Industrial Relations Commission of New South Wales CITATION : Employers First and the NSW/ACT Independent Education Union and Another [2002] NSWIRComm 113 APPELLANT Employers First PARTIES : FIRST RESPONDENT NSW/ACT Independent Education Union SECOND RESPONDENT Association of Child Care Centres of NSW FILE NUMBER: IRC 175 of 2002 CORAM: Wright J President; Walton J Vice-President; Macdonald C Award - Appeal - Wage fixation - Application for leave to appeal - Primary decision granted substantial increases to teachers in early childhood education - History of wage fixation - Special case - Principle 10 of State Wage Case principles - Nature of criticisms made by primary judge of employers' approach - Apparent criticisms explained - Trial judge's conclusions open - No basis for "leap-frogging" - Leave to appeal refused. CATCHWORDS : Appeal - Award - Wage fixation - Application for leave to appeal - Primary decision granted substantial increases to teachers in early childhood education - History of wage fixation - Special case - Principle 10 of State Wage Case principles - Nature of criticisms made by primary judge of employers' approach - Apparent criticisms explained - Trial judge's conclusions open - No basis for "leap-frogging" - Leave to appeal refused. LEGISLATION CITED : CASES CITED : State Wage Case 2001 (2001) 104 IR 438 Teachers (Non-Government Pre Schools) (State) Award [2001] NSWIRComm 335 HEARING DATES: 05/09/2002; 05/14/2002 EXTEMPORE JUDGMENT DATE : 05/14/2002 APPELLANT Mr P M Kite SC and Mr P J Newall of counsel Mr T McDonald and Ms T Marshall (Employers First) FIRST RESPONDENT Mr S C Rothman SC LEGAL REPRESENTATIVES: Ms C Mathews (NSW Independent Education Union) SECOND RESPONDENT Ms B Kenneally, Solicitor Kenneally & Co Lawyers JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: Wright J, President Walton J, Vice-President Macdonald C Tuesday 14 May 2002 Matter No IRC 175 of 2002 EMPLOYERS FIRST AND THE NSW/ACT INDEPENDENT EDUCATION UNION AND ANOTHER Application for leave to appeal and appeal against a decision of Schmidt J given on 14 December 2001 in Matter Nos IRC 2261 and 2262 of 2000 DECISION OF THE COMMISSION (Extempore) [2002] NSWIRComm 113 1 The present proceedings involve an application for leave to appeal and, subject to leave being granted, an appeal against the decision of her Honour Justice Schmidt given on 14 December 2001 in award proceedings which involved a consideration of a special case application which was dealt with by her Honour pursuant to the proviso in principle 10 of the State Wage Case principles: see, for example, State Wage Case 2001 (2001) 104 IR 438 at 480. Her Honour's decision is entitled Teachers (Non-Government Pre Schools) (State) Award [2001] NSWIRComm 335. 2 Mr Kite SC and Mr Newall of counsel appeared for the appellant, Mr Rothman SC appeared for the respondent union, the New South Wales/ACT Independent Education Union, and Ms Kenneally, solicitor, appeared for the respondent Association of Child Care Centres New South Wales. 3 Counsel for the appellant were permitted to make their submissions as to both the application for leave and appeal proper notwithstanding an application by the respondent union that the leave issue be dealt with as a discrete and preliminary issue. The appellant's submissions were adopted and supported by the respondent employer organisation. 4 Nevertheless, as the submissions for each of the parties developed, it became clear that the key issue raised for determination by the appellant was that identified in its notice of appeal by the first three grounds of appeal and by its third prayer for relief which were in the following terms. H. Grounds of the appeal are: 1. Her Honour erred in her findings as to the terms of the agreements between the parties to the awards. 2. Her Honour erred in proceeding on the basis that a there was an agreement between the parties that teachers covered by the awards subject to the proceedings should be paid similar salaries as teachers covered by other awards in government and non-government schools. 3. By determining the value of changes in work in part based on an erroneous view of agreements reached in the past, her Honour fell into error. … I. Relief Claimed: … 3. That so much of the decision in which her Honour expresses the view that early childhood teachers should be paid the same as teachers in other awards, particularly paragraphs 6, 7, 8, 11, 13, 17, 18, 362, 363, and 395, be set aside. 5 The way in which these matters were argued and, in particular, how the rates awarded by her Honour were attacked as being tainted by the allegedly impermissible reference to, or use of, the agreement said to have been found by her Honour, are exemplified by the appellant's submission in this way: 43. Her Honour made an express finding of fact that employer parties to the Award had maintained, between 1970 and 1990, an agreed position that there should be parity between wages paid under the Award under appeal and those paid to teachers in schools; with a further agreement operating from 1990 that teachers in long day care centres should be paid wages 4 per cent higher than teachers under the award under appeal. 44. Her Honour made that finding of fact at paras. 6, 9 and 18 and again at paras.352, 362 and 395 of that decision. (AB Vol 1 pp 10, 11 and 15; pp 123, 126, 138) 45. Her Honour also observes that the present claim, "properly understood", seeks to restore the position agreed by the parties in 1990 (AB Vol 1 p 12 para.11). That is, that the rates to be paid to teachers under the award under appeal should match those paid to teachers in schools, with those paid in long day-care centres remaining 4% above those rates (AB Vol 1 p 138, para 395) 46. There was not an agreement of the kind found to exist by her Honour, and accordingly the present claim was not and could not have been to restore such an agreed position. 47. That finding had a substantial effect upon the decision under appeal and the rates struck in the award made. That is because her Honour was influenced in determining the rates in the award by an understanding that in doing so she was, at least in part, restoring a position which had been wrongly abandoned by the employer parties. … 50. That finding of fact was wrong. Her Honour's perception that the employers were ignorant of their own agreements and, further, that they had acted without regard to their own agreements, was also necessarily wrong. Her Honour formed a view, which influenced the award ultimately made, that there had bee agreements between employers and unions in the relevant industry as to parity in rates of pay between the subject Award and other awards. 51. Contrary to her Honour's finding of fact, there were no agreements of that kind. … 60. The Appellant has submitted that her Honour's assessment was clearly influenced by her finding as to the agreement. The extent of that influence is, like the assessment itself, necessarily subjective. It is clear, for example, that her Honour was satisfied that there were substantial increases in work value and an element of productivity improvement. These matters are not challenged on appeal. 