Industrial Relations Commission of New South Wales CITATION : Notification under section 130 by the Department of Juvenile Justice of a dispute with the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales and another re closure of Worimi Juvenile Justice Centre [2000] NSWIRComm 257 APPLICANT: Department of Juvenile Justice PARTIES : RESPONDENT: Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales FILE NUMBER: 1524 of 2000 CORAM: Schmidt J Industrial Action - closure of a Juvenile Justice Centre CATCHWORDS : Award - special case - displaced staff - supernumerary placement - travel allowance claim - New Allowance Principle - claim dismissed LEGISLATION CITED : Industrial Relations Act 1996 State Wage Case 2000 (NSW) (2000) 97 IR 93 CASES CITED : Occupational Health Nurses' Superannuation (State) Award (unreported, Bauer J, Schmidt J and French C, 6 November 1996 Re Crown Employees (Scientific Section, Fisheries Division, Department of Agriculture - Relocation Compensation) Award (1986) 16 IR 458 and (1987) 21 IR 100) HEARING DATES: 11/07/2000; 11/08/2000 DATE OF JUDGMENT: 12/12/2000 APPLICANT: Ms T Anderson of Counsel LEGAL REPRESENTATIVES: RESPONDENT: Mr A Hatcher of counsel JUDGMENT: - 19 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Schmidt J DATE: 12 December 2000 MATTER NUMBER IRC 1524 OF 2000 Notification under section 130 by the Department of Juvenile Justice of a dispute with the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales and another re closure of Worimi Juvenile Justice Centre DECISION 1 This decision concerns a claim for the making of an award which arose out of a dispute notified to the Commission by the Department of Juvenile Justice in April 2000. The dispute concerned industrial action being taken by employees of the Department on a statewide basis in response to an announcement by the Minister about the closure of the Worimi Juvenile Justice Centre at Broadmeadow. 2 The award claim was filed later when negotiations between the parties failed to resolve some aspects of the dispute, as it had developed. As finally pressed at the hearing, the award sought to deal with only two outstanding claims. They concerned clauses 5 and 6 of the proposed award, which provided: 5. DISPLACED STAFF - SUPERNUMERARY PLACEMENT An employee displaced from Worimi Juvenile Justice Centre shall be redeployed to a work location of his/her choice within the Department's operation. Where a substantive position is not available an employee will be held at the chosen location as a supernumerary employee until a substantive position becomes available. 6. DISPLACEMENT COMPENSATION (a) Employees displaced from the Worimi Juvenile Justice Centre to the Frank Baxter Juvenile Justice Centre or Kariong Juvenile Justice Centre shall be paid an allowance equivalent in net terms to 1½ hours salary at the employees' ordinary rate of pay per day. (b) The rate of payment to apply shall be that specified in (Public Sector Salary January 2000) Award and subsequent variations. (c) This allowance will be offset by any amounts paid to employees by the Department as travel assistance during the three months following the closure of Worimi Juvenile Justice Centre. 3 The parties advanced submissions in relation to other aspects of the proposed award, which it is unnecessary to deal with here. 4 Evidence was called by the Union from Michael Sinclair, former Senior Youth Worker, Worimi Juvenile Justice Centre; Bruce Cook, Senior Youth Worker, Kariong Juvenile Justice Centre; Eti Filipo, Senior Youth Worker, Kariong Juvenile Justice Centre; Andrew Jennings, Assistant Team Leader at Frank Baxter Juvenile Justice Centre, and Dorothy Molyneux, Industrial Officer in the Health and Safety Welfare Services Team of the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales ('the Union'). 5 The Department called no witnesses and tendered only one document in its case, concerning the cost of housing in some areas of the Central Coast. 6 After judgment was reserved, the parties continued their discussions, with the result that on 6 December they announced that a settlement had been reached in relation to the particular circumstances of Mr Jennings. The result of that agreement was that the Union no longer pressed clause 5 of its award claim. Accordingly, this judgment deals only with the claim advanced in relation to clause 6. 7 The evidence was that the Worimi centre closed in July 2000. Some of the employees who had been employed there by the Department took voluntary redundancy. Some employees had taken permanent appointment at other of the Department's workplaces, including the Kariong and Frank Baxter Juvenile Justice centres at Gosford; two had been transferred to other workplaces on a supernumerary basis and some eight permanent employees had been relocated to either the Kariong or Frank Baxter Juvenile Justice centres, but remained on the Public Sector Work Management list. 8 These employees who are on the Work Management list are seeking permanent work in the public sector in Newcastle. Under the applicable public sector policy, as displaced employees they have priority for appointment to suitable positions which become vacant in Newcastle. While in the past there was a limitation of six months during which displaced employees could remain on this list, that limitation no longer operates. It follows that these employees may remain on the list until they are appointed to a permanent position. 