public interest reasons for not setting rates based on the existence of a labour shortage. To do so: (i) would lead to rates being set that were not based on what the Commission determined to be a fair and just rate for that work: see the Objects of the Industrial Relations Act 1996 (NSW), in particular s 3(a); (ii) would be inequitable to do so for one group, in circumstances where wages are not otherwise moved on this basis. Further, it would lead to inequity in comparison to employees working in areas where there is no current shortage; (iii) would lead to consequential pressure for flow-on outside the area of need, creating other difficulties; (iv) would be contrary to the Commission's long standing practice of not setting wages based on a "market rate" approach where shortages are addressed in classic economic theory by the market increasing the "cost" of labour (i.e. higher wages); and (v) would be to artificially increase rates of pay to cover short term labour shortages which come and go, and even in the case of persistent shortages, heighten or lessen in intensity over time. In the present case, a labour shortage may or may not be affected by changed economic conditions, changes in the population profile, or a combination of such factors. In these circumstances any artificially increased rate of pay would remain after the circumstances giving rise to it had changed or been removed. (d) Whilst the Commission may be concerned to see steps taken to alleviate a potential shortage of teachers such a concern cannot lead the Commission to ignore well established industrial principles and thereby create a new basis for wage increases which could have widespread and unpredicted ramifications. In particular, if the Commission were to award an increase based on the fact that there is a shortage in an important profession or trade it would inevitably lead to similar claims being made by others. (e) The position is a fortiori here when the Commission is addressing a claim based on a potential labour shortage, the dimensions of which, by definition, cannot be assessed. In any event, insofar as any predictions can be made as to areas where shortages are likely to be required to be addressed the respondents have put in place a number of strategies to address this situation. [21] Fourthly, as to the decline in the relativity of teachers' salaries to both average earnings for employees generally and average earnings for professionals: (a) The Commission would not conclude that a special case (i.e. on the ground contended for by the Federation) has been made out simply by reference to the rates payable to other professional and/or non-professional groups. (b) Reference to the statistical comparators relied on by the Federation do not make out a special case. Changes in average earnings or average award wages, each average involving thousands of occupations, can provide no guide at all as to how the value of the work of teachers, being one of the thousands of occupations concerned, has altered relative to the value of the work of other occupations: In re Crown Employees (Teachers) Award Reference 1981 AR (NSW) 217 at 223.6 - 223.7 (albeit in the context of a work value changes application). That is, the Federation's reliance on statistical comparators does not "establish an adequate evidentiary foundation for those factors which are relied upon as showing the special case attributes of the case": Ambulance Officers Case (2001) 113 IR 384 at 420.10; par [168]. [22] Fifthly, as to the Vinson Report: (a) It is entirely unclear how it is said by the Federation that the Vinson Report in globo provides a justification, on special case grounds, for a 25 percent, across the board, salary claim. (b) Relevantly, the Vinson Report (at p 370.4) concluded by commenting that it had difficulty "seeing how anything less than a 5% increase, resulting in annual gains of the order of $2,000 - $3,000 for the majority of teachers, would be just and supportive of the scale of system change recommended." This is a conclusion far more in tune with the respondents' case than the applicant's case. (c) Further, insofar as the Vinson Report recommends a particular salary increase it is relevant that it does not, on its face, appear to have factored into its consideration the history of salary movements of employees the subject of the Federation's application. [23] Sixthly, as to the changes to teachers' qualifications: (a) The changes to the qualifications of teachers relied upon by the Federation appear to traverse the same or similar ground as is relied upon by the Federation in the work value changes aspects of its case. (b) To the extent that there have been changes to the qualifications of teachers these matters have been compensated for by the salary increases received since 1991. (c) Further, in addition to the above, to the extent that changes to the qualifications of teachers are taken into account by the Commission in its assessment of the Federation's work value changes application it would be erroneous (and amount to double counting) for this matter to be taken into account in the Federation's special case application. Equally, to the extent that changes to the qualifications of teachers are taken into account by the Commission in its assessment of the Federation's special case application it would be erroneous for this matter to be taken into account in the Federation's work value application. [24] The submissions by Mr P Kite SC for the Minister focused on the impact of the Federation's claim on the State's finances and the implications for the State's economy. The respondents also made submissions as to the economic impact of the claim. 34 We propose to deal with each aspect of the Federation's case in this area seriatim. The need for an economic adjustment 35 As was observed by the Full Bench in Re Crown Employees (Administrative and Clerical Officers) (State) Award and other Awards (No 2) (1993) 52 IR 243 at 377 in the course of determining a special case application: it is [also] entirely appropriate, if it is concluded that, in general, the claim should succeed, the Commission have regard to economic considerations, including the changing value of money over time, when deciding the amount of increase which should be awarded . 36 We consider that the Federation has made out a special case in this matter and, in those circumstances, it is appropriate to have regard to economic considerations in deciding the amount that should be awarded. However, we consider that the amount of salary increase offered by the respondents for a two year award is ample to compensate the Federation for these considerations. We also note that since reserving decision in this matter a Full Bench of this Commission has handed down the 2004 State Wage Case [2004] NSWIRComm 148. Productivity Efficiency and Quality of Work Improvements (and Work Value Changes) 37 Mr S Crawshaw SC, with whom Mr A Hatcher and Mr M Gibian of counsel appeared for the Federation, submitted that the Commission should take into account the contribution made by teachers towards improvements in productivity, efficiency and quality of teaching work. This may be measured, it was submitted, by reference to the results being achieved by the students taught by teachers. Thus, it was contended that the special case had been made out on this basis because teachers have contributed significantly to improved outcomes for students. 38 In Crown Employees (State) Award (No 2) the Full Bench recognised that the contribution of employees to improvements in productivity and efficiency may give rise to special case considerations, even though an application is not pressed under the work value principle. The Full Bench stated (at 378): We are satisfied that the applicants have reasonably made out a case that, in the public sector generally, there are positive indications as to improvements in productivity and efficiency and that employees have significantly contributed to that state of affairs. It is an impractical exercise to attempt to particularise, or even summarise, again the pertinent evidence which has led us to that conclusion. We mention, however, in particular, the evidence of Dr Howard and Mr Guthrie, as being persuasive; speeches by the then Premier in 1988 and 1992 to which we have earlier referred; and the contents of the Annual Reports and the evidence of officers of individual departments which overwhelmingly, in our view, attest to significant public sector performance, efficiency and productivity improvements over the last few years. 39 We agree with the submission made by the respondents that there is a significant overlap between the factors identified by the Federation as supporting this special case consideration and those considerations supportive of its work value claim. However, we do not accept the submission of the respondents that it would be erroneous for the Commission to take into account productivity, efficiency and quality of work improvement factors in considering both the special case and work value aspects of the Federation's application. 40 As was recognised in Crown Employees (State) Award (No 2) there are some aspects of the factors associated with productivity and efficiency improvements which may not necessarily warrant attention under the work value principle. Indeed, in that case the Commission considered those factors as being relevant to the establishment of a special case where the applicant union had expressly eschewed reliance upon work value considerations. However, it does not follow that those factors may not be relevant to work value considerations and may, therefore, properly feature (as in this matter) in the consideration of both special case and work value principles, provided that the Commission avoids any double-counting of these factors when considering the relief to be granted in a particular case. 41 In this matter, we consider that the Federation has demonstrated that teachers have contributed significantly to the outcomes achieved by the respondents which may be broadly described as improvements in productivity, efficiency and the quality of the service provided to students (and consequentially to the broader society including parents). We consider that there is ample evidence before us in the form of official reports and statements and through the evidence of senior officers engaged by the respondents (or other significant educational institutions) that improvements in teaching (and, in particular, the productivity, efficiency and quality thereof) have substantially improved educational standards for students. We also accept the evidence of Professor James Ernest Guthrie that the data extracted by him from official reports suggested that: depending upon the deflator used, weighted average per student employee related cost has diminished in real terms over the period [1997-2003] reinforcing the conclusion that real productivity and performance gains have been achieved by the human resources deployed within the four teaching focus programs in the NSW Department of Education and Training. 42 Those four programs consisted of preschool and primary education services, secondary education services, non-government schools assistants and TAFE and related services. 43 The fact that changes in work value (referable to the work value principle) may have contributed to the attainment of this outcome, does not, in our view, diminish the conclusion which should be appropriately reached that the Federation has by this factor established the existence of a special case. Work value considerations may, as in this matter, constitute a basis for the finding of a special case, particularly where those changes may be favourably distinguished by their nature and extent when compared with the already strict requirements of the work value principle: Health Employees Pharmacists (State) Award at [33]. 44 We consider that the Federation has made out a case under Principle 6, work value changes, for both the government schools and TAFE sectors (although, as we will later discuss, the overall increase in the work value of teachers in TAFE has been relatively less than that experienced by teachers in government schools). Further, we consider that when taken together, the nature and extent of the changes in work value in the sectors warrant a finding that a special case exists in this matter. Teacher Shortage 45 The Federation submitted that the Commission should grant an increase in pay taking into account the "significant problems which presently exist in ensuring an adequate supply of teachers in New South Wales government schools and the potential for substantial shortages in the supply of teachers to occur in the near future." 46 In contending that the evidence revealed there are presently shortages of teachers in New South Wales schools, in other States and worldwide, the Federation referred to a national survey of the supply and demand of teachers in Australia undertaken by the Ministerial Council on Employment Education Training and Youth Affairs (MCEETYA) and published in 2003. The MCEETYA 2003 report concluded that at 2001 there were significant recruiting difficulties in certain secondary teaching specialisations, most notably in respect to mathematics, science, information and communication technologies and languages other than English. Further, that in 2001, NSW was experiencing moderate shortages of special education teachers in primary schools and moderate or acute shortages in mathematics, science, technology and special education in secondary schools. 47 The MCEETYA 2003 report also referred to shortages of teachers in other major English-speaking countries and it was submitted such shortages were likely to affect the supply of teachers in New South Wales as educational authorities in other countries sought to recruit Australian teachers to meet shortfalls. 48 The Federation referred to evidence from a number of witnesses concerning difficulties encountered at schools in obtaining sufficient teachers to provide casual relief to cover short and long term absences by permanent teachers. Reference was made to a casual call centre known as Casual Direct. It was submitted this system has been operating State-wide only since the start of Term 4 2003 and it provided no basis for concluding that there has been any alleviation of the casual shortage reported by the Federation's witnesses. 49 The Federation submitted adequate measures to address the present shortages must include improvements in the rates of pay of teachers to improve and restore the professional status of teachers and address attraction and retention issues. 50 In relation to the shortage of teachers in the near future, the Federation submitted this was a serious issue, particularly as a consequence of increased replacement demand for teachers resulting from increasing retirements. The Federation referred to the ageing of the teaching workforce. It was submitted that Australia-wide data for 2002, for example, shows that 29.7 per cent of teachers are 50 years old or older. The average age of teachers in NSW schools in 2002 was 43.2 years. The breakdown available for teachers in NSW government schools shows that for 2001: (a) For government primary school teachers in NSW, 42.2 per cent are in the 45-54 age group and 10.4 per cent over the age of 55; (b) For government secondary school teachers in NSW, 43.2 per cent were in the 45-54 age group and 10.4 per cent over the age of 55. 51 It was evident, the Federation submitted, that as a result of the ageing of the teaching workforce there will be very sharp increases in the demand for teachers in the next 5 or 10 years as a result of increased rates of retirements. 52 Referring again to the MCEETYA 2003 report, the Federation submitted that the report analysed the number of teachers who are currently and will become eligible for retirement over the period to 2007, noting that across Australia there were already in 2001 23,827 teachers (9.4 per cent of the workforce) over the age of 55 and by 2007 a further 44,352 teachers will be aged over 55 (an average of 7,392 teachers turning 55 per year). On the basis of this analysis the Committee concluded: Other data indicate that most teachers retire between the ages of 55 and 59. Data from the 2001 census also indicate that only 2.2 per cent of persons employed as teachers were aged over 60. Assuming this pattern is repeated in the period between 2002 and 2007, there is therefore potential for significant losses of teachers to retirement over this period. Obviously the extent of retirement will depend on a range of factors including individual superannuation arrangements and preferences, but the high number of teachers aged 50 and over suggests losses to retirement and other factors could be significant between 2002 and 2007. 53 The Federation made further reference to the MCEETYA 2003 report where the observation was made that: The data available suggest that in the period ahead (post 2004) Australia is likely to face increasing shortages of teachers due to age-based retirement. The extent of the shortfall will depend on the success of policy initiatives to attract and retain teachers. Workforce planning to target potential sources of teachers and training those people to become teachers will also be important. Retraining those teachers qualified to teach in areas of greater supply so that they can teach in areas of greater demand is another issue that workforce planners may need to consider. Depending on the success of such initiatives shortages of possibly up to 20,000 to 30,000 teachers are estimated later in the decade. The shortages seem likely to be most pronounced in certain secondary teaching specialisations as well as in remote and rural locations and difficult-to-staff metropolitan schools. 54 The Federation submitted: Given the age profile of teachers in NSW and the fact the one third of all teachers in Australia are in NSW, there is no reasonable basis for concluding the sharp rise in retirements will not produce shortages of teachers in NSW as it will in Australia as a whole. The Premier Bob Carr, for example, has acknowledged that "serious issues of teacher supply will need to be tackled by 2007". 55 A Workforce Planning Report, relied upon by the respondents, was described by the Federation as a "fundamentally inadequate basis for concluding that there will be no general shortfall of teachers in NSW this decade" and that it failed to disclose any reasoning or basis for the projections. The Federation contended that the data produced by the Department indicated that at March 2003 there were at least 6,500 teachers who were already over 55 and at least a further 10,000 were in the 50-54 age group. Despite the fact that female teachers are eligible to retire at 55 and male teachers at 60, the Department was predicting that only 7,231 of the 16,500 teachers who will be over 55 by 2007 will retire. It was submitted the Department was effectively predicting that in the next five years the only teachers to retire would be those who are already over 55 and that no teacher who is to turn 55 over the next five years will choose to retire. This conclusion, it was submitted, could not be accepted as a reliable prediction. 56 It was submitted for the Federation that it was the MCEETYA 2003 report that provided a proper basis for the Full Bench to conclude that there will be significant shortages of teachers in the next 5 years as a result of age-based retirement. 57 Whilst conceding that salaries may not necessarily provide a complete solution to existing and impending shortages of teachers, the Federation submitted that an increase in the rates of salary would provide significant assistance in improving the attraction and retention in the public education system. Reference was made to a study undertaken by Alan Watson and Neville Hatton as part of the Vinson Inquiry into mid-career teachers, which found that of teachers who started teaching in 1986 only about half of secondary and two-thirds of the primary teachers were still teaching in NSW public schools. 58 The Federation referred to data concerning resignations that revealed a high level of resignations in the first few years of teaching. For example, the data produced by the Department for resignations in 2002 indicated that 22.3 per cent of all resignations took place in the first two years of teaching. 59 Reliance was placed on the Commonwealth Department report "Australia's Teachers: Australia's Future", which drew the following conclusion: Salaries and levels of responsibility and performance related to remuneration are key signals of the value placed by the community on the teaching profession and its relative significance in the country's priorities. 60 Reference was again made to the MCEETYA 2003 report, which included a qualitative survey of teachers and school principals concerning possible policy options in retaining teachers and attracting new teachers. The survey indicated that improved or higher remuneration was seen as the most important factor in retaining current teachers and as the key factor in attracting new teachers to the profession. 61 The Federation submitted: It is clear that proper (increased) remuneration is a necessary and integral part of any effective strategy to address the current and future shortage of teachers in NSW by retaining current teachers and recruiting the future generation of teachers. 62 The respondents contended that current and future shortages of teachers were not a basis for increasing teachers' salaries. It was submitted that the Commission would not overturn the well-established industrial principle that wage rates should not be set on the basis of shortages. To do so, it was submitted: (a) would lead to rates being set that were not based on what the Commission determined to be fair and just for that work; (b) would be inequitable to do so for one group, in circumstances where wages are not otherwise moved on this basis. Further, it would lead to inequity in comparison to employees working in areas where there is no current shortage; (c) would lead to consequential pressure for flow-on outside the area of need, creating other difficulties; (d) would be contrary to the Commission's long standing practice of not setting wages based on a "market rate" approach where shortages are addressed in classic economic theory by the market increasing the "cost" of labour (i.e. higher wages); (e) would be to artificially increase the rate of pay to deal with the phenomenon that might come and go or heighten or lessen in intensity over time. The position is of course taken to a new level where the Commission is asked to deal with an anticipated shortage of labour. In the present case, the anticipated labour shortage relied upon by the Federation may or may not be affected by changed economic conditions, changes in the population profile, or a combination of such factors. In these circumstances any artificial increased rate of pay would remain after the circumstances giving rise to it had changed or been removed; (f) an artificially increased NSW rate would have the potential to simply attract teachers from other States, creating or exacerbating shortage problems in those States or otherwise lead to "a circular self-perpetuating process of wage enhancement" in the sense discussed in the Equal Remuneration Principle Case (2000) 97 IR 177 at [152]. 63 In any event, the respondents did not accept the Federation's claims regarding shortages, either current or future. 64 In relation to the claimed future teacher shortage, the respondents contended that there were an "innumerable number of imponderables" that would impact on the likelihood and/or the severity of an anticipated labour shortage. These imponderables were said to include the following: (a) the state of the national and NSW economy; (b) movements in interest rates; (c) movements in the inflation rate; (d) movements in the unemployment rate; and (e) the success of strategies designed to attract and retain teachers. 65 The respondents submitted that care needed to be exercised in drawing conclusions from the federal report "Australia's Teachers: Australia's Future" in relation to shortage of teachers. For example, in their conclusions the authors of the report stated: Over the next few years, Australia will face increasing shortages of teachers due to age-based retirements. The extent of the shortfall will depend on the success of policy initiatives to attract and retain teachers , and other factors such as changes to policy settings affecting student-teacher ratios and general employment conditions in the wider economy. Depending on these factors , shortages of possibly up to 20,000 to 30,000 teachers are estimated later in the decade (MCEETYA 2003). The shortages seem likely to be particularly pronounced in the learning areas of science, mathematics and technology, as well as in remote and rural locations and certain disadvantaged metropolitan schools. Summary Although there are a number of uncertainties involved in projections of both supply and demand for teachers , there appears to be some general conclusions that emerge from data concerned with the availability of teachers over the years to 2010. The deficit in supply is much more an issue for secondary that primary schools, is likely to be greatest in the mid to latter part of the decade and may be greater in mathematics, science and technology. However, it needs to be noted that projections are based on data at aggregate levels and these overall generalisations can mask areas of particular need in some jurisdictions. There is a need for better and more disaggregated data to support labour force projections in school education . (emphasis added) 66 Caution was also advised concerning any interpretation of the MCEETYA Report in relation to which the respondents said: (a) Whilst the MCEETYA Report estimates that shortages of "possibly up to 20,000 to 30,000 are estimated later in the decade" these are estimates based on the whole of Australia and take no account of jurisdiction, school level, locality or curriculum area; (b) The MCEETYA Report contains an important caveat when it notes "the extent of the shortfall will depend on the success of policy initiatives to attract and retain teachers." In this respect the respondents refer the Commission to their submissions below in relation to initiatives that are in place to attract teachers to, and retain them in NSW government schools; (c) The methodology adopted in the MCEETYA Report does not appear to take into account persons currently listed on the Department's Employment Database. 67 The Department undertakes a workforce planning process that leads to the development of school teacher supply and demand projections for permanent teachers over a seven-year period. This is the Workforce Planning Report. The respondents submitted that the Report's projections of net teacher school supply for the period to 2010 indicate that: (a) there is an adequate supply of primary teachers in all geographical locations, except for a small number of positions in specific geographical locations; and (b) there is also an adequate overall supply of secondary teachers except for teachers of: mathematics, science, technology and applied studies; English in isolated NSW; and some positions in particular geographical locations. 68 The respondents submitted that according to its "Employment List/Database" there are approximately 16,000 persons who are seeking permanent employment as teachers in NSW and who are qualified to teach but are not able to be accommodated in terms of their preferred teaching location/s. That is, the barrier to their entering the teaching profession is their unavailability to teach anywhere in NSW. The consequence of this is that in secondary schools there is currently an under-supply of teachers in mathematics, science, technology and applied studies, and English in specific geographic locations in the State. 69 The respondents submitted that the issue confronting the parties was not one of potential teacher shortage, but how to encourage qualified teachers to teach in the geographical and subject areas of most need. It was submitted that awarding an across the board 25 per cent salary increase would do nothing to address this situation and, in fact, might worsen it. What was required, the respondents submitted, was the development and implementation of targeted initiatives designed to attract and retain teachers in government schools in New South Wales and encourage teachers and/or those who are qualified to teach to take up employment in the geographical and subject areas of most need. The respondents described a number of strategies and initiatives in this regard. These included: (a) The School Teacher Scholarship program; (b) Accelerated Teacher Training programs; (c) Retraining programs; (d) Promoting Teaching as a Career; (e) School Teachers' Recruitment Programs and Administration for Overseas Trained teachers; (f) Programs Implemented to the Benefit of teachers; (g) Programs designed to attract, retain and support schoolteachers; (h) Strategies to assist beginning teachers; (i) Support for Aboriginal and Torres Strait Islander teachers; and (j) The development of exit interview procedures designed to provide data to assist in the formulation of policies and practices in relation to the induction and support of beginning teachers. 70 As to the claimed shortage of casual teachers, the respondents submitted that whilst there was some evidence of difficulties, particularly relating to casual relief in particular geographical areas of the State, the evidence did not support a contention that there was a general shortage of casual teachers. The respondents submitted that, in any event, there could be no proper basis for increasing teachers' salaries generally based on an asserted difficulty in finding casual teachers. 71 The respondents referred to the evidence of Mr Irving relating to the casual teacher staffing system "Casual Direct" that showed the system had now become State-wide and was currently showing a 94.8 per cent success rate. 72 The respondents submitted that, in relation to TAFE, the Federation had proffered no evidence relating to actual or likely shortages. 73 We do not consider the evidence supports the contention that that there is currently a general shortage of teachers to the extent that such a shortage could support a special case for across the board salary increases in order to attract and retain teachers. By no means could it be said that shortages of teachers exist of the nature found to have been the case in Re Public Hospital Nurses (State) Award (No 3) (2002) 121 IR 28 or Health Employees Pharmacists (State) Award. The evidence reveals there are shortages of teachers, but these are limited to certain subjects such as mathematics, science, technology and applied studies, and certain geographic areas or locations in the State. There was no suggestion by any party that salary increases should be targeted at the specific areas of shortage. Further, an across the board salary increase on the basis of certain areas of shortage, be they subject or geographically based, is simply not justifiable on the evidence before us. We agree with the respondents that what is required to address the current problem is for resources to be directed to the development and implementation of targeted initiatives designed to attract and retain teachers in government schools in NSW and encourage teachers and/or those who are qualified to teach to take up employment in the geographical and subject areas of most need, rather than a general wage increase. 74 It is apparent from the Federation's submissions that an issue of significant concern was a future serious shortage of teachers. The Federation submitted this would be brought about by very sharp increases in the demand for teachers in the next decade as a result of increased rates of retirements. The Federation submitted that an integral part of any effective strategy to address the future shortage of teachers in NSW by retaining current teachers and recruiting the future generation of teachers was to significantly increase salaries. 75 The evidence would suggest that aged based retirements over the next decade are likely to generate an Australia-wide shortage of teachers. However, to a significant degree, the prospect of a shortage remains in the realm of speculation and very much depends on whether policy initiatives by governments to avoid such a shortage are, firstly, implemented and, secondly, are effective. 76 Whilst we understand the Federation's concern about the prospect of teacher shortages, a concern that the community should share, it is not appropriate for the Commission to award salary increases based on speculation. An existing shortage of labour is not, of itself, a sufficient basis for increasing salaries; that a shortage may occur in the future provides even less justification. 77 In relation to labour shortages, whether they be current or future, we note what the Full Bench said in Health Employees Pharmacists (State) Award at [54] and [55]: 54 Accordingly, we are, of the view that the shortage of labour is a significant factor in finding that a special case exists, the reasons for which are primarily twofold. Firstly, as discussed earlier, the shortage of labour is connected to changes in work value. There is little doubt that a shortage of labour in the relevant streams has resulted in changes in the way work is now performed, such that it has resulted in changes in the nature of the work (that is, the requisite skills and responsibilities) and in the value of that work. 55 Secondly, given that this matter is concerned with significant shortages in a number of occupational streams in the public health sector, it is plainly a matter of considerable public interest. In this context, the fact that there is a labour shortage, and the magnitude of that shortage in some areas (such as pharmacy), is sufficient to make out a special case in this matter. 78 We do not consider that the factors that influenced the Full Bench in Health Employees Pharmacists (State) Award are present in this case. Accordingly, we decline to award any salary increases on the basis of claimed current and future shortages of teachers even if that consideration provided an appropriate basis for wage fixation. Decline in Relativities 79 We agree with the submission put by the respondents that there is no proper basis for the Commission finding a special case based upon the relative position of teachers' salaries with average total weekly earnings of comparable professional groups. 80 We do not consider that the Federation has cited any authority which would warrant the use of comparative wage statistics in the manner proposed by it. The Federation's contentions do not comfortably fit with the requirements of the present wage fixing principles, including specifically the special case and work value principles. 81 This is not to say that the Commission could not have regard to relevant wage relativities for the purposes of assessing the quantum of wage movements which were otherwise indicated because the Federation has successfully mounted a work value case. Further, the relative position of comparable professional groups may be a factor to be taken into account in assessing the appropriate quantum of salary increases which are otherwise warranted under the wage fixing principles (although such assessments will usually be made in the context of some proven historical nexus): see Health Employees Pharmacists (State) Award. We do not, however, consider that the mere demonstration of a shift in relativities at some abstract level (by means of statistical analysis) warrants a conclusion, of itself, that there is a special case. The Vinson Report 82 The Federation relied on the evidence of Professor Tony Vinson, particularly his report Inquiry into the Provision of Public Education in NSW ("the Vinson Report"). Whilst we consider that some aspects of Professor Vinson's evidence are important in the assessment of the work value changes which the Federation contends have occurred, we do not consider that the mere fact of the publication of the Vinson Report (and its discussion of issues and recommendations) of itself adds any weight to the conclusions we have otherwise reached in relation to the existence of a special case. We, therefore, shall consider the relevant aspects of Professor Vinson's report and his evidence in the context of an examination of work value changes Qualifications 83 We consider that the Federation has established on the evidence that there has been a gradual change in initial teacher training so as to elevate the nature of the basic qualifications held by teachers. Broadly speaking, initial teacher education programs are more typically of a four year higher education academic qualification (at a degree level). We do not consider that the respondents are correct in submitting that this change is merely demonstrative of the change in the length of degrees but represents, in our view, a responsiveness by educational institutions to the changing nature of teaching services. 84 We do not, however, consider that this factor of itself constitutes a basis for a special case. Rather it is a significant feature of the work value case brought by the Federation. 85 We agree with the respondents that the change in qualification is not uniform across the teaching services. However, the Federation has brought a case in which it contends that there should be "averaging" of factors relevant to teachers in government schools and TAFE. We propose to adopt that course. Work Value - Relevant Principles 86 The work value principle (Principle 6) is in the following terms: (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. In addition to meeting this test a party making a work value application will need to justify any change to wage relativities that might result not only within the relevant internal award structure but also against external classifications to which that structure is related. There must be no likelihood of wage leapfrogging arising out of changes in relative position. These are the only circumstances in which rates may be altered on the ground of work value and the altered rates may be applied only to employees whose work has changed in accordance with this principle. (b) In applying the work value principle, the Commission will have regard to the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which work is performed. (c) Where new or changed work justifying a higher rate is performed only from time to time by persons covered by a particular classification, or where it is performed only by some of the persons covered by the classification, such new or changed work should be compensated by a special allowance which is payable only when the new or changed work is performed by a particular employee and not by increasing the rate for the classification as a whole. (d) The time from which work value changes in an award should be measured is the date of operation of the second structural efficiency adjustment allowable under the State Wage Case 1989. (e) Care should be exercised to ensure that changes which were or should have been taken into account in any previous work value adjustments or in a structural efficiency exercise are not included in any work evaluation under this principle. (f) Where the tests specified in (a) are met, an assessment will have to be made as to how that alteration should be measured in money terms. Such assessment will normally be based on the previous work requirements, the wage previously fixed for the work and the nature and extent of the change in work. (g) The expression "the conditions under which the work is performed" relates to the environment in which the work is done. (h) The Commission will guard against contrived classifications and over-classification of jobs. (i) Any changes in the nature of the work, skill and responsibility required or the conditions under which the work is performed, taken into account in assessing an increase under any other principle of these principles, will not be taken into account under this principle. 87 In the Interim Decision in this matter we identified the recent authorities which set out the manner in which work value is assessed as follows: [7] … In the recent judgment in Re Public Hospital Nurses' (State) Award (No 4) [2003] NSWIRComm 442 the Full Bench at [16] - [22] discussed the requirements of the work value principle in the following terms: 16 The work value principle allows for award wages to be increased if it can be demonstrated that there have been changes in the nature of the work, skill and responsibility required or the conditions under which work is performed to such an extent that the changes constitute a significant net addition to work requirements so as to warrant the creation of a new classification or upgrading to a higher classification. The principle refers to this test as a "strict test". There must be no likelihood of wage leap frogging either within the internal award structure or against external classifications to which that structure is related. 17 Further, there should be no double counting. That is, changes that were, or should have been, taken into account in any previous work value adjustments are not to be included in any work evaluation under this principle. 18 These requirements under the work value principle impose a significant burden on an applicant, particularly because of the strict test requiring the applicant to demonstrate a "significant net addition to work requirements so as to warrant the creation of a new classification or upgrading to a higher classification". It might be asked how such a burden exists in a decade or more of rapid and continuing workplace change and the almost universal impact that phenomenon has had on employees. But as the principle makes clear, changes in work by themselves may not justify an increase in wages. Some changes bring about a net reduction in work requirements. Others merely reflect the evolving nature of the particular occupation where skills or responsibilities are lost and new ones gained without producing a net addition to work requirements. In many occupations, particularly professional occupations, change, and the requirement to cope with it by coming to terms with new methods and new technology, is an inherent and accepted characteristic of the employment and rarely will this evolutionary process attract extraordinary wage increases under the work value principle. In this respect, we note the observations of Fisher P in Re Medical Officers – Hospital Specialists (State) Award (1990) 33 IR 79 at 84 where, after referring to the work value principle, his Honour said: One of the problems with the application of the "strict test" to professional or managerial employment lies in the nature of the change. Change must be accommodated, being an essential part of what professional practice is all about. It does not follow therefore without more, that changes even spectacular changes, necessarily fall within the work value principle. Secondly it is to be understood that new techniques and procedures bring with them their own advantages. For every new technological advance there is likely to be somewhere an inferior technology in part or in whole abandoned. Superior technologies give superior results and tend to free practitioners from laborious, uncertain and stressful practice. Changes, subject to habitation, do not necessarily make things more difficult or more demanding. They may, but equally they may remove problems, decrease anxieties and uncertainties and as well be more rewarding and more productive. 19 Other changes to work which have occurred in the quest for greater productivity and efficiency may have already been compensated for by wage increases paid in recognition of the increased productivity and efficiency or by increases granted for earlier work value changes. 20 A tribunal charged with determining whether the tests under the work value principle have been met must carefully sift through the material that has been placed before it and separate out those changes which have occurred to the nature of the work, skill and responsibility of employees or to the environment in which the employees work and which have not previously been the subject of compensation. An objective assessment then has to be made as to whether the changes that have occurred amount to such a significant net addition to work requirements as to warrant the creation of a new classification or upgrading to a higher classification. The change is to be measured from the last time wages were increased on the basis of work value or from the date of operation of the second structural efficiency adjustment allowable under the State Wage Case 1989, whichever is the later. An assessment is then to be made as to how that change should be measured in money terms. Such assessment will normally be based on the previous work requirements, the wage previously fixed for the work and the nature and extent of the change in work. 21 Finally, in relation to the application of the work value principle we refer to the Full Bench decision in The TAFE Case (unreported, Full Bench of the Industrial Commission of New South Wales, Matter Nos 515, 566 and 1619 of 1989, 7 August 1991) where after analysing the work value principle applicable at that time it was held at 44: We consider that reliance on this principle for general wage movements across all classifications in an award is not justified. Consideration of the phrases emphasised [by underlining] show that the purpose of this principle is directed towards specific work changes in specific areas. It was not intended that generalised across the board wage increases should be based on this principle. 22 We consider that the important point to be drawn from The TAFE Case is that if an applicant seeks wage increases for all classifications under an award the applicant carries the onus of demonstrating work value change in respect of each classification. It is not sufficient to contend, for example, that there have been changes in technology over the relevant period that have impacted on the work value of employees generally. It must be demonstrated how that impact has led to a significant net addition to the work requirements of each award classification in respect of which the increase is sought. [8] We respectfully adopt this approach for present purposes. We also adopt the following passages from Re Health Employees Pharmacists (State) Award and other Awards [2003] NSWIRComm 453 at [128], [129] and [130]: 128 Before turning to the question of qualifications it is appropriate at this juncture to deal with some more general considerations. As we have mentioned, we do not accept as the HAC contends, that the additional knowledge and skills required of Hospital Pharmacists can or should in the context of these proceedings, be consigned to the realm of continuing historical professional work and although minds may differ as to what should reasonably be expected by way of professional development, such issues are in the sense of industrial regulation, ultimately matters of fact and degree and must in their determination rest on what is, in the judgment of the Commission, fair and reasonable in terms of rates of pay and conditions of employment. 129 The test of whether there have been changes in work value such as to satisfy the relevant wage fixing principle is necessarily a global one. It is not amenable to microscopic evaluation of discrete functions of the particular classification or classifications under review and we agree in that regard with the HSU submission that although a thorough and exhaustive analysis of the work in question is required in each case, the application of an unduly rigid or function specific approach to changes in the work of professionals such as Hospital Pharmacists (which in our view are amply demonstrated by the evidence) would render it virtually impossible for a professional classification to satisfy the test. We do not consider such a result to be a fair and just one, and nor do we consider such a result to be consistent with the spirit and intention of the Commission's wage fixing principles. 130 We would, emphasise that those principles would dictate that such a realistic evaluation of the nature of the work of professionals would be tempered by the requirement to avoid the double counting of features said to constitute the elements of work value change (so as to avoid compensation for features of the work that merely arise from ordinary professional development or have been previously taken into account in wage reviews). However, we do not agree with the HAC's submission that changes in work value that have occurred since 1 July 1996 have been or will be adequately compensated by existing arrangements. 88 In the Interim Decision we made the following statements as to work value: 30 We have given particular consideration to the submissions of the respondents regarding the implications of any salary adjustments that have been made in the past and the basis of those increases. We have not reached any concluded view on the full extent to which those past adjustments have compensated for increases in work value. We are, however, of the view that the increases in rates of pay for teachers since 1991 have not compensated them to the extent submitted by the respondents and in that respect, on the basis of the evidence and submissions in these proceedings, we are satisfied beyond any doubt that there has been a significant net addition to the work requirements of teachers since the datum point in 1991 such that it would warrant an increase in salaries. 31 On the basis of the material presented to us we consider the change in teaching work has been profound and that there are features of this matter that warrant the finding that a special case has been made out. Consequently, we consider there is greater scope for ultimately awarding more than the six per cent increase over two years as proposed by the respondents. 