61. Given that work value appears to justify the substantial portion of her Honour's assessment and some allowance needs to be made for general productivity elements, the Appellant does not seek to set aside the whole or even the majority of her Honor's award. 62. It does appear, however, that the impact of the alleged agreement was not insubstantial. In those circumstances the Appellant submits that the orders sought in the Notice of Appeal, particularly Order 2, should be made. 63. But there is an additional impact. The Appellant is an employer organisation of long standing. It represents employers in a wide range of industries and its relationship with other industrial organisations and the Commission are significant in terms of the day to day conduct of industrial relations in this State. Its reputation in connection with industrial agreements, whether registered or not, is important not only to it but to the administration of industrial relations more generally. 64. It is undesirable to permit the Appellants' reputation to be harmed by reason of an error of fact recorded in a judgment of the Commission. The error should be corrected and the record adjusted accordingly by the making of Order 3 sought in the Notice of Appeal. (emphasis supplied) 6 Paragraph [18] of her Honour's detailed decision, which is to be found at page seven of the decision, illustrates the appellant's concerns in these respects: [18] Given that a not unimportant aspect of the case advanced by the employers was the inappropriateness of the comparison which the Union sought to draw between the work of teachers employed in schools, especially in the early years of children's schooling, and that of teachers employed in preschools and long day care centres, an apparent ignorance of the relevant history on the part of these employers, was rather troubling . The explanation for that cannot have been, As Mrs Bardetta suggested, the ACCC's former representation. Like the EF's predecessor, the Employers' Federation, which then represented it, the ACCC was a party to the 1990 agreement at a time when Mrs Bardetta was member of the executive. It appears that the employers have failed to have regard to their own past agreements . For many years it was agreed that the work here in question should be rewarded at least on the same basis as teachers in schools, higher since 1990 for long day care teachers. Rather than never having been the case, it seems to have been an agreed position which persisted from 1970 and was in reality only abandoned in 1999. (emphasis supplied) 7 However, it is also appropriate to have regard to other parts of her Honour's decision to see that extract in context; for example: [362] These decisions, it might be noted, are not irrelevant to the teachers who here arise for consideration, forming an undoubted part of the background to the hitherto agreed history of wage fixing, which long included the recognition that these teachers should be paid rates similar to those paid to teachers employed in schools, commencing with the first agreement in 1970. I say, similar and not identical because there has never been a history of automatic adjustment of rates in these awards, by reference to rates paid in schools. Rather, the award parties have looked to those rates over the years, when the rates fixed by the predecessors to these awards have arisen for review from time to time . Indeed, there was reference to this in the submissions advanced before Bauer J in 1990. [363] I here make these observations because the employers' attitudes and the cases they pursued before the Commission appeared to have been advanced without any regard being paid to this history, nor even to the basis upon which in the past the Commission had accepted changes in the value of the work of teachers had been established. (emphasis supplied) 8 We have determined that leave to appeal should be refused in this matter. We consider that the appellant has not demonstrated that there was an error of principle at first instance. It was open to her Honour to make the award under the Special Case principle of the wage fixing principles having regard to the fact that no substantial issue was taken on the appeal otherwise as to her Honour's findings as to changes in work value or the undervaluation of work. There was no requirement for her Honour, and no warrant in this appeal, to dissect the components of the wage adjustment granted by reference to the operation of wage fixing principles other than the Special Case principle. 9 We do not accept the submission of the appellant that her Honour found either that an agreement had been made to maintain comparable rates between the subject awards and rates of pay for teachers after 1990 or that the appellant had breached any such agreement. 10 Her Honour's conclusion was that in 1990 the rates were fixed by agreement by reference to teachers' salary rates and, although perhaps slightly unclear in certain parts, when considered as a whole, not that there would be maintained a particular relationship with teachers' rates thereafter. Her Honour's conclusions were entirely open on the evidence. The criticisms made by her Honour were restricted essentially to the evidence of certain witnesses because they failed to adequately recognise that the subject awards historically had been made by reference to teachers' salaries and, although there was no nexus with teachers' rates, that there had been a history of agreed variations to salaries which had occurred in light of salaries or salary increases for teachers. 11 When her Honour's decision is seen in this way, it cannot be said that the apparent criticisms made by her Honour are of the dimensions which are of concern to the appellant. In particular, it cannot be said her Honour's observations, properly understood, give rise to the apprehension expressed in paragraphs 63 and 64 of its submission set out earlier. 12 Finally, we note that the rates which were awarded by her Honour constitute no basis for "leap frogging", or for the grant of increases or claims therefor, in any other award or for any other group of employees. So much was appropriately conceded by the respondent union. In any event, this conclusion follows from the way in which the rates in the award made by her Honour have been fixed as they derive from a finding that there existed a special case under the wage fixing principles consisting of various elements including undervaluation of work and substantial work value changes. 13 The Full Bench accordingly orders: 1. Leave to appeal refused; 2. Appeal dismissed. 14 These proceedings are now concluded. We thank counsel for their most helpful submissions. ____________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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