9 There were also a number of casual employees and temporary employees who had obtained work at either the Kariong or Frank Baxter centres. They were also covered by the claim which applied to twenty-one employees in all. 10 All of those affected by the claim who are presently working at Kariong or Frank Baxter, live further away from those centres than Worimi, apart from one employee who lives at the Central Coast, some 90 kilometres closer to Kariong than to Worimi. That employee has taken a permanent position at Kariong. Nevertheless, this employee is still covered by the claim, which seeks the payment of an ongoing allowance of 1½ hours extra pay per day for each employee affected by the closure of Worimi, whileever they continue to work at Kariong or Frank Baxter. 11 Ms Molyneux explained in her evidence that the claim had been formulated having regard to the allowance for excess travel time presently provided in clause 12 (ii) Allowances of the Crown Employees (Public Service Conditions of Employment 1997) Award ('the Conditions award'). It was common ground that these employees had no entitlement to any payment under this provision. It expressly excludes the time normally taken by employees to travel from home to headquarters. 12 The claim as to clause 6 of the proposed award was advanced pursuant to s10 of the Industrial Relations Act 1996 ('the Act') and the Commission's New Allowance Principle (State Wage Case 2000 (NSW) (2000) 97 IR 93 at 118). That principle provides: (d) New allowances to compensate for the reimbursement of expenses incurred may be awarded where appropriate having regard to such expenses. 13 The matter was allocated to me for hearing by the President as a special case. The special case principle provides: 10 Special Case 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. 14 The obligation falling upon an applicant in a special case is that the ordinary requirement that a case must be made out on the evidence and matters of cost of the claim and the public interest also arise for consideration. (See Occupational Health Nurses' Superannuation (State) Award (unreported; Bauer J, Schmidt J and French C; 6 November 1996), Teachers (Non-Government) (Schools) (State) Award and other Awards (unreported; Fisher P, Sweeney J, Varnum DP; 17 August 1990). 15 Mr A Hatcher of counsel appearing for the Union described the Union's claim at the outset as primarily being directed to reimbursement of expenses associated with travelling with an attached element of compensation for conditions associated with changed working circumstances. Reliance was placed on the approach adopted by Bauer J in Re Crown Employees (Scientific Section, Fisheries Division, Department of Agriculture - Relocation Compensation) Award (1986) 16 IR 458 and (1987) 21 IR 100). The decision was relied on for the proposition that travel expenses of the type here claimed were capable of falling within the compass of the Allowance Principle. 16 It was submitted that the Commission had jurisdiction to allow the claim in whole or in part or to refuse it, depending on how the merits were viewed. The normal rule was that where an employee regularly travels to a place of work, the fares and travel time are the employee's, not the employer's expense. There were a number of special circumstances recognised in the cases, where costs of fares to and from work were met by employers, such as in the case of broken shifts or in the building industry, where there was no regular place of employment. While it was submitted that these authorities were not strictly binding, they would be persuasive. 17 In this case, exceptional circumstances had been demonstrated on the evidence, bringing the employees outside the normal rule, so as to merit the claim being granted. These included the closure of the Worimi workplace, which was close to where the employees lived and where their personal circumstances were structured and adapted to the proximity of their place of work. They had received short notice of the closure of Worimi of some three months and the affected employees were required to work on the Central Coast after the closure. There was no suggestion that they had received any prior notice of the closure, so as to put them on notice of this possibility when taking up employment at Worimi. 18 These employees had not chosen their present work location and as a result were incurring considerable additional travelling time and expense. A distance of 100km each way was involved, which was at the edge of what was reasonable for any transfer. While the Department had the right to transfer the employees, it was submitted that there must be a point at which the transfer became unreasonable by virtue of sheer distance, without some special consideration being given to the employees affected. 19 It was relevant to the claim that for practical purposes public transport was not a viable mode of transportation for the affected employees. On the evidence the only option they had was to travel by car at considerable expense. 20 It was also submitted that relocating residences was not a practical option for the employees concerned, given the evidence of real estate costs. Furthermore, only four employees had been allocated to permanent positions at Kariong or Frank Baxter. The others were there only temporarily, so removal had not become a real option for them. They were not in a position where they could make any decision as to that matter. This also applied to the supernumerary, casual and temporary employees. 21 As to housing costs, the evidence demonstrated significant differences in median housing costs between Newcastle and Gosford. The evidence also demonstrated that the option of moving between Newcastle and the Central Coast was not a real one for some employees, given their family circumstances. While it might be true in the long run that if a more expensive house was purchased, a more valuable asset was obtained, it was submitted that this required an employee to be able to afford the cost in the first place. 22 It was also relevant that the Department had itself already acknowledged the fact that the claim had a proper basis because it had provided travel assistance to the employees for some three months, but at public transport rates. While the evidence demonstrated this to have been inadequate, because public transport was not a viable option, the payment should not have ceased after three months. 23 It was also obvious, it was submitted, from the claim and the Department's response to it, that the cost of meeting the claim was not a significant one. 24 Ms T Anderson of counsel appearing for the Department submitted that the Union was not entitled to rely on the evidence of the travel compensation payments made to the employees in question by the defendant for three months after their transfer to workplaces at the Central Coast. The dispute was notified to the Commission in April. Some seven months had elapsed since then, allowing the employees ample time to decide what they wished to do. They were entitled to decide to continue residing in Newcastle, while working on the Central Coast for family reasons, but that was their decision, not their employers. The payment made by the Department during the employees' first three months at their new workplaces in an endeavour to settle this aspect of the dispute, could not be seized upon in the arbitration as a foundation for the claim now advanced. 25 The employees had the ability under the Crown Employees (Transferred Officers Compensation) Award ('the Transferred Officers award') to change their minds and to relocate their place of residence, in which case they would be entitled to receive the compensation which Bauer J had determined in the Fisheries case should be made available to the employees there under consideration. The employees here were also entitled to compensation in respect of excess rent under the applicable policy, if they relocated. Like the approach of Bauer J however, there was here no basis on which the travel claim could be granted. 26 Of those permanent employees who had not obtained permanent positions at Kariong or Frank Baxter, that was as the result of their own choices. Permanent positions were there available for each of them. It was their decision to seek priority appointment to other positions in the public sector in Newcastle and thus to remain on the Workplace Management list. It was as the result of that decision, not that of the Department, that the employees had any doubt as to where they might have ongoing permanent positions. 27 The Union's claim also ignored the basis upon which a 2% salary increase for public servants had been funded in 1998. That agreement provided: · Effective service delivery requires that work be located in areas to meet community demands. · The employer can require an employee to relocate to available work, should work cease to be available at their current work location. · The job at the new location may be similar to the work previously performed or different to that previously performed by the employee at their existing salary. In any case, the employee should possess the qualifications required for the other job and the work assigned to the other job is appropriate to that salary. · Where the work is different the employee will receive necessary support, including staff development to perform the role. The employee will be assisted through the provisions of the Crown Employees (Transferred Officers Compensation) Award such as removal expenses and conveyancing costs incurred in relocating outside of the Metropolitan area. To facilitate the move by an employee, organisations should consider the need for a reasonable time off work to arrange accommodation, school transfers for children and other matters. The emphasis is on assisting employees take up the job. 28 It was submitted that this agreement would become of no effect if these employees were to be granted the travel allowance claimed. The travel claim paid no regard to the evidence as to those employees who incurred less costs than those claimed - namely, the one employee whose place of residence on the Central Coast actually reduced his travel time and costs and those employees who car pooled, thereby reducing their costs. In any event, such a claim had been rejected by Bauer J in the Fisheries case, consistent with the Allowance Principle. It also paid no regard to the employees who had achieved salary improvements as the result of the relocation. As to the evidence that less shift penalties or overtime were earned by some employees, it could not be overlooked that they were penalty payments for disabilities, which the employees were not suffering and hence were not receiving payment for. 29 It was further submitted that the inevitable result of granting the claim for expenses traditionally those of an employee, was to create a precedent which others would seek to rely on, including in the private sector, in case of relocation. 30 As to the claimed cost of relocation having regard to real estate costs, the evidence demonstrated that the cost of housing was a non-issue. There was insufficient evidence on which a proper view of respective housing costs could be formed. On the evidence it was not housing costs, in any event, but family circumstances, which were precluding some employees from relocating. It was submitted that it was the case for any employee relocating from the city to the country or vice versa, that profits or losses on the cost of their accommodation would have to be faced, depending on their circumstances. In the case of loss, the additional costs were dealt with in the Transferred Officers award. 31 The further difficulty with the claim, it was submitted, was the resentment it might cause other employees who have to travel similar distances to these workplaces, but who are not entitled to any compensation. The position of one employee who had earlier travelled from Newcastle while employed at Kariong as a casual demonstrated this, as did the position of the employee who lived at the Central Coast and was now better off, as the result of the relocation, and who had consequently accepted a permanent appointment there. 32 As to the cost of the claim, the position was that it would be met if the award were made. Nevertheless, the cost would not be insubstantial -something in the order of $120,000 per year, money which would not be available for some other purpose, in circumstances where the award conflicted with the principles and an agreement between the parties which had funded a wage increase. This would not be overlooked. Consideration 33 There are a number of difficulties with the case advanced by the Union. The first is that the claim is advanced in circumstances where a 2% wage increase across the public sector was agreed in 1998 in return for an acceptance of the Department's right to relocate employees. The existence of this agreement cannot be ignored and provides an obvious impediment to the claim advanced. 34 The ordinary rule is that employees are not entitled to be reimbursed the costs of travel to and from work. There are exceptions to this general approach which have been recognised, for example where an employee does not have a regular place of work and therefore has no opportunity to reside within a reasonable distance of the workplace, or where an employer requires an employee to relocate on some temporary basis in order to suit the employer's convenience. (See the discussion in Mills Industrial Laws New South Wales, 4th Edition at paragraph 306). 35 While it was submitted for the Union that the particular circumstances of this case were such that an exception to the general rule should be made, for a variety of reasons, that submission must be rejected. 36 The New Allowance Principle on which reliance was placed provides for new allowances to be introduced into awards to reimburse expenses which employees incur, 'where appropriate'. That principle does not involve any departure from the ordinary rule that travel to and from work is an expense to be met by employees, not employers. 37 Furthermore, despite the reimbursement of expenses which the principle envisages, the proposed clause was structured on the basis that all employees would be remunerated for an extra 1½ hours per day, whileever they worked at Kariong or Frank Baxter. The clause so structured is plainly inconsistent with the principle. The explanation that it was modelled to reflect the excess travel time provision of the Conditions award, is not one which brings the clause into conformity with the principle. The Conditions award, of course, provides compensation for employees who are required to spend additional time in travel, at their employer's direction. This accords with Principles 5(d) and 6(c), which contemplate the payment of an allowance for changed work or conditions justifying a higher rate which affects only some employees or arises only from time to time. Such an allowance is payable when the employee is affected by such work or conditions. 38 While the New Allowance Principle on which primary reliance was placed, envisages reimbursement of expenses, the effect of the proposed clause is that the classification of senior youth workers would be paid one rate, assistant team leaders and team leaders other considerably higher rates and casual employees at the applicable casual rate for their classification. Those rates pay no regard to the costs actually incurred by particular employees in driving to and from their work at Gosford and are set irrespective of the time, in fact, taken. Again, this demonstrates the failure of the claim to reflect the requirements of the principles. 39 I accept that the evidence demonstrated that travel by public transport was impracticable for employees working at the centres at Gosford, who lived in Newcastle, given the timetable for trains and buses and the distance of the two centres from the station. It followed that employees had to bear the expense of driving to work, in many cases an extra 100 kilometres per day each