89 Before examining the elements of the Federation's claim, we wish to make some global observations in relation to the assessment of work value in this matter. Firstly, a component of the Federation's claim related to increased workload. The Federation contended that the various changes they described have had the effect, inter alia, of increasing the volume of work teachers are required to perform. Part of the Federation's case in this respect merely demonstrated that there had occurred an increase in the volume of teachers' work, resulting from either an increase in the frequency of existing tasks or the introduction of new tasks, which do not meet the 'significant change' criteria of the work value principle. Whilst we are sympathetic to the difficulties teachers face in meeting such demands, we do not consider that such factors, of themselves, meet the strict requirements of the work value principle. 90 It would be a rare case where change in volume of work would have even an indirect affect on work value. However, part of the Federation's case came within this rare situation. That is because the nature of the changes in the skills and responsibility of teachers, which we will discuss below, not only satisfied the work value principle because of the significant change in the functions and tasks of teachers, but also because the magnitude of those changes required a significant adaptation of work methods by teachers to enable them to discharge the full range of their current duties. In other words, in order to carry out the full range of the complex and voluminous professional responsibilities since 1991, teachers have been required to be more sophisticated and skilled in the management of their work and the discharge of their new accountabilities, both in and outside of school hours. This is a factor relevant to be considered under Principle 6. 91 The second matter relates to the manner in which any changes in work value should be assessed. The respondents submitted, broadly stated, that an assessment of the nature and value of teachers' work as at the datum point, and the extent of any relevant change since that time, must include a consideration of what has already been factored into teachers' rates of pay, by reference to earlier decisions, being compensation for changes which were to occur in the future. The respondents cited the Education Teaching Services case in support of its argument that a work value assessment is necessarily a "forward looking" activity. Indeed, the Federation relied on the same passage in support of the same contention. The Commission in that matter held, in an interlocutory decision: The second matter concerns notice we have been given by Mr Costello, largely quoting from Dr Sharpe's material, about what in fact appears to be a change in direction, the direction or style of administration and management. In this regard, we are dealing with restructuring and efficiency and the starting place, as can hardly be doubted, is an immense change overcoming the teaching services exhibited in the Education Act, in the Carrick Report and in the Scott Report. Things are already different and they are going to be vastly more different in the future. We have made some gentle criticisms of the concept of work value which in the past has always looked back, on this occasion I (sic) think to 1981, and traced the history of the teaching service up to the present date. The case is then decided by what is essentially a retrospective inquiry. That is not what this inquiry is about. May we remind the parties that in all the cases that we have done, and we have done hundreds of them, these issues relating to restructuring and efficiency have been agreed. No question has arisen about the future course of industry because there in black and white are the parties' proposals to change the future by restructuring and efficiency in the interests of the future. We cannot do that here because the parties simply do not agree, but our essential task is surely to make our estimate in substitution for your estimate of what the future is and then award rates for whatever restructuring our conclusions dictate. I (sic) said a little bluntly apparently, it was quoted again this afternoon, no restructuring, no increased efficiency equals no money because restructuring and efficiency are what these hearing are all about. If you continue not to agree on restructuring and efficiency, there is a prospect that you will be gently propelled towards it anyway. Now, what is said here is that the changes that are occurring and are going to continue to occur are changes that would affect the administration of the promotions positions. We think that is a legitimate thing to introduce, indeed, an unavoidable thing to introduce. The fact that it has not occurred yet and we have to make the attempt to foretell, on the basis of evidence, what is likely to occur by way of restructuring and efficiency, is just an inevitable result of the fact that the parties cannot agree. 92 We do not consider that passage to be of much assistance in our assessment of work value in the present matter. The Education Teaching Services case was brought on the dual bases of work value change and structural efficiency reform, the latter being the focus of the case. However, whereas structural efficiency reforms plainly require a 'future' assessment, work value changes may have both retrospective and prospective elements. That is, an assessment of work value changes may involve an analysis of changes which have already occurred - the traditional work value case - or changes which are yet to be implemented (but are known), for instance, by virtue of workplace agreement or by force of statute. With respect to the latter type of change, it is conceivable that there may be a merger of the concepts of structural efficiency reform and work value changes. However, it is also possible that the particular future changes may satisfy the requirements for structural efficiency changes, but not satisfy the work value principle. 93 Unlike the Education Teaching Services case, which essentially required an in futuro assessment of structural efficiency reforms, the present matter requires assessment of changes in the value of work, some of which were of a traditional nature (in that they were already effected), and some of which were either partly or wholly prospective. 94 Accordingly, we will consider the relevant earlier awards and agreements relied upon by the respondents to determine whether teachers have already been compensated for work value changes (encompassing both categories described above) and, if so, the extent to which they have been compensated. We note that, particularly in the case of prospective change, whilst it is important to guard against double counting, it is equally important to avoid inflating the effect of the change being compensated and, in that respect it is necessary to examine the nature of the agreement and its historical context. We should be careful to limit any discount to the precise area of earlier compensation and, therefore, closely examine the actual scope of a change earlier recognised and compensated to guard against an artificial inflation of the extent of earlier changes. This is particularly so where, for example, the description of the changes earlier identified was expressed in broad and generic terms and needs, therefore, to be assessed for its true operation and examined in context. For example, we do not consider that the respondents established a material connection between the compensation awarded to teachers in the 1980s regarding curriculum change and the extent of change relating to curriculum development in the 1990s. 95 We turn then to a consideration of the various changes to the work performed by teachers in government schools and TAFE that have occurred since the 1991 datum point. We shall undertake that task separately for these sectors as we do not consider the extent of the change is the same in each sector. 96 We have referred to some aspects of the evidence in our conclusions by way of analysis or illustration, but we have not endeavoured (as we consider it would be fruitless) to summarise the massive amounts of evidence before us in this matter. Consideration of Work Value - Government Schools Curriculum changes 97 A great deal of time and attention during these proceedings was focused on curriculum change. The Federation submitted that the implementation of "revolutionary" curriculum changes, since at least the 1991 datum point, has had a fundamental impact on the skills and workload of teachers and represented a significant net addition to the work requirements of teachers. The Federation advanced submissions as to the pace of change, the nature of curriculum changes and the limited support provided to teachers to contend with those changes. 98 First, the Federation submitted that there has been an "unprecedented revision of virtually all syllabuses in the K-12 curriculum" over the past 5 or 6 years, requiring teachers to "radically review and rewrite" their teaching programs in a short period of time. According to the Federation, the pace of curriculum change can be demonstrated by the following program for the revision and implementation of the K-12 curriculum: (a) As to years K-6, in 1998 new syllabuses were introduced in all six key learning areas; (b) As to years 7-10, syllabuses have been (or are being) revised and rewritten to conform with the K-10 Curriculum Framework and Standards Framework, with implementation of syllabuses for History and Geography in 1999, Science in 2000, English and Mathematics in 2004 and the remainder in 2005; (c) As to years 11 and 12, between 1998 and 1999 all syllabuses were revised, and the majority implemented in 2000 and 2001. Syllabuses for Senior Science, Chemistry, Physics, Biology and Earth Environmental Science were revised in 2002 for implementation in 2003. 99 It was the Federation's submission that the magnitude of these changes imposed "massive demands" on teachers to become familiar with and implement the many new syllabuses. 100 Secondly, the introduction of "outcome based" or "standards referenced" teaching methods across the K-12 curriculum was central to the Federation's submissions as to curriculum change. In that regard, the Federation submitted: The systematic overhaul of the syllabuses used in NSW government schools in recent years was not limited to replacing one syllabus with another of similar structure, content or type. There has been a fundamental transformation of the syllabuses from content-driven documents to documents focused on specified outcomes setting out expected standards of student achievement. 101 The Federation described outcome based teaching as follows: Outcome based teaching and assessment is aimed at ensuring that students work towards achieving pre-determined standards. Each syllabus document can contain up to 50 outcomes which teachers are mandated to teach. Students' performance is assessed against these standards for each course, that is, against the descriptions of level of achievement of outcomes or standards specified in the syllabus. 102 It was submitted the movement towards outcome based education has significantly increased teachers' workload, and has "necessitated all teachers acquiring new knowledge and skills relating to teaching, learning and assessment and new responsibilities in relation to reporting and other measures of accountability to the Department, students, parents and the community". 103 In addition, there has been a restructuring of curricula such that there is a continuity between all stages (stages 1-3 comprising years K-6, stages 4-5 comprising years 7-10 and stage 6 comprising years 11-12) in order to promote coherency and consistency across the entire primary and secondary education system which, according to the Federation, imposed further demands on teachers to comprehend the curriculum across all stages. 104 Thirdly, the Federation submitted that teachers have been required to accommodate changes in curriculum in circumstances where they have been provided with inadequate support materials and professional development opportunities, and what resources were provided were lengthy and dense. In addition, the use of electronic and on-line material meant: first, that a copious amount of information was available, not all of which was useful, requiring teachers to sift through the material to determine what could be incorporated into their teaching methods; and, secondly, that some teachers may experience difficulties accessing support material due to either limited access to a computer at school, or limitations on the teachers' technology skills. The Federation contended that much of teachers' professional development, including participation in the "train-the-trainer" process, was undertaken by teachers outside of school hours. 105 The respondents contended that curriculum change was a systemic feature of the education system, and that whilst the pace of curriculum change may have increased, any such changes are, nevertheless, part of a continuum. In support of this contention, the Department relied on a similar finding in Re Public Hospital Nurses (State) Award where the Full Bench held (at [59]): That there has been an increase in the acuity of patients does not, of itself, automatically translate to a significant net addition to work requirements such as to justify a wage increase. This is so for a number of reasons. An increase in acuity levels, for instance, is not a new phenomenon; such increases have been identified in past work value inquiries as early as 1981; and, whilst we acknowledge that over the past seven years the increase in acuity has come about quicker than in past years, the impact of the pace of the change must, to some extent, be offset by the fact that the change is part of a continuum. 106 The respondents submitted that the requirement for teachers to adapt to and accommodate curriculum change is not new. The respondents contended that, whilst teaching outcomes are now explicit in the various syllabuses, they nevertheless existed in 1991, albeit in an unstructured way and not "particularly prescribed". The respondents relied on the evidence of Ms Judy King, Principal of Riverside Girls High School, and Ms Kate Cameron, Head Teacher, Human Society and its Environment at the Mt Druitt Campus of Chifley College, in support of their submission that, at the relevant datum point, teachers were cognisant of their responsibilities to achieve outcomes. 107 In essence, the respondents submitted that teaching curricula, making professional judgements as to how to teach curricula and adapting and responding to changes in curricula were inherent requirements of a teacher's job in 1991 (that is, at the datum point) and, hence, the Commission could not conclude that changes in curricula since that time constituted a "significant net addition to work requirements" of teachers. In that regard, it was further submitted that performing tasks that are inherent responsibilities of a professional teacher in a different manner to how they were previously performed (for instance, due to the emergence of an outcomes based educational environment) does not equate to a relevant work value change for the purposes of the work value principle. The respondents cited the decision in the 1980 Teachers Awards case, where it was held that change in work was not synonymous with change in work value. In that regard, Dey J stated (at 925): Alterations in methods of teaching and in the functions performed do not of themselves constitute changes in work value. In many instances the concepts and approaches involved in the work described were not novel, even if there were a shift in emphasis. The application of professional expertise to situations which have not been experienced before can be a mere demonstration of the exercise of skills which are already recognized [sic] and recompensed. 108 The respondents emphasised the professional role and responsibilities held by teachers (and which were held prior to the introduction of outcome based education), and submitted that "the capacity of school teachers to respond to curriculum change is inherent in the role of a professional teacher". 109 Finally, it was the respondents' submission that teachers have been already compensated for the curriculum changes described by the Federation. 110 Given the enormity of the task of assessing "curriculum change", we will consider the evidence in three broad categories: the introduction of outcomes based education; the pace of curriculum change; and, the adequacy of resources and curriculum support. Introduction of outcomes based education 111 It is clear that the Education Act 1990 (formerly the Education Reform Act 1990) marked the commencement of significant changes in public education in New South Wales. Whereas curriculum development was once a school-based exercise, it became a centralised responsibility overseen by the newly established Board of Studies. The shift to a centralised approach to the development and implementation of school curriculum followed recommendations that this change occur arising from the 1989 Report of the Committee of Review of NSW Schools ("the Carrick Report") and the 1990 School-Centred Education: Building a More Responsive State School System ("the Scott Report"). The nature of the changes to curriculum control is usefully summarised in the Vinson Report as follows (at 89): The key changes were as follows: 1. Knowledge : The Act specified the key learning areas (KLAs) to be studied by primary and secondary school students. The Board of Studies was required to develop courses of study within each KLA and, since its inception in 1990, it has set out to write new syllabi for all subjects, from kindergarten to Year 12. The Board is currently working on the revision of syllabi within the Years 7-10 curriculum; 2. Accountability : The Act gave the Minister power to conduct Basic Skill Tests and to develop regulations covering the publication of the results to prevent any inappropriate public disclosure of the results. The Minister now has available a battery of external accountability measures: Basic Skills Tests in literacy, numeracy and computer skills in years 3 and 5, English Language and Literacy Assessment (ELLA) and Secondary Numeracy Assessment Program (SNAP) in Year 7, the School Certificate in Year 10 and the Higher School Certificate in Year 12; 3. Outcomes : In line with the developments referred to earlier, the Act empowered the Board of Studies to specify the 'aims, objectives and desired outcomes' to be attained by young people in the course of their school study. The Board of Studies has adopted a 'standards framework' as the basis for curriculum development, teaching practice, the monitoring of student achievement and reporting to parents. Through an analysis of student's performance, examiners' judgments, marking guidelines and work samples, the Board has constructed a set of outcome descriptors (standards) that describe the level of achievement of students within particular subjects. Taken together, the changes in knowledge, accountability and outcomes have reshaped the architecture of the curriculum in New South Wales schools and influenced the work of both students and teachers. 112 In 1995, the progress of the implementation of outcomes was reviewed, giving rise to a report entitled "Focusing on Learning: Report of the Review of Outcomes and Profiles in New South Wales Schooling" ("the 1995 Eltis Report"). The 1995 Eltis Report contains a comprehensive history of the introduction of outcomes based education in Australia, and in New South Wales in particular, and it is useful at this juncture to set out a summary of that history. 113 An "outcomes and profiles" approach to education was adopted by the Department of School Education in New South Wales in May 1994. This step had its origins in the mid-1980's, when, following a statement by the then Federal Minister for Employment, Education and Training regarding the need to focus on curriculum at a national level, the Australian Education Council initiated a program of "collaboration and rationalisation" in order to develop a standardised national curriculum framework. In 1989, a program of establishing national education goals was accepted by Ministers for Education across Australia, including New South Wales. What followed was a process of developing and trialling curriculum frameworks covering the following areas: (a) the Arts; (b) English; (c) Health and Physical Education; (d) Science; (e) Languages other than English; (f) Mathematics; (g) Studies of Society and Environment; and (h) Technology. 114 The task of developing the relevant Statements and Profiles was given to the national Curriculum and Assessment Committee in June 1991, for completion in June 1993. Upon receipt of the Statements and Profiles, the Australian Education Council referred those documents back to each State and Territory for further review. 115 In the meantime, the NSW Board of Studies had begun including outcomes in the various syllabuses following the passing of the Education Reform Act (1990). Section 14(3) of that Act stated that any syllabus developed or endorsed by the Board of Studies for a particular course of study: … is to indicate the aims, objectives and desired outcomes in terms of knowledge and skills that should be acquired by children at various levels of achievement by the end of specified stages in the courses, and any practical experience that children should acquire by the end of such a stage. 116 Between 1991 and 1993, the Board of Studies developed syllabus documents, which included outcomes, in a range of subject areas. In September 1991, the Board of Studies published a statement entitled "Curriculum Outcomes" which sought to "define the concept [of outcomes] and discusses the relationship of outcomes with objectives, stages, assessment reporting and flexible progression". The New South Wales K-12 curriculum was structured into six consecutive stages, which the Board of Studies stated was "a convenient way of structuring syllabus outcomes, and syllabuses will indicate outcomes for each stage of the course. Rather than being rigidly defined, the stages should be regarded as overlapping because students will not only achieve outcomes at differing levels within each stage but they are likely to achieve some outcomes from different stages". 117 Upon receipt of the national Statements and Profiles in 1993, the then New South Wales Minister for Education and Youth Affairs requested that the outcomes specified in the national profiles be incorporated into New South Wales syllabuses. According to the 1995 Eltis Report this was done, however, in the following circumstances: The lack of content in the national profiles meant that the connection of the national outcomes to NSW syllabus objectives could not be clearly elucidated and comment has been made already that there was inevitable conflict between the eight levels of "typical achievement" of the national profiles and the six stages of NSW syllabuses. 118 In April 1995, the implementation of profiles and outcomes in New South Wales schools was paused to enable a review to be undertaken, resulting in the 1995 Eltis Report. The 1995 Eltis Report made 21 recommendations regarding the implementation of outcomes and profiles in the New South Wales education system. 119 The Board of Studies document "Curriculum Outcomes" defines a syllabus outcome as follows: The Board of Studies' syllabus outcomes are the intended results of teaching and learning expressed as a set of broad, comprehensive, assessable and observable indicators or benchmarks of student achievement at each stage of a course. Taken together they cover the range of knowledge, skills and attitude expectations of the syllabus. Syllabus outcomes are expressed in relatively general terms because they are not meant to be in the form of an exhaustive, behavioural list. They can be regarded as being placed on a continuum between the very general aims of core knowledge, skills and attitudes in the syllabus to the much more detailed and specific outcomes expected from classroom activity. Another way to view outcomes is to see them placed in the middle of a pyramid in which the apex represents the aims of the syllabus and below which, in increasing order of specificity, are syllabus objectives, syllabus outcomes and, at the base of the pyramid, classroom and lesson outcomes. Aims Objectives Syllabus Outcomes Classroom and Lesson Outcomes Although syllabus outcomes need to be sufficiently discrete to be observable and assessable it does not necessarily follow that all syllabus outcomes should be tested or that they should be expressed in terms of minimal mastery or pass-fail dichotomy for the purposes of reporting student achievement. 120 Each syllabus also included a set of indicators for each outcome, which is a statement of the behaviour that a student might display as they work towards the achievement of the syllabus outcome. 121 The role of outcomes and indicators in education is best demonstrated by way of example. The English K-6 syllabus covers three broad subject areas: Reading, Writing, and Talking and Listening. The English syllabus is applied at each of the four primary stages: Early Stage 1 (Kindergarten), Stage 1 (years 1 and 2), Stage 2 (years 3 and 4) and Stage 3 (years 5 and 6). There are specified outcomes for each subject area, which are based on notions of "learn to" and "learn about". For instance, in relation to reading, children will be expected to achieve outcomes at each stage relating to "Learning to Read" and "Learning About Reading". One of the "Learning to Read" outcomes for Stage 1 is: Reads a wider range of texts on less familiar topics with increasing independence and understanding, making connections between own knowledge and experience and information in texts. 122 There are 22 indicators which accompany this outcome in the syllabus document. The syllabus states that these indicators "exemplify the range of observable behaviours that contribute to the achievement of outcomes. They assist teachers to monitor student progress within a stage as well as to make an on-balance judgement about the achievement of outcomes at the end of a stage. Teachers may wish to develop their own indicators, adapt and/or modify syllabus indicators as appropriate". For example, the set of indicators for the above outcome includes the following: · Participates in the reading of poems eg repetitive rhymes, chants; · Interprets story illustrations and simple diagrams; · Speculates on the behaviour of characters in stories and discusses own behaviour in similar situations. 123 In addition, there are "Values and Attitudes outcomes" which apply at all stages. The English syllabus is 101 pages in length and is one of seven K-6 syllabuses. 124 There is no doubt, on the evidence, that outcomes based education has emerged as a significant educational initiative in New South Wales schools since the 1991 datum point. 125 In relation to all K-6 Key Learning Areas, the Agreed Statement of Facts in these proceedings confirmed that since 1998 new outcomes based syllabuses have been introduced. Similarly, in relation to the HSC, a review of the HSC was commissioned in 1995, resulting in the publication of the HSC Green Paper in April 1996. Following a further period of consultation, the HSC White Paper "Securing Their Future" was released in August 1997. The White Paper proposed, amongst other things, a new HSC curriculum structure and a revision of the existing syllabuses in all major subject areas. The Agreed Statement of Facts noted that all HSC syllabuses were revised between 1998 and 1999, with the first group of Year 12 students commencing under the new curriculum structure in 2001. 126 How, then, has the introduction of outcomes based education (and the accompanying new syllabuses) affected the work performed by teachers? Many teachers gave evidence regarding the need to develop "new ways of teaching". Ms Jennifer Leete, Deputy President of the Federation, summarised the effects on teachers' work of replacing a "norm-referenced" approach with a "standards referenced" approach as follows: Teaching and Learning - teachers have altered their pedagogy to incorporate teaching to the standards and levels of achievement rather than teaching content. They facilitate students' achievement of these levels and progression to higher levels, in addition to ensuring all relevant content and skills are covered. The standards make explicit what it is a student should know and be able to do. 127 Similarly, Ms Mary Fogarty, Deputy Principal, Development at Turramurra High School, deposed that: In my experience, these [outcomes based] syllabuses require the teacher to develop new ways of teaching. Because the student has to display certain competencies or skills the teacher no longer has the freedom to implement the syllabus document in an individualistic fashion. Each outcome has to be documented in the teacher's markbook with an accompanying comment for each student. These outcomes need to be tracked for each student throughout the year. 128 Ms Kerry Goldhagen, Assistant Principal at Castle Cove Public School, a teacher since 1984, gave evidence in relation to the changes to the K-6 curriculum, stating: It is the direct connection between content, process, skills and assessment which makes the syllabuses so complex. Most testing prior to the mid-1990s made fairly straight forward judgments about achievement. Marks were distributed on an either right or wrong basis (such as spelling) or on a subjective basis (such as the quality of a project or a piece of writing). The amount and scope of testing was largely up to the teacher. Children's work was judged according to the work of other children in the group or across a grade. Assessment is now also much more complex. It uses many more tools, including observation. It is continuous rather than episodic. It contains both specific and non-specific elements in the one area of study. 129 Ms King gave evidence in relation to the changes to the years 11-12 curriculum, stating: The standards framework delineates six levels of achievement for years 11-12 courses. The levels of achievement in [Board of Studies] syllabuses as "draft performance bands" apply to HSC exam performance. Both myself and executive staff have supported teachers in terms of strategies and guidance so that they can help students demonstrate the knowledge and skills to achieve these designated levels. In my experience over the last 20 years teachers have not been required to work with such prescriptive syllabuses. The standards must be explained to students with each unit of work and included in the marking criteria for each assessment task. … [Teachers] indicated that it took a lot of time and a change in thinking to be able to articulate the standards to students and ensure that students understand what knowledge and skills they must demonstrate to have their achievement linked to a designated standard. This was not a requirement prior to the introduction of the new HSC. 130 Evidence was adduced by the respondents from Mr John O'Brien, Director, Curriculum of the Office of the Board of Studies. In relation to the new HSC, Mr O'Brien deposed that: New Higher School Certificate (HSC) syllabuses were distributed in 1999. The new syllabuses are more comprehensive and structured. By making explicit the content, generally in the form of 'students learn to' and 'students learn about', directly linked to particular outcomes, they provide, in my opinion, more guidance and support than the syllabuses they replaced. Prior to the HSC White Paper in 1997 there were 76 subjects, involving 174 HSC courses. As a result of the White Paper changes there are now 69 subjects, involving 110 courses (excluding vocational education frameworks, Life Skills courses, and distinction courses). Only 14 of the 69 revised syllabuses were complete revisions resulting in new courses. The others were either minor or moderate revisions. 131 Ms Fogarty's evidence suggested that the level of "guidance" provided by the new curriculum was an issue in itself. She deposed that: The New HSC syllabuses released in 2000 into schools adopted the format of "Learn To" and "Learn About". The Learn About was the basic knowledge component of the course by the Learn To dictated teaching practice for teachers. This trend has continued with the new Years 7-10 syllabuses where teaching style is being dictated by the [Board of Studies]. In my experience this presents difficulties for a number of teachers. Teachers who have developed their own unique and effective teaching style over several years are being dictated to in terms of what is acceptable in their teaching discipline. 132 Ms Leete gave evidence in relation to changes to the HSC curriculum. She said: Revision of syllabuses has always occurred. What was new on this occasion was the fact that all syllabuses were being revised at the same time, and in a short time frame. Given that the changes were to a standards-referenced framework, they were far more significant than has ever been the case before. 133 There was disagreement as to the need to integrate the curriculum across different Key Learning Areas. Dr Michele Bruniges, Assistant Director-General, School Educational Services, deposed that there was no departmental requirement to integrate the curriculum, and that "planning, programming and teaching in this way are matters of teacher preference". It was Ms Cheryl McBride's evidence that "good teaching and effective learning occurs when the curriculum is integrated thereby demonstrating links and reinforcing learning for students". Ms McBride is employed by the Department as Principal of Sarah Redfern Public School, and has been a teacher since 1978. When cross-examined on her evidence, Ms McBride confirmed that integration was a widespread practice: Q … you appear to accept what Ms Bruniges had to say, namely the requirement to integrate the primary curriculum by saying it may not be a requirement but it happens frequently. A If you want to cover the areas effectively of the school teaching week, day, term it is a necessity – it is not a written requirement but it is common practice, well recognized practice and effective time management. Q By necessity you don't mean to suggest to the Commission that there are schools that are operating and teaching K-6 students that are not doing this? A I would say every school in New South Wales would have teachers integrating their curriculum, yes. Q You don't suggest every teacher in a K-6 context does? A I would. Q You would say that would be the universal practice? A Yes, the universal practice. Q You would simply say that although there is no normal requirement, that it is good teaching practice and is universal? A And promoted through teaching learning facilities, promoted from our own departmental in-service courses et cetera; it is not just common practice, it is seen to be and known to be sound practice, effective practice to reinforce students' learning. 134 The Vinson Report indicated that teachers were concerned about a perceived loss of professionalism as a result of the change from contents based to outcomes based education, stating: There is light and shade to the question of what constitutes an effective and relevant curriculum… Suffice it to say that in the fulfilment of what they regard as their central tasks, teachers lay claim to that degree of specialised knowledge and commitment to service that warrants trust in their professional judgment. That is, they say that they should be trusted to interpret educational objectives in ways that match the needs and capabilities of their students. 135 The respondents sought to rely on the evidence of Professor Vinson and others regarding that perceived loss of professionalism as evidence that teachers are professionals and, as such, teachers are expected to be able to apply their expertise in new and different ways. 136 In our view, there is little in the discussion regarding the so-called de-professionalising of teachers' work which contributes in any meaningful way to the task presently before us. Our assessment of the evidence is that teachers in an outcomes based educational environment have had to adapt their professional skills and apply those skills in more sophisticated ways than was the case previously. There is, in reality, an enhancement and growth in professional skills, even though some teachers may have felt the constraints of the new system may have given them less overall freedom in the delivery of teaching. By way of example, Ms Zadkovich, Deputy Principal at Eschol Park Public School, a teacher since 1980, gave evidence in cross-examination which demonstrates quite plainly one area where she has experienced a change in the exercise of her professional judgement: A … the outcomes are all there, but its teacher judgement that will determine which ones are taught to which student at which point in time. Q That judgement, that professional judgment that you have just mentioned there, that is a structured judgment because outcomes are part of the syllabus and the structure, but is there something essentially different between the exercise of judgement that you have just described and the exercise of judgement that a teacher, as a professional, prior to the introduction of the outcomes based syllabus would have been required to exercise on a day-to-day basis in terms of what matters to focus on within a syllabus? A Yes, I think there is a fundamental difference. I don't think they are the same. Prior to the introduction of outcomes, the syllabus was largely content based, it was largely driven by norms, it was largely driven by the specific units of work that you might want to teach. Outcomes are child centred. They are criterion based and they involve skills that the child has rather than knowledge that they are being assessed on and that is the fundamental difference way between the two systems. I could have taken a unit of work on gold, for example, present the children with videos, let them read some articles on it, give them data and at the end of the term I might give them a test to do, a piece of writing, give a little speech, mark them all, rank them all and said: This kid is right at the top. You know he is my top A student, 95 per cent; this student has failed the course, 23 out of 100 marks and that would be all that was involved. No one would question that. I now no longer worry about the unit of gold. I now worry about the outcomes that each child is supposed to have. The definition of outcomes is no one fails. You are along on a continuum somewhere. So you might have a child who even though in the study in gold, has the skills level of a child in Year 2 or Year 3, and I am talking about Year 4 or Year 5 students. I can no longer say: This child has failed the unit of gold. I now, as a teacher, have to teach them the skills back at Year 2 level to understand the concepts that children at Year 5 or Year 6 level do and I have to be able to show that I have understood the children's level at Year 2 and that I have to take him further along the continuum and that's for every child in my class, and that's the fundamentally difference way of looking at a curriculum between pre-outcomes and post-outcomes. … Q One of the things that you described to the Commission was that teachers are deciding which outcomes to teach, rather than teaching every single outcome that might find its way into a syllabus document? A That's correct. Q That involves the teachers making a professional choice as to what's the best way to come to grips with the syllabus and the outcomes based approach, which is inclusive therein? A That's correct, although that there are points which the system tells us to teach students to do certain things and the advices given to the teachers are often contradictory. We have some people coming … to the school basically say[ing]: "You should be reporting on every single outcome". So there is still a confusion as to what to do. Q Some people seem to be giving teachers that message that they need to be teaching every outcome? A Yes. Q But the approach that you have described to the Commission this morning is not that approach, but one where the teachers are taking a view as to what outcomes they are going to teach? A That's correct. Q And they are certain[ly] not moving on the basis that they are required to teach every outcome, is that correct? A That is correct, but there continues to be a problem because teachers would have debates even amongst themselves, even at team meetings, as to which are the appropriate ones. We do not have freedom to do exactly as we like. The whole aspect about outcomes based education has presented a problem for teachers because if you have a syllabus that says, for example, in English, there are 14 outcomes that you decide, for example, that, "well, I am only going to do ten of them", you will find that someone, be it the principal or a parent, will say to you "Why hasn't my child covered those?" So that professional judgment, while we are glad to have professional judgement, is nonetheless bringing pressure to bear that didn't exist prior to the introduction of outcomes based education. The pace of curriculum change 137 In relation to the pace of curriculum change, Mr O'Brien gave evidence that: Most States and Territories have a regular cycle of syllabus revision of eight years or less. In my experience more frequent revisions result in gradual change that can be readily incorporated into teaching and learning programs. … The changes to the primary school and secondary school curriculum since 1990 have been based on a need to provide NSW teachers with contemporary high-quality syllabuses so that they can continue to develop high-quality programs of learning for students. 138 Ms Dorothee Lean, Principal, Collarenebri Central School, a primary school teacher since 1971, gave useful evidence explaining the use and implementation of syllabus documents in primary schools, and the increased frequency with which new syllabuses are now introduced: Teachers use the syllabus statements, prepared and released by the Board of Studies, for programming the teaching and learning activities which occur in the classroom. The syllabus statements now include outcomes and indicators that are the basis of the teaching, assessing and reporting activities. There is also a range of perspectives that are expected to be included in the teaching and learning activities. Some of these are Environmental education, Multicultural education, Aboriginal education, Mass Media education, Non Sexist education. The rapid turnover of syllabus statements is one important factor that has exacerbated the work intensification of primary teachers. To give an idea of the rapidity of change I have included a list of the recent syllabus releases, including the number of outcomes and indicators: a) Maths 2002, 83 outcomes with 5-9 indicators per outcome b) Creative Arts 2000, 62 outcomes with 3-7 indicators per outcome c) Science and Technology 2000, 44 outcomes with 9-10 indicators per outcome d) Personal Development, Health and Physical Education 1999, 58 outcomes with 5-11 indicators per outcome e) Human Society and its Environment 1988, 32 outcomes with 6-15 indicators per outcome f) English 1998, 64 outcomes with 7-14 indicators per outcome In six years there has been a complete renewal of all syllabuses. The work needed to implement these changes is an ongoing cycle for classroom teachers. Maths is a good example. In 1990 a Maths syllabus was released with 216 objectives. Objectives were replaced by 119 outcomes in the mid 1990's and last year a new syllabus was released for implementation in 2003 with 83 outcomes and nearly 600 indicators. In 12 years there have been three changes to this syllabus alone. As can be seen in the table above the change rate is increasing. The average is now one new syllabus per year or every two years if we are lucky. There is never a chance to consolidate a new syllabus before another one appears from the Board of Studies. Teachers are stressed at the mere mention of a new draft syllabus because they know it will involve a process of consultation and the issuing of a new syllabus within a year. We are suffering syllabus burnout. 139 Similarly, in relation to secondary school syllabuses, it was Ms Fogarty's evidence that: In the 1980s it was my experience that syllabus documents were released by the [Board of Studies] and the expectation was that they would have a life of around ten years. In the early 1990s this expectation was readjusted by the Board to be around six years. The new Geography Years 7-10 syllabus was introduced in 1997 and before it was examined in 2002 the [Board of Studies] announced that they would revise the syllabus. These new Years 7-10 syllabuses will have to be implemented in 2005. I am aware from my position on the Board that the Science and History syllabuses had only been implemented in schools for two years when the Board announced a revision and the new syllabus will be implemented in 2005. Resources and curriculum support 140 The Federation made a variety of submissions in relation to curriculum support material: that the materials were inadequate to support the syllabuses; secondly, teachers were required to sift through large amounts of information to find material that can appropriately be incorporated into their teaching; thirdly, limited resources meant that many teachers were not able to access, or had difficulty accessing, electronic forms of information such as information on the internet or a CD-ROM; and fourthly, there was inadequate professional development available, mostly in the form of "train-the-trainer" models. 141 The Federation contended that the volume of support material that has been produced by the Department was "indicative of the scope and degree of curriculum change which has taken place over recent years". 142 The respondents submitted that "the evidence before the Commission reveals a systematic and broad ranging approach to professional training and development" and relied on the evidence of Mr Randall, Director, Professional Support and Curriculum for the Department. 143 We have no doubt that a large amount of information has been disseminated by the Department in support of syllabuses that have either been introduced or modified since the datum point. In this respect, the witnesses were ad idem regarding the magnitude of that material, which included booklets, CDs, videos and internet sites. Given the extent of curriculum change experienced in the New South Wales education system, the need for a high level of support was inevitable. We find support for this proposition in the evidence of the respondents' witness, Dr Bruniges, who gave the following evidence in cross-examination: Q In paragraph 7.2 you say the new K-6 syllabuses have been supported by the Department with a level of consultancy, professional development and curriculum materials support not seen previously? A Yes. Q Presumably the extent and scope of the material which has been distributed which you have described at some length in your affidavit was seen by the Department as necessary to ensure the successful implementation of the new K-6 syllabuses, is that correct? A That is correct. Q And such expansive support material was necessary because of the significant and substantial changes that were intended to be effected by the implementation of the new syllabuses is that correct? A Yes. Conclusions regarding curriculum change 144 Our purpose here is not to debate the merit of outcomes based education as a paradigm, nor to assess the success or otherwise of the implementation of that paradigm in New South Wales government schools (although we do note our earlier observations about the quality of educational services in New South Wales in relation to the special case aspect of this matter). Rather, having established that an outcomes based educational environment exists, where it did not exist at or prior to the datum point, we must determine whether the move to an outcomes based model of education has changed the work, skills or responsibilities of teachers and, if so, the extent of that change. 145 In our view, there is overwhelming and compelling evidence to support a finding that there have been dramatic changes in curriculum content, structure and theory since the datum point. Those changes have fundamentally altered the work performed by teachers. The introduction of outcomes based education represents a shift in both the philosophy and provision of educational services. The systematic overhaul of each syllabus in the K-12 curriculum since the datum point has been phenomenal, and has had significant implications for every aspect of teachers' work. The K-12 curriculum culminates in the HSC, which itself has undergone significant review. 146 The respondents contended that much of the evidence presented to the Commission focused on the increase in workload associated with the introduction of outcomes based education. Our views in relation to increased workload have been stated earlier, but it must be emphasised that this submission profoundly understates the extent of change in the skills and responsibilities of teachers in this area. 147 To the extent that the respondents seek to minimise the impact that the introduction of outcomes based education has had, we do not accept the respondents' submission that the evidence "conclusively demonstrates that [the role of the professional classroom teacher] inevitably had to focus on various types of outcome if the professional role of the teacher was to be properly discharged". The essence of the respondents' case in relation to curriculum change is that teachers are performing the same job, albeit in a different way. We do not agree. Indeed, we consider that reliance on the evidence given, for example, by Ms Fogarty in cross-examination that teachers are "always concerned about teaching outcomes", entirely misses the point that the requirements of the education system for teaching outcomes has fundamentally changed since 1991 - the broad description may be similar but the subject matter is entirely different. We are satisfied that the types of outcomes which were targeted pre-1991 were significantly different to the prescribed outcomes which are now expressly embedded in the public education system. Professor Eltis noted that "simply having the work 'outcomes' incorporated in a school's curriculum does not necessarily mean that the school's work is outcomes based". In our view, the same logic should be applied to the use of the word "outcomes" in any discussion of norm-referenced education. 148 The evidence established that there has also been an increase in the pace of curriculum change since the datum point. According to the Federation, the corollary of rapid change in curriculum is a reduction in the time available to teachers to re-evaluate their teaching programs and prepare to assimilate the new syllabuses, and has "placed enormous workload pressures on teachers in recent years and has resulted in a considerable intensification of teachers' work". To the extent that the Federation's claim relates to an increase in workload arising from the pace of curriculum change and inadequate preparation time, we repeat our earlier findings that increased workload does not, of itself, infer increased work value, but that the management of those developments does constitute such a change. We are of the view that the increased rate of change, when combined with the nature of those changes, is such that there is demonstrated a very significant net addition to the work requirements of teachers since the datum point. 149 Of less weight in our determination is the issue of the adequacy of curriculum support material. The Federation would urge us to accept that there is insufficient information available and, at the same time, argue that teachers are unable to digest the volume of material that the Board of Studies has provided. In our view, it is an inherent requirement of the role of teachers that they exercise professional judgement to discern the usefulness and application of the available resources and support materials in their teaching programs. The fact that reviewing that material may be time-consuming or laborious is to miss the point. The significant and relevant issue is that these curriculum support documents are a reflection of the extent of the change, and thus a recognition by the Department that the magnitude of change required it to provide special assistance to teachers. In that regard, we note that we do not accept that the provision of resource material in electronic form establishes that there has been an increase in work value, either because of limitations in the availability of computers to enable teachers to access that material, or because of a need to use different skills to do so. We will deal in more detail with the implications of changes in technology later in our judgment. 150 We do not agree with the respondents' contention that any changes to teachers' work arising from the curriculum changes since 1991 must be accommodated by teachers, and that the capacity of teachers to do so is part of the inherent requirements of the role of a professional teacher. Whilst we agree with the findings of Dey J in the 1980 Teachers Awards case that "alterations in methods of teaching and in functions performed do not of themselves constitute changes in work value", in that matter his Honour noted that "the concepts and approaches involved in the work described were not novel…". The opposite is true here. The nature of curriculum change since the datum point that has been amply demonstrated by the evidence can best be described as innovative and novel, and responding and adjusting to those changes can hardly be said to fall within the scope of the inherent requirements of the job of a professional teacher. In this respect, we reiterate the observations of the Full Bench in Health Employee Pharmacists (State) Award which we have set out earlier in this decision. 151 Further, we do not accept the respondents' contention that teachers have been compensated for changes in the curriculum. The respondents drew the Commission's attention to the Federation's claim prior to the making of the 2000 Award which stated that a salary increase for teachers must incorporate components that, inter alia: Recognise the increased workload of teachers, the radical changes to curriculum and changes in the nature of work that have taken place as a result of educational change, including technology and changes in society. 152 Whilst Mr R Kenzie QC, who appeared with Mr P Ginters of counsel for the respondents, conceded that the Federation's claim was not granted in full, and that an element of compromise was involved in the making of the 2000 Award, he submitted that enough of the work value factors raised by the Federation in its claim were recognised as part of the "whole package" of the 2000 Award, effectively extinguishing any remaining work value claim. According to the respondents, the Commission can be "completely satisfied" that the 2000 Award encapsulated the Federation's claims such that there can be no outstanding work value claim. In that regard, Mr Kenzie highlighted the evidence given by Ms Maree O'Halloran, President of the Federation, in cross-examination that she considered that the implementation of certain processes (being the matters listed in clauses 18.1 and 40.2 of the 2000 Award) were "political imperatives of the government at the time", and that she thought "the government was concerned to ensure that the Teachers Federation didn't ban some of them". Mr Kenzie submitted that: We are quite content for the matters to go forward on the basis [that] Ms O'Halloran's evidence is an accurate representation of why those matters were executed in clauses 18 and 40 of the award. Our submission will be seen in that light. We are not in a position to say, nor do we say anything different to what Ms O'Halloran was saying at that stage of the transcript. We say that does not change the result in any way, because on everyone's view, the 2000 Award was progressed on the basis [that] a substantial increase in salary was paid in recognition of the performance of those activities - indeed, paid to secure it, to ensure these things were done. So the effect of accepting that evidence is, we invite the Commission to, is only to direct attention to the association between the increases in salaries and those identified matters so when you come to the question of how has the introduction of these things been impacted in the wage rate, that is the evidence. It shows the 2000 award is an award which (a) involves salary increases and (b) involves those salary increases being a reflection of those things being done. 153 Other than the express references in clause 18.1 of the 2000 Award to the implementation of State-wide testing (which we will discuss further below), what was absent from the respondents' case was the terms of any agreement or statement relating to the 2000 Award which indicated that the bargain reached had recognised, in part or whole, the issues raised in the Federation's claim (as would be expected if changes of this magnitude were being taken into account). Neither the record of the proceedings nor the award itself warrants such a conclusion. We do not consider that there is a proper basis for inferring, on the evidence, that the bargain struck by the parties was intended to encompass the very substantial work value changes in evidence before us. 154 The respondents relied also on clause 15 of the 1993 Schools Enterprise Agreement as it relates to the introduction of new curricula, where it was stated: 15.1 General Description The parties agree to provide in the Department's schools enhanced student learning through increased emphasis on teaching and learning focussing on agreed outcomes and profiles. 15.2 Strategic Plan Major Focus Plans The system will focus upon determined curriculum implementation areas (Major Focus Area) in each year. These particular, determined areas will attract major system support in terms of personnel, materials and training and development. Major focus areas are a priority for implementation during 1994/1995. Supplementary Areas Whilst there will be activity and support in other areas this will be less in comparison. Supplementary areas are not a priority for implementation during 1994/1995. Decisions regarding timing and implementation are school plan based. It is accepted that secondary schools will have to respond to any Board of Studies requirements for changes to the School Certificate and Higher School Certificate courses and public examinations. … 15.3 Benefits i) clear realistic expectation about the implementation of curriculum change; ii) improved allocation and use of resources to support curriculum change; iii) enhanced support of teachers during the period of curriculum change (materials in-service and consultancy); iv) improved teaching and learning framework to assist teachers plan and monitor their work; v) improved teaching practices to provide improved learning outcomes for students; vi) improved reporting to parents and students; vii) improved capacity for the system to be more informed about its performance in terms of educational outcomes; viii) more effective allocation of resources on educational needs basis to serve equity requirements; ix) improved articulation from year 6 to Year 7; x) enhanced professional development of teachers; xi) enhanced vocational education in schools to equip students for the world of work. 155 The statement of purpose in the 1993 Schools Enterprise Agreement that "the parties agree to provide in the Department's schools enhanced student learning through increased emphasis on teaching and learning focussing on agreed outcomes and profiles" sheds little light on the extent to which, if at all, agreed outcomes and profiles had in fact been incorporated into the curriculum, or were taken into account in the rates of pay provided by the agreement. In our view, there is nothing in the 1993 Schools Enterprise Agreement or the 2000 Award which could properly be interpreted by the Commission as a clear expression that teachers were being compensated for the changes in their work, skill or responsibilities associated with curriculum changes since 1991 as disclosed in the evidence in this case. In essence, there seems to have been a recognition in 1993 of the prospect of such changes and some preliminary attempt to specifically address the changes in 2000. Given also the extent of the changes that have occurred, we are not satisfied that any adjustments to teachers' rates of pay contemplated by those instruments had, as their intention, fully compensating teachers for the changes in the value of their work relating to curriculum development since 1991. The offsetting of any wage adjustment arising from the 1993 Schools Enterprise Agreement or 2000 Award must, therefore, necessarily be minor. Assessment of student performance 156 The Federation submitted that with the introduction of outcomes based teaching comes the requirement for outcomes based assessment, which represented a departure from the "norm-referenced" assessment regime. The Federation cited the Department's 1996 document "Principles for Assessment and Reporting in NSW Government Schools", which stated: The norm-referenced assessment practices used in schools will need to be reconsidered and integrated with an outcomes-approach to assessment. Parents and industry have recognised that schools need to do more than merely rank students from the highest to the lowest achievers. Schools are being asked to assess and report on what students actually understand, know and can do. An outcomes-approach that clearly defines expected learning provides a much stronger focus for higher quality curriculum, assessment and reporting processes than we have ever had before. 157 It was submitted by the Federation that this has resulted in teachers being required to undertake continuous rather than periodic assessment of students; to implement a range of techniques for recording student achievement (such as the use of portfolios); to ensure that assessments conform with consistent teacher judgement; and, to make assessments with reference to objective standards. These assessment requirements, according to the Federation, have made the work performed by teachers "significantly more time-consuming, complex, demanding and intellectually challenging and has required teachers to exercise their professional judgement in a far more complex and refined manner". 158 Again, the respondents submitted that assessing student performance "is and always has been quintessentially the role of a professional teacher", and that any changes in assessment strategies as a result of the introduction of outcome based education does not constitute a change in work value as contemplated by Principle 6. The skills exercised by teachers in undertaking student assessment in that environment have been "recognised and recompensed in the rate [of pay] of a professional teacher". 159 In 2003, a review of outcomes based assessment and reporting practices was conducted, giving rise to a further report "Time to Teach: Time to Learn" ("the 2003 Eltis Report"). The respondents referred to the fact that the 2003 Eltis Report acknowledged, in respect of the introduction of outcomes based assessment and reporting, that there were "problems needing to be addressed, not the least of which is the clear specification of just what is mandatory for teachers in relation to curriculum assessment and reporting outcomes, and where [teachers] have more freedom". This finding translated into a number of recommendations for the review and refinement of the assessment and reporting regime. In those circumstances, the respondents submitted, given that these recommendations expressly recognise the concerns of teachers regarding assessment in an outcomes based educational environment, the Commission should not grant a generic salary increase on the basis of the workload and any ambiguity surrounding the responsibilities associated with student assessment. 160 Mr O'Brien gave evidence for the respondents that: Good assessment practice does not change in changing from norm-referenced to standards-referenced assessment. Explicit standards give teachers more structure and focus to their assessment. Based on my knowledge and experience, it is my opinion, that this makes it easier for teachers to judge student achievement. 161 Ms Leete explained how student assessment is conducted in an outcomes based education system: Teachers now assess students' against the standards. The standards referenced approach facilitates teachers' use of two forms of assessment: (i) assessment of learning, to be used to report students' achievement; (ii) assessment for learning, which is described by the Board of Studies thus: "In assessment for learning, teachers monitor and respond to their students' learning progress. Using student responses to various activities, exercises and questions designed to assess groupings of outcomes, teachers are able to plan how to remedy misconceptions, support deeper understanding and help students acquire new knowledge, skills and understanding. Assessment for learning helps increase the effectiveness of teaching strategies and improve learning processes, resulting in better learning outcomes for students". 162 Ms Zadkovich deposed that: The introduction of Outcomes Based Education in 1994 has led to a profound change in the way we approach teaching. In the past students were taught from a body of knowledge which was enshrined in the various syllabuses. Testing for achievement was a school-based, even teacher-based, matter. Students were marked according to an assessment by the teacher on work undertaken at a particular time - either at a weekly test time or at the half-yearly and yearly examination time. Results were distributed according to either a number derived from a series of right/wrong test items (such as in a Maths test), or according to a process of matching against the work of the other students in the class or grade (as in a reading test, or a piece of written work). Students are now continually assessed in relation to specific outcomes that describe a standard to be achieved. When a student demonstrates accomplishment he or she moves on to the next level of standards to be achieved. Student progress is described in terms of attaining standards in stages of development from Early Stage One to Stage Three (ie. In Kindergarten to Sixth Class). Percentage marks and ABC assessments have been replaced by performance descriptors… The reporting is not about what the child has achieved in relation to other children in the class, but what he/she has achieved in relation to the standard as described in the syllabus. Teachers need to assess each student to see where they lie in this continuum, develop various programs since 'one size does not fit all' and adapt teaching strategies to meet student need. The focus is student focused. 163 The introduction of the new HSC within the outcomes based approach to education appears to have had particular consequences in the area of assessment. Whilst acknowledging that the changes have been positive, Mr Peter Morgan, Principal of Belmont High School, a teacher since 1974, stated that the implications of standards referencing for teaching work and learning has been profound, and that the changes to teachers' work have been the most intellectually challenging that he has seen in decades. 164 In relation to teachers' accountability for assessment decisions, Mr O'Brien stated: The 1995 review by Eltis, Focusing on Learning: Report of Outcomes and Profiles in NSW Schooling made it clear that 'assessment and reporting practices [should] be time-efficient and not detract from teaching and learning'. It affirms that teaching and learning are the prime focus of classroom activities and it empowers schools and their communities to decide on and implement strategies for assessment and reporting. The Board's 1996 policy document Assessing and Reporting Using Stage Outcomes: Part 1 Assessing states 'a single activity can often provide information about more than one outcome'. This document makes it clear that it is not necessary to assess outcomes individually. It states that 'Teaching and assessment strategies should allow students to demonstrate outcomes in integrated ways' (p.12). Based on my experience, it is my opinion, that combining outcomes in assessment can help to reduce the number of assessments needed. 165 Ms King gave evidence in relation to the assessment requirements of the new HSC: The standards framework underpins the assessment of the HSC courses. At my school it has significantly intensified the work of teachers and Head teachers as reported at staff and faculty meetings. They indicated that it took a lot of time and a change in thinking to be able to articulate the standards to students and ensure that students understand what knowledge and skills they must demonstrate to have their achievement linked to a designated standard. This was not a requirement prior to the introduction of the new HSC. 166 Ms King was cross-examined in relation to her evidence in relation to assessment of student performance: Q And so part of the process [in a norm-based system] would have been the development of a strategy to allow that process of delineation and assessment to be made? A Except it was mostly concentrated on tests and, therefore, every student would be sitting for the same test whereas with the standards based system all assessments in terms of individual assignments have to be matched against the criteria so the requirement for teachers to conform to consistent teacher judgment is something quite new and the whole system of teacher consistent judgment was not mentioned before 1999 in the lead up to the HSC. Q That doesn't differentiate the new system from the old in terms certainly on the part of the professional teacher from outcomes from their student? A I think it differs hugely because the specificity of the outcomes and the level of achievement against which they must be matched is the absolute essence of the huge mind shift for curriculum change in the late 1990s. 167 It is hardly surprising that a fundamental philosophical shift in the content of a curriculum would have equally significant consequences for the assessment of students within that altered curriculum framework. Teachers no longer simply assess whether the knowledge they have sought to impart to students is known or not known. Teachers must now assess the achievement of specified outcomes, which involves, amongst other things, devising a range of tasks to give students valid opportunities to demonstrate their achievement of an outcome, and monitoring the performance of students against the standards specified in the outcome. 168 As to Mr O'Brien's evidence, whilst the establishment of a framework in which the assessment of student performance is performed may provide some assistance to teachers to manage that task, that assistance does not displace the effect that the changes to assessment requirements have had on the skills and responsibilities of teachers arising from the development, comprehension and application by teachers of significantly more complex and sophisticated assessment practices. 169 We are satisfied that assessment practices within a standards referenced or outcomes based educational environment depends on consistent teacher judgement. We are further satisfied that the standards against which student achievement is assessed are now externally available, making teachers more accountable for their assessment decisions. We agree with the Federation that a standards referenced approach "has required teachers to exercise their professional judgement in a far more complex and refined manner". 170 In support of their contention that teachers have already been compensated for changes to assessment practices, the respondents relied on the following: (a) Clause 15.1 of the 1993 Schools Enterprise Agreement which states: The parties agree to provide in the Department's schools enhanced learning through increased emphasis on teaching and learning focussing on agreed outcomes and principles. (b) Clause 15.2 of the 1993 Schools Enterprise Agreement, which includes the following statement: It is accepted that secondary schools will have to respond to any Board of Studies requirements for changes to the School Certificate and Higher School Certificate courses and public examinations. (c) Clause 3.1 of the 1996 Schools Award, which is in the following terms: The purpose of this award is to implement the agreement, to increase the salary and status of teachers, to recognise the changes affecting the work of teachers, and to improve the quality of public education. (d) The findings of the Commission in Re Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (2002) 116 IR 361 that: Overall, the application [for the 2000 Award] is one having industrial merit as it introduces substantial improvements in the structure and organisation of the teaching services of this State and rewards teachers for their contribution under the new arrangements. 171 The respondents' submissions in this regard are even less compelling in relation to student assessment than they were in relation to curriculum change. The instruments to which we have been referred contain little more than platitudes relating to improvements in teaching services or, at best, indications of general areas for potential future change. In our view, the changes to teachers' work relating to assessment of student performance, which satisfy the work value principle, have not been compensated. Further, to the extent that the 1993 Schools Enterprise Agreement, the 1996 Schools Award and/or the 2000 Award increased teachers' rates of pay, the offsetting of those increases in respect of any wage adjustment in the present case will be negligible (and we do not propose, therefore, to provide any reduction in this respect). Reporting of student performance 172 According to the Federation, the implementation of outcome based teaching and the consequent introduction of standards referenced assessment has a further flow-on effect with regard to reporting student performance. The Federation submitted that "the more sophisticated, complex and precise mechanisms of assessment employed under a standards referenced assessment approach has been accompanied with more detailed recording and reporting of student performance to students and their parents. Teachers are now required to report each individual student's achievement against the outcomes and levels of achievement specified in the syllabus documents rather than simply providing a rating against their peers". 173 The Federation submitted that changes to reporting requirements has significantly increased teachers' workload, required the development of new skills, and involved the implementation of new methods of recording and reporting information. 174 Again, the respondents submitted that the complex, time-consuming and demanding task of reporting student performance is and always has been an inherent professional responsibility of teachers, and that any increased responsibility relating to reporting student assessment associated with the introduction of outcome based education has already been factored into the rates of pay of a professional teacher. 175 Mr O'Brien deposed that "The Board [of Studies] does not require more record keeping in a standards-referenced system than in the previous norm-referenced system. Schools have long been required to keep records of results awarded to each student for each formal assessment task". This is no doubt correct, but the nature of the change relied upon by the Federation transcends the mere fact of the number of records to be produced, and goes to the quality and nature of reporting tasks. 176 Ms McBride deposed that: The [Department] requires Principals to ensure some kind of hard evidence is produced to support teacher judgment regarding students' achieved outcomes. Work samples are frequently collected from each Key Learning Area to be compiled in a student assessment book. At Sarah Redfern Public School teachers prepare an assessment book for each student. Twice a year teachers present work samples with annotated notes including the expected outcome, the indicators and comments on the student's performance. Samples are presented in all aspects of the Key Learning Areas eg in English there are samples of students' work in Reading, Writing, Talking and Listening. Over the year, formative reports (indication of student's progress part way through the program) and summative reports (a final report and completion of the student's annual program) are completed. These comment on the student's attitude, social skills, behaviour, homework, attendance as well as major academic/intellectual achievements. Each student's level of achievement must be closely identified and the task set at that level with indicators demonstrated. Teachers' observations in each Key Learning Area are explained and documented. This means more work and more accountability. 177 In cross-examination, Ms McBride expanded on her evidence regarding the changes in the use and application of portfolios, or assessment books, as a reporting tool: Q As far as the use of student work samples for the period of assessment there is nothing new about that? A Not greatly new, sorry no. In the early 90s you might have come across some schools, a few schools that might have presented work samples to parents which is to demonstrate what the children were doing but by no means were they considered in the way that they are considered now so for example what we are looking at in each of the six key learning areas is pinpointing diagnostically where that child fits into all those areas, how the work sample actually demonstrates the level of outcome that child has achieved, some sort of recognition of what level they have achieved at and then how that might be connected to the next key learning area so rather than just saying okay here is a piece of Johnny's art work, we will put that in his folder to take home to Mum and Dad it is far more diagnostic and individualised than it has ever been before. Q And far more particularised as a requirement? A Absolutely and of course now there is the opportunity also for the children to make their own self assessment and for that to be included in the report or the student report portfolio that goes home to Mum and Dad. The teachers also make a formative or indeed summative report on the child's social skills, attitudinal skills etc. Q Whilst you have expressed your view as to the frequency with which one might find the use of work samples or portfolios, you do not deny that within schools at the start of the 90s you would have found such things? A Not in the same way, yes I would deny that because not even within metres of being similar. Q You would invite the Commission to accept that you would not have found in the school system the use of student work samples, portfolios at the start of the 90s? A Not in the way they are used now, not even close. Q When you say "[not] in the way they are used now", you are focusing on the degree of particularity, the outcomes and the indicators, aren't you? A I guess the issue I am trying to put across is in the early 1990s you might have had an art folder that goes home - and perhaps ladies and gentlemen you might be familiar with those - the art folder that goes home with pieces of work that the children have done in the day or whatever. Now you receive something that has written at the top the expected outcome for the child to achieve, a list of the indicators demonstrating that the child has [achieved] that outcome, a comment on how that child has gone in that particular area and how that then links to a formative assessment at the end, so greatly different. Q You would not have expected to find at the start of the 1990s anything which looked in a report anything remotely like the sort of outcomes that you would find in a K-6 context that you find today? A I think in the early 90s you would have in reports anecdotal evidence of anecdotal response to what a child has been doing that may reflect what the child's outcomes are but nowhere near in the particularity or the very individualised way that it is now so if we cast out mind back to the types of reports that were around at that time there would be in many cases still an A, B, C or D for how the child had gone in a particular learning area and then the A, B, C or D about their performance that they have put in and then maybe a comment about maths and literacy and numeracy at the bottom of that. Now it is just so vastly different to that it is not funny so each key learning area, the significant key learning areas demonstrated and sometimes you will find children's portfolios that will have work samples from each of the areas: English, Maths, so not just one sheet; there might be a sheet on numeration. There might [be] a sheet on subjects of measurements, in English for example there might be another one that demonstrates the children's level of achievement in reading, writing, speaking and listening. It might be a language other than English as well so they are very much more thorough, more specific and much more individualised and much more specifically communicative to parents about what the child is doing. 178 The Federation relied on evidence from a range of witnesses, including the following: (a) Ms Lean deposed that reporting is far more detailed and focused. Reports must be supported by assessment data, which must be identified and annotated; (b) Mr Christopher Tome, Deputy Principal, Orange High School, a teacher since 1976, gave evidence that "the new [HSC] has meant that all teachers have had to learn a new standards-based system of marking which is conceptually significantly different from the rank-order system, which most teachers have used throughout their careers"; (c) Ms Narelle Grant, classroom teacher at Dubbo West Public School, a teacher since 1966, deposed that outcomes based reporting is more complicated. Previously teachers would award gradings for effort and achievement, and perhaps a comment. Now, each semester, teachers must complete a report as well as a portfolio which contains outcomes based work samples, each of which must identify the relevant outcome and an explanation. 179 We note that the vast majority of teachers who gave evidence regarding reporting student performance complained of significant increases in the time needed to prepare reports, the increased frequency of reporting, and the increased workload associated with the revision of reporting formats and approaches. The evidence conclusively establishes, in our view, that reporting student performance in an outcomes based educational environment is considerably more time consuming. However, as we have earlier stated, such a consequence is largely irrelevant to a consideration of changes in work value. 180 The evidence also demonstrates, however, that the change in thinking that has occurred since 1991 to enable teachers to teach and assess outcomes has had a trickle-down effect to the reporting process. Reporting student performance is an obvious, tangible product of education and assessment, and has been manifested in changes in the reporting process which we consider satisfies the requirements of the work value principle, although we consider that these factors are largely taken into account in the overall assessment of student performance. 181 We note that the respondents' submission, that the skills and responsibilities associated with reporting student performance have been factored into the rate of pay of a professional teacher, was essentially a derivative of their submissions relating to student assessment. The respondents sought further support for their contention that teachers have already been compensated for changes to reporting, in the decisions of Dey J in the 1980 Departments of Education and TAFE case and the 1980 Teachers Awards case. As earlier stated, we do not consider that the broad statements in the awards and agreements cited by the respondents contain any material recognition of changes in the value of teachers' work in the current context, nor do we consider that the decisions referred to assist the respondents in their case. State-wide testing 182 The Federation highlighted the increase in the number, regularity and content of State-wide testing undertaken in New South Wales since 1998 (and consequently since the relevant datum point) as a further indicator of the "stress and pressure" placed on teachers. The Federation submitted that the following changes have occurred: (a) In 1989, the Basic Skills Test in literacy and numeracy commenced for year 6 students. The Basic Skills Test was later extended to year 3 students in 1990, and transferred from year 6 to year 5 in 1994; (b) In 1998, the Primary Writing Assessment (PWA) was introduced for students in years 3 and 5; (c) In 1997, the English Language and Literacy Assessment (ELLA) was introduced as a pilot program for year 7, and was implemented State-wide in 1998; (d) In 2000, the Secondary Numeracy Assessment Program (SNAP) was introduced for students in year 7 as a pilot program, and was implemented State-wide in 2001; and (e) In 2001, the Computer Skills Assessment was introduced for students in year 10 as a pilot program (and then in 2002 as a pilot program for year 6), and became a mandatory assessment in 2003. 183 According to the Federation, teachers are required to possess and exercise a higher degree of professional skill and judgement, associated with analysing complex external test results, altering their teaching strategies in accordance with each student's results, and in some cases undertaking school-based marking of the tests. In addition, there was a consequent increase in the time and organisation required by teachers to prepare students for external testing, to administer the various tests and (in some cases) mark the tests. 184 The respondents submitted that compensation for the increased responsibility associated with the introduction of standardised testing has already been factored into the rates of pay of a professional teacher. The increase in teachers' rates of pay in the 2000 Award included compensation for the introduction of State-wide tests. 185 The parties agreed in the Agreed Statement of Facts that standardised testing, such as the Basic Skills Test, SNAP and ELLA, were in fact implemented as submitted by the Federation. 186 The introduction of State-wide testing involved teachers administering the tests, marking the tests (in some cases), and interpreting the results. There was little evidence to suggest that administering the tests required significant new skills or altered the nature of teachers' work. The focus of the Federation's claim in relation to the introduction of State-wide testing was on the interpretation and analysis of the results of those tests. The Federation contended that: There is a greater expectation from the Government, Department and the community that information derived from external assessment measures is used to inform and improve teaching and learning outcomes and report on student achievement. This has resulted in a change in the focus of teachers on assessment as an end in itself to regarding assessment as an integral tool for providing good learning for their students. 187 Mr Tome described the work associated with analysing test results: The introduction of English Language and Literacy (ELLA) and Secondary Numeracy Assessment Programs (SNAP) tests into Years 7 and 8 in NSW high schools has led to an increase in workload. In particular, these tests require time to be spent in analysing the results, and on the basis of those results, changes being made to the way in which courses are taught. This is a demanding task for all teachers. At Oberon High School, I, as Deputy Principal, worked with the head teachers, particularly the head teacher of English, in analysing the results, and devising strategies to make improvements where the results indicated these were needed. Following the analysis phase, it was then necessary to work with all the school's teachers in pursuing common goals to improve literacy and numeracy across the school curriculum. 188 Evidence was adduced from Ms Robyn McKerihan, Director, Student Assessment and School Accountability, on behalf of the respondents that "the tests provide valid, reliable and useful data and reports to parents, teachers, schools, districts and the State system. They help develop teachers' understanding of their own students' achievements and of State-wide standards so that student achievement can improve in vital areas." Ms McKerihan also gave evidence regarding the support available to teachers to analyse data (such as the "Using the ELLA School Report Package"). 189 The respondents made no submissions in relation to the change in teachers' work resulting from the introduction of State-wide testing. Rather, the respondents presented evidence of the extent to which changes to teachers' work relating to the introduction of State-wide testing has already been contemplated and compensated. In particular, clause 18.1 of the 2000 Award acknowledges the proposed implementation of, amongst other things, new tests as follows: 18 Assessment and Reporting and Quality of Educational Outcomes 18.1 The following shall be implemented: 18.1.1 the Basic Skills Test; 18.1.2 English Literacy and Language Assessment tests; 18.1.3 annual school reports and associated school self-evaluation and improvement programs; 18.1.4 school development policy; 18.1.5 the School Certificate and the Higher School Certificate; 18.1.6 Secondary Numeracy Assessment Program; and 18.1.7 Computing Skills Assessment Years 6 and 10. 190 Ms O'Halloran was cross-examined in relation to the inclusion of these tests in the 2000 Award: Q So it provided specifically for the implementation of the basic skills test? A Sorry I am not quibbling about that; it is just the basic skills test was being performed before that; the question was it going to be listed in the award or not, the answer is yes. Q It provided an obligation to implement the basic skills test? A The teachers already were. Q This provided an award obligation? A Yes. Q And it provided an obligation in relation to the English in Literacy Assessment referred by acronym in these proceedings as ELLA? A Yes, whether that was already implemented or not but certainly it was then listed in the award; all I mean I can't remember the year it came in I think before 2000, these were more political imperatives of the government at the time. Q The government was concerned to ensure that in relation to the increases that were being sought and granted as a result of this agreement, these processes were going to go forward? A I think the government was concerned to ensure that the Teachers' Federation didn't ban some of them. … Q You don't regard this agreement produced by way of consideration [an] obligation on the part of teachers to perform these activities? A Yes I do. Q You don't accept you were as a result of these increase being paid to do these things? A I don't accept the increases were anywhere enough for the amount of work that came out of them. Q So is the position of the Federation that the Federation doesn't believe as a result of this agreement having its members paid to do these things this agreement involved an agreement to implement? A The position of the Federation at least were listed in the award at the government's behest but they, teachers, were certainly not paid for the amount and the change in work that resulted. Q So the Commission should set aside those matters as part of the consideration given in respect of the increases for work value purposes? A No I think I was trying to say the opposite, for example in the Catholic agreed statement of facts there was compensation for the changes in work. Q Don't you accept that the award and the agreement which gave rise to it was an industrial package? A I accept we negotiated it. Q You can't split up the consideration by saying some things in the agreement didn't form part of the consideration can you? A I think I can say we didn't get enough compensation for what was there and what had already been started in 1996 and what was ongoing process and the extra matters that came as a result. Q Your true complaint is you didn't receive enough in the 2000 award in relation to the obligations of your members to do these things, is that correct? A If I have a complaint it is that since 1991 teachers have not been fully compensated for what they are required to do regardless of any amount of money paid to them. 191 We are satisfied that the introduction of State-wide testing has been adequately recognised and compensated since the datum point. It is a matter over which the Federation has previously bargained, and the 2000 Award contains a clear statement of the precise regime of testing to be introduced at various educational stages. Clause 18 of the 2000 Award is not a token reference to the possibility of such testing being introduced. Unlike other areas of the Federation's claim, which we will discuss later, this is not a matter for which there has patently been no, or inadequate, compensation in earlier agreements or awards. Rather, the Federation is seeking salary adjustments in circumstances where there has been clear recognition in the past of the very thing that is the subject of the present claim. Such a claim lacks merit and, in our view, was unwarranted in the context of the overall claim. Meaningful industrial bargaining demands that the Federation be expected to comply with both the letter and the spirit of the agreement that was reached. 192 Further, we are not satisfied that the evidence demonstrates that the implementation of these tests would require teachers to implement changes beyond that ordinarily falling within a professional's duties or as part of professional development. We specifically reject the Federation's submission that external testing has increased the stress and pressure on teachers as a result of comparisons between a school's results and the State average, or against the results of other schools which, although not published, may be discerned from the available data. "Over-crowded" curriculum 193 The Federation submitted that the K-12 curriculum has become over-crowded "in recent years" as a result of the requirement to teach cross-curriculum content or perspectives, including: information and communications technologies; work, employment and enterprise; literacy; aboriginal and indigenous content; civics and citizenship; difference and diversity; gender; and, multicultural content. In addition, in 2000, the Department advised that a range of departmental policies was also to be implemented, in part through the delivery of syllabuses, including: AIDS education; aboriginal education; anti-racism education; and, drug education. 194 It was submitted for the Federation that the incorporation of cross-curriculum content or perspectives increased teachers' workload, and required the development of new skills and knowledge to enable the teacher to teach outside narrow subject areas. It was contended that "the effect of the overcrowded curriculum on teachers is to increase their workload, to cause them to neglect or compromise teaching in some areas because of the lack of time for preparation and presentation, and to increase anxiety levels as they are required to teach new subjects without adequate training, backup and resources". 195 The respondents submitted that notions of a crowded curriculum have not evolved recently, but have been in existence since prior to the 1991 datum point. Further, according to the respondents, teachers have already been compensated for the incorporation of perspectives and cross-curriculum content. 196 Mr O'Brien explained the nature and emergence of "perspectives" as follows: In 1996, the Board [of Studies] adopted Statement of Equity Principles which were derived from the Board's 1994 Statement of Values . The purpose of the equity principles was to guide the development of syllabuses, support materials and assessment guidelines for teachers. The statements became curriculum perspectives against which the quality of the Board's syllabuses and support materials were to be judged. The perspectives included: Aboriginal and indigenous; gender; local, national and international; intercultural and multicultural; socio-economic; and religious perspectives. From 1996 these perspectives were incorporated into all revised syllabuses. Additionally, from 1999 the nationally agreed Key Competencies were incorporated into revised HSC syllabuses. In 2001 the Board, in consultation with the schooling sectors, established a set of 'cross-curriculum content statements' to be incorporated into all revised Years K-10 syllabuses. The cross-curriculum content statements address issues, perspectives and policies that will assist students to achieve the broad learning outcomes of the K-10 Curriculum Framework … It is my opinion that embedding the statements in the content of syllabuses makes it easier for teachers to be sure that all perspectives are included in the teaching, learning and assessment programs they develop. 197 An example of cross-curriculum content is the State Literacy Strategy, launched in 1997, and expanded in 1999 to become the State Literacy and Numeracy Plan. Dr Bruniges stated that "a key message of the State Literacy Strategy was that literacy skills and knowledge are integral to student achievement in all subjects and that all teachers are teachers of literacy". Ms Fogarty described the effect of the Strategy: Prior to 1990 literacy was perceived by myself and other teachers I talked to as something which all English teachers taught. In my faculty essay writing was taught but text types and the associated grammatical detail was left to the English staff. From 1996 onwards the State Literacy Strategy was introduced. This Strategy required all teachers to incorporate Literacy into all their teaching programs. 198 Similarly, Ms King deposed that: The State Literacy Plan is quite specific about the expectation that all teachers must be explicit in their teaching of language skills in the context of their disciplines. This policy requires teachers to have acquired the level of expertise necessary to understand all text types and teach literacy and language in context. The policy also requires teachers to incorporate literacy and language skills into their school based assessment programs and report on them in formal reports to parents and students at least twice a year. We have discussed these requirements at Executive meetings and staff meetings. I am aware from these meetings and Staff Development days that many teachers have had to learn new skills and develop new resources to implement this policy and further that Since 1999, SNAP has required that Maths teachers will become familiar with the explicit literacy demands of their courses … The explicit literacy demands of the maths courses need to be addressed if students are to cope with the new senior and junior maths courses. This has required Maths teachers to embed technology competencies into the maths curriculum and assessment regimes. I am aware that Maths teachers have to have developed the skills themselves first and develop ways of teaching these skills to students. 199 Mr O'Brien acknowledged that ten years ago, it would not have occurred to the "average science teacher" to incorporate cross curriculum content areas into his or her teaching, whereas now they are embedded in the syllabus and there is a requirement to teach those areas. To that extent, according to Mr O'Brien, "all teachers have had to broaden their horizons beyond the narrow scope or subject they are teaching". 200 The respondents referred to the specific changes in curriculum and school organisation which were taken into account in the Independent School Teachers case, and submitted that, given the results of that decision were "flowed on" to school teachers in the Education Teaching Services case, similar factors are relevant in the present matter. The following statements were included in the evidence considered in the Independent School Teachers case (at Schedule 1, pages 5 and 10): In addition to the across the curriculum teaching that occurs in the primary schools there are now new demands for subjects such as environmental education, teaching about AIDS, Child Sexual Abuse, multicultural education, and Australian Studies. … Examples of matters which are now administered at the direction of and under the control of the school principal, which were formerly outside the school's responsibilities twenty years ago, … * Child abuse reporting * Protective behaviour education * Alcohol and drug education * Personal Development and Sex Education * Pastoral Care/Student Welfare Programs * Values education * Driver education * Bike education * Safety House Programmes * Computer education * Careers education * Non-sexist education * Multi-cultural education * Aboriginal education * Disadvantaged Schools Programme * English as a second language * New Arrivals Programme * Country Areas Programme * Special Education – Learning Difficulties * Special Education – Integration of Disabled Pupils * Australian Second Language Learning Programmes * Community Language Education * Mass Media Education * Daily Physical Education 201 The evidence demonstrates that there are a range of topics (described in the early 1990's as 'perspectives' and now as 'cross curriculum content areas') which have been taught in schools for many years and, in some cases, pre-dating the 1991 datum point. Road safety is an example of such a topic. In that respect, we agree with the respondents that the notion of a crowded curriculum is not new, and we will accordingly avoid double-counting. 202 It is not necessary that we determine whether the curriculum is over-crowded or merely crowded: the distinction is irrelevant. We are satisfied that what may have been taught as a matter of policy rather than curriculum, and administered in a discretionary or ad hoc fashion, has, since the datum point, been formalised, expanded and embedded in the current curriculum. Teachers are now mandated to integrate those cross-curriculum content areas into their teaching. We accept, for instance, that the State Literacy and Numeracy Plan, in itself an entirely commendable and positive initiative, represents a significant change in the content of the curriculum and the manner in which it is delivered. 203 We note that we do not consider that the acquisition of new knowledge by teachers in order to teach cross-curriculum content areas, by itself, warrants a finding that there has been a significant change in teachers' work, skills or responsibilities. It is inevitable, for instance, that a history teacher may need to acquire new knowledge in order to introduce gender perspectives into his or her teaching of the history syllabus. We have stated earlier our view that the acquisition of such knowledge is inherent in the role of a teacher. We do, however, consider that the changes in the content, philosophy and focus of the curriculum has required teachers to develop new ways of teaching to accommodate those changes. 204 It is not necessary or appropriate in a work value assessment to apportion a wage adjustment to particular elements of work changes, and we do not propose doing so in this case. In our view, the emergence of cross-curriculum content areas since the datum point as an integral part of the curriculum is one of the features of curriculum change on which we have based our finding that there has been a significant net addition to the work performed by teachers. Vocational education and training in schools 205 There are two limbs to Vocational Education and Training (VET): vocational courses which Years 11 and 12 students may study as part of the HSC; and vocational education programs which students may undertake to develop an understanding of a particular vocation, as well as preparation for and access to the world of work, and which are not assessed as part of the HSC. 206 In relation to the latter courses, the Federation referred to the integration of work-related competencies, identified in the report of the Mayer Committee in 1992, into all syllabuses. Those key competencies included: collecting, analysing and organising information; communicating ideas and information; solving problems; and working with others and in teams. However, the focus of the discussion in this matter was primarily on HSC assessable VET courses. 207 The Federation submitted that the growth and development of VET in schools has affected the work, skills and responsibilities of teachers, the reasons for which were principally fourfold: (a) The preparation of a VET course requires considerable work and skill; (b) Teachers are required to assess student achievement of key competencies, measured against industry standards; (c) Teachers teaching VET courses have been required to undertake further training to upgrade their skills as well as maintain the requisite industry experience; and (d) Teachers are required to organise and monitor structured work placements for all students undertaking an Industry Curriculum Framework course. 208 The respondents acknowledged that the delivery of VET in government schools has added "a dimension to the work of those teachers who teach VET in schools courses". However, the respondents submitted that: (a) Those changes affect only those teachers engaged in teaching VET in schools, not teachers as a whole as claimed by the Federation; (b) In 2003, only 6.5% of the primary and secondary teaching workforce were qualified to deliver VET schools courses; (c) In August 2002, only 6.4% of the combined primary and secondary school population undertook either a TAFE or school delivered VET course; (d) The nature of the changes affecting VET teachers does not constitute a significant net addition to the work value of teachers generally so as to justify a generic salary increase; (e) Increased workload does not equate to increased work value; (f) There is no obligation on teachers to teach VET; and (g) The Department supports teachers who choose to obtain the necessary VET qualifications, for instance by meeting the cost of training and providing relief days to assist the teacher to complete that training. 209 It is useful at this point to set out a brief history of VET in government schools. The HSC VET program in New South Wales government schools originated in 1985, with the courses delivered by TAFE, usually at a TAFE campus, for secondary school students. That program, known as the "Joint Secondary Schools TAFE" program, counted towards the students' HSC assessment. The program was broadened in 1997, and became known as "TAFE delivered VET in Schools" courses. 210 In the early 1990s, vocational education was the subject of two reviews: the 1991 Finn Review of Young People's Participation in Post-Compulsory Education and Training and the 1992 Carmichael report into The Australian Vocational Training System. Arising from those reports, and to accommodate a range of other demands on the system, from 1992 TAFE delivered VET was supplemented by school delivered courses. 211 From 1993, all VET courses were required to be accredited by the NSW Vocational Education and Training Accreditation Board (for industry purposes) and by the Board of Studies (for HSC purposes). 212 Quality assurance arrangements were implemented in the mid-1990s. In 1995, each of the 40 school district offices and 12 TAFE Institutes were required to attain Registered Training Organisation status in order to comply with the Australian Qualifications Training Framework. The Australian Quality Training Framework is a set of nationally agreed standards established to ensure quality and consistency of vocational education and training services throughout Australia. A student must be taught VET by a Registered Training Organisation in order to gain a nationally accredited and recognised qualification. 213 In 1999, as part of the reforms leading to the new HSC, nationally agreed principles for VET were established, with assessment conducted in accordance with National Training Package guidelines, and a new range of courses were implemented, known as Industry Curriculum Frameworks. There are presently nine Industry Curriculum Frameworks available for study, being: (a) Business Services; (b) Construction; (c) Entertainment; (d) Hospitality; (e) Information Technology; (f) Metal and Engineering; (g) Primary Industries; (h) Retail; and (i) Tourism (delivered only by TAFE). 214 Mr Bob Smith, Director of VET in Schools, gave evidence that: Framework courses combine study and work placement to meet the aims of the HSC in providing students with knowledge, skills, understanding and industry appropriate attitudes in the chosen field of study. Students are also able to choose to use their personal part time or casual work in the industry towards their work placement requirement. Since the early 1990s, structured workplace learning has been used in NSW government schools as an effective tool to enhance the educational, vocational and social development of students. It is a significant means of supporting students' school to work planning while they are still at school. Preparation of new VET courses 215 The Federation relied on the evidence of Mr William Cowell, Industrial Arts and Vocational Education Teacher at Canowindra High School, a teacher since 1973, who described the extent of the work required to establish a new viticulture course, including "undertaking extensive additional training and education, liaising with industry, budgeting for equipment and resources and liaising with careers adviser and employers in relation to work placements". 216 In response, Mr Bob Smith deposed that: … Mr Cowell refers to the additional work he has had to undertake to support the introduction of the VET Viticulture course into his school. I say that the additional work he describes as necessary to introduce a VET course is little different from any such work for any teacher teaching a new course for the first time in any subject area. This work has always been and remains an integral component of the role of a teacher. 217 When cross-examined, Mr Smith conceded that establishing a VET course may require additional skill or training: Q Could you give me an example of [how the introduction of a VET course is similar to the introduction of a regular course]? A As a geography teacher, the introduction of a new course in geography, I had to liaise in respect to new resources. I had to organise and arrange - I had to relate to industry in relation to manufacturing geography and urban geography, so a whole range of activities that I personally was involved with, and that I am aware that others were involved with also, with the introduction of a new course. Q Were you self-trained as a geography teacher? A No. Q Can I suggest this is something more radically different for someone like Mr Cowell who was an industrial arts teacher, to take up a totally unrelated field such as viticulture - that is something radically different in terms of acquiring the skills and knowledge necessary? A I can't comment on Mr Cowell's prior experience but he would have been retrained to be able to deliver viticulture and my understanding is that he has both a background and experience in viticulture. Q You read his affidavit? A Yes. Q Any you knew that he had been an industrial arts teacher? A Yes. He was an industrial arts teacher but he also has other attributes. Q I know that, but can I suggest to you that for an industrial arts teacher to train up to something like viticulture, is a much more radical change than a trained geography teacher introducing a new geography course? A I am prepared to accept that, if you'd like to say that. Q And of course, again on your example, the introduction of a new geography course for a geography trained teacher would not have involved dealing with industry competency standards in the way Mr Cowell identified, having to draw up a new course like viticulture? A No. Q Sorry? A No. Q You accept what I say? A Yes. Assessment of competencies 218 In relation to assessment of competencies, Mr Smith deposed that: The requirements for [Australian Quality Training Framework] VET and internal HSC assessment specify a competency approach to the assessment of the range of skills and knowledge which can be applied in the workplace. This assessment is criterion referenced. The Board of Studies requires that, as far as possible, the assessment of skills and knowledge be integrated. Assessors are encouraged to adopt a holistic approach, where assessment encompasses a whole unit of competency or, preferably, combinations of units rather than single elements of performance. 219 The evidence of Ms Cobby, Head Teacher, Teaching and Learning at Northern Beaches Secondary College Administration Centre, a teacher since 1984, is indicative of the evidence adduced by the Federation regarding assessment of competencies: In my experience, the VET teachers I work with and I have had to develop new skills in order to effectively assess students in terms of competencies. As teachers we are no longer looking for a satisfactory attempt, or a big improvement, or the best a student can do, or comparing the attempt with the rest of the class or year. Students must either be deemed competent or not competent when measured against a required industry standard, regardless of the student's ability or application. There are long lists of competencies, which must be assessed. Qualifications and industry experience 220 Teachers must be accredited in order to deliver the Industry Curriculum Framework courses. The requirements for accreditation are established by the Qualifications Recognition and Resource Requirements Committee, and includes the following four mandatory components: (a) Orientation, including overview and context of VET, competency based teaching and assessment, workplace learning policies, procedures and co-ordination, and syllabus implementation strategies; (b) Industry skills training, usually at Australian Qualifications Framework Certificate II level, for instance by completing training through a suitably qualified Registered Training Organisation; (c) Industry experience in the relevant industry; and (d) Certificate IV in Assessment and Workplace Training. 221 According to Mr Smith, teacher retraining is "funded by the Department and funds are also provided to schools to employ relief teachers when the VET teacher is absent from school undertaking training". Structured work placements 222 Each of the nine Industry Curriculum Framework courses requires students to undertake a structured work placement. Ms Leete described the way in which this represented a change in work requirements: Work placements differ from earlier versions of workplace learning, such as work experience, which has been operating in NSW for decades. Work placements are structured to the extent that specific competencies are developed and assessed in the workplace, rather than just delivering some general experience of the world of work. Conclusions regarding VET 223 In our view, the evidence demonstrates that the nature of training available to students in government schools under the VET program, and the manner in which that training is provided, assessed and recognised has changed dramatically since 1991. The respondent acknowledged as much in its submission that the delivery of VET has added "a dimension to the work of those teachers who teach VET in school courses". We are satisfied that those changes have significantly affected the work, skills and responsibilities of teachers engaged in such work, consistent with the work value principle. 224 However, the evidence is equally clear that not all teachers in government schools are affected by changes in VET. We accept that, as a proportion of the entire primary and secondary teaching workforce, the number of teachers engaged in VET is low. This is unsurprising, given the nature of VET. The number of teachers engaged in VET as a proportion of secondary school teachers only would no doubt be greater. In any event, the fact that changes to VET only affect a relatively small number of teachers does not diminish the nature and significance of the changes, although there are consequences in terms of the assessment of an appropriate wage adjustment. The Federation advanced its claim on the basis that the Commission should determine an appropriate salary increase based on an averaging of work value changes. Adopting that approach, the value of a change in the work performed by teachers in the delivery of VET, however significant that change might be, must be averaged having regard to the value of all other changes. Technological developments 225 The Federation noted that significant changes in technology have occurred in the past decade, with computer technology featuring in schools in terms of teaching and learning, and the administrative functions performed by teachers. Teachers are required to possess and exercise new skills and knowledge associated with performing tasks such as maintaining student behaviour and academic records on database systems and accessing online materials from the Board of Studies and the Department. 226 The Federation submitted that, consistent with the cross-curriculum content strategy, Information and Communications Technology content must be included in every syllabus in the K-12 curriculum, requiring teachers to develop new skills and knowledge. For instance, the Federation points to the new 7-10 English Syllabus, which includes the following outcome: In their study of English, students are able to apply their existing knowledge of word processing, multimedia, ways of formatting and presenting texts, simulation software, graphics and electronic communication and further develop their skills, knowledge and understanding of these technologies. 227 The respondents submitted that a change in technology is not necessarily a negative factor, and that there were benefits associated with the use of technology in teaching. The respondents cited Medical Officers - Hospital Specialists (State) Award, where it was held (at 84): Secondly, it has to be understood that new techniques and procedures bring with them their own advantages. For every new technological advance there is likely to be somewhere an inferior technology in part or in whole abandoned. Superior technologies give superior results and tend to free practitioners from laborious, uncertain and more stressful practice. Changes, subject to habituation, do not necessarily make things more difficult or more demanding. They may, but equally they may remove problems, decrease anxieties and uncertainties and as well be more rewarding and more productive. 228 Changes in technology, and in particular the increased use of computers in schools, has had two principal consequences for the work of teaching: first, technology plays a more significant role in the performance of administrative tasks; and, secondly, Information and Communications Technology is now incorporated into each K-12 syllabus. 229 Mr Wayne Houston, the Director of Technology Services and Deputy Chief Information Officer for the Department, gave evidence regarding the work of the Information Technology Directorate in New South Wales government schools. His evidence was that: The Computers In Schools Program (CISP) was introduced by the New South Wales Government in 1995 as a key initiative to enhance the quality of school education services and to prepare students for the global and technological challenges of the 21st century. This program featured a range of specific initiatives designed to meet the government's articulated objectives. Specifically: · Connection of all schools to the Internet; · Provision of centrally-funded computers to government schools; · Provision of training and development to government school teachers across the State; · Appointment of a Technology Adviser to each district office; · Provision of funding for computer coordination in schools; and · Development and dissemination of curriculum support materials to teachers, relevant to their learning area, to assist in the integration of computer technologies into student learning. 230 Mr Houston stated that "the Department is aware of the continuing need for improved access to computers …" 231 Ms Joan Masterton, Head Teacher, Human Society and its Environment at Asquith Girls High School, a teacher since 1968, gave extensive evidence regarding the impact of technology on many of the administrative aspects of teachers' work. Ms Masterton deposed that: (a) Computers have increased the amount of system tracking and accountability. Student attendance can now be tracked using the Office Administration Schools Information System (OASIS), and teachers are required to generate correspondence to parents or carers in cases of poor attendance; (b) Similarly, teachers are required to be more accountable in relation to disciplinary matters. Unacceptable behaviour by students who are sent to the Head Teacher is entered in the Register of Individual Student Contact (RISC) database. Teachers are responsible for data entry, and for typing correspondence to parents or carers in relation to each event; (c) A large amount of data is available relating to School Certificate and HSC results, which must be analysed by teachers; (d) Teachers are required to prepare information bulletins, meeting agendas and minutes. Previously, faculty communication was more informal, episodic and ad hoc; (e) The volume of correspondence teachers are required to deal with has increased. Email has created an expectation that correspondence will be dealt with more urgently; (f) Teachers are required to develop technical skills to enable them to operate a variety of highly technical equipment; (g) Technology is demanding of teachers' time, for instance in setting up computerised presentations; (h) Material distributed online by the Board of Studies takes "more time and work" to download and read than the booklets that were previously sent to teachers; (i) Photocopying tasks are now performed by teachers rather than administrative support staff; (j) Computerised marking and recording of marks is "more complex". "All that was required during the 1980's was a basic calculator, to add up a set of raw marks in an exam, or you could add them up in your head". 232 Ms Leete gave evidence that the introduction of technology, in some respects, "automates jobs already performed", but has also fundamentally changed "what teachers teach about and how they go about teaching" and, in any event, requires teachers to learn and apply new skills. Ms Leete deposed that "Information and Communications Technology (ICT) knowledge, skills and understandings have been or are being embedded into the content and outcomes of every syllabus across the K-12 framework. Teachers are expected to program teaching, learning and assessment using the ICT skills as part of the subject." In that regard, Ms Grant deposed that: As a classroom teacher I must now teach the computer skills necessary to integrate this technology into each [Key Learning Area]. This has necessitated considerable extra work and learning on my own time. I must be able to teach a range of word processing and page layout skills, the application of databases in Human Society in its Environment (HSIE) and spreadsheets in maths, the use of drawing programs and graphics, as well as teach children how to access information from the internet. 233 Ms McKerihan gave evidence on behalf of the respondents that "although the use of computers as a tool in teaching and learning is new (since approximately 1990), the introduction into teaching and learning programs has been incremental with the gradual implementation of new syllabuses from 1997 to 2006". 234 The respondents acknowledged that "it is undeniable that in the period since the datum point there has been a conscious expansion of the use of technology in the educational environment". We have no doubt that the use of that technology in schools has affected the way teachers perform their work. However, we accept the respondents' submission that there are positives associated with changes in technology as well as negatives. 235 We do not accept the Federation's contentions regarding the impact of technological change on the administrative work performed by teachers. There were many examples in the evidence before the Commission of the benefits to teachers of enhanced technology. For instance, Ms Jenifer Milligan, classroom teacher at Evans High School, a teacher in New South Wales since 1994, deposed that, in 1994 "most teachers in the English Department hand-wrote or typed material to be handed to students which was then photocopied for distribution. Very soon the pressure was on to improve the presentation of materials I was generating for my students". This is one instance where, as Ms Leete suggested, the use of technology has automated a task that is already performed. Although Ms Milligan gave this evidence to demonstrate the requirement that she learn word-processing skills, in our view her evidence equally indicates that there are various benefits associated with the automation of the task she described: the presentation of her work has improved; there are less steps involved in the production of the work; the time taken to produce the work is potentially shorter; and the quality of the content may well benefit from the use of a word-processor, which allows the author to easily review, edit and manipulate text. 236 Similarly, Mr Ian Backhouse, Head Teacher at Umina (Middle School) Campus of Brisbane Waters Secondary College, a teacher since 1990, gave evidence that: Since 1990 many additional workplace expectations and accountabilities have been placed on me. I have had to become computer literate and to use computers for writing programs, lessons and as an administrative tool … every staff member is provided with a personal computer at his or her desks [sic]. The school has an intranet operating so that administration could be done by email. 237 Again, whilst this evidence was presented in support of the Federation's claim that the use of technology in government schools increases and changes the work performed by teachers, there are also obvious benefits associated with that technology, not least of which is the convenience of communicating via email compared with the preparation, reproduction and circulation of memos to staff. 238 In our view, the evidence presented to the Commission regarding the need for teachers to become computer literate, and the associated need for increased skills, is not at all compelling in the context of a work value assessment. In 2004, technology is deeply entrenched in almost every aspect of our personal and professional lives. Teachers do not perform their work in a vacuum, and like any member of a modern society which develops and advances, their technological capacity must evolve. It certainly could not seriously be contended that the acquisition of computer skills in teaching was outside the scope of ordinary professional development. 239 Further, we do not accept the Federation's submissions regarding the incorporation of Information and Communications Technology into the curriculum. The fact that teachers need to learn about Information and Communication Technology in order to teach it, does not, in our view, represent a significant net addition to the work performed by teachers. Teaching is a dynamic endeavour, which requires teachers to constantly expand their knowledge base. The acquisition of knowledge, by itself, does not constitute an increase in teachers' work, skill or responsibilities. 240 We do recognise, however, that there have been considerable developments in the way in which information is globally generated and exchanged since 1991, particularly as a result of the introduction of the internet and web based knowledge system. We note in that regard the compelling evidence of Dr Guthrie that: The Western World has entered what is commonly referred to as the 'Knowledge Age', where information and ideas have overtaken agricultural produce and manufactured goods as the key commodities (Dunford, Steane and Guthrie, 2001). National wealth and economic strength are now being increasingly measured in terms of knowledge, its usefulness and the speed with which it can be applied. Nations are being forced to compete in a global information economy where ideas, information and knowledge have no boundaries, but are instead multiplying and growing at a hectic pace (Petty and Guthrie, 2000). In this knowledge-based work, the maintenance of the competitive edge of a national economy increasingly depends on the management of ideas and innovation. As governments and their agencies embrace the 'Knowledge Age', the value of, and demand for, government information and services will increase significantly (OECD, 1999a). Essentially the demands of globalisation and rapid advances in technology have led to national leaders calling on their nations to become 'Knowledge Economies'. This is the same for each State and Territory government in Australia. The very words 'Knowledge Economy' brings primary and secondary schools, TAFE and Universities, as the prime producers and transmitters of knowledge, to the forefront of the political and public arena. At the same time, these institutions have been experiencing cutbacks in government funding, forcing them to reduce expenditure on key intangibles in the production of knowledgeable students - that is the teachers and lecturers involved in the public education sector. 241 We acknowledge that the immense changes in curriculum development includes a requirement to use web based knowledge systems, and that the work of teachers is complicated and exacerbated by the sheer volume of information available to teachers. We have discussed earlier the significant changes to the work performed by teachers relating to curriculum change. We consider that any changes in the work value of teachers relating to technology and the introduction of Information and Communication Technology into the K-12 curriculum (which we note are modest changes) falling within the work value principle have been contemplated in that earlier discussion. 242 Many witnesses gave evidence regarding the inadequacy of the training available to teachers and, in particular, the Technology in Learning and Teaching course. For instance, Ms King gave evidence that: Teachers at my school have not had access to extensive technology training. As Principal I have to endorse all training. I know that Technology in Learning and Teaching (TILT), a [Department] course, provided opportunities for only a few teachers in my school to upgrade their skills. To make up for this, teachers at [Riverside Girls High School] have been training each other in their own time, after school, and at weekends. 243 In general, there was considerable evidence presented to the Commission regarding the lack of resources available to government schools in terms of hardware, software, technology support and teacher training. We have no doubt that teachers face many obstacles in their day-to-day work associated with inadequate facilities, and that this must be a source of frustration. Ms Zadkovich gave the following evidence which was indicative of the views expressed by most of the Federation's witnesses: There are very great expectations about schools, teachers and computers, yet I doubt that any person working in an office where there is a computer on every desk, serviced by professionals, has the slightest understanding of how schools are expected to be able to deliver in this area. 244 This may well be the case, and we are not unsympathetic to the plight of teachers in this respect. However, the fact that teachers may perform their work in difficult circumstances does not, of itself, make that work more valuable. Put differently, the nature and significance of the work performed by teachers is not substantially altered because teachers may struggle with limited resources or have inadequate training. Student behaviour and discipline 245 The Federation submitted that both student behaviour and discipline techniques have changed over the past ten years in ways which have affected the work of teachers. Firstly, the anecdotal evidence of teachers indicates that there has been "an increase in the incidence of challenging, disruptive or violent student behaviour" over the past decade. The Federation contended that "the deterioration in student behaviour and increase in incidents of violence, assault, possession of weapons, illegal drug use and persistent misbehaviour has made the work of teachers more difficult, stressful and dangerous and has required teachers to spend more time, effort and skills in seeking to maintain control of the classroom and school environment and deal with behavioural issues." 246 Secondly, there has been a major change in disciplinary techniques from an authoritarian approach to "more contemporary behaviour management approaches". The Federation submitted that contemporary approaches to discipline (such as counselling and negotiating a restitution task) are more time consuming than previous methods of discipline (such as writing lines or detention). Those new methods require teachers to develop new and greater skills in conflict resolution, negotiation and counselling. In addition, schools and teachers are required to ensure students are afforded procedural fairness in the making of disciplinary decisions, and there is greater scrutiny of and accountability for those decisions. 247 The respondents submitted that the challenges facing teachers in relation to the effective management of student behaviour are not new, and that "consideration of student behaviour issues has already been factored into the rate [of pay for teachers]". 248 In any event, to the extent that student behaviour is raised in the present matter, the respondents contended that any changes are part of a continuum and do not amount to a significant net addition to the work of teachers and, further, that the Department has provided training, development and support resources to teachers to assist them in addressing behavioural problems in the student population. 249 We are satisfied, based on clear evidence, that there has been a considerable deterioration in student behaviour since the datum point. 250 Ms Carol Carrigan, Relieving Assistant Director-General, Schools/Special Needs Students and Equity Programs, gave evidence on behalf of the respondents that: Schools have always spent time and effort addressing student behaviour on a whole-school and individual basis. This has not substantially changed over the last decade although some methods of dealing with problems of student discipline have become outmoded and others have been developed in line with changing educational and community expectations. 251 Ms Carrigan acknowledged that "some schools" have experienced greater challenges in relation to student behaviour, and that this is "particularly the case in areas of low socio-economic status, higher unemployment and areas where there is a high incidence of domestic violence". Ms O'Halloran gave evidence that reports of violent, abusive and disruptive behaviours also come from teachers in areas of medium and high socio-economic status. 252 Ms Masterton, who began her teaching career in 1968, gave the following evidence regarding behaviour management which was not only frank, but in our view, clearly demonstrated the nature and extent of change: Twenty years ago, in my experience students generally did as they were told, and parents rarely questioned the way classes or students were managed. Schools were still authoritarian environments. When I became a Head Teacher in 1981 the cane was still used. Discipline problems were more speedily dealt with, and there was only perfunctory documentation required of caning and after school detentions. Authoritarian behaviour management methods are much quicker to use and require a much lower level of skill from teachers. Modern processes of behaviour management are time intensive, requiring extended discussions and negotiation with students and parents. Extensive documentation is required for accountability purposes. Teachers using these processes require a much higher level of interpersonal and psychological skills than was needed before and must spend much more time on documentation. General acceptance of egalitarianism, an emphasis on individual rights and student empowerment and a rejection of authoritarian behaviour by teachers, although good things, have left teachers vulnerable to student bullying and harassment. This is particularly so when combined with increasing parent expectations and a culture of complaints which seems to have developed. Increasing numbers of students are not prepared to take instruction from teachers, and openly exhibit very challenging and aggressive behaviour. Whilst this behaviour can be dealt with and turned around, it is exhausting, time consuming, very stressful and requires a lot of teachers to manage. 253 Ms Masterton gave some disturbing examples of the types of behaviour she now encounters from students at the school where she works as a Head Teacher, and stated "I cannot recall having to deal with such intransigence on a regular basis in the 1980's or early 1990's." 254 Ms McBride, who began work as a teacher in 1978, gave the following evidence in cross-examination: Q In 8.1 of your statement you say that one of the key areas for teachers is the management of the increasing number of students who display violent behaviour and/or have mental health problems. You would agree that is an increasing tendency and not new in itself? A An increasing tendency in society? Q In schools. A In schools, yes. Q And that there has always been a need to have strategies to deal with students displaying such behaviour regardless of its frequency? A They would always had to have strategies to manage difficult children. I think that in later years some of the extremes of those behaviour and the quantity of those behaviours I have not seen before and I think there are all sorts of societal pinpoints as to why that may have occurred, but certainly the incidence has grown. And later: Q Could I take you to your affidavit in reply, Exhibit 38, and ask you a couple of matters there. Paragraph 16 of that affidavit; this deals with the question of development in behaviour management and I think I asked you some questions about this before and I think you agreed that there would be positive aspects from the teachers point of view in respect of development of proper strategies in relation to behaviour management? A Yes. Q You would not go all the way, at least the suggestion you see in paragraph 16 that the new methodology is likely to reduce teacher workload in a net sense? A I could not disagree more vehemently; that is an ignorant statement. If I could give an example; a boy in year 6 is a violent boy from a violent background and has been known to throw chairs, he has broken a child's arm, punctured a chalk board with his fists; a very violent boy, a difficult boy to manage. His behaviour is now calm and he is taking responsibility for that. But why is that happening? Two days a week, two lunch times a week he is working with a teacher to talk him through anger management and programmes and other strategies - formulated a self-defence programme - we are communicating with the parents so there is a communication book going backwards and forwards. That sort of support hasn't always been there for students but it is becoming common place in schools and certainly we are benefiting because he is now calm, he is not hurting children in the classroom. But we are working very hard to make sure he stays there. 255 The Commission also heard evidence from: (a) Mr Tome, a teacher since 1976, that "in recent years there has been a marked increase in the incidence of violent and abusive students"; (b) Mr Michael Fullerton, teacher at the Balmain Campus of the Sydney Secondary College, a teacher since 1977, that "in general, I find that students are more likely to challenge authority, be disengaged from the learning process, less amenable to follow instructions and much more volatile in general behaviour"; (c) Ms Grant, a teacher since 1986, that "I believe School discipline is becoming increasingly difficult. Children backchat, test my authority, threaten and sometimes assault fellow students and staff" and; (d) Mr Backhouse, that "in 1990 at Broken Hill High School the playground atmosphere was much calmer and I felt quite safe supervising students … The playgrounds are increasingly more dangerous places to be … " 256 Mr Morgan was cross-examined in relation to his evidence on student behaviour, and was asked to identify the specific characteristics of the work that made it new. Mr Morgan's evidence was: We have had to learn a lot more about the nature of the behavioural conditions that students – just going back a step in terms of areas, there are two areas: content and process. The content we have been learning is the content about things like non-violent crisis intervention, content about ADHD and such disorders and so on. Content about the latest research on the factors that contribute to student behaviour. For instance, historically we've always looked at just the student. Now what we are researching much much more thoroughly is the impact of teacher behaviour on student behaviour. The impact of curriculum and classroom on student behaviour plus obviously student behaviour. That is part of the content we have been learning. Also learning about processes. For instance, we have just revised our student behaviour policy and procedure and from my discussions from principal counsel they are more structured, strategic, explicit for two reasons: 1. they are working more effectively and, secondly, we are held accountable when dealing with these students who often end up on the suspension and expulsion process. There is a level of accountability that we have been through procedurally and offered student management welfare openings to those students. I was overseas in 1997 and 1998 as a principal. I came back in 1999. I noticed a significant jump just in that two-year period largely as a result of changing departmental policy. That was when the current policy came out. Also the level of scrutiny of school management of students has become much higher. 257 A "violence audit" conducted by the Federation in August 2003 by way of questionnaires distributed to schools throughout New South Wales revealed a disturbing number of behavioural incidents in schools. Ms O'Halloran was not cross-examined in relation to this evidence, and the Commission has no comparative evidence with which to compare it, indeed any details as to when any of the reported violence took place. Nevertheless, we note that the results of the Federation's audit indicated that the following numbers of occurrences had been reported by teachers: (a) 3,047 physical attacks; (b) 2,766 instances of verbal abuse; (c) 613 instances of malicious damage; (d) 853 instances of verbal threats; and (e) 547 instances of continued harassment. 258 Ms Carrigan's evidence was that "policy development, training and development and targeting of resources and support in districts have increasingly supported the work of principals and teachers in managing student behaviour". Ms Carrigan gave evidence of the policies and resources that are available to teachers, including: (a) Good Discipline and Effective Learning, December 1995 (policy); (b) Student Welfare Policy, 1996 (policy); (c) Procedures for the Suspension and Expulsion of School Students, 1999 (policy); (d) Guidelines for Managing Drug-Related Incidents in Schools, 2000 (policy); (e) Support for Young Students with Behaviour Difficulties (resource document); (f) Transition to High School (resource document); (g) Schools as Community Centres (inter-agency program); (h) Families First (inter-agency program); (i) Forum of Community, Parents and Police, April 2002; (j) Taskforce VAR - a permanent taskforce established by the Minister for Education and Training and the Minister for Police which "has provided significant support to the work of teachers and principals by establishing protocols for information exchange between police, parents and principals with special consideration given to truancy, violent behaviours, participation in gangs or suspected drug use or alcohol abuse"; (k) Social Responsibility - curriculum resource introduced in K-12 curriculum in 2002; (l) Priority Actions Schools program - a program which aims to "improve student engagement in learning and educational outcomes, reduce disruptive behaviour and suspensions and improve attendance and retention"; (m) "Providing Effective Behaviour Support" - CD Rom resource; (n) "Professional Assault Response Training" and "Non-Violent Crisis Intervention Training" - training courses to provide teachers with "a systematic and comprehensive approach to the understanding and management of aggressive behaviour"; and (o) "Hydra" - a computer simulated training programme to "improve the tactical and strategic responses of key officers to incidents". 259 The volume of training, resource materials and support that the Department now provides teachers, and indeed the very existence of training courses in areas such as "professional assault response", whilst commendable, is in itself indicative of the extent of change in student behaviour, and the nature of the behaviour to which teachers are required to respond. Indeed, in cross-examination Ms Carrigan acknowledged that these types of training had been recently introduced in response to the current behavioural climate in schools. 260 The respondents sought to rely on the following passage from the 1980 Teachers Awards case (at 916): Many of the items referred to in the course of the evidence were reminiscent of matters discussed in earlier teachers' salaries cases, to which Mr Brady drew attention in detail. These included such matters as … the greater disciplinary problems presented by today's pupils who are less docile, more questioning, more active and more individualistic … 261 The respondents further relied on the Independent School Teachers case which relied on evidence of "the use of new discipline techniques that do not alienate young people". 262 It may well be the case that issues relating to student behaviour and discipline were relevant to the Commission's decisions in those matters. However, even if we accept that rates set by the 1980 Teachers Awards case and the Independent School Teachers case included consideration for issues associated with student behaviour and discipline of the kind identified in the evidence before us (with which we have real doubts), there is sufficient evidence in the present matter to persuade us that, since the 1991 datum point, there has been a further deterioration in student behaviour and changes have been introduced as a means of dealing with that problem beyond that contemplated in those earlier decisions. In short, we consider that the work performed by teachers in managing that behaviour and disciplining students has qualitatively changed and represents a factor satisfying the work value principle. 263 We do not agree with the respondents' contention that the Public Hospital Nurses case is apposite in this regard. The respondents' relied on the finding in that case that "the issue of aggression is a matter of serious concern to the Association and its members but the answer does not lie in a wage increase." In that matter, the issue of aggression of patients and their families was considered as it related to the working conditions of nurses, including occupational health and safety concerns. In the present matter, the issue is not so much about working conditions. Teachers have a responsibility to not only manage a student's aggression, but to attempt to re-educate that student in relation to acceptable behavioural standards. Therein, in our view, lie significant, additional skills. Student, parental and community expectations 264 The Federation submitted that changes in students', parents' and community expectations of the roles and responsibilities of teachers and schools have "placed new demands and responsibilities on teachers, required [the] development of new skills and knowledge and increased the accountability of teachers for their work and decisions". The changes described by the Federation included: (a) Increasing expectations that teachers will monitor and address all aspects of students' life, including social aspects such as depression and family issues; (b) There is an increasing expectation that teachers will be regularly available for parents to discuss their children; (c) Parents are increasingly likely to blame teachers or schools for a child's learning or behaviour difficulties, and to lodge complaints about teachers and/or schools; (d) Increased competition between schools has resulted in an increasing expectation that teachers take active steps to promote or "sell" the school, including participation in open days, parent interviews, production of promotional material and involvement in local community events; and (e) There is an increased obligation to communicate with the community and be publicly accountable, for instance, by publishing formal annual school reports. 265 According to the respondents, these responsibilities are not new, and consideration in respect of those responsibilities has already been factored into the rates of pay of a professional teacher. Further, the respondents submitted that, to the extent there has been any change or increase in student, parent or community expectations, those changes are part of the ordinary continuum and do not represent a "significant net addition to work requirements". 266 Mr Ken Allen, Mathematics teacher at Jannali High School, and a teacher since 1980, gave the following evidence regarding the change in parental expectations which was indicative of the evidence of many witnesses: I find that in 2003 teachers are more accountable to parents, students and their immediate supervisor. Parents expect schools to be all things to all people and provide solutions to every situation that arises. Students expect me to do everything from finding a lost pen to counselling over the loss of a family member. I am required to be flexible, manage an increasing[ly] complex workload, manage a changing curriculum, manage a changing clientele, manage a changing classroom environment, deal with a mixture of student problems and be an academic expert. 267 Similarly, Mr Fullerton gave evidence that: One of the changes that I have noticed over the past ten years is the change in parental expectations and how it affects their dealings with the school. It is increasingly likely that when a student is not achieving or is misbehaving, the parent will look to blame the school or the teacher. It is also more likely that a parent will accept their child's version of events and take their side against the school. In 2002 I attended a special meeting between a number of year 11 students, their parents and staff members. These students were truanting, failing to complete homework, and not applying themselves to their studies. The tone of the meeting was not "why are our children disengaged?" but "you have failed our children, they are disengaged, and what are you going to do about it?" 268 Many of the teachers who gave evidence described a diverse range of issues potentially affecting or impacting on students, which they believed society and parents expected them to monitor and address. Those issues included domestic violence, drug and alcohol education, healthy eating and nutrition, obesity, eating disorders, bullying, immigration related issues, family breakdown, poverty and financial management, depression, suicide, self-mutilation and homelessness. 269 Ms Zadkovich gave evidence regarding the increased expectations on teachers associated with monitoring and educating children about social issues, recognising children at risk, liaising and negotiating with parents, and traversing the difficulties associated with family court orders. Ms Zadkovich gave the following summation: The increased expectations have come with outcomes based education. The perception is that students can meet outcomes if supported, therefore parents and Department officials simply assume or expect that teachers will find or supply the necessary support. Ten years ago the parents of a child with speech problems would be expected to make arrangements for finding assistance. Today parents assume that there is a speech therapist for their child, and do not understand that the speech therapist support is hard to get. Ten years ago many of the students with physical difficulties who are now in local schools would have been in special schools and I have to continually upgrade my information as to how to deal with the practicalities relating to their physical difficulties. 270 Ms King stated that: … there have been increasing demands on schools over the last ten years in terms of identifying and supporting students at risk. Students at risk is a term we use to identify those boys and girls who need more intensive support to become successful learners…We have developed programs to help our girls build self-esteem, confidence, resilience, problem solving strategies, awareness of help from agencies outside school. Teaching this has required teachers to increase their understandings of these issues and develop appropriate strategies for identifying students at risk. 271 Mr David Gilbert, Principal of Governor Philip King Public School, a teacher since 1975, gave evidence that schools are now under unreasonable expectations to solve children's and their family's problems, and teachers are confronted with aggression, threats and official inquiries instigated by disgruntled parents. He stated that "the threat of litigation once never considered ten years ago is now a regular threat and a reality", and that "parents have become more and more demanding. The idea of joint responsibility is fast disappearing. As parents spend less time with their children their expectations of the school have, at the same time, increased proportionately". 272 Ms Carrigan gave evidence on behalf of the respondents with respect to parental and community expectations. In summary, Ms Carrigan's evidence was that: (a) In relation to monitoring and addressing social issues which affect students, Ms Carrigan deposed that the professional responsibilities of a teacher have included "consumer education, nutrition, safety, environmental education, physical fitness and animal protection", areas which are supported by curriculum materials; (b) Ms Carrigan did not give any direct evidence in relation to the expectation that teachers will be regularly available for interviews with parents; (c) In relation to parents blaming and complaining about, teachers Ms Carrigan gave evidence that it has always been the case that difficulties inevitably arise between parents and teachers from time to time. She gave evidence regarding the resources and training that was available to teachers to deal with complaints, stating that: The Department of Education and Training is committed to a partnership with parents of children in the public education system. This partnership is a tradition at the heart of public education. Parents have always been interested in their children's education. This has mostly been to the advantage of the efforts of teachers as the great majority of parents are positive about their local school, support their children's teachers and welcome quality information about the school and its programs. Parent interest occasionally causes challenges for school principals and teachers. These challenges can be compounded when there are sensitive issues or parent participation is limited through a lack of knowledge about the school system or their own language difficulties. The Department provides extensive support for principals and teachers to assist them to develop and maintain productive relationships with parents and community members. (d) In relation to threats of litigation, Ms Carrigan did not give evidence as to whether the incidence of such threats have increased or decreased, but stated that "all Department legal action and litigation is managed by the Department's legal services". 273 Ms King gave evidence regarding the level of communication that is now expected of schools: In my experience, there has been an increasing demand in recent years by parents from my school to communicate with regular newsletters, email and a website which is updated regularly. Again, this places additional responsibility on myself and my staff as we have to ensure that publications are first rate, with photos, digital imaging, glossy paper, as our material has to favourably compare with that of private schools. 274 We accept that there has been a change in the expectations of students, parents and the community since the 1991 datum point. The evidence clearly demonstrates that this is the case. Further, we agree with the Federation that teachers have greater responsibility, inherent in which is greater accountability. In our view, that accountability arises predominantly from the systems established by the Department which involve an outcomes based teaching process which is more transparent to students, parents and the community. 275 Similarly, there is a greater accountability and transparency relating to the management of student behaviour. In our view, the deterioration in student behaviour and discipline that has occurred since 1991 has, to some degree, been accompanied by an increase in the demands and expectations on teachers to appropriately monitor, address and report on student behaviour and well-being. At the same time, gaining entrance to secondary school, university and indeed the workforce has, since 1991, become highly competitive. In that environment, many parents are acutely aware of every step of their child's progress at school, and look to their child's teacher for answers when that progress falls below parental expectations. 276 The marketing of schools is, in our view, an extension of the work already being performed by teachers, albeit in a different way. It is hardly surprising that marketing has been modernised since 1991, or that a more professional image of schools and teachers is now expected. 277 The respondents sought to rely on findings in the 1980 Teachers Award case, the 1981 Teachers Awards Reference case, the Education Teaching Services case and the Independent School Teachers case as evidence that teachers' accountability to parents and the community was not a new phenomenon, and had been relied upon by the Federation previously in pursuit of salary increases. In one of the most recent of those cases, the Independent School Teachers case, on which the rates of pay in the Education Teaching Services case were based, the Commission relied on evidence of teachers that teachers' responsibility had increased, including: (a) "There has been an increase in the demands of the wider school community resulting in teachers being more accountable to parents and the community"; (b) "With the increasing involvement of the wider school community the Principal is required to be available to parents at times often outside the normal school hours and must spend an increasing amount of time discussing the progress of individual students with parents"; and (c) "The nature of the work has changed in that more responsibility is involved, in addition to community [and] parent expectations which have increased". 278 Further, the respondents point to the grounds underlying the Federation's 1996 claim, which resulted in the 1996 Teachers Award, which included: The relationship between teachers and parents has fundamentally changed. 279 In our view, there has been some measure of compensation in the past for the increased responsibility and accountability of teachers, however that increase has not been fully compensated for, particularly having regard to the rapidly developing and changing nature of those expectations. Students with Special Needs 280 The Federation submitted that over the past decade there has been a "rapid and substantial increase" in the number of children with special needs who are either enrolled in mainstream classes or in supported classes within a mainstream school. The Federation submitted, based on data in the Vinson Report, that: (a) From 1988 to 2002, the number of students with disabilities integrated into mainstream classes increased by more than 1365%, from 1,135 to 16,638; (b) From 1988 to 2002, the number of students with disabilities enrolled in support classes or schools for special purposes increased by 39%, from 13,353 to 18,618; (c) From 1988 to 2002, the total number of students with disabilities enrolled in public schools increased by 143%, from 14,488 to 35,256. 281 The Federation contended that of the students with physical, intellectual, sensory, psychological and behavioural disabilities who had been integrated into mainstream classes, nearly half had moderate or severe support needs. 282 The Federation noted the increased difficulties for teachers in classroom and playground management, particularly in relation to the challenging behaviour often exhibited by students with disabilities. A further consequence of mainstreaming students with disabilities was an increase in the severity of the disabilities of students enrolling in Schools for Special Purposes, as students with milder disabilities are now enrolling in their local public school. 283 The Federation submitted that, as a result of these changes, teachers' work has become more complex, there was greater pressure on teachers' time resources, and teachers were required to develop new skills, responsibilities and knowledge. In particular, there is an expectation that teachers will play an increased role in identifying and addressing the needs of students with special needs, as well as planning, implementing and evaluating different teaching and learning strategies. 284 The Federation acknowledged that "the Department provides funding support for students integrated into mainstream classes on an individual basis to students diagnosed with a recognised disability". However, the Federation submitted that: (a) Students who were not diagnosed (for instance due to lack of access to experts to enable a diagnosis to be made) missed out on funding; (b) Extended delays were experienced while funding applications were processed, during which time teachers were required to deal with students without funding support; (c) The level of funding is inadequate. For instance, between 2001 and 2003, the number of students with low support needs increased by nearly 34%, whereas the funding increased by only 14.5%; (d) The funding application process is complex and lengthy, placing a significant burden on teachers' time to not only complete the relevant forms, but to also liaise with parents and support teams and produce supporting material such as individual learning plans or behaviour modification programs. The application process must be completed on an annual basis for the majority of students with special needs. 285 The respondents acknowledged that there has been an increase in the number of students with special needs who have been mainstreamed since the datum point. However, according to the respondents, the mainstreaming of children with special needs occurred prior to the datum point. The respondents contend that this is something that "has already been factored into the teachers' professional rates of pay", and does not constitute a significant net addition to the work value of teachers. 286 Further, the respondents submitted that, in response to the increase in the number of students with special needs in the public school system, the Department has provided support and resources to teachers, including: (a) Funding for special education increased from $328.8 million in 1994/5 to $477.7 million in 2001/2; (b) Funding for the Integration Program has increased by over 800% since 1996 and by 946% since 1990; (c) Training and development resources are available for staff supporting students with disabilities; and (d) A "range of support materials" have been provided to teachers to assist meeting the educational needs of students with special needs. 287 The services available to students with disabilities in New South Wales are described in the Vinson Report as being on a continuum, comprising Schools for Special Purposes, support classes and inclusion in mainstream classes, with parents given a considerable degree of choice as to the most appropriate option for their child. The Vinson Report stated: Notwithstanding the issue of choice, approaches to meeting the needs of students with disabilities have been increasingly influenced by community pressure to normalise the experiences of people with disabilities. In the education sphere, this involves providing an education to students with disabilities in mainstream schools and classes or in environments and in ways that approximate as closely as possible those applying in mainstream schools and classes. Consistent with normalisation, since the McRae report of 1966, which explored the feasibility and necessary funding arrangements to enable more students with disabilities to be educated in mainstream classrooms, inclusion has been emphasised where possible. The McRae report did not advocate the abolition of the continuum of services, but was the impetus for significant increases in funding for inclusion in recent years. It did this through changing the basis on which additional support would be provided, from one of disability classification to one of 'support need'. 288 The unchallenged evidence of Mr Smyth King, Director, Disability Programs for the Department, was that: A review of enrolment data since 1990 shows that the percentage of students with disabilities enrolled in Government schools has remained relatively constant. What has changed since that time is the way in which these students are supported within the system. There has been a significant increase in resources targeting students with special needs, the range of support available to schools and students has expanded and there is increased capacity at school and district level to flexibly manage resources. 289 The data presented by Mr Smyth King can be summarised as follows: 1990 1996 2002 Students with disabilities enrolled in NSW government schools Percentage of total school population 2.1% 2.7% 2.95% Students attending schools for special purposes Total number 4,366 3,749 3,915 Percentage of total school population 0.59% 0.49% 0.51% Students attending special classes in regular schools Total number 9,633 12,100 11,706 Percentage of total school population 1.29% 1.59% 1.55% Students with disabilities supported in regular classes Total number 1,983 5,080 16,600 Percentage of total school population 0.26% 0.66% 2.18% 290 Consistent with the statement set out earlier from the Vinson Report, the data does in fact reveal a considerable increase in disabled students who have been included or mainstreamed in regular classes, and does not support the above statement by Mr Smyth King with respect to the number of special needs students being enrolled in 'regular classes' remaining 'relatively constant'. Mr Smyth King deposed that "the figure [of 16,600] for 2002 includes 9,760 students with mild disabilities and language disorders" and that "the increase in numbers is due in part to the fact that there is increased effectiveness in identifying students with disabilities and that since 1998 support is available to a wider group of students". 291 Ms McBride gave the following evidence: Mr Smyth King at paragraph 29 says that since 1990 the number of students in the school sector identified with disabilities has remained relatively constant. I say there are more disabled students in mainstream classes at Sarah Redfern Public School. In my experience many of these students are inadequately supported in the mainstream setting, compared to the support given in a special setting. For example a student with moderate intellectual disability (IO) in one of my classes receives approximately $5,000 support, compared to an IO student in a support class or a School for Specific Purposes (SSP) who is in a class of nine with specialist teacher, teachers aide and resources. There is no reduction in class sizes in mainstream settings. This means that teachers with class sizes of up to 30 have to develop skills, strategies and knowledge to educate and manage students who may have an intellectual disability, a neurological disability, a behavioural problem or an intellectual capacity that may be slow, average or bright. This is a difficult, complex and challenging task. 292 When tested in cross-examination, Ms McBride gave the following evidence: Q Returning to paragraph 4.1 of your first statement you speak there in the second line of paragraph 4.1 of an increasing number of students with a range of disabilities or disorders being included in regular class rooms. Do we take it from that that students with a range of disabilities such as those you have described have always been there but have increased in numbers or is that the correct flavour to get from paragraph 4.1? A I think what needs to be understood is that many of the students that are now in mainstream with disabilities in previous times would have been in support units or in [schools for special purposes] so the nature of the student in now mainstream has changed and it is my experience that the numbers in mainstream of those students is increasing quite dramatically. Q There are some of the groups that you described in 4.1, that is the group of disabilities identified that you would not have expected to find in the school at all at the start of the 1990s? A Absolutely. In the mainstream school you would not have had students with autism or students with a moderate disability and probably not anywhere near the number of students with a mild disability or a very significant disability as well, no. Q Obviously those with any disabilities, mild and moderate intellectual disabilities, attention deficit disorder and the like would or may have always been in mainstream classrooms though not appreciated? A Moderate disabilities, no. Mild disabilities yes and some language disabilities as well. Several - not several years ago, a long time ago - 17 years ago I taught IO students myself, moderately intellectual disabled students in a support unit, nine children supported with an aide and those children now, some of those students now we are finding in mainstream. At that time definitely you would not have found them in the mainstream class. 293 Ms Zadkovich's evidence further demonstrated the impact of mainstreaming: The increasing number of special needs students in classes can often mean disruptions in learning for the other students, and much of my time is spent dealing with issues raised by those students. Last year my school had one student with significant hearing problems; one with sight problems (until about six years ago this student would have been in a Special School); four students with Asperger's Syndrome (this is a form of autism which I did not know about until four years ago); one with Spinabifida; one with brittle bone disease (this student needs a full-time aide and until a few years ago would have been in a Special School); two with dyspraxia; approximately ten with Attention Deficit and Hyperactivity Disorder (this is not really new but the number of students identified with it has tripled in the last ten years); one with Tourette's syndrome, and others whose behaviour showed signs of behavioural and emotional problems. This list did not include the students in the school's behaviour unit. The student population was approximately 450. 294 The Vinson Report presented the following conclusions in relation to the inclusion of students with disabilities in mainstream classes: Many of the foregoing observations suggest that teachers are feeling stressed and confused at what are perceived as ever-increasing demands in relation to students with special needs. Others point to real and pressing inadequacies in relation to resources and training for the inclusion of students with disabilities in mainstream classes. At another level, though, the examples above need to be seen as part of a sea change in government policy in relation to the inclusion of students with disabilities. This change has occurred very rapidly, at a time when many other changes are also happening in the system, including the rewriting of nearly every aspect of the curriculum, a new focus on student achievement and outcomes, and increasing pressures on teachers to meet the needs of every student in their class regardless of cultural, linguistic and social background. The Inquiry is of the view that much of the tension surrounding inclusion stems from the above factors, as well as from the rapid expansion of the Funding Support program, and failure to provide [Support Teachers for children with Learning Disabilities] in all schools rather from inherent levels of rigidity in the teaching profession. 295 Professor Vinson was not cross-examined in relation to this aspect of his report, and his findings in relation to the mainstreaming of children with disabilities are, for the most part, consistent with the evidence of other witnesses, including Mr Smyth King. 296 We are satisfied that there has been significant change, particularly since the McRae Report in 1996, to the provision of education services to children with disabilities in New South Wales. Those changes relate to both the manner in which those services are provided and the administration of funding and support for the provision of those services. There is overwhelming evidence, in our view, that those changes have had a profound impact on teachers at every conceivable level. We were also greatly assisted in our understanding of this evidence by our inspections of schools. Teachers are not only required to learn new teaching techniques, which in itself is significant, but also to cope with an increasing range of educational needs. 297 In support of its contention that "mainstreaming" is not new, and that teachers have been compensated for any changes in their skills and responsibilities associated with mainstreaming, the respondents placed reliance on the evidence referred to by the Commission in the Independent School Teachers case that "in the so-called mainstreaming of the disabled into classrooms many teachers are learning new skills to allow them to teach children who were formerly segregated into special schools". 298 Further, the respondents drew the Commission's attention to submissions made on behalf of the Federation in the Education Teaching Service case regarding the impact of the Schools Renewal initiative in support of its claim for increased salaries in that case. Those submissions included a statement that "Schools Renewal affected class sizes, welfare and discipline policy, professional development, curriculum development, and the integration in the school community of children with special needs". 299 It is difficult to comprehend the respondents' lack of recognition of the changes to teachers' work relating to students with special needs, given the extent of those changes. We do not accept that teachers have been compensated adequately for the very significant changes to their work, skills and responsibilities associated with the increased number of children with special needs who are included in regular classes, and the increased severity of disability displayed by many of those children since the datum point. We consider the reference in the Independent School Teachers case to be merely a preliminary reference to the impending change and the submissions in the Education Teaching Services case to be, at their highest, of marginal assistance to the respondents. 300 We have had regard to the level of support that is provided to teachers, including financial support, to assist with the education of children with special needs. It is laudable that such support is given, however, in our view that assistance represents the minimum requirement that is to be expected of any employer of employees who are involved in the provision of educational services to children with special needs. In any event, the level of support that is available to teachers reinforces the significance of the change. 301 We note that the respondents have sought to resist the Federation's claim generally on the basis of the extensive support given to teachers in all areas, not only the education of children with special needs. In our view, in areas of change, the provision of resources, training and support does not necessarily represent an answer to the Federation's work value claim. Rather, that support is invariably necessary to equip teachers to deal with the changes, and is no more than what would be expected of a modern management approach to significant changes at the workplace. Child protection requirements 302 The Federation acknowledged that child protection legislation has been in place in New South Wales prior to the 1991 datum point. However, the Federation submitted that changes to both legislation and Departmental guidelines have had a "dramatic impact on the work of teachers". The Federation identified three specific ways in which that impact has been experienced: first, teachers have been required to read and understand legislative and policy changes; secondly, teachers have increased obligations to identify and report children who may be at risk of harm; and thirdly, the increased scrutiny of teachers' actions has increased the uncertainty, difficulty and stress associated with their work. 303 In relation to legislative change, the Federation noted that the following statutes have been enacted since the datum point: (a) The Commission for Children and Young People Act 1998 was enacted, which provided for a screening process for people engaged in child-related occupations; (b) The Child Protection (Prohibited Employment) Act 1998 was enacted, preventing "prohibited persons" from working in child-related occupations; (c) The Children and Young People (Care and Protection) Act 1998 was enacted, which imposed mandatory reporting by persons including teachers where there is reasonable grounds to suspect a child is "at risk of harm". 304 The Federation relied on the decision of Schmidt J in Re Teachers (Non-Government) Pre Schools (State) Award and Another Award (2001) 120 IR 3 at 73, where her Honour discussed the legislative changes that followed the Wood Royal Commission, and stated: Again witness after witness described the work performed in order to learn about the changes, to develop policies to ensure compliance with the legislative requirements and the changes in work which flowed from their implementation, including increased overtime and decline in volunteer working in centres. I have no doubt that these changes have affected the work of teachers in a dramatic way, reflective of a very deliberate decision on the part of Government to more closely regulate adults' contact with young children in a variety of situations, as the result of the distressing revelations before the Royal Commission. These developments were admirable, but have undoubtedly affected the conditions under which teachers performed their work and have added to their responsibilities. 305 According to the Federation, similar considerations apply to teachers in public schools. 306 The Federation referred to the mandatory reporting requirements in s27 of the Children and Young People (Care and Protection) Act, and the Departmental policies regarding child protection in submitting that "the increasingly onerous obligations imposed upon teachers to identify and report suspected child abuse, including sexual abuse, physical abuse or neglect and behaviour which may cause psychological harm, has required teachers to continually be aware of legislative and Departmental requirements and to acquire new skills and knowledge necessary to identify possible abuse." 307 The Federation submitted that the possibility of complaints being made against teachers has made the work of teachers, and their interaction with students, more "uncertain, demanding and stressful and has rendered tasks such as imposing appropriate discipline or comforting students fraught with difficulty". 308 The respondents acknowledged that legislation was introduced in 1998 which placed new statutory obligations on teachers with respect to child protection. However, the essence of the respondents' submission appears to be that by making the system of reporting suspected child abuse more structured, and establishing more Departmental procedures for dealing with suspected child abuse, it has become easier for teachers to navigate the notification process, and it "removes from teachers the need to make a discretionary decision as to whether to report a particular case". 309 The respondents contended that the Public Hospital Nurses case is apposite in this regard. Indeed, it is patent that the respondents' submissions in this matter were based on the findings in the Public Hospital Nurses case, where it was held: 95 The Association submitted that the reporting obligations of nurses under the Children And Young Persons (Care And Protection) Act 1998 were a further substantial burden on nurses. Reference was made to the requirement on nurses to report children at risk. 96 Whilst conceding the reporting requirement places a new statutory requirement on nurses the HAC submitted it had to be seen against a background in which nurses, as professionals, previously had a responsibility to report situations where their children were suffering from abuse. While the system now is more structured it has the benefit of giving nurses an established system to report such matters pursuant to protocols which gives a level of protection to the nurse, and removes from them the need to make a discretionary decision as to whether to report a particular case. 97 We note the new statutory requirement on nurses but we do not consider, of itself, the requirement places a significant new obligation on them. 310 We do not consider those findings in the Public Hospital Nurses case to have direct application in the present matter. It is inherent in the role of a nurse to treat a child who is ill or injured, and to assist in the identification of the cause of any such illness or injury, whether the child's symptoms are physical or emotional. In those circumstances, requiring nurses to report cases where a child is considered to be at risk of harm may not necessarily add to the responsibility of nursing. In our view, the same cannot be said in respect of teachers. 311 The Agreed Statement of Facts confirmed that, amongst other things: (a) Child protection legislation, aimed at securing the safety of children and young people, has been in place in NSW and other states for many years. Section 148B of the Child Welfare Act 1939 and Regulation 74 of the Child Welfare Regulations provide a mandatory reporting mechanism for cases of suspected sexual assault of a child, that is, a person under 16 years of age; (b) In 1982, the Community Welfare Act came into force and required 'prescribed persons' to notify the Director of Youth and Community Services (YACS) of cases where they suspected a child had been or was in danger of being abused; (c) In 1987, school principals, school deputy principals, school teachers, early childhood teachers who were employed in a school, school counsellors and school social workers became prescribed persons, required to notify pursuant to s22(3) which deals only with sexual assault. 312 The requirements for mandatory reporting were broadened by the Children and Young People (Care and Protection Act) 1998 to incorporate the concept of "risk of harm". 313 Many teachers spoke of their increased stress associated firstly, with the responsibility of reporting children who are considered to be at risk of harm, and, in particular, the possibility that a teacher may not recognise a child who is at risk and, secondly, with the need to monitor their own behaviour in the classroom and playground to avoid misunderstandings, complaints or allegations being made against them. There is no doubt that changes have occurred in the way teachers perform their work. For instance, Ms Grant gave evidence that "I am conscious that I must try not to touch students or to be alone with a child. I find that I have to change the way in which I relate to students who naturally crave affection and recognition." Further, teachers understandably feel vulnerable attempting to comply with strict legislative requirements and Departmental protocols, in circumstances where children are now taught protective strategies and are increasingly aware of their rights, but who often lack the maturity to comprehend the implications of asserting those rights. Ms Zadkovich gave the following example in her evidence: In restraining a young year 1 boy, he called out in a loud voice, "she's hurting me!" I hadn't, but later in thrashing about he banged his hand on a chair edge and when his mother arrived told her that I did it. She believed me, but what if she hadn't? No one had seen it. 314 The most qualitatively significant aspect of the Federation's claim in relation to child protection is the recent statutory duty that requires teachers to report children who are considered to be at risk of harm. The Department has a duty of care to students enrolled in government schools in New South Wales, and enforcing child protection legislation is a fundamental aspect of performing that duty. The introduction of the legislation does not seem to have a widespread effect, but the obligation nevertheless exists. It scarcely needs to be said that child protection is vital in a child's schooling, and it is extremely unlikely, under the present statutory regime, that any allegation made by a child would be ignored, even in circumstances which may appear relatively minor or harmless such as the incident described by Ms Zadkovich. We are satisfied that the administration of the Children and Young People (Care and Protection Act) 1998 represents a significant change to the work, skills and responsibilities of teachers. In that respect we consider the findings of Schmidt J in Non-Government Pre-Schools Award, set out earlier, to be apposite. 315 The respondents drew the Commission's attention to the 1996 "Agreement Between the Department of School Education and the Federation to Enhance the Salaries and Status of Teachers", which included the following passage: The parties agree to the early introduction of effective procedures to address issues of child abuse, and to improve the reporting of suspected child abuse. 316 There is nothing in that passage which indicates that teachers have been compensated for the significant change in their work and responsibilities associated with the expansion of their role by child protection legislation. Occupational health and safety 317 The Federation submitted that, since the datum point, the obligations imposed on teachers with respect to occupational health and safety have increased, particularly in the area of risk management. The Federation points to a range of policy documents and guidelines issued by the Department as evidence of those obligations, as well as the commencement of the Occupational Health and Safety Act 2000 and the Occupational Health and Safety Regulations 2001. 318 The Federation contended that the increased obligation to assess and manage risk imposed significantly increased responsibilities on teachers. 319 The respondents submitted that it is not appropriate to remedy health and safety issues by awarding a wage increase. Rather, the employer must take steps to ensure the health and safety of its employees. 320 The respondents submitted that occupational health and safety obligations have "existed in essentially the same terms" since the enactment of the Occupational Health and Safety Act 1983. 321 The respondents pointed to "good industrial reasons why the Commission would not grant substantial increases in rates of pay as a result of changes brought about by employers to improve occupational health and safety". That is, employers should not be discouraged by the possibility of wage claims from taking positive steps to improve workplace safety. 322 The respondents relied again on the Public Hospital Nurses case where it was held: 94 As the evidence confirms, the introduction of new laws relating to occupational health and safety have added to the responsibilities of nurses. In so doing, of course, the workplace has become safer. Even if we were prepared to have regard to the added occupational health and safety responsibilities of nurses for the purpose of assessing whether wage increases were warranted - something we are disinclined to do for public policy reasons - we do not consider that the added responsibilities are of such a nature as to represent a significant net addition to work requirements. While risk assessments, for example, are now mandatory it would be surprising that public hospitals did not carry out such assessments prior to the introduction of the new legislation. 323 The evidence relied upon by the Federation included the following: (a) Ms Marina Kyriakou, temporary teacher at Denman Public School, a teacher since 1972, deposed that she must be more vigilant in reporting things that may pose a danger to students and staff; (b) Ms Fogarty gave evidence that "with the new legislation teachers are now more conscious of unsafe working practices and conditions and they are more likely to raise it with me as a person who has the authority to employ a tradesperson to fix the problem". Ms Fogarty also highlighted in her evidence the increased risk to health and safety associated with student violence and aggression; (c) Ms McBride deposed that Departmental guidelines have "placed additional responsibilities on Principals to develop skills and knowledge of OHS legislation and injury management", and that very little training was provided; (d) Mr Gilbert gave evidence that he required a new level of expertise in the area of occupational health and safety, that he has received inadequate training, that he is responsible for matters such as hazard identification and control and promoting a healthy workforce, that the occupational health and safety responsibilities have created increased record keeping, and that areas which are considered unsafe are unusable until repairs are undertaken, often for long periods of time. 324 We acknowledge that the introduction of new legislation may have increased the responsibility of teachers and we accept that risk management may be a new dimension in the work life of many teachers. However, we agree with the Full Bench in the Public Hospital Nurses case that there are compelling public policy reasons why increased responsibilities relating to occupational health and safety do not warrant any wage adjustment as part of a work value assessment and we do not consider that the added responsibilities are of such a nature as to represent a significant net addition to work requirements. Conclusions regarding work value - government schools 325 We consider that the respondents have been partially successful in arguing for a reduction in the scope of compensable work value changes based on prior agreements and awards. However, we do not consider that, on balance, the respondents have succeeding in significantly ousting the Federation's case in schools. Rather, we consider that, even with off-setting factors associated with prior agreements (to the extent we have found such prior arrangements in our earlier discussion), the Federation has demonstrated a very substantial work value case for government schools, sufficient in our view to also support the findings in its favour under both the work value changes and special case principles. Consideration of Work Value - TAFE 326 The Federation's claim for a 25 per cent increase in rates and allowances extends to teachers in TAFE. Given the smaller number of TAFE teachers compared to teachers in government schools, there was, perhaps understandably, less time spent during these proceedings on changes in the value of the work performed by TAFE teachers. However, we note that, even having regard to those factors, we consider the Federation's claim for teachers in TAFE to be generally less strong than its claim for teachers in government schools. Whilst we acknowledge that there have indeed been changes in the value of work of TAFE teachers which amply satisfy the work value principle, on balance, we do not consider the changes affecting TAFE teachers to be as extensive or as significant as the changes affecting teachers in government schools. On the case advanced by the Federation, we will, therefore, be required to average the adjustments in rates of pay having regard to these differences. 327 We turn then to consider the elements of the Federation's claim relating to teachers in TAFE. Changes to the structure, funding and curriculum of TAFE 328 The Federation contended that there have been significant changes to the structure and focus of TAFE since the 1991 datum point which have impacted on the work, skills and responsibilities of teachers in TAFE, resulting in a significant net addition to the work of teachers, and warranting a salary increase under the work value principle. 329 It was the respondents' submission that the national change in focus within TAFE has not altered the work, skills or responsibilities of teachers in a way which demonstrates that there has been a significant net addition to the work of teachers, and that the evidence falls short of establishing relevant changes sufficient to satisfy the work value principle. Further, many of the changes identified by the Federation fall within the scope of the professional responsibilities of teachers; have been compensated by earlier awards or agreements; and/or have had minimal impact on teachers due to the extensive support provided by Training Divisions within TAFE. 330 The evidence demonstrates, in our view, that there have indeed been changes to the structure and focus of TAFE, the most significant changes being the development of a national approach to training and a move to competency-based training. The National Training Framework and competency-based training 331 The National Training Framework comprises Training Packages, developed by the Australian National Training Authority, together with the Australian Quality Training Framework. Mr Robin Shreeve, Deputy Director of TAFE, summarised the national training system as follows: The [Australian Quality Training Framework] is a set of nationally agreed standards to ensure the quality of vocational education and training services throughout Australia. Training organisations must be registered under the [Australian Quality Training Framework] in order to deliver, assess and issue Australian Qualifications Framework (AQF) qualifications or Statements of Attainment in endorsed Training Packages and accredited courses. 332 The Australian National Training Authority was established in 1992, the aim of which was to promote a national vocational education and training system. Strategic direction for the Australian National Training Authority is provided by a Ministerial Council and, in New South Wales, the day-to-day control and administration of vocational training rests with the NSW Board of Vocational Education and Training. 333 The NSW Board of Vocational Education and Training is responsible for implementing the Australian Quality Training Framework, and for co-ordinating the registration of Registered Training Organisations. Each TAFE Institute is a Registered Training Organisation, and TAFE Institutes now deliver vocational education and training through a network of over 130 campuses throughout New South Wales. 334 The Federation submitted that, consistent with new national standards, the focus of vocational training has fundamentally shifted from contents-based training to outcomes based, or competency-based, training. Curriculum documents are now issued in "short-form", identifying outcomes rather than curriculum content. Teachers are required to exercise greater professional judgement as to "content, resources, lesson plans and instruction". Further, teachers must tailor their teaching style and method to individual students. According to the Federation, "a more individualised approach to learning and assessment is at the heart of the competency-based system, since it recognises that students will come to a course with differing degrees of experience, skills and knowledge, and will progress towards the demonstration of the prescribed competencies at different speeds". 335 The respondents relied on evidence regarding the significant role of centrally-structured Training Divisions in the administration and application of Training Packages. The purpose of the Training Divisions was said to be threefold: first, the Training Divisions "are primarily responsible for the design and development and maintenance of the courses delivered in line with national and State industry educational priorities and government priorities", that is, curriculum development; secondly, the Training Divisions play an important role in the professional development of teachers; and thirdly, they are the main point of contact for industry. 336 It was the respondents' contention that TAFE teachers are given extensive support from Training Divisions, and that: Whilst the Commission would comfortably reach the conclusion that the national changes brought about by the move to competency based training within TAFE Institutes were, at the macro level, significant, the Respondents submit that the Commission would conclude that TAFE teachers in New South Wales have been largely sheltered from the impact of these changes because of the unique role that the [Training] Divisions have played and continue to play in relation to the designing and provision of curriculum support materials to TAFE teachers. In short, the Respondents submit that in light of the Divisional support provided to TAFE teachers in NSW the Commission would conclude that changes in the work value of TAFE teachers that have arisen from the introduction of a regime of competency based training have not in themselves been such as to constitute a significant net addition to work requirements. 337 The Commission heard evidence from Mr Rex Hewett, the Federal TAFE Secretary of the Australian Education Union. Mr Hewett's evidence summarised the nature of vocational education and training prior to 1991: Prior to 1991 vocational education and training was generally time-based, was almost solely delivered in educational institutions, rarely on the job or in combinations of on and off the job settings, rarely recognised prior learning or non-formal skills, and was regulated under eight different state and territory training systems. Under the pre-reform system, training providers were generally the final determinants of course content, course assessment, the time and place of delivery and the standards that underpinned the course content. The influence of industry or enterprises on vocational education courses and outcomes was limited to an advisory role rather than the extensive involvement now provided in the major structures of the national training system. 338 Mr Christopher Freestone, teacher of Electrical Trades at Bathurst College in the Western Institute, a TAFE teacher since 1988, described the effect of the introduction of competency-based training as follows: The introduction of competency based training in 1992 meant that students are assessed against competency standards required in the workplace not learning outcomes derived from curriculum developed by TAFE. This has meant that teachers, particularly those like me who are trade-based need to provide simulated learning experiences (practical) to bridge workplace skills and competencies and learning outcomes in TAFE. Assessment 339 The Federation contended that assessment of students' competency is a continual process. Assessment commences when students enter a course, at which time teachers must determine each student's level of competence, including Recognition of Prior Learning. Assessment of competency has become more complex, for instance, requiring teachers to assess competency in an actual or simulated workplace environment. 340 The respondents acknowledged that Recognition of Prior Learning may, in some circumstances, be time consuming, but submitted that Recognition of Prior Learning was one of four recognition services, with the majority of recognition being granted through the other three services, namely pre-arranged recognition, TAFE credit transfer or mutual recognition. In any event, the respondents contended that teachers' responsibilities to undertake Recognition of Prior Learning assessments are "expressly recognised in the 2000 Award as being duties related to teaching that fall within the broad range of duties that TAFE teachers perform" and, as such, teachers have been compensated for those duties in the 2000 Award. In that respect, the respondent relied upon the findings of the Commission in the TAFE case (at [56] - [57]) that: We are satisfied that the award sought comes with the genuine consent of the parties. The application meets the requirements of the Act and satisfied the relevant wage fixing principles… Overall the application is one having industrial merit as it introduces substantial improvements in the structure and organisation of the teaching services of this State and rewards teachers for their contribution under the new arrangement. 341 Mr Dennis Hine, teacher of Business Studies (Human Resources Management) at Wollongong West College of the Illawarra Institute, a TAFE teacher since 1988, described the changes to assessment practices that have occurred as a result of the introduction of competency-based training: With the [competency based training] training packages, there has been an increased number of assessments required to be undertaken and the manner in which they are undertaken has also varied. I now assess individual competencies rather than simply cover subject areas. There is also a requirement that learners be given the opportunity to re-attempt assessments in which they have been deemed "not yet competent". The assessment competent is required to be based upon the learner's workplace, which means I can be required to attend the workplace, depending on the course. In the case where there is no workplace, there is a requirement for the teacher to develop case study scenarios that would facilitate such an environment. Flexible teaching methods 342 The Federation submitted that the introduction of competency-based training has required teachers to adopt more flexible teaching methods, including work-based training and online instruction. 343 The respondents submitted that the departure from traditional classroom teaching to more flexible teaching methods is not new, and formed part of the agreement reached in the 2000 Award. In that respect, the respondents relied firstly upon clause 2.6 of Schedule 13 to the 2000 Award which stated that the strategies to maximise Annual Student Contact Hours in TAFE included "utilising a variety of delivery modes that are appropriate to the particular learning situation, including the needs of students". Secondly, the respondents relied upon clause 40.2 of the 2000 Award, which stated: Teachers perform a broad range of duties that include the following activities: Direct Teaching Activities Direct teaching activities include but are not limited to: · Face to face teaching in any environment or setting, including but not limited to: o classrooms, o workshops, o industry, o in the field; · distance mode and online · workplace training and assessment. 344 Ms Carol Maloney, teacher of Administrative Studies at Wollongong campus of the Illawarra Institute, a TAFE teacher since 1988, gave a useful insight into the extent to which her teaching practices have changed from traditional classroom teaching. In particular, she described the way in which a practice firm, a resort hotel, is used in Administrative Studies, with the help of a "business partner" in industry on which the practice firm is modelled, as a successful and innovative teaching method: A practice firm trades with other practice firms both within Australia and internationally. We simulate the buying and selling of goods, complete the financial documents cycle, pay for goods we purchase and receive payment for goods sold, all through a Central Bank (a practice firm bank). For example, we receive accounts for electricity and insurance for example that the accounts department in our practice firm has to pay. The students are the employees and the teachers have taken on a new role as Office Managers. The [practice firm] has 15 workstations through which the students rotate over a semester. The competencies are spread over these workstations. For example, the module Telephone Operations, along with other modules, is studied in the Reception workstation and the reservations workstations, which include Clouds Restaurant, Packages, Accommodation, Weddings and Functions workstations. Thus all modules are studied concurrently and assessed holistically. Trainees 345 The Federation submitted that the introduction of the workplace traineeship system requires teachers to customise training plans and assessments for each workplace, and to work on a highly individualised basis with each trainee and employer. 346 The respondents contended that the provision of education services to trainees is not materially different to the provision of those services to other TAFE students and that, in any event, teachers have been provided with professional development and support services (such as Traineeship Coordinators) to assist in the management of trainees. The respondents relied on the decision of Dey J in the 1980 Departments of Education and TAFE case in making its submission that: Moreover, the fact that TAFE teachers assume responsibilities in relation to the delivery of courses to trainees who may have variable attendance patterns and whose courses of study may require an element of individual tailoring is not a new occurrence and consideration of such matters has already been factored into the rate of TAFE teachers. Technical Vocational Education and Training in schools 347 According to the Federation, changes to the delivery of VET by TAFE teachers in government schools has required teachers to comprehend and incorporate Board of Studies' requirements into their teaching. 348 The respondents submitted that becoming familiar with Board of Studies' requirements "is not inherently different from the professional responsibility of a TAFE teacher to remain up to speed and competent in relation to the subject areas they were teaching", and that such a responsibility does not constitute a significant net addition to the work requirements of teachers justifying a salary increase higher than that offered by the respondents. The respondents drew attention to the fact that any changes to the responsibilities associated with delivering VET in government schools has affected only a small segment of the teaching workforce, yet the Federation has claimed an across the board salary increase. It is in that context, according to the respondents, that the Commission must assess whether there is sufficient evidentiary foundation to establish that there has been a significant net addition to the work of teachers generally. The respondents contended that there is no such foundation. Conclusion 349 In our view, the evidence demonstrates that there have been significant changes in the way in which vocational training is developed, administered, supported, presented and assessed. Similar to the introduction of outcomes in government schools' curricula, the introduction of competency-based training in TAFE represents a significant shift in the nature and purpose of vocational training, and thereby the skills and responsibilities of TAFE teachers. This change has had an unmistakable impact on the work performed by teachers who now provide training in more innovative and sophisticated ways, and with greater regard to the individual progress and achievements of students. 350 We note, however, that some aspects of the Federation's case with regard to TAFE teachers were weaker than others. For instance, the Federation's claim regarding changes to the delivery of VET by TAFE teachers in government schools had substantially less merit than its claim relating to the introduction of competency-based training. Further, the respondents have demonstrated that there are some areas where the impact of changes in work value should be offset by recognition of those changes in earlier awards and agreements. The recognition in the 2000 Award of changes in teaching methods is a clear example where there has been recognition of change in the work performed by TAFE teachers. We have had regard to these matters in our determination of the Federation's claim. 351 We have also had regard to the extensive resources that have been provided by TAFE to assist teachers, for instance, the provision of curriculum support materials to teachers. However, as with our findings in relation to government schools, we consider that the provision of assistance, support and resources to TAFE teachers, in circumstances where there has been considerable change to the work performed by those teachers, is a necessary measure to manage that change, and does not ameliorate the impact of the change nor diminish the fact that the overall work, skills and responsibilities of TAFE teachers have increased. 352 We do not consider that each of the changes described by the Federation are sufficient, by themselves, to satisfy the requirements of the work value principle. For instance, we do not consider that changes to the delivery of VET by TAFE teachers in government schools represents a significant net addition to the work performed by teachers. However, when taken as a whole, we consider that there is sufficient foundation to warrant a finding that there has been a change in the work, skills and responsibilities of teachers such that there has been a significant net addition to the value of teachers' work. Accordingly, we consider that, on balance, the Federation has made out a work value case arising from the development of the National Training Framework and the shift to competency-based training (although we note that the introduction of competency-based training has not changed the work of teachers to the same extent as the curriculum changes in government schools discussed earlier). New competitive environment 353 The Federation submitted that "TAFE now operates in an environment in which it is expected to act commercially and compete with private providers of training services" resulting in TAFE institutes "being expected to become more competitive, raise private revenue and market their programs and services". The Federation cited the introduction of TAFEPLUS in 1995 (a fee for service course available to commercial clients) and the User Choice policy, adopted in 1997 in conjunction with the New Apprenticeship System, whereby funding is directed according to a client's choice of training provider. 354 It was submitted by the Federation that these changes have had a "profound" effect on the work of teachers. Specifically: Teachers are required to promote TAFE services to potential clients in the commercial market, to be directly involved in obtaining commercial work or to provide support and assistance to TAFE business development personnel in obtaining such work, to customise and tailor TAFE courses to meet the needs of particular commercial clients, and to become involved in partnership arrangements with various education and industry-based organisations such as colleges, enterprises, private providers, schools and higher education institutions, and to maintain links with industry and stay abreast of industry developments. 355 The respondents contended that obligations such as marketing and competitive tendering are not new, and were "a foundation stone upon which the TAFE case was constructed". 356 Ms Jennifer Hill, Senior Head Teacher in Welfare at Wollongong Campus of Illawarra Institute, a TAFE teacher since 1989, deposed that: Over the past ten years there has been increasing pressure on TAFE, and consequently on TAFE teachers, to become involved in revenue raising. Head Teachers in the Illawarra Institute are given commercial financial targets, which have been increasing annually. My target this year is $5,500. We are expected to identify markets for commercial training opportunities, nurture those relationships and deliver customised and relevant training, which will provide income for the Institute. This is a new role for teachers, requiring skills of selling and marketing. 357 Mr Stephen Davies, Senior Head Teacher of Metal Fabrication at Ultimo Campus of Sydney Institute, a TAFE teacher since 1980, deposed that: I have had to learn about commercial policies, cost and estimate commercial programs in accordance with Institute regulations, develop and customise programs to suit client needs and process results. I have to negotiate with customers in relation to course content, [Recognition of Prior Learning], compliance with specialised industry and national standards, delivery costs and career pathways. Accordingly, I have had to come to terms with a vast range of training issues outside my normal field of expertise… 358 The respondents relied on the evidence of Mr Shreeve in support of its contentions, although we note that for the purposes of assessing work value changes since the 1991 datum point, Mr Shreeve's evidence was not entirely inconsistent with the position advanced by the Federation. Mr Shreeve deposed that: [Mr Hewett] appears to claim that prior to 1997 recurrent funding was guaranteed and there was little need to generate funding from external sources. He also says that TAFE Institutes operated in a secure funding environment and the notion of the competitive training system was not considered. This was not the case in NSW. Following the 1990 Scott report and the subsequent structural changes in 1992, Institutes were expected to become more competitive, raise revenue and market their programs and services. 359 Further, in relation to the commercial programs and competitive tendering processes, Mr Barry Peddle, Director of the Illawarra Institute of TAFE, gave evidence that: TAFE Institutes have set up structures to do most of this work and to support teachers in delivering these non-core programs. For example, Business Development Units will, as part of their role, coordinate and write major tenders and submissions. Also, state wide units such [as] the State and National Business Unit support Institute business units in growing the business for TAFE NSW as a whole. The State and National Business Unit also manages the centrally developed TAFE PLUS training resources, TAFE Global and the International Students Unit to assist with marketing and business development opportunities. 360 The respondents noted also the Statement issued by the Commission in relation to the TAFE case, where it was said (at 2 - 4): TAFE was said to have a vitally important role to play in the State's economic well-being and is also at a crossroads for several reasons: First: industry's demands on post-compulsory education and training have grown enormously, and will continue to do so. Virtually all growth industries today are knowledge-based, and new processes and techniques require constant retraining and new training. Second: industry's demands are increasingly becoming customised in character, requiring new kinds of courses and forms of delivery. This is not simply a logistical challenge: it requires a shift in managerial mindset as well. Third: TAFE is inexorably having to move into a vastly more competitive environment in the market-place. Technical and vocational education has become demonstrably a fast-growth business. In some areas private providers have taken more than half the market, even though they charge commercial fees in areas were TAFE's courses are basically free (aside from the administrative charge introduced in 1989). (Scott Report at xiii). The case brought on behalf of TAFE was designed to obtain a new award which could help cope with necessary changes … … Finally, funding and marketing opportunities need be addressed. Marketing in particular has been constrained by traditional and restrictive patterns of class scheduling. For example: there is a heavy emphasis on evening as opposed to day-time classes; a teaching week is typically four days only; there is inflexibility in scheduling courses to allow block release arrangements with industry; and weekend course offerings are limited. There is also the inconvenience and waste of TAFE's 36-week teaching year. While this limited delivery service stems mainly from award structures and the financial strain of overtime provisions, it is nonetheless unproductive from the point of view of the industry client. TAFECOM will need to address these basic problems (including, importantly, their industrial relations implications) if it is to compete in the market-place of the future. Previously industry and commerce have fitted in to TAFE's schedule because there was no other option. As accreditation passes out of TAFE's hands (see chapter 19), and as private providers continue to grow in number, TAFE's market advantages and its ability to dictate its own terms of supply will by [sic] whittled down. (Scott Report p. 157) 361 In our view, the requirement that teachers engage in funding and marketing activities demands that they develop and utilise a new range of skills. We accept that, since the 1991 datum point, teachers have been given responsibilities to develop business opportunities, maintain competitiveness and generate funding. 362 However, in weighing the impact of those changes, we have also had regard to the support given to teachers by TAFE New South Wales (for instance, via Business Development Units), and the recognition in past awards and agreements of the increased competitiveness amongst providers of vocational training. In our view, the respondents' contentions as to the earlier recognition of increased competitiveness were relatively weak. Accordingly, the previous adjustments in rates relating to increased competitiveness will not offset any adjustment to rates of pay arising from this factor in the matter presently before us. Growth in proportion of casual teachers 363 The Federation contended that there has been a "casualisation" of TAFE teaching staff, with a corresponding decrease in the number of permanent, full-time teachers. Both groups of teachers suffer the effects of this change: the remaining permanent full-time staff experience an increased workload, including mentoring casual teachers; and the casual teachers have increased responsibility for many time-consuming, administrative tasks previously performed by permanent full-time staff. The respondents did not make any submissions in relation to the so-called casualisation of teaching staff. 364 It is difficult to see how the Federation's claim in this respect could satisfy the work value principle. The essence of the Federation's submission relates to changes in the terms of engagement of teachers rather than changes in the intrinsic value of the work being performed by those teachers. Further, any additional work associated with mentoring casual teachers is, in our view, merely an expansion of an existing role. We reject this aspect of the Federation's claim. Technological developments 365 The Federation contended that "the increasing use of computer technology in TAFE has had an impact upon the work of teachers similar to that in schools described earlier, affecting both teaching work and the performance of administrative duties". The nature of the changes to teaching work, according to the Federation, include: (a) Changed teaching methodologies, incorporating online delivery, self-paced activities and mixed mode delivery; (b) Presentation of class materials requires new technology, for instance, the use of Powerpoint presentations; (c) Research for the preparation of lessons and teaching resources is increasingly undertaken via the internet; (d) The development of the TAFE Online Project, which enables the delivery of educational services to students via the internet, requires teachers to possess new skills. According to the Federation: Teachers have been involved in the development of online courses associated with this project, requiring the use of sophisticated technical skills such as writing material for the web, learning to use complex software to facilitate online learning, negotiating and managing the technological requirements of the software, developing simulated and interactive learning experiences that work technically and educationally, and negotiating with technical experts to ensure that the online product met both technical requirements and student needs. 366 Administrative procedures at TAFE have been "radically changed" as a result of computer technology. In this respect the Federation submitted that: the introduction of the Class Management System (CLAMS), an electronic roll book system, requires teachers to use computers on a daily basis; communication is increasingly done electronically; and there is greater expectation from students participating in online learning that teachers will quickly read and respond to email communication. 367 The respondents' submissions in relation to changes in technology affecting TAFE were substantially the same as their submissions in relation to government schools. That is, there has been a conscious expansion of the use of technology in the educational environment, but that changes in technology have brought benefits and assistance to teachers, and has been universally welcomed. 368 In support of its submissions, the respondents relied on the following passages from the Public Hospital Nurses case (at [118]): We recognise that the introduction of new technology will often require nurses to update their skills and knowledge and no doubt since 1996 that has occurred. But apart from the fact that updating skills and knowledge is an intrinsic part of the work of nurses, we do not consider that in the period since 1996 the requirement to do so constitutes a significant net addition to work requirements. and from Medical Officers - Hospital Specialists (State) Award at 84: Secondly, it has to be understood that new techniques and procedures bring with them their own advantages. For every new technological advance there is likely to be somewhere an inferior technology in part or in whole abandoned. Superior technologies give superior results and tend to free practitioners from laborious, uncertain and more stressful practice. Changes, subject to habituation, do not necessarily make things more difficult or more demanding. They may, but equally they may remove problems, decrease anxieties and uncertainties and as well be more rewarding and more productive. 369 The majority of TAFE teachers who gave evidence described the increased role of computers in their work. On the whole, that evidence was not challenged by the respondents. Mr Shreeve gave evidence that computers have been phased into TAFE since 1984, and that the services and information now available to teachers as a result of the advancement in technology has provided considerable benefits, for instance, in access to document libraries and document management facilities. 370 Similarly, Mr Peddle gave evidence regarding the benefits of improved technology. He deposed that: While it is true that there has been a general adoption of computing technologies it is in line with other contemporary occupations where these technologies represent the basic tools of work. The increased use of computer technology has resulted in a significant decrease in handwritten and paper based systems that were in the past time consuming and cumbersome to prepare and store for ready retrieval. In this respect I consider that the use of this technology has made work easier. Email and the use of the internet/intranet to access information has become a fundamental skill that that [sic] is widely used access industry and TAFE NSW would be regarded as an inferior training provider if it did not utilise electronic forms of information storage and exchange. 371 In our view, Mr Peddle accurately described the central role that technology now plays in virtually every workplace. It is clear that using computers, email and the internet facilitates the performance of teachers' work. We agree with Mr Shreeve that these are skills which form part of a teacher's "professional toolkit". In our view, as with teachers in government schools, there is no basis for awarding TAFE teachers additional compensation for developing skills which not only assist them in their work, but which are inherent in their professional role. Students with Special Needs 372 The Federation submitted that, as in government schools, there has been "a remarkable increase in the number of students with disabilities enrolled in TAFE". According to the Federation, this has changed the work, skills and responsibilities of teachers by reference to the "challenges presented by educational programming for students with special needs, student management and the understanding required of the needs of such children". In support of this contention, the Federation cited the available data, presented by Mr Smyth King, which can be summarised as follows: 1990 1996 2002 Total TAFE population 423,614 417,873 526,083 Percentage of students receiving additional support 0.96% 1.51% 2.33% Number of students receiving additional support 4067 6309 12,258 373 The respondents did not make any significant additional submissions regarding the enrolment of students with special needs in TAFE beyond those made in relation to government schools. 374 Consistent with our findings in relation to government schools, we accept that there has been a significant increase in the number of students with special needs enrolled in TAFE, and that teachers have had to equip themselves with new skills in order to surmount the challenges associated with providing training to increased numbers of students with special needs, particularly in a context where students are required to demonstrate specified competencies. We accept the evidence of Professor Vinson that: By direct observation of teaching and discussion with teachers and parents it is clear that an added degree of complexity is introduced as teachers strive to meet the varying behavioural, mobility and, more particularly, the markedly different cognitive abilities of their students. 375 We note, however, that, as in government schools, the number of such students in the TAFE education system is not such that the changes could, of themselves, sustain an across the board increase for TAFE teachers in the absence of other factors. Student Behaviour and Discipline 376 The Federation contended that the deterioration in student behaviour and changes to discipline described earlier is a trend that has "impacted upon TAFE". 377 As to student behaviour, the respondents' submissions in relation to TAFE were substantially the same as their submissions in relation to government schools. 378 The Federation relied on the following evidence of Ms Maloney, a TAFE teacher since 1986: Some students are sent by Centrelink and are told they must complete some form of study in order to receive any payments. Consequently, these students are reluctant students and can bring with them a different set of problems. They can be very aggressive to teachers and to other students, are not motivated, can be disruptive, attend sporadically (just enough to be able to tell Centrelink they are attending a course) and can reduce the motivation and morale of both my other students and myself. I often feel that I have to treat these students very carefully in order to maintain some form of harmony in my classroom. On a few occasions when I have tried to pull a particularly disruptive student into line I have been verbally abused and can feel quite threatened. 379 In our view, the submissions in relation to student behaviour were unconvincing, and the evidence far from compelling. Unlike the Federation's case with respect to government schools, there was an absence of evidence to demonstrate that changes in student behaviour have had a widespread (as opposed to sporadic) effect in TAFE. There is little before us to establish that changes to student behaviour and discipline, (which no doubt occurred in some respects) have affected in any meaningful way the work, skills or responsibilities of teachers in TAFE. Child Protection Requirements 380 As to child protection, the Federation's submissions in relation to TAFE were substantially the same as their submissions in relation to government schools. The Federation made two additional submissions that were specific to TAFE: first, the Federation submitted that the increased number of students undertaking VET delivered by TAFE teachers has enhanced the responsibility of TAFE teachers with respect to child protection; and secondly, the Federation highlighted the obligations on TAFE teachers to ensure that they do not expose any child to a risk of harm, for instance as a result of a child having contact with a violent or abusive student who has been placed in workplace training. 381 The respondents' submissions in relation to TAFE were substantially the same as their submissions in relation to government schools. The respondents did not make any additional or particular submissions with respect to teachers in TAFE. 382 There was limited evidence presented in relation to child protection responsibilities affecting TAFE teachers. Ms Hill gave evidence regarding the impact on work placements in the area of Community Services. She deposed that: All students are required to sign a TAFE Student declaration that they have had no history of violence or criminal offences involving violence and all students have to sign the Prohibited Employment Declaration indicating that they have no history of abusing children. Where students have been unable to sign these documents as Head Teacher I have liaised with legal branch to determine our legal situation with regard to this student completing the course. Our duty of care to the community has been greatly increased in this regard and we have had to assess the suitability of students to be placed in community agencies to a far greater degree. 383 Similarly, Ms Maloney gave evidence that: Although TAFE has been considered an "adult learning environment", Child Protection legislation has made me very aware of the ages of my students and of their activities, particularly when they are not in the classroom … Another issue of great concern to me is the risk of possible allegations being made by students against me that could ruin my teaching career. 384 Changes to child protection legislation also apply to teachers in TAFE. However, we do not consider that TAFE teachers have experienced those changes to the same degree as teachers in government schools. Teachers in government schools are exposed to a quantitatively greater level of responsibility by virtue of the number of children in their care. Further, whereas teachers in government schools have statutory responsibility for the protection of every student by virtue of their age, many of the students taught by TAFE teachers fall outside the scope of the Children and Young People (Care and Protection) Act 1988, being neither children (that is, under the age of 16) or young persons (that is, over the age of 16 but under the age of 18). Whilst we do not wish to suggest that the protection of a fewer number of children is less valuable or requires less skill, the extent of the responsibility is relevant, and the impact of this change is therefore significantly less in TAFE. Occupational Health and Safety 385 As to occupational health and safety, the Federation's submissions in relation to TAFE were substantially the same as their submissions in relation to government schools. The Federation further submitted that, in TAFE, teachers are now required to participate in a new and systematic procedure for risk assessment, and that TAFE curriculum documents expressly state the occupational health and safety requirements to be followed with respect to each course and module. 386 The respondents submitted that the obligation on TAFE teachers to "create, maintain and promote a safe working environment" in accordance with relevant legislation has been recognised in the TAFE Enterprise Agreement and the 1996 TAFE Award. In that respect, clause 9 of the 1996 TAFE Award is in the following terms: 9.1 The parties acknowledge the obligations on both [TAFE] and its staff to create, maintain and promote a safe working environment in accordance with their obligations under the Occupational Health and Safety Act 1983 and other relevant occupational health and safety legislation. 9.2 Management has an obligation to ensure that appropriate management systems are in place to effectively manage health and safety issues, which include the provision of protective clothing and equipment, risk assessment and risk management and provision of relevant training. 9.3 All staff have an obligation to ensure that health and safety at the workplace is maintained; that staff have undertaken relevant training, apply their training in the workplace and implement [TAFE] policies, programs and systems relevant to health and safety matters. 387 Clause 23.1 of the TAFE Enterprise Agreement is in similar terms. 388 We reiterate our findings with respect to teachers in government schools: that there are compelling public policy reasons why increased responsibilities relating to occupational health and safety do not warrant any wage adjustment as part of a work value assessment; and that we do not consider that the added responsibilities are of such a nature as to represent a significant net addition to work requirements. We note also that the TAFE Enterprise Agreement and the 1996 TAFE Award explicitly recognised changes in teachers' obligations with respect to occupational health and safety and, accordingly, we are satisfied that any increase in those obligations has already been factored into the rates of pay for TAFE teachers. Ancillary Claims Additional increase at top of Common Incremental Salary Scale 389 The Federation sought an additional increase in the rate of pay applicable at Step 13 of the Common Incremental Salary Scale, calculated by adding $2,000 to the existing rate at that Step and then applying a 25 per cent increase. The effect of the additional $2,000 increase would be to increase the rate of pay for TAFE teachers at Step 13 by 29 per cent and the rate of pay for school teachers at Step 13 by 30 per cent. Mr Crawshaw acknowledged that the creation of an additional step would achieve a similar aim, but submitted that "we see our method as preferable if only because it has the benefit of simplicity in that it gives an immediate enhancement to the salary of the most experienced teachers at the top of the scale". Mr Crawshaw went on to submit that "we are not wedded to it as the only way that such an enhancement could occur". 390 The Federation contended that the additional increase at the top of the Common Incremental Salary Scale was necessary because: (a) A higher rate of pay at the top of the scale would appropriately reflect the expertise, skills and commitment of teachers who, being at the top of the scale, are the most experienced and valuable teachers in the public education system; (b) A higher rate of pay is necessary to provide an incentive for experienced teachers to remain in the profession; (c) There is a lack of promotional prospects for many teachers at Step 13, many of whom are women, providing "an appropriate basis for granting the higher increase at the top of the scale in order to achieve a salary rate that is fair and reasonable for those teachers"; and (d) The higher rate will restore historical relativities between the top of the incremental scale and the first promotion position, which were upset when significant increases were granted in respect of executive positions by the Education Teaching Services case. 391 The respondents submitted that the Commission should not award the additional increase at Step 13, primarily for the following reasons: (a) The Federation's claim seeks to secure for school teachers the "one off" allowance which was granted to TAFE teachers as a result of negotiations leading to the 2000 Award; (b) As to the Federation's submissions regarding the lack of promotional prospects for women at Step 13, the Federation has made no attempt to make out a gender under-valuation claim pursuant to the Equal Remuneration principle; (c) The Federation's claim involves a double count, that is, there is a general claim of 25 per cent based on work value considerations, and then a subsequent claim for $2,000 at Step 13, based, at least in part, on the same grounds; (d) Any additional increase in the rate of pay at Step 13 will result in a compression of the relativities between Step 13 and the promotional positions, which will have the effect of "exacerbating the difficulties associated with attracting teachers to the promotion positions (as identified by Ms O'Halloran) by making the obtaining of such positions relatively less financially attractive". 392 The respondents further submitted that the "inherent vice" in the Federation's approach is demonstrated by what is not pressed in the proceedings, that is, the proposed Leave Reserved provision, which seeks to retain for the Federation the right to make an application to the Commission during the nominal term of the award seeking, inter alia, various salary re-alignments. The respondents submitted that "… the Commission would not give comfort to an approach to arbitration whereby a party seeks to reserve for itself the right to have a "second bite of the cherry" during the nominal term of an award in relation to classifications of employees whose work value changes and special case considerations have already been ventilated and the subject of final consideration by the Commission in a major industrial proceeding". 393 We have some initial hesitation regarding the Federation's submissions relating to its claim for an additional increase at Step 13 (or any alternative claim for an additional incremental step). Whilst we acknowledge that it is clearly in the public interest to retain experienced teachers and that teachers at the top of the Scale are no doubt frustrated that there can be no further recognition of their skills and responsibilities, the very nature of a salary scale is such that it must have a ceiling. Irrespective of any additional increases or further increments that are awarded, there will always be a point at which limits on the salary level for experienced teachers must be set. However, the question for determination in the present matter is whether there are relevant factors warranting an increase in that limit. Given the adjustments in the existing rates of pay based on work value changes, any further increase at the top of the Scale must, to avoid double counting, be based on additional factors. 394 We accept that teachers at the top of the Common Incremental Salary Scale are, by their length of service and the nature of their work, a very experienced and dedicated workforce. We are also prepared to assume for the purpose of this decision (although the evidence was not clear in this respect) that inherent in the increased experience of these teachers were additional and more highly developed skills exercised within their classifications. However, it does not necessarily follow from these facts that this group experienced changes in work value above those we have otherwise identified in this decision for teachers generally or contributed to changes in teaching services by way of improved efficiency and quality of teaching work more significantly than any other group. In our view, the evidence before us does not sustain such a conclusion. In any event, it is important to bear in mind that the Federation conducted its case on an "averaging" basis (which necessarily encompassed outcomes for teachers at Step 13 of the incremental scale). 395 The Federation also submitted that there was a particular difficulty in retaining those experienced teachers who had reached the highest salary increment and that there was a dearth of financial incentives operating to keep these teachers in the profession. It was submitted that an additional increase at Step 13 or, alternatively, an additional incremental step would "positively assist in retaining valuable and experienced teachers in the public education system". 396 We recognise the difficulties in retaining teachers who have reached the top of the incremental scale and who have limited opportunities to increase their earning potential if they wish to stay in the teaching profession. This represents a possible weakness in the salary structure applicable to teachers. However, we do not consider the Federation has made out a special case that would support the additional increase for teachers at Step 13 on the ground that such an increase is necessary to retain teachers. 397 It is not part of our function to fix salaries at a particular level within an award classification structure in order to retain employees in their employment. But, in any event, the evidence in the case is not sufficient to satisfy us that the additional increase sought for Step 13, or even an additional incremental step in the scale would, if granted, have any material impact on the retention of senior teachers. 398 We note that any perceived existing imbalance in relativities is not, of itself, a basis for granting an increase. 399 We also note that we agree with the respondents that the Federation has not made out, or attempted to make out, its case in this respect based on the Equal Remuneration Principle. Accordingly, we do not accept the Federation's submissions can be sustained. The evidence adduced from Ms O'Halloran regarding the over-representation of women at the top of the Common Incremental Salary Scale did not constitute an equal remuneration case. Such matters will require consideration in the future if a case of that kind is brought. 400 Finally, we do not consider that the grant of this aspect of the Federation's claim is economically sustainable having regard to the wage increase we propose to award and the number of teachers positioned on level 13 of the incremental scale at this time. 401 We reject this aspect of the Federation's application. This is not to say that the Federation may not pursue in the future (after the expiry of the award made in consequence of this judgment) adjustments to classification structures or rates of pay at the top of the incremental scale. Extension of operation of Year Adviser allowance 402 The Federation's claim with respect to the Year Adviser allowance consisted of two elements. First, the Federation is seeking to extend the application of the Year Adviser allowance by amending the definition of "Year Adviser" to include a school teacher appointed to assist Years 7 - 12 students in any schools which has a secondary department, not only schools which have an enrolment of more than 700 students. The effect of such a change would be to confer an entitlement to the Year Adviser allowance on teachers engaged at an additional 169 high schools and 60 central schools in New South Wales. Secondly, the Federation is seeking a 25 per cent increase in the allowance. The value of the Year Adviser allowance is presently $2,403 per annum, and with the Federation's 25 per cent increase, $3,004 per annum. 403 "Year Adviser" is defined in clause 2.58 of the 2000 Award as: … a school teacher appointed to assist Years 7-12 students in a high school which has an enrolment of 700 or more students. 404 The definition proposed by the Federation is in the following terms: … a school teacher appointed to assist Years 7-12 students in every high school or every central school which has a secondary department. Year advisers shall be appointed for each year. 405 The Federation relied on the evidence of Mr William Cowell, Year Adviser at Canowindra High School, a school with less than 700 enrolled students. Mr Cowell deposed that, whereas his role as Year Adviser in the 1980s at Merriwa Central School was relatively informal and involved the provision of some counselling and administrative functions for students, he is now more responsible and more accountable. There was no evidence as to the size of Merriwa Central School. Mr Cowell is presently Year 11 Adviser at Canowindra High School, where he has taught since 1994. Mr Cowell gave evidence that his role involved: liaising with parents regarding student behaviour (both good and bad); supporting the schools Welfare and Discipline policy, for instance by implementing a student behaviour and consequences scheme; as part of the Welfare team, attending weekly meetings and developing and implementing strategies for improving student welfare; responding to parental complaints; counselling an increasing number of students who are depressed or anxious; and promoting student achievement through the student commendation scheme. Mr Cowell was not cross-examined in relation to this evidence. 406 It was the Federation's contention that: All these duties must be performed in each school regardless of its size. The Federation submits that it is arbitrary and unfair that there is no appropriate reward in the form of additional remuneration for the performance of these duties in schools within [sic] enrolments of under 700 students by a teacher such as Mr Cowell. 407 In addition, Ms Bourne deposed that, as a school counsellor, she has been required to support Year Advisers who, over the past ten years "have become overwhelmed by the intensity and complexity of their work". Ms King gave evidence that "the increasing number of welfare issues we deal with in our school means that Year Advisers are required to take much more responsibility for liaison with students and parents, addressing student needs and being proactive when students are identified as at risk". 408 The respondents submitted firstly, that any changes in the work performed by Year Advisers would be caught by the Federation's work value changes claim, and any extension of the allowance would constitute a double count; secondly, the Federation's claim fails to take into consideration the fact that an allowance may not be warranted in circumstances where enrolments are low, either because Year Advisers have less responsibility requiring compensation and/or because there is no need for a separate Year Adviser for each year; and thirdly, there is insufficient evidentiary foundation to demonstrate any special case attributes of this aspect of the Federation's claim. 409 We accept the Federation's submission that it is arbitrary and unfair to require teachers in smaller schools to perform the work of Year Adviser without compensation, in circumstances where a teacher performing similar duties in a school with more than 700 enrolled students is entitled to an allowance for performing those duties. However, we also accept the respondents' contention that the Federation's claim fails to consider that, depending on the number of enrolments at a particular school, the appointment of a Year Adviser for each year, and consequently the payment of a separate and discrete Year Adviser allowance, may not be warranted. In our view, it is unnecessarily prescriptive to require the appointment of a Year Adviser for each year, at every school, regardless of class size and without consideration for the needs of students. Accordingly, there is no merit in the inclusion in the definition of Year Adviser of the words "Year Advisers shall be appointed for each year". 410 We propose granting the Federation's claim in relation to the Year Adviser allowance by altering the definition of Year Adviser as sought, subject to the exclusion of the requirement that a Year Adviser be appointed for each year. We shall also increase the allowance by the same percentage adjustment which we shall award with respect to rates of pay. We have factored this consideration into our assessment of the economic impact of the award we propose to make. New allowance for School Counsellors 411 The Federation's claim in relation to a new allowance for School Counsellors also consisted of two related elements. First, the Federation is seeking a new allowance for school counsellors equivalent to the allowance paid to Teachers of Students with Disabilities. Secondly, the Federation is seeking a 25 per cent increase in the allowance. The value of the Teachers of Students with Disabilities allowance (on which the Federation's claim for a School Counsellors allowance is based) is presently $1,536 per annum, and with the Federation's 25 per cent increase, $1,920 per annum. 412 The Federation submitted that "the claim for an allowance for school counsellors should be granted in recognition of the special responsibilities of school counsellors and the changes which have taken place in their duties". In support of this submission, the Federation relied on the evidence of Ms Cathryn Bourne, School Counsellor at Singleton Public School and Singleton High School, regarding changes to the role of school counsellor. For instance, Ms Bourne deposed that: (a) There is less opportunity for consultation and supervision. For instance, whereas guidance meetings for professional development, feedback and consultation were conducted monthly prior to 1991, such meetings are now held twice per term; (b) School counsellors have been given increased responsibilities. For instance, counsellors are required to participate in regular Learning Support Team meetings for students seeking behaviour or learning support; (c) Changes to child protection legislation have meant that both teachers and children are more likely to seek help from school counsellors; (d) The increased number of students with special needs has increased the responsibilities of school counsellors, for instance, in relation to the assessment of students and preparation of reports. 413 The respondents contended that granting the Federation's claim for an additional allowance for school counsellors would constitute a double count, as some of the matters relied upon by the Federation in support of this aspect of its claim - the increased responsibilities associated with child protection legislation and the increased integration of children with special needs into mainstream schools - also formed the basis of the Federation's work value claim. In support of its contention, the respondents relied on the Public Hospital Nurses case in which the Full Bench considered an application for an allowance for community nurses. It was held (at [304]): The relevant principle in this case is the work value principle. We consider that the work of community nurses and nurses working in public hospitals should, in terms of work value, be regarded as being at the same level. It is the case that community nurses do experience such disabilities as exposure to inclement weather; dirty and unpleasant working environments; and, lack of staff amenities. It may equally be submitted, as the HAC has done in this case that ICU nurses, for instance, work under the disability of a particularly high-pressure environment caring for acutely sick patients. To grant an allowance to community nurses in recognition of the disabilities they experience would inevitably lead to claims by other sections of the nursing workforce seeking disability allowances. The allowance is refused. 414 Further, the respondents submitted that the Federation's claim does not have proper regard to the level of support provided to schools or other ameliorating considerations. 415 We note that there are qualitative differences between the Federation's claim for a new allowance for School Counsellors and its claim for an extension of the existing Year Adviser allowance, not least of which is the nature of the two roles. That is, whereas a Year Adviser is a teacher performing additional duties, school counsellors are engaged and paid as such. To grant an allowance to School Counsellors would be to compensate them further for performing the very job for which they are paid. Any changes to the work, skills and responsibilities of school counsellors are, in our view, adequately addressed in the context of the Federation's work value claim. In that regard, we acknowledge that there is no doubt that there have been such changes, arising, for instance, due to the increased number of children with special needs enrolled in government schools and changes in the behaviour and disposition of students since 1991. It is pertinent to reiterate that increased workload does not equate with increased work value. 416 We do not consider that there is sufficient evidentiary foundation to support the Federation's claim for a School Counsellor's allowance. Further, we consider that this claim is a case of double counting and we reject the Federation's application in this respect. Leave reserved 417 The Federation's application includes amendments to clause 16, Leave Reserved. The proposed clause is in the following terms: 16.1 The Federation may make an application to the Industrial Relations Commission during the nominal term of this award with respect to the following claims: 16.1.1 That Assistant Primary Principals, Assistant Principals Central Schools, Primary Principals Grade 6, Head Teachers High School, Head Teachers Central School, District Guidance Officers, Teachers in Charge Grade 1 Environment Education Centres or Hospital Schools shall be paid equivalent with Senior Education Officers Class 1, Year 1 and thereafter; 16.1.2 That Assistant Primary Principals, Assistant Principals Central Schools, Primary Principals Grade 6, Head Teachers High School, Head Teachers Central School, District Guidance Officers, Teachers in Charge Grade 1 Environment Education Centres or Hospital Schools shall be paid equivalent with Senior Education Officers Class 1, Year 2. 16.1.3 That Primary Principals Grade 5, Deputy Primary Principals, Deputy Principal (Primary) Central Schools, Teachers in Charge Grade 2 Environment Education Centres or Hospital Schools shall be paid equivalent with High School Deputy Principals, Deputy Principals (Secondary) Central Schools. 16.1.4 That Primary Principals Grade 6 and Primary Principals Grade 5 shall receive a $500 per annum allowance for their special responsibilities. 418 The respondents contended that it would be inappropriate for the Commission to include such matters in a Leave Reserved clause, and that it ought be rejected because "implicit within it is an (erroneous) assumption that the statutory criteria in s17(3)(c) and (d) [relating to public interest] will, without more, be met - thereby entitling the Federation to press its application during the nominal term of the award and/or after the nominal term of the award has expired". 419 In our view, the respondents' submissions in relation to clause 16 were largely erroneous. We do not see that s17 of the Industrial Relations Act 1996 precludes the Federation from pursuing a claim for increased rates of pay and allowances for certain promotional positions. Indeed, the very nature of the Leave Reserved clause is to specify those aspects of an application which are reserved and which may be pursued in the future (during the nominal term of the award). In any event, we can see no reason why an application for salary adjustments for promotional positions as foreshadowed in the proposed Leave Reserved clause would not meet the test in s17. Additional claims 420 The respondents contended that the Federation's application included a number of additional changes which were not the subject of evidence in these proceedings. Whilst some of those changes reflected an agreed position, and were therefore not contested, there were some matters "where there is no agreement between the parties, and in circumstances where no evidence or contentions were proffered in support of these claims the respondents submit that the Commission would reject them". The areas of dispute, as identified by the respondents in this respect, are new sub-clause 4.8 and proposed amendments to clause 13. Sub-clause 4.8 - new allowance for Principal, College Group 421 Sub-clause 4.8 of the Award appears to identify a category of employee to whom the allowances listed in Schedule 2 to the Award must be paid. Sub-clause 4.8 is in the following terms: High school principal Grade 1 (PH1), campus and principal, college group 422 Further, Schedule 2 to the Award includes a proposed new allowance of $7,030 for Principals, College Group, with the following note: All Principals, College Group shall receive an allowance of $7,030 per annum allowance. The initial amount of the allowance improved by the percentage allowance increases under the Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award 327 I.G. p 582 with the 25 percent increase. 423 The entitlement to the allowances in Schedule 2 to the Award is established by sub-clause 4.1, which is in the following terms: Allowances in terms of Schedule 2 shall be paid to the officers and or temporary employees in the circumstances set out in subclauses 4.2 to 4.7 inclusive. 424 We note also that the Award includes a new definition of "Principal College Group" in the following terms: "Principal College Group" means a school teacher appointed as such to be responsible for the management, organisation, administration, supervision and efficiency of a college group and all campuses in a college group. A Principal College Group does not include a teacher in charge of a school. 425 We note that the Federation has not sought an amendment to sub-clause 4.1 to include a reference to sub-clause 4.8. In any event, no submissions were made in relation to the payment of a Principal College Group allowance, and no evidence was presented in support of those matters. We reject the Federation's application with respect to the inclusion of a definition of "Principal College Group" and its claim for a new allowance for teachers who may fall within that definition. Clause 13 - No Further Claims 426 Clause 13 of the 2000 Award is in the following terms: 13.1 Except as allowed by the Industrial Relations Act 1996, there shall be no industrial action and no further salaries or conditions claims by the parties prior to 31 December 2003 in relation to matters expressly contained in this award. 427 The Federation is seeking amendments to this clause as follows: 13.1 Except as provided by the Industrial Relations Act 1996, prior to 31 December 2005, there shall be no further claims by the parties to this Award for changes to salaries, rates of pay, allowances or conditions of employment in relation to matters expressly contained in this award, subject to the following: 13.1.1 The parties may make claims with respect to the matters prescribed in clause 16, Leave Reserved, and may seek to have those matters arbitrated by the Industrial Relations Commission; and 13.1.2 The Federation may, prior to 31 December 2005, make a claim for salary increases and changes to conditions to take effect on or after 31 December 2005 and seek to have that claim arbitrated by the Industrial Relations Commission. 428 As to sub-clauses 13.1 and 13.1.1, we consider the adjustments sought by the Federation are appropriate, and reflect our decision regarding clause 16, Leave Reserved. However, there is no basis, in our view, for the inclusion of sub-clause 13.1.2. Any application the Federation may make seeking changes to salaries and/or conditions of employment under the 2000 Award would be a matter for consideration under s17 of the Act. Accordingly, we reject the Federation's application as to sub-clause 13.1.2. economic impact 429 Section 146(2) of the Act, which sets out the Commission's obligation to have regard to public interest factors, is in the following terms: The Commission must take into account the public interest in the exercise of its functions and, for that purpose, must have regard to: (a) the objects of the Act; and (b) the state of the economy of New South Wales and the likely effect of its decisions on that economy. 430 In Crown Employees (State) Award (No 2) a Full Bench of the Commission held (at 377 - 378): A further matter in the present case in this context is, of course, budgetary factors concerning the State of New South Wales which have been brought comprehensively to our attention by the Crown during the course of the proceedings. The Crown's preferred option of industrial coverage of its employees by way of enterprise agreement, rather than award, as demonstrated by Ex 2, has already been exhaustively discussed, as has its decision that, under that enterprise agreement system, additional amounts available from Treasury to fund wage increases will be capped at 3 per cent for 1993-94 (in reality 1.5 per cent on the basis that virtually no agreements have so far been executed in the present financial year), 2 per cent in 1994-95 and 2 per cent in 1995-96. It is entirely appropriate to give the evidence and submissions of the Crown on these aspects careful and weighty consideration, but at the same time it must be emphasised that the Commission cannot be constrained in its statutory wage-fixing obligations by limiting itself to increases which the Crown submits, on budgetary considerations should not be exceeded. 431 In Re Health and Community Employees Psychologists (State) Award (2001) 109 IR 458 the Commission held (at [52]): In other words, it seems to us, in discharging our statutory duty to make an award setting fair and reasonable conditions of employment the cost implications, whilst most important, are to be taken into account as one factor, but not decisively so in itself, which may cause the refusal of a claim. We think that may appropriately be accommodated in a case, and the present is but an instance, by tempering the final outcome so as to result, as par (e) in s3 - Objects of the Industrial Relations Act suggests, in facilitating "appropriate regulation of employment through awards". 432 We note that these statements of principle were adopted in Health Employees Pharmacists (State) Award, and we also adopt them in this matter. The economic and financial position of the State and the effects of our decision on the New South Wales economy have played a significant role in our decision, but not a determinative one. It is our statutory duty to fix fair and reasonable rates of pay and conditions. In a matter, such as this one, where a compelling basis for increases in rates of pay has been demonstrated, then the Commission must give recognition to that conclusion even though it may temper the final result in recognition of economic considerations. The terms of s146 of the Act require no more than this, particularly in the light of the paramount requirements of s10 of the Act. It is those duties that we will discharge in this matter. We shall exercise those duties without fear or favour and in order to do justice between the parties in the light of the evidence and submissions in the proceedings. 433 Finally, in this respect, we reiterate also what was said by Sheldon J in Crown Employees (Teachers - Department of Education) Award that teachers' numbers "are so large that any award materially increasing their salaries must necessarily involve a great sum of money but this fact is not a legitimate barrier to their right to receive remuneration commensurate with their work and its contribution to the welfare of the community". Evidence 434 The Commission heard extensive evidence from: (a) Dr James Guthrie, Professor of Management at Macquarie Graduate School of Management; (b) Mr Kenneth Dixon, the Department's General Manager of Finance; and (c) Mr John Pierce, Secretary to the New South Wales Treasury. 435 There was considerable disagreement between Dr Guthrie on the one hand and Messrs Dixon and Pierce on the other as to methodology, particularly in relation to the use of budget, revised or actual figures, which, for the most part, it is not necessary to resolve. 436 Dr Guthrie highlighted in his evidence that financial management practices in the public sector have changed "in the past few decades", away from the traditional cash based Government Financial Statistics budget reporting towards "accrual and output based budgeting, facilitating greater focus on outputs and outcomes". In relation to that budgetary transformation the witness cautioned that "working within an accrual and output budgeting framework requires an entirely new ethos and set of skills, for example, the ability to clearly define measurable outputs and outcomes in a manner which makes the shift from input to output based budgeting worthwhile". Dr Guthrie further highlighted that public budgeting involves balancing competing interests and making policy choices. 437 Dr Guthrie gave evidence regarding the 2002/2003 budget, the budget estimates for that period for the Department, and the trends in the Department's expenditure in the six financial years ending in 2003. The witness's evidence was updated during the proceedings and took account of available data, being actual data for 1997/1998 to 2001/2002, revised data for 2002/2003, and forecast data for 2003/2004. Dr Guthrie used the financial year 1997/1998 as the starting point of his analysis as this was when the Department, in its present form, was created. In summary, he deposed that: (a) The government's focus in the 2002/03 budget was the production of "prudent" financial outcomes, the reduction of liabilities and the improvement in net assets. (b) The Budget Papers indicate a generally tight budget strategy for the next three budget cycles. (c) Education is second only to health in terms of the percentage of total government expenditure, comprising 23.7 per cent of total expenses in 2002/2003. (d) The government has announced, in Budget Statements and Budget Speeches in Parliament, significant planned expenditure on education activities in New South Wales in future budget cycles. (e) The Department's total expenses have increased from $6.119 billion in 1997/1998 to $8.292 billion in 2003/2004. The Department's total net cost of services has increased from $5.949 billion in 1997/1998 to $7.868 billion in 2003/2004. However, "while total general government sector net cost of services grew by a cumulative 36.02% over the period [from 1997 to 2004], the level of net cost of services growth for the Department of Education & Training was constrained to 32.23%, a difference of 3.76%". If the Department's net cost of services was to increase at the same rate as the general government sector, the Department's net cost of services would be an additional $224 million above the 2003/2004 forecasted figures. (f) The 2002/2003 budget forecast of the Department's expenses and net cost of services, as percentages of State expenses and net cost of services, indicates that: i. the Department's expenses are forecast to be 23.56 per cent of total expenses, down 0.35 per cent on the six year average, and equating to a dollar difference of $113.2 million based on forecast expenses; and ii. the Department's net cost of services are forecast to be 25.74 per cent of planned total general government net cost of services, down 0.74 per cent from the six year average, and equating to a dollar difference of $212 million based on forecast total net cost of services. (g) The expenses and net cost of services data suggests that: ... the NSW Department of Education and Training is expected, under the current budgetary regime, to contribute more to its overall expense base through internal revenue generation (for example fees) than on the average internal resource allocation expectation placed on agencies across the NSW general government sector. This means that the budget forecasts assumes that an increasing proportion of additional resources available to the NSW Department of Education & Training will come, not from budget appropriations, but rather from own source revenue. (h) The data suggests that the Department currently enjoys a smaller share of whole of budget resource allocation than has been the case on average over the past six years. (i) The increase in employee-related expenses within the Department over the period under review was significantly less than for non-employee related expenses. That is, employee expenses grew by a six year cumulative total of 19.03 per cent, compared with non-employee related expenses which grew by a cumulative 37.85 per cent. Dr Guthrie concluded that: ... the share of employee related expenses with the four teaching focused programs have fallen materially over the six-year period in question. To restore employee related expenses within the four teaching focused programs to their share of total departmental expense at the beginning of the data series would require an additional $236.1 million dollars to be allocated. Alternatively, restoring employee related expenses within the four teaching focused programs to their 6 year average share of total departmental expenses would require an additional $131.7 million dollars to be allocated. (j) A similar result is seen when the seven year period from 1997/1998 to 2003/2004 is considered, that is, employee related expenses grew by a seven year cumulative total of 29.41 per cent, compared with non-employee related expenses which grew by a cumulative 41.82 per cent. Dr Guthrie's conclusion was: ... while overall expenses in all categories have grown over the seven year period in question, total resources devoted to teaching focused programs have shrunk as a proportion of total resource allocation, and employee related expenses within teaching focused programs have shrunk as a proportion of teaching focused program expenditure. This suggests reallocation and reprioritization on behalf of the [Department] over the past seven years. (k) The cost of producing each "unit of output", that is, each educated student, is calculated by measuring total expenses in teaching focused programs against student numbers. That data indicates that whilst the weighted average employee related cost per student grew by 17.38 per cent over the six year period to 2002/2003, the weighted average non-employee related cost per student grew by 35.93 per cent over the same period. Over the seven year period to 2003/2004, the weighted average employee-related cost per student grew by 26.23 per cent, and the weighted average non-employee related cost per student grew by 38.81 per cent. According to Dr Guthrie, this data suggests that: depending on the deflator used, weighted average per student employee related cost has diminished in real terms over the period under examination, reinforcing the conclusion that real productivity and performance gains have been achieved by the human resources deployed within the for teaching focused programs in the [Department]. 438 Dr Guthrie further concluded that: First, the relative share of the resource pie directed towards the NSW Department of Education and Training appears to have fallen compared to average resource pool allocations over the past six years. Second, within the NSW Department of Education and Training, the level of resources allocated to employee related expenses relative to non employee related expenses has fallen over the period of the study. Third, growth in employee related expenses, when measured in aggregate cumulative terms, has been more constrained than growth in other non employee related expenses. Fourth, it appears that the real cost of employee related expenditure on a per student basis has fallen measurably over the six year period of the study. 439 Dr Guthrie was cross-examined in relation to his evidence that employee related expenses have not increased at the same rate as non-employee related expenses: Q There is a real increase in the overall allocation to employee related expenses? A Correct. Q And a real increase in overall non employee related expenses? A Correct. Q The increase in the last is greater than the increase from the second, that is an increase in the non employee is greater than the increase in the employee? A Correct. Q That would result in relative reallocation in your terms, is that right? A Correct. Q Your analysis does not suggest, or seek to suggest at least in this part, there has been a diminution in the allocation to employee related expenses? A Within [the Department], no. and later: Q This comes to the nub of it. Taking it at a very senior, high level, you have not sought to make any judgment about whether the money spent on health should have been spent on education? A I make none of those judgments. I just do the slice of the pie. There seems to be more money in health. That is all I do. Q That is a matter for Government, those judgments? A Those judgments are a matter for Government. Q Similarly, going down a level within the Department, you have not sought to say it was wrong to spend $500m on technical programs and that money should have been spent on more teachers? A In these affidavits I don't look at performance, outputs, outcomes, achievements of performance at all, so I don't try to make those sorts of judgments. 440 Mr Dixon gave evidence that the Department estimated the cost of the Federation's claim as $1,623.9 million for 2003/2004 (calculated over the whole of the financial year), $1,651.6 million for 2004/2005 and $1,692.30 million for 2005/2006, and that "based on existing payrolls, each 1% additional increase in the wages of school and TAFE teachers, that is the staff covered by the Teachers Federation's claim, would generate an additional $55.56 million in costs to the budget". It was Mr Dixon's evidence that, based on the Department's cost estimates, "the Federation's 25% claim would involve an estimated cumulative in-year cost of $4.53 billion by the end of 2005/2006". 441 Mr Dixon gave evidence that: (a) The Department has received significant funding increases since the 1991/1992 financial years. Mr Dixon's analysis commenced in 1991/1992 based on instructions from the Department that this was the relevant datum point; (b) The Department's expenses and net cost of services have increased since 1991 by 63.1 per cent and 63.0 per cent respectively (or 74.1 per cent and 74.2 per cent based on the Department's "revised" budget figures, which incorporate expenditure of funds such as those held in the Crown Finance Entity). Since 1997/98, expenses and net cost of services have increased by 24.3 per cent and 23.8 percent respectively (or 32.1 percent for each based on "revised" budget figures). To the extent that their evidence is comparable, Mr Dixon's evidence in this regard was consistent with that given by Dr Guthrie. We note that Dr Guthrie's evidence was amended in cross-examination to take account of the "revised" budget figures, which he acknowledged were more reliable than budget figures; (c) The Department's employee related expenses and non-employee related expenses have increased since 1991 by 69 per cent and 51.8 per cent respectively (or 75.4 per cent and 71.3 per cent based on "revised" budget figures). Since 1997/1998, employee related expenses and non-employee related expenses have increased by 18.3 per cent and 39.5 per cent respectively (or 28.2 per cent and 41.6 per cent based on "revised" budget figures). Again, based on non-revised budget figures for comparable periods, Dr Guthrie's statistics largely correlated with the data cited by Mr Dixon. According to Mr Dixon, "a significant reason for the higher percentage increase in non-employee related budget expenses is the fact that during this period the Government introduced a range of non-employee related enhancements including Technology funding, Back to School Allowances and increased school building maintenance funding"; (d) Since 1994/1995, the Department has received substantial funding enhancements. In 2002/2003, funding enhancements of $497.7 million were granted. The employee related share comprised 48.5 per cent of the total enhancement funding; (e) The real increase in the weighted average employee related and non-employee related cost per student since 1997/1998 is 8.3 per cent and 20.9 per cent respectively. These figures take into account a CPI increase from 1997/1998 to 2002/2003 of 17.1 per cent; (f) Global funding to government schools in 2003/2004 increased by over $21.1 million since the previous financial year. The average recurrent funding per public school student in 2003/2004 is $7,965, an increase of over 58 per cent since 1994/1995; (g) Changes to school financial management, for instance the introduction of school global budgeting and the associated devolution of financial authority, has not impacted directly on the workload of teachers; (h) Expenditure for school and TAFE maintenance and capital works has increased from $440,918,000 in 1999/2000 to an estimated $625,750,000 in 2003/2004. 442 Mr Dixon gave evidence that if wage increases cannot be fully funded by Treasury, the Department will be "unable to meet the balance of award costs from within its annual internal budget". Mr Dixon compared the impact of any increase in wage rates awarded by this Commission to the burden imposed by the 16 per cent increase in teacher salaries agreed in September 1996. He deposed that: The impact of [the 1996 adjustments to global school budgets], offset to some extent by cost escalation and other factors, was that the amount available for school budgets reduced from $235 million in 1996/97 to $225 million in 1997/98. The fact that there was a need to resort to the use of school global funds to finance a portion of the cost of the salary increase illustrates the significant difficulty which the Department faced at the time in identifying a funding source to cover these costs. Similar difficulties, although on a much larger scale would be encountered if the Federation's claim is successful. School global funds represent the most basic element of the school resourcing arrangements and are provided to meet the day to day operating costs of schools. Any further reduction in this allocation would seriously and fundamentally impact on the ability of schools to deliver educational services. 443 In weighing the evidence we have had regard to the objections raised by the Federation to the evidence given by Mr Dixon regarding the impact of changes to global budgeting and financial management processes. 444 In cross-examination, Mr Dixon was questioned about his conclusion that each one per cent increase in teachers' salaries will result in a cost to government of $55.56 million: Q You say that each additional 1 per cent increase in wages for teachers will generate an additional 55.56 million in costs to the budget. What do you mean by "costs to the budget"? A Cost to the budget means total cost to Government, both to the Department and to Treasury inclusive. Q See, Mr Dixon, the Department is required to pay payroll tax on salaries, isn't it? A Yes, it is. Q What rate do they pay that? A At 6 per cent. Q And, while this will increase the overall level of funds required to be provided to the Department, it will not increase the cost to the Government, is that right? A It will increase the cost to Government. Q But those monies are returned to State Treasury as revenue, aren't they? A They are. Q So, in relation to the payroll tax component of the 55.56 million, there is no increase in the cost to the Government, is there? A There is an expense to Government, a cost to Government, and that expense finds its way into revenue to Government. 445 Mr Dixon was also cross-examined in relation to his evidence regarding the impact on global budgets of the 16 per cent increase in teachers' salaries in 1996. After identifying a range of measures for reallocating funds to teachers, such as unexpended enterprise agreement funds, teachers supplementation, allowances and scholarships, Mr Dixon gave the following evidence: Q ... you have concentrated on school global funds being the target for funding if there is a wage increase, haven't you? A No. I haven't concentrated on it. I'm pointing back to history to indicate how difficult it was at the time to find money out of the department and as a last resort, we took money out of schools global budgets, and I would hope not to have to do that again. Q But that is the only area of departmental activity that you have identified for cutbacks in your affidavit, isn't it? A Yes it is. Q And if that was to be the area for cutbacks, that would be a political decision, wouldn't it? A I'm not so sure "political" - a government decision. Q Why didn't you attack, for example, the amount that you have costed in your proposal for increased costs by way of payments to private schools arising from the increased wages? A In preparing this affidavit it was not my intention to indicate the various options for finding the additional dollars - whether that be from that source or any other source I can nominate. Q It was just by coincidence that you wrote of global funds was it? A No, not at all. It is a matter that is very close to my area of operation and I know how difficult it has been in school to cope with that reduction. Q All the more reason why it is unlikely that they would be cut back, isn't it? A I would hope so. 446 Mr Pierce deposed that "Treasury has reviewed the assumptions and methodology on which the Department has based its estimated cost of the claims … and considers these assumptions and methodology to be reasonable based on available information at the time of writing this affidavit". 447 As to Budget estimates and the government's wages policy, Mr Pierce gave evidence, in summary, that: (a) Employee related expenses are the single largest expense incurred by the New South Wales government, comprising wages, superannuation and related costs; (b) The 2003/2004 budget projected "modest" surpluses of $43 million in 2003/2004 and $303 million in 2004/2005, and that "the projected surpluses do not represent a reserve contingency fund to cover unanticipated costs such as wage increases, but are required for debt and other liability reduction". Surpluses in later years are projected to be $821 million and $932 million in 2005/2006 and 2006/2007 respectively; (c) The 2003/2004 budget provides a total of $8,599.4 million to the Department. That budget and forward estimates incorporate funding for, amongst other things, "priority Government election commitments totalling $674 million over the four years 2003-04 to 2006-07 that will help teachers in their task of delivering better outcomes for students". Those commitments include reducing class sizes for Kindergarten to Year 2, improved teacher quality, supply and professional development, improved school security, additional pre-schools and new suspension centres, behavioural schools and tutorial centres. According to Mr Pierce, "the Government will also be funding improved amenity of buildings for teachers and students through the $1.2 billion School Improvement package"; (d) Whereas the demand for services provided by the government is not greatly affected by the state of the economy, the revenue side is volatile and highly sensitive to economic conditions. There is a wide margin for error in budget estimates, particularly in relation to revenue. For instance, revenue from transfer duty is volatile and highly sensitive to domestic and global economic conditions. The government is budgeting for a decline in transfer duty revenue; (e) The 2003/2004 budget provides a total of $220 million for "additional contingency funding to cover the exigencies of government" in the Treasurer's Advance. The Treasurer's Advance is available to cover "costs associated with natural disasters, unforeseen policy adjustments and other fiscal shocks", and is likely to be expended in any given year. Further, the government is unlikely to be able to fund any unbudgeted wage increases from Commonwealth grants, which are expected to be about 43 per cent of total General Government sector revenues in 2003/2004; (f) The government's public sector wages policy seeks to maintain the real value of wages, which, based on the current Consumer Price Index, may be achieved by increasing wages by 3 per cent annually. The 2003/2004 budget provides for a 4 per cent increase in total wages and salaries expenses; (g) Data from the Australian Bureau of Statistics demonstrates that between September 1997 and March 2003, based on the Wage Cost Index, public sector wages have increased by 23.7 per cent whereas private sector wages increased by only 19.7 per cent. Allowing for inflation, this means that wages for public sector employees have increased by twice as much as salaries for private sector employees; (h) Salaries for teachers in government schools and TAFE have increased by 36.8 per cent between July 1996 and December 2003, which is 16.8 per cent higher than the total estimated consumer price increase. 448 Mr Pierce also gave evidence regarding the government's fiscal strategy, developed in accordance with the provisions of the General Government Debt Elimination Act 1995. The fiscal strategy in the mid-1990s (when New South Wales was recovering from a recession and faced large deficits, high debt levels and heavy subsidies to public trading enterprises) was established to: provide a 'road map' to restore State finances to maintain a strong balance sheet, which means low levels of net financial liabilities. Low levels of net financial liabilities means that the Government can continue to fund services to the state even in the event that there is a significant downturn in the economy (and hence revenues), or the State economy experiences other shocks that are outside the influence of the Government but must still be managed (such as negative investment returns, the collapse of HIH, natural disasters, or security and health concerns). 449 Mr Pierce further deposed that "to reduce financial liabilities to a sustainable level requires keeping the budget in surplus while the economy is healthy and growing", and that any additional revenues should be applied to reducing debt and other financial liabilities in order to prepare the State's finances for weaker periods when tax revenue may decline. According to Mr Pierce, further reductions in financial liabilities are necessary to meet the medium and long term targets required by the General Government Debt Elimination Act. 450 Mr Pierce gave evidence that any decision of this Commission to award wage increases in excess of the government's wages policy will "directly affect the government's capacity to meet the legislated fiscal targets and to implement some of the fiscal principles in the Act". In particular, any such increases will affect Fiscal Principle 5 (Expenditure restraint), Fiscal Principle 7 (Tax restraint) and Fiscal Principle 3 (Funding Superannuation Liabilities). 451 Mr Pierce deposed that the Federation's wage claim may have the following possible impacts: (a) The Department must, in the first instance, seek to manage any increase in teachers' salaries within its budget and forward estimates; (b) Any wage increase granted to government school teachers will have a flow-on effect to State budget funding for non-government schools, based on the funding requirements set out in the Education Act ; (c) Similarly, any wage increase will, it was said, have State-wide public sector flow-on effects, as awards expire for fire-fighters in February 2004, nurses, ambulance workers, other health workers and the general public service in June 2004, and police in 2005. Any decision by the Commission to increase teachers' salaries will influence the expectations of other public sector groups; (d) The Federation's claim, if granted, and in the absence of any offsetting policy adjustments, would push the New South Wales budget into deficit. This would, in turn, result in growth rates in general government net debt of about 19 per cent per year, and would affect New South Wales' credit rating; (e) In order to fund the Federation's claim and leave the budget outcome unchanged, the government would be required to make policy adjustments, for instance by increasing tax and/or cutting funding in other areas such as health, public order and safety, transport or social welfare; (f) Wage increases will increase the level of unfunded superannuation liabilities. Based on figures provided by Mercer Human Resource Consulting, a 25 per cent increase in teachers' salaries would increases projected employer accrued superannuation liabilities by $1,005 million, or 21.9 per cent. 452 In weighing the evidence we have had regard to the objections raised by the Federation to the evidence given by Mr Pierce regarding the implication of increases in teachers' salaries for the government's capacity to meet fiscal principles, the impact of wage increases on the level of unfunded superannuation liabilities, the potential flow-on effect to other public sector groups and the impact of increases in teachers' salaries on the economy generally. 453 In response to Mr Pierce's evidence, Dr Guthrie deposed that there is no reason to believe that a one per cent increase in teachers' salaries would translate into a one per cent increase in employee related expenses, primarily because not all employees of the Department are teachers. Further, Dr Guthrie gave evidence that: it is possible that certain "on-costs" would not increase at the same rate as the increase in teachers' salaries; Mr Pierce has not attempted to indicate how he or the Department calculated the estimated cost of a 1 per cent increase in teachers' salaries, or the assumptions that were made in arriving at the result of $55.56 million; Mr Pierce's estimate of the total cost of the Federation's claim is overstated because of the inclusion of amounts for "non-government flow-ons" and "global funding", neither of which are relevant to employee related on-costs; Mr Pierce's discussion of policy adjustments does not consider the "vast amount of money associated with Government policy that provides tax concessions to a range of individuals and corporations within NSW" which "amounts to billions of dollars per year of revenue forgone because of Government and Treasury policy"; Mr Pierce does not attempt to define or justify the selection of the level of debt deemed "sustainable" by Treasury; Mr Pierce's evidence incorrectly implies that New South Wales is a high debt State; and Mr Pierce's evidence does not demonstrate the falling share of the total New South Wales budget that is allocated to education. It was Dr Guthrie's evidence that: ... the operation of the [Department] is an instrument of Government policy, and the Government could choose to devote increased resources to the [Department] for policy reasons, whilst at the same time adopting a policy of overall fiscal conservatism. Further, the [Department] is not responsible for the design or implementation of the Government's fiscal framework and the arbitrary fiscal targets. It is responsible for the delivery of quality education services to the community, as per agreed program objectives outputs and outcomes. The Government must therefore expend an aggregate sum sufficient to allow it to deliver services commensurate with the achievement of the Government's targeted outcomes. Far less arbitrary is the requirement to provide quality educational services to the people of New South Wales, an outcome which the Government is committed to based on the narratives within the NSW Budget Papers 2003-2004. 454 Having considered Mr Pierce's evidence, Dr Guthrie offered the following conclusion: I note that the Government has committed itself to tight fiscal policy settings over the medium term, and as a result wishes to constrain growth in recurrent expenditure. As a result, resource funding decisions may be being reached less on the basis of the desired or required level of outputs and quality of outcomes in individual portfolio areas and more on the basis of overall fiscal "imperatives". This also means that consideration of pay outcomes is likely to be dominated by macro considerations such as whole of government fiscal considerations, not directly related to the output/outcome and performance metrics of each portfolio area, including the [Department] or longer term considerations associated with the knowledge economy and the development of social capital. Also this means that consideration of pay outcomes is likely to ignore more micro issues associated with teachers such as equity, relativity with other professional groups, and award for performance achievements. 455 Mr Pierce's evidence demonstrates that the present state of the New South Wales economy and forecasts for the future of the economy are good. We note that Mr Pierce accepted in cross-examination that, amongst other things, New South Wales has enjoyed a long period of continuous economic growth, unemployment is low and the global economy is improving: Specifically, he gave evidence that: (a) Unemployment levels were low: Q Is this the case that unemployment in New South Wales is at very low levels compared to the levels in [the] previous decade? A Yes. (b) Tax revenue has been increasing: Q Is this the case, that in the recent past, New South Wales total tax revenue has been above budget? A That has tended to be the case in the last couple of years, yes. Q When you say it has tended to be the case, has that been the case or has it not been the case? A In aggregate yes. Some of the components have not been but the aggregate certainly has, yes. Q Could I just take you to that issue of payroll tax, not the issue that we went to yesterday but in terms of revenue. I don't think you mentioned that in your section on revenue in paragraphs 16 to 23, did you? A No. We usually get payroll tax pretty right. Q You see, payroll tax is New South Wales' broadest based and largest single tax, isn't it? A That's correct. ... Q But payroll tax revenue - has that been going up in the last couple of years? If you don't know that off the top of your head perhaps I could refer you to budget JP2? A Page 3-13 and payroll tax year on year has been going up. I might draw your attention to - for 02/03 the difference between the budget and the revised estimate, just to show that whilst year on year it has certainly been going up, we do on occasion forecast a tax revenue number which comes in lower than what we forecast. (c) New South Wales is experiencing economic growth: Q In paragraph 35 you refer to a recession. "In the 1990's New South Wales was recovering from a recession". That's the recession of 1990/91, is that right? A That's correct. Q "There's has been continuous economic growth since that date"? A Pretty well. (d) The Gross State Product in New South Wales is consistent with the Australian average and is higher than that of most other States: Q ... I put this proposition to you. The New South Wales forecast for Gross State Product is a higher figure than for all the other States at the present time. I am excluding from that question the Territories? A I would have to refer to material about that. I would be surprised if our forecast was higher than the forecast of, say, Western Australia, I'm not sure. Q This is for Gross State Product? A Yes. Normally in the medium term we would expect essentially New South Wales' growth rate - sorry, you would expect New South Wales' growth rate to be effectively the same as the Australian average just because of our size and industry structure. That means there will be some States that are growing above that number in order to produce an average, and its normally Western Australia and Queensland. (e) The global economy is improving: Q Also the global economy has got stronger since March 2003, hasn't it? A On the basis of some numbers that have come out in the last two weeks that appears to be the case. Q I'm sorry, I didn't quite catch that? A On the basis of some numbers that came out in the last two weeks or so that is definitely the case. I would add a lot of qualifications to that statement. Q The Reserve Bank has said that the risks from the world economy were receding and there have been encouraging signs on the US economy? A Yes. Q Japanese growth has been surprisingly solid? A For Japan, that growth is underpinned by - the growth has come from exports which has been underpinned by artificially low interest rates and whilst you have observed it now, I think there is considerable uncertainty about whether that is going to be sustained. Q If I suggest to you that the Japanese growth has been surprisingly solid, you would reject that proposition, would you? A It's not surprising given what they have done to their interest rate. Therefore I don't think its real. Q There have been indications that European economies are improving? A I believe that to be the case. Q That is not just in the last three months is it in the last two weeks? A The European economies, no. Q The signs that I have just put to you about the US economy and Japanese growth and the European economy, they have been there since at least September, haven't they? A I think there were some signs around the middle of this year that we could be getting a global recovery but one swallow doesn't make a spring, whatever the saying is. We like to wait till there's some more substance to initial indicators and those indicators have not come through in the last little while. 456 When cross-examined in relation to New South Wales' share of Commonwealth government grants, Mr Pierce gave the following evidence: Q You say in paragraph 23 in the second sentence "New South Wales is unlikely to be able to fund any unbudgeted wage increases from Commonwealth grants". That is based on this low percentage, as you see it, of the share of GST, is that right - and that situation is likely to continue? A Money has this horrible habit of being fundable. All I am saying here is to the extent a wage increase - given a wage increase then the government policy has been factored into the forward estimates. Therefore, everything else being equal, there would be an impact on the bottom line. We are not going to be saved from that impact by any unexpected increases in Commonwealth grants. The Commonwealth grants aren't going to be more than what we expect currently and hence they are not going to be a source of financing for unexpected cost increases. Q The view of New South Wales Treasury and the New South Wales Government is that New South Wales is presently getting a lower portion of the Commonwealth grants than it should. Isn't that the case? A Yes, but that isn't the reason for - it's one factor. It isn't the primary reason for the beginning part of the statement. ... Q ... The position that New South Wales Treasury and the Treasurer will put in the future over the next five years until the matter is redressed is that New South Wales should get a greater share of Commonwealth grants, isn't that the case? A That's - yes that's certainly the case. 457 Mr Pierce was also cross-examined in relation to the purpose of the present budget surplus: Q If I could then move on to paragraph 11. You say there that these surpluses are very modest by the standards of recent years, but nonetheless they remain essential to the Government's fiscal strategy. You would accept that the fiscal strategy has been put in place as a result of a political decision? A It has been enshrined in a piece of legislation that is attached. It's the legislation that I would take guidance from rather than people's interpretation of political processes. Q Mr Pierce, can you answer that question with a yes or no? A Okay, yes. Q You then go on to say "The projected surpluses do not represent a reserve contingency fund to cover unanticipated costs such as wage increases, but are required for debt and other liability reduction"? A That's correct. Q When you say "are required", they are only required if in fact the Government wants to reduce debt and reduce liabilities, isn't that the case? A Yes, they are required in order to satisfy the requirements of the Government fiscal strategy as reflected in the debt elimination [Act]. Q Can you answer that question, yes or no? A I thought I did. I said "yes" and gave the reason why. Q You will accept in paragraph 12 that the projected [surpluses] are getting bigger? A They are. The forward estimates are getting bigger. We don't refer to them as "projections". They are simply the numbers in the forward estimates and importantly those forward estimates are based on the premise of there being no policy changes in the future so we avoid having to make projections by saying: we cannot project what future policy changes will be. 458 On a similar note, Mr Pierce was cross-examined in relation to the government's budget strategy, particularly the strategy of debt reduction vis a vis the financing of any increase in teachers' salaries: Q Can I suggest that from paragraph 46 onwards you deal with the financing of any granting of the teachers salary claim, is that right? A That's correct. Q In essence you are saying that it has to be financed by accompanying expenditure, an increase in taxation, or a lesser surplus, or perhaps go into a deficit. The other factor that that includes is reducing repayments of debt, is that right? A It would actually - if it's - if expenditure and revenue is kept the same, the logical consequence is there is a deficit, which would then increase the debt. Q But also aren't you presently repaying debt as part of the budget strategy over the next twenty years, or whatever? A That's correct, although the level of debt as it currently stands - it's consistent with that and we are not particularly worried about it. We are more worried about other liabilities in the balance sheet, like the unfunded superannuation liabilities, which for financial management purposes have the same characteristics as debt. Q That debt is going down, isn't it? A Yes, that debt is going down. Q That's because you are devoting monies in the budget to repaying debt? A Yes, although the amounts that we are doing that is reducing and we are more concerned about building up financial assets. In the future we will be more concerned about building up financial assets and superannuation liability rather than repaying debt. Q Table 5 tells us how you have reduced net debt and proposed to reduce net debt in 2002 through to 2007? A That's right. Q There's a huge reduction in net debt? A Well, relatively to the levels that we had - both relevant to the level we have had in previous periods and the rate at which that's declining, I wouldn't describe those reductions as huge. As I say, they are actually small compared to what we've done in the past and that's because we are more concerned about super. Q One way the teachers salary claim could be met is by not paying back debt as quickly as is proposed in table five? A Yes, you could do that. The impact of course depends on the final quantum. The quantum we are talking about here means that its actually not feasible to finance that size of increase purely through debt. Q At that point, in your hypotheticals that you set out in your statement you have not dealt with the combination scenario where you use various of those methods - expenditure cuts, taxation, payments of net debt etc - you have concentrated on scenarios where you only use one of those methods? A Yes, because the combination - it isn't possible for me to say what the combination would be. That's a policy decision by government. But by pointing to the implications of three of the possibilities it's trying to say, "Here are the boundaries", as I think I've mentioned by way of examples as well. When we're faced with it, it will be some sort of combination of those. Q You say that at the end. None of the hypotheticals is realistic as a political option, is it? A No. 459 On 21 May 2004, we granted an application by the Intervenor to adduce further documentary evidence before us: Re Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (No 2) [2004] NSWIRComm 134. That evidence was as follows: (a) 2003-04 Half-Yearly Budget Review released by the Treasurer of New South Wales on 23 December 2003; (b) Media-Release from the Treasurer of NSW concerning the Commonwealth Grants Commission Report on State Revenue Sharing Relativities, 2004 Review, of 3 March 2004; (c) The NSW Mini-Budget Speech delivered to the Legislative Assembly by the Treasurer on 6 April 2004; and (d) Commonwealth of Australia 2004-2005 Budget announced on 11 May 2004. 460 The Federation did not seek to introduce any additional evidence in reply. Submissions 461 The Department submitted that "the granting of claims of anything like the magnitude claimed by the Federation would have a decisive impact on the Department's ability not only to provide effective teaching services but more particularly on their capacity to pursue targeted strategies designed to ensure a continued availability of teachers in areas of particular need". Further, it is in the public interest for the Department to be able to respond to those areas of need, and that ability would be compromised by significant wage increases. 462 The Department relied on the evidence given by Mr Dixon to demonstrate that: (a) each 1 per cent increase in teachers' salaries would generate an additional $55.5 million in cost to the Department's budget; and (b) if granted in full, the Federation's claim would involve an estimated cumulative in year cost of $4.53 billion by the end of 2005/2006. 463 The Department contended that Mr Dixon's evidence was based directly on Departmental payroll information, including costs relating only to employees caught by the Federation's claim, and was therefore more reliable than the evidence given by Dr Guthrie. 464 Separate submissions were made by the Intervenor in those proceedings regarding the effect of the Federation's claim on the New South Wales economy. The Intervenor submitted that the Commission should have regard to the cost of the Federation's claim and, in particular, the cost of any percentage increase above what has been allocated in the 2003/2004 State Budget in accordance with the government's public sector wages policy. The Intervenor relied on the decisions in Health and Community Employees Psychologists and Public Hospital Nurses (No 3) in support of its contention that the Commission must consider the impact of a wages claim on the State's finances pursuant to s146(2) of the Act. That impact, demonstrated in the evidence of Mr Pierce, includes a cost of $55.56 million for each 1 percent increase above the government's offer of 6 per cent; an increase in the unfunded superannuation liability of $1,005 million; the magnitude of the effects of an increase on recurrent expenditure (particularly relative to other areas of expenditure); and the magnitude of the steps necessary to fund a salary increase greater than that offered. These impacts must be weighed, according to the Intervenor, in light of the "legislated standards of fiscal responsibility which are mandated in the General Government Debt Elimination Act 1995". It was the Intervenor's submission that: There are only three places that the money to fund the salary rates increase can come from: increasing revenue (taxes); reducing expenditure elsewhere; or reducing the surplus or incurring debt. In any one (or mixture) of these measures the New South Wales public interest will necessarily be adversely affected. 465 The Intervenor further submitted that: (a) Granting the Federation's claim will force the Budget into deficit, and would result in growth rates in general government net debt averaging about 19 per cent per annum, in addition to the increase in unfunded superannuation liability. This in turn will "raise concerns amongst credit rating agencies"; (b) Teachers have received significant real pay increases since 1996/1997, including a 16 percent salary increase in the current award, being a total wage increase of 36.8 percent since July 1996, well above the Consumer Price Index increase of 17.1 per cent for the same period; (c) The government's wages policy seeks to maintain the real value of wages provided to public sector employees, and given the anticipated low rate of inflation, the budgeted increase of 3 per cent per annum in the 2003/2004 Budget is "more than adequate" to meet that objective; (d) There will be an automatic flow-on of costs for non-government schools by virtue of s21 of the Education Act 1990; (e) Whilst the government is forecasting budget surpluses for the 2003/2004 and 2004/2005 financial years, the revenue side of the Budget is highly volatile (particularly in relation to revenue streams such as transfer duty) and regard must be had to that volatility when increasing recurrent expenditure (such as salary increases); (f) Dr Guthrie's conclusions as to the reduction in spending on education are flawed and his evidence has little utility. For instance, contrary to the evidence of Dr Guthrie, there has been no reduction in the proportion of the State Budget allocated to education. Indeed, the evidence demonstrates that government expenditure on education has grown at a faster rate compared to growth in total government expenditure. 466 In support of its application to put additional documentary evidence before the Commission after the conclusion of the proceedings, the Intervenor submitted that the fiscal position of New South Wales has significantly changed, and that the State's budgetary position has been affected by the New South Wales 2003/2004 Half Yearly Budget Review, changes to Commonwealth government funding, the New South Wales Mini-Budget, and the Commonwealth 2004-05 Budget: Re Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (No 2). That submission constituted the submissions of the Intervenor as to the further evidence and its further submissions as to the current state of the New South Wales' economy. In that regard, the Intervenor submitted: (a) The Half Yearly Budget Review indicates, instead of a $303 million surplus as estimated in the 2004/2005 State Budget, the Treasury now forecasts a $275 million deficit for that period; (b) The Half Yearly Budget Review shows a significant increase in Employee Related Expenditure, demonstrating the impact of employee related expenses on the ultimate Budget result; (c) There have been changes in the funding relativities structure set by the Commonwealth Grants Commission, resulting in a reduction in the projected funding to New South Wales of $375.7 million; (d) In his Mini-Budget speech, the Treasurer revised the State's projected deficit for 2004/2005 up from $275 million to $300 million. "Substantial policy changes" were announced in order to deal with the reduction in Commonwealth funding, the increase in public sector wages and the need to provide extra funding for "frontline services". Those policy changes comprised a net increase in taxes (for instance vendor stamp duty and premium property stamp duty) and significant cuts in expenditure; (e) The 2004/2005 Commonwealth Budget indicates a decline in GST revenue to be provided to New South Wales, a decline in general revenue grants and a decline in Total General Purpose Payments from the Commonwealth to New South Wales. 467 The Federation submitted that there were compelling reasons why the Commission should approach the respondents' estimates of cost with caution, although the Federation made no direct submissions as to the cost of its application, save to say that "the estimates [given by the respondents] are an exaggeration and the actual costs will be significantly less than suggested by the Government witnesses". 468 It was the Federation's submission that: (a) Mr Pierce's evidence regarding the cost of the application was not based on an independent assessment of the data, but was based on the Department's figures; (b) The costings given by Mr Dixon were exaggerated by the inclusion of amounts for increased payments to private schools, increased global funding and extra payroll tax; (c) The respondents' reliance on the General Government Debt Elimination Act is misleading, as that Act "sets out a range of goals targets and reporting requirements, but in relation to its key tenets, is unenforceable". Further, that Act "explicitly recognises the possibility and legitimacy of departure from fiscal targets and goals otherwise described within the remainder of the Act"; (d) Dr Guthrie's evidence demonstrated: first, employee related expenses in the four key teaching programs within the Department have fallen compared to non-teaching focused areas; secondly, on a per student basis, employee related costs in the four teaching focused programs had arguably fallen on a real basis; and thirdly, relatively less of the total government resource pie appears to have been devoted to education; (e) Mr Pierce did not give evidence that there was any incapacity to pay; (f) The present state of the economy is good, as are forecasts for the future; (g) There is significant public interest in increasing teachers' salaries, to "recognise the peculiar and special value of teachers to the community at large in educating those who will shape the society of the future", to stem the flow of teachers from the public school system, and to attract and retain teachers. 469 The Federation further submitted that the respondents' costings did not take into account the costs and "opportunity losses" associated with a failure to increase teachers' salaries, for instance, the recruitment and training costs associated with replacing disgruntled teachers who leave the profession or move to the private school system. We note that the Federation further submitted that: In this case there is no prospect of automatic flow on to other public sector employees, except for that component of the salary increase offered or to be offered by the Government to all public sector employees to maintain real wages. That component is the six percent increase over two years to maintain real wages. 470 After the receipt of the further documentary evidence earlier referred to, the Federation submitted that the additional economic evidence adduced by the Intervenor has not changed the position expressed by the Commission in the Interim Decision that "... the New South Wales economy is in good shape at the present time and the outlook is favourable". It was the Federation's contention that the further evidence supports, rather than detracts from, the Federation's submissions. The Federation sought to update relevant parts of its original submissions with the following further submissions: (a) The question of the decrease in relative share of Commonwealth grants must be considered in context. That is, the New South Wales government was aware of the risks to the relativities; New South Wales will receive more revenue from GST from 2004-05 onwards; and the Commonwealth Grants Commission assessed the fiscal capability of New South Wales as relatively strong, and having a stronger capacity to raise revenue from land tax, transfer duty and payroll tax. Further, the Mini-Budget speech demonstrated that the government was able to take action to remedy a deterioration in the State's budgetary position and what was required was "thinking outside the square", contrary to the limited hypothetical examples given by Mr Pierce as to how to fund an increase in teachers' wages; (b) Mr Pierce did not give evidence of incapacity to pay and there was nothing presented in the additional evidence to suggest incapacity. The government funded the interim increase, and any suggested deterioration in the State's budgetary position arises, in part, from the government's failure to budget for realistic wage increases; (c) Contrary to Mr Pierce's evidence that any tax increase, by definition, harms somebody, the Treasurer (in the Mini-Budget speech) demonstrated how increased taxes can be beneficial to the economy in that, in this case, they can help dampen an overheated property market; (d) The additional evidence adduced by the Intervenor supported a finding that the present state of the New South Wales economy and forecasts for the future state of the economy are good. The Federation contended that, consistent with the evidence given by Mr Pierce: i. Although the State will start from a deficit position in 2004-05, it remains the case that projected budget surpluses are forecast to get bigger; ii. The Half Yearly Budget Review confirms improved Gross State Product and forecasts an increase by 3.5 per cent; iii. The Half Yearly Budget Review confirms low rates of unemployment and gives a revised forecast of only 5.5 per cent unemployment. Further, in the Mini-Budget speech the Treasurer stated that this is the lowest unemployment rate of all the States; iv. The Half Yearly Budget Review confirms an improvement in drought conditions, stating that agricultural output has partially rebounded and that recovery in farm output should provide a strong boost to rural incomes and business in the agricultural sector; v. The Half Yearly Budget Review confirms that the global economy is improving, with downside uncertainties in the global outlook dissipating since June 2003, and clear signs of global recovery becoming evident; vi. The Half Yearly Budget review confirms that State revenue is increasing, with taxation revenue expected to be $783 million above budget; and vii. The Half Yearly Budget review confirms that revenue from transfer duty has continued to grow and is, in fact, expected to increase by $654 million above the budget estimate and is 9 per cent higher than in 2002-03. (e) In addition, the Half Yearly Budget Review indicated that general government underlying debt is expected to be below the budget estimate, net financial liabilities are projected to decline further as a proportion of Gross State Product, New South Wales is expected to record a net financial asset position from 2004-05, consumer demand has strengthened and there is evidence to suggest that a change to the State's AAA credit rating is highly unlikely. Conclusions 471 In our decision of 21 May 2004 as to an application by the Intervenor to introduce new evidence in Re Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (No 2), we made the following observations which bear upon the public interest considerations we are required to take into account under s146 of the Act: [17] Whilst it was submitted that the State's financial situation has deteriorated in budgetary terms, having regard to the deficit, and that the reduction in the State's revenue will need to be addressed through appropriate policy responses, there was no suggestion that the state of the economy (which is the essential aspect that the Commission is to have regard to pursuant to s146 of the Act) had deteriorated to the extent it precluded any further salary increases for teachers. Counsel for the Intervenor made clear that the new material was not put forward on the basis of "incapacity to pay", as no such case was being put. [18] It has to be acknowledged that there would appear to be a deterioration in the budget and it may not be open to the Commission to simply ignore that development given our obligations under the Act. However, the projected budget decline may not be a basis, of itself, for denying fair and reasonable rates of pay to teachers as required by s10 of the Act (and it was not suggested that was the case by the Intervenor). Nor is the bald claim that the Government cannot afford additional wage increases for teachers. In order to bring public interest considerations into play it must be shown, in convincing fashion, that the economic consequences of any pay increases are, in light of the downward revisions in budget projections, against the public interest because of the economic impact of those increased rates of pay on the State of New South Wales. In presenting the additional material the Government has not provided any assistance to the Commission in this respect, other than in a most general way or by reference to a policy preference, and it is left to the Commission to make its own assessment against the background of what the Government accepts is a sound economy. [19] When seen in this light, whilst we are sympathetic to the submissions put by Mr Crawshaw regarding the potential for prejudice to the Federation by the admission of the additional material, we do not consider that any response the Federation might contemplate should, realistically, be substantial or wide ranging (although we expect that counsel for the Federation will provide us some assistance by way of submissions in reply to those relied on by the Intervenor). Nonetheless, having made these observations, we will afford the Federation a proper opportunity to call evidence and make submissions to the extent it considers necessary. We do not presently perceive any basis exists (given the manner in which the Intervenor sought leave to adduce the new material) for the Intervenor to have leave to put in evidence in reply or make further submissions. 472 In its recent decision in Re Safety Net Review - Wages May 2004 (PR002004, 5 May 2004), the Full Bench of the Australian Industrial Relations Commission expressed considerable confidence as to the state of the Australian economy and made the following observations: [104] In summary, it can be seen that the Australian economy is expected to continue to perform strongly throughout the 2003–04 financial year with gross domestic product forecast to increase by 3¾ per cent compared with the 3¼ per cent earlier budget estimate. Household consumption is forecast to grow at a slightly higher rate than in 2002–03 whilst total business investment is anticipated to grow at a slower rate than in the previous year, albeit at a healthy 7 per cent. Net exports are forecast to make a negative contribution to growth. The labour market is forecast to grow and unemployment to again fall. The CPI is expected to record a financial year average of 2¼ per cent increase, a reduction on the 3.1 per cent increase in the previous year. Earnings growth will be in line with last year's outcome. ... [107] Australia's immediate economic outlook is positive with support coming from both a strengthening domestic market and an improvement in the international economy which should obviate some earlier concerns that our growth rate may not be sustainable. There is every reason to believe that there will be further strength in the labour market with employment numbers on the increase and the favourably low levels of unemployment at least maintained. ... [113] Overall, there are grounds for optimism that the Australian economy will perform strongly in the immediate future. We do not foreshadow, on the material currently available, any major impediments to the realisation of the Treasury forecasts. Any downside risks should be counterbalanced by strong aggregate performance. ... [319] Since our last decision growth in non-farm GDP has remained strong. Farm GDP in the year to December 2003 grew by 21.1 per cent, reflecting the recovery in many areas of the rural economy from the drought conditions which had contributed to major declines in farm production over recent years. GDP overall increased by 3.5 per cent in the year to December 2003. During the last 12 months, private investment continued to grow strongly, with the exception of dwelling investment which is declining from the very high levels recorded in previous years. Imports continued to grow strongly and exports declined slightly. Inflation, as measured by the CPI, was 2.4 per cent in December 2003, down from 3 per cent in December 2002. Unemployment has crept steadily lower, standing at 5.6 per cent in December 2003. Employment, particularly full-time employment, showed encouraging growth. Productivity increased at satisfactory levels. GDP per hour worked in the market sector grew by 3.2 per cent during 2003. Profits remain at high levels. Despite differences between the parties concerning the proper method of measuring the profit share, no one suggested that the share of total factor incomes attributable to profits is a serious obstacle to a safety net adjustment. 473 These assessments as to the strength of the Australian economy appear to be supported by the economic forecasts provided in the Federal Budget released 11 May 2004 (Paper No 1, Statement 3 - Financial Outlook): The stronger world economy will provide a renewed source of growth for domestic economic activity in 2004-05, leaving Australia well-placed to build on the current economic expansion. Solid economic growth is forecast for 2004-05, with higher export growth largely offsetting lower growth in domestic demand (as measured by gross national expenditure). Employment growth is forecast to remain solid, holding the unemployment rate near 23-year lows, while inflation is forecast to fall to below the bottom of the 2 to 3 per cent target band reflecting moderate growth in labour costs and the higher exchange rate. Overview In 2003-04, economic growth in Australia is forecast to be 3¾ per cent, unchanged from the forecasts presented in the Mid-Year Economic and Fiscal Outlook 2003-04 . Gross national expenditure (GNE) is forecast to grow by 6 per cent for a second consecutive year, with household consumption being boosted by increasing wealth from higher house prices and investment growth driven by increasing construction activity in both the residential and non-residential sectors. Farm production is forecast to grow strongly in 2003-04, contributing ½ of a percentage point to gross domestic product (GDP) growth. Strong consumption growth helped the economy to ride out the challenges presented by the severe drought, a patchy world economy, Severe Acute Respiratory Syndrome (SARS) and continuing international security concerns, which saw net exports make a large detraction from GDP growth in 2003-04. In 2004-05, economic growth is forecast to be 3½ per cent, with growth in GNE easing to a more sustainable 3¾ per cent, partly offset by a smaller detraction from net exports. Employment is forecast to grow by 1¾ per cent in 2004-05, which should be sufficient to maintain the unemployment rate at around 5¾ per cent. Inflation is forecast to decline to around 1¾ per cent through the year to the June quarter 2005, influenced by low prices for imported consumables and moderate labour cost pressures. The current account deficit is expected to narrow to 5 per cent of GDP in 2004-05, primarily reflecting an improvement in Australia's terms of trade. Growth in all of the major components of GNE is forecast to slow in 2004-05. A decline in the construction of medium-density buildings is forecast to contribute to a contraction in dwelling investment activity. Construction of detached housing is also forecast to fall in 2004-05, while investment in alterations and additions is forecast to grow by less than in 2003-04. Growth in household consumption and business investment is forecast to ease towards trend rates in 2004-05, following very strong growth in recent years. Net exports are forecast to detract ½ of a percentage point from economic growth in 2004-05, as imports continue to grow a little more quickly than exports in response to the still solid levels of domestic spending. Nevertheless, and despite the appreciation of the currency over the past two years, 2004-05 should see a significant improvement in export growth compared with the previous two years. The stronger world economy will provide support for exports of non-rural commodities, manufactures and services. The large grain harvest in 2003-04 has contributed to a build up of farm stocks, which will provide continuing support to rural exports into 2004-05, although the prospect of continuing dry conditions in parts of rural Australia is a risk to the outlook for activity in aggregate. The recovery in the world economy has strengthened significantly since last year's Budget. World growth was strong in the second half of calendar 2003, supported by expansionary monetary and fiscal policy. The durability of the world economic recovery has been aided by the broadening of growth, with strong growth in the United States (US) and East Asia, a firming recovery in Japan and modest growth in Europe. World economic growth is expected to be brisk throughout 2004, resulting in above trend growth for the year as a whole. Monetary and fiscal policy will likely remain broadly expansionary across a wide group of economies. Despite higher oil and commodity prices, world inflationary pressures are generally low. 474 Whilst it was considered that some risk may have been posed to the Australian economy by movements in exchange rates, this threat is now expected to pass. 475 Overall, the evidence overwhelmingly indicates that the Australian economy is strong and may be expected to remain so until 2005. 476 The New South Wales economic performance was softer than the Australian economy during the periods 2001-02 and 2002-03, perhaps due to a more significant impact of the drought in this State (and perhaps also a relative fall in the New South Wales share of construction in Australia). This is not to say that some indicators in the New South Wales economy did not fare as well as the Australian economy over this period. For example, the decline in the unemployment rate was very similar. However, the New South Wales economy is expected to grow strongly over 2003-04, and may be expected to exhibit the same strengths (and weaknesses) as the Australian economy. 477 We also note the conclusions in the State Wage Case 2004 (at [63]) which was, in part, based on the submissions of the Minister for Industrial Relations and the Public Employment Office: The AIRC concluded that the Australian economy was strong and may be expected to remain so until 2005. The evidence led in these proceedings is consistent with that conclusion and showed that the New South Wales economy continues to broadly reflect the strengths and weaknesses of the national economy. Whilst some aspects of the economic performance of the New South Wales economy has been softer than the Australian economy during 2002-03 and 2003-04 (due, for example, to the more significant impact of the drought in this State) the New South Wales economy is expected to grow strongly in 2003-04. Overall, the economic performance of New South Wales is and is expected in the immediate future to remain strong, making the increase awarded by the AIRC, which it described as sizeable, also sustainable in New South Wales. In coming to this conclusion we have, of course, had regard to the submissions advanced by both the employers and the Minister and the detailed economic material upon which they relied. 478 This conclusion is unremarkable and we adopt it in these proceedings for the following reasons. 479 With the lifting of drought conditions and global growth, the New South Wales economy may be expected to perform similarly to the Australian economy, given that New South Wales accounts for about a third of the total Australian economy and employs about a third of the total Australian workforce. This is consistent with Mr Pierce's evidence, given in cross-examination, that "... you would expect New South Wales' growth rate to be effectively the same as the Australian average just [because] of our size and industry structure". 480 Thus, the Treasurer of New South Wales, the Honourable Michael Egan MLC, stated in the New South Wales Mini-Budget Speech given on 6 April 2004 (at 6): We're proud of the fact that we have the lowest unemployment rate of all the States. We're proud of the fact that we get more private investment than the other States. We're proud that New South Wales is the powerhouse of the Australian economy. 481 The strength of the New South Wales economy is also reflected in the 2003-04 Half-Yearly Budget Review issued by the Treasurer of New South Wales. There a positive overview of the New South Wales economy was given as follows: Uncertainties in the global economic outlook and correspondingly the domestic outlook have changed rapidly over the course of the last six months. At Budget-time, a reasonably optimistic outlook was forecast, though the balance of uncertainties in that outlook was seen as decidedly to the downside. At present, a slightly more optimistic outlook seems more assured, with uncertainties more evenly balanced. As an example of how quickly the balance of uncertainties in the outlook has changed, in June 2003 the Reserve Bank indicated that if adverse trends in the global outlook continued, a reduction in interest rates was likely. By year end, however, the Reserve Bank had not reduced, but rather raised interest rates in both November and December. In the 2003-2004 Budget, improving agricultural conditions and a firming in world growth were expected to offset a decline in dwelling construction and slower growth in other components of state demand. NSW gross state product was expected to increase by 3¼ percent, employment growth was projected to moderate to 1¼ percent with the unemployment rate falling to 5¾ percent. Since June, downside uncertainties in the global outlook have progressively dissipated and clear signs of the anticipated global recovery have become evident. Domestically, consumer confidence and spending have been buoyed by these improving global signs, low interest rates, rising house prices and declining unemployment. These more favourable than anticipated trends for the NSW economy are reflected in revisions to the forecasts for the current financial year. While near-term uncertainties in the outlook are more balanced, in the longer term there remain several key uncertainties that could affect the economy in 2004-05 and beyond. These include the sustainability of the recovery in the global economy, the path of adjustment in the dwelling construction sector and the future course of monetary policy. 482 Recent data produced in the State Wage Case proceedings by the Minister for Industrial Relations and the Public Employment Office (see State Wage Case 2004 at [55] - [60]) confirms the evidence given by Mr Pierce, and the concession made by Mr Prince of counsel on behalf of the Intervenor, that the economic fundamentals in New South Wales are sound. 483 Based on these estimates, we conclude that as with the Australian economy, the New South Wales economy will perform strongly for 2003-04 and 2004-05. 484 However, there has been a deterioration in New South Wales' fiscal position most substantially deriving from a reduction in Commonwealth funding. 485 It is predicted, based on the Half Yearly Budget Review and the Mini-Budget, that the budgetary position in New South Wales will be downwardly revised in 2004/2005 by $603 million from a projected budget surplus of $303 million to a projected deficit of $300 million. Similarly, budget surpluses were estimated to be reduced in 2005/2006 from $821 million to $94 million, and in 2006/2007 from $932 million to $106 million. No estimates have been made in respect of future years beyond 2004/2005 in the Mini-Budget. 486 Those estimates require some clarification. The general government budget result for 2003-04 is expected to be a surplus of $150 million. That surplus will be used to reduce the State's net financial liability in anticipation of the more difficult fiscal position in 2004-05 (particularly as the level of transfer duty falls and expenditure commitments grow). The Half Yearly Budget Review showed that the general government underlying net debt to have declined in each year from June 1999 to June 2004 (with the June 2004 debt being an estimate). Similarly, the net worth of the general government sector has increased from June 1999 to June 2004 (with the June 2004 figure being a projection). 487 Further, as to the present and future fiscal position of the State, it was reported by the Treasurer in the 2003-04 Half Yearly Budget Review that (at 2): General government net financial liabilities, which also include unfunded superannuation, are expected to rise slightly over the next four years, partly due to the projected deficit in 2004-05, but continue to decline as a proportion of Gross State Product. Based on the projected budget results, general government underlying net debt will be reduced to $1,516 million by 30 June 2007, a reduction of $1,722 million since June 2003. Net worth of the general government sector is projected to rise by June 2004 to more than $123 billion, a $2,079 million increase on the year before. The State's overall financial position remains strong as a result of budget surpluses in recent years. However, the growing costs of providing key services, including the payment of increased wages to teachers and nurses, along with the projected downturn in transfer duty, will place increasing pressure on State finances over the next few years. Should further fiscal shocks occur, corrective action may need to be taken to protect the State's longer term financial position. 488 We have received little assistance from the Intervenor as to the precise economic effects that may derive from the projected budget deficit in 2004-05. What can be said with certainty is that the grant of the full claim advanced by the Federation would represent a very substantial expenditure in State finances. 489 Neither the respondents nor the Intervenor sufficiently explained what was the precise economic impact of a partial grant of the Federation's claim over 6 per cent (particularly in the context of the new evidence brought before the Commission). 490 It may also be concluded with reasonable certainty that the projected deficit for 2004-05 is a structural deficit and may, therefore, offer the prospect for a negative economic outcome (which may, if there was such an outcome, have the potential to be exacerbated by the grant of a wage increase over 6 per cent). However, it is not at all clear on the evidence led by the Intervenor what will be the precise economic effect of any growth in the deficit (if such were, in fact, to occur after the grant of a wage increase for teachers). The actual effect of any deficit may depend on a number of factors which the Intervenor has not discussed in any great detail. For example, we have not been advised with any precision as to the potential implications of any wage increase (or potentially resulting change in a deficit outcome) for net debt or what role projected levels of employment may play in any such outcome. Nor has there been any discussion of possible expansionary effects of any deficit. We emphasise that in no sense has any party or the Intervenor, who represents in these proceedings the interests of the government, argued a case based on economic incapacity. 491 We note that the government reached agreements with the Federation in the 1996 Schools Award and the 2000 Award to increase salaries for school teachers by cumulative increases of 16.95 per cent (implemented between August 1996 and January 1999) and 16.98 per cent (implemented between April 2000 and January 2003). There was no suggestion at either time that any such increases resulted in any significantly adverse fiscal position (the Treasurer reporting in his Min-Budget Speech a previously favourable position including surpluses) or overall economic outcome. 492 Having regard to the terms of s146 of the Industrial Relations Act, we propose to have regard to the State's economic position in reaching our decision. In that respect, we propose to have regard to the soundness of the State's economic fundamentals and the expected deterioration of the State's budgetary position (particularly in the light of any increase in wages we may grant). 493 Whilst the economic analysis provided to us is, as we have noted, somewhat limited, we consider that, given the implications of any wage increase for teachers to the State budget, we should temper any adjustment in wages having regard to the projected fiscal position of the State. However, it must also be plainly stated that, in the absence of evidence showing poor economic prospects or an incapacity to meet the wage adjustments awarded by us (an argument which has not been advanced in this case) we are required to strike a proper balance between the legitimate expectations of the Federation and its members where they have demonstrated a compelling case in conformity with the wage fixing principles and economic factors which we must take into account pursuant to s146 of the Act. We emphasise that, whilst s10 of the Act gives the Commission a discretion as to whether to make an award, it mandates that in any award made the Commission set "fair and reasonable conditions of employment for employees": see Re Pastoral Industry (State) Award (2000) 104 IR 168 at [16] - [20]. 494 We note that one means we have adopted to adjust for economic factors is to stagger the operative dates of the increases in salaries and allowances awarded. 495 We have, therefore, consistent with the principles set down in Health and Community Employees Psychologists (State) Award, tempered the result in this matter, but with a view to ensuring that such modification does not do an injustice to teachers having regard to the success of their claim. Flow-On 496 The Intervenor expressed concern at the flow-on implications of any increases granted to teachers above the six per cent that has been budgeted. It was contended that any increase in teachers' salaries would influence the expectation of other public sector groups. 497 Before we turn to consider those arguments, we should mention two matters. First, an application in relation to wage increases for Catholic School teachers is proceeding before another Full Bench of the Commission but as we understand it there was an agreement between the parties from the outset of that case that, essentially, any increase awarded to public school teachers should be applied to teachers in Catholic Schools (based upon an agreed special case). Secondly, the Federation has filed applications for equivalent salary increases as this matter with respect to teachers employed by other government agencies (Matter Nos. IRC 455, 456, 458, 459, 460, 461, 462, 486 and 487 of 2004). Whilst some accommodation as to interim arrangements has been reached, the matters are otherwise reserved pending the outcome of these proceedings (except Matter No. IRC 460 of 2004 where a programme for hearing has been fixed). Those matters will plainly need to be assessed on their own particular merits having regard to the wage fixing principles. 498 If any expectations arise that increases to teachers will flow to other public sector employees we say this about those expectations: we consider that the prospect of any flow-on of the increases granted to teachers is most unlikely for three reasons: 1. Given the position of the government as to public sector wage increases, it is highly unlikely that the government would agree to any flow-on and we would be most surprised if it did because it would be inconsistent with the stance adopted in these proceedings; 2. The Commission would not countenance any increase in rates of pay based on a contested claim that was, in reality, a flow-on of increases granted to teachers; 3. The increase that we propose to award to teachers follows an exhaustive inquiry by the Commission under its special case and work value principles which has demonstrated the extraordinary degree of change that has impacted on the work of teachers since 1991. We have been most impressed by the capacity of teachers to cope with that change and it would do them a serious injustice to award any less of an increase than that which we propose. It may well be that the changes in work value that have been demonstrated in this case are unique. Certainly, no party or intervenor was able, in the context of their submissions as to flow-on or otherwise, to point to any comparable or near comparable area where such changes have occurred. In any event, any applicant for wage increases, in the absence of agreement, will face a rigorous examination of its claim by the Commission and no concession will be made for those that fail to meet the required tests. Quantum of Increase and Operative Dates 499 The parties have presented an extensive amount of evidence in support of their respective contentions and made extensive submissions in respect of many of those contentions, as discussed earlier in our judgment. We have expressed the view that changes in the value of work performed by teachers, in particular teachers in government schools, constitutes a significant net addition to the work requirements of teachers since the 1991 datum point. We have no doubt that the requirements of Principle 10, Work Value Changes, are well and truly met in this case and that even after averaging the difference in outcomes for government schools and TAFE, a substantial increase in salaries is warranted. We are also satisfied, as earlier stated, that the Federation has made out a special case, principally relating to improvements in productivity, efficiency and quality of teaching work brought about by the contribution and commitment of teachers to education services and the nature and extent of work value changes demonstrated. 500 We have had particular regard to the submissions of the respondents as to potential areas of double-counting, and we have considered closely the awards and agreements identified by the respondents as recognising changes in the value of work performed by teachers. Accordingly, in determining the increase to be awarded we have applied appropriate discounts where, in particular cases, offsetting and ameliorating factors have been found, the details of which are set out in our judgment. In accordance with our earlier observations, we have also averaged the increase in rates of pay. 501 Given the nature and extent of work value changes, and that a special case has been made out, and having regard to appropriate discounts, the public interest, and the impact of any salary adjustment on the New South Wales economy, we consider that rates of pay for employees in classifications covered by the 2000 Award who are entitled to be paid and progress by way of annual increments on the Common Incremental Salary Scale (that is, teachers; education officers (schools and TAFE); home school liaison officers; Aboriginal student liaison officers; counsellors (schools and TAFE); adult literacy officers; and assistant outreach coordinators), shall be increased by 6.5 per cent, in addition to the interim increase of 5.5 per cent awarded in the Interim Decision. 502 As to allowances, we consider that: (a) all allowances specified in sub-clauses 4.2 to 4.9 inclusive of the 2000 award shall be increased by the same percentage increase that we have awarded with respect to salary rates, including the percentage increase awarded in the Interim Decision; (b) the Year Adviser allowance shall be extended to all Year Advisers, regardless of student enrolment numbers; and (c) there is no basis for granting a School Counsellor allowance. 503 We propose granting the amendments sought by the Federation to clause 16, Leave Reserved, and sub-clauses 13.1 and 13.1.1, No Extra Claims. 504 The Full Bench awards in terms of the matters determined in this decision which variations shall be incorporated in a new award. 505 As to the operative dates of the increases and adjustments we have awarded, we consider that: (a) As to salaries, the further 6.5 per cent increase in salary rates shall be applied as follows: (i) An increase in salaries by 3 per cent from the beginning of the first pay period to commence on or after 1 July 2004; and (ii) A further increase in salaries by 3.5 per cent from the beginning of the first pay period to commence on or after 1 January 2005. (b) As to the payment of allowances: (i) The modifications to the definition of Year Adviser shall operate from the beginning of the first pay period to commence on or after 1 July 2004; (ii) A 5.5 per cent increase shall apply to relevant allowances payable (including the Year Adviser allowance) under the 2000 Award from the beginning of the first pay period to commence on or after 1 January 2004; (iii) An additional 3 per cent increase shall apply to relevant allowances payable under the 2000 Award from the beginning of the first pay period to commence on or after 1 July 2004. (iv) An additional 3.5 per cent increase shall apply to relevant allowances payable under the 2000 Award from the beginning of the first pay period to commence on or after 1 January 2005. 506 The Award shall operate from 1 January 2004 for a period of 2 years, the nominal term expiring on 31 December 2005. 507 We note that the Award contains terms and conditions which satisfy the requirements of Chapter 1, Part 1, Division 1 of the Act, and the Award shall be treated as a reviewed award for the purposes of s19 of the Act. Directions 508 We make the following directions: (a) Within 14 days from the date of this decision, the Federation shall serve on the respondents a draft award reflecting our decision in this matter; (b) Within 14 days of being served with the draft award, the respondents shall specify, by serving upon the applicant appropriate documentation, whether they accept the proposed form of the award; and (c) Within 7 days thereafter, the Federation shall file and serve a draft award, indicating if it is filed by consent or whether there is disagreement; with, in the latter case specifics of the areas of disagreement. 509 If the award is filed by consent, it shall be dealt with administratively in Chambers. If there is a dispute as to the terms of the award, the matter shall be listed before Walton J, Vice-President, for resolution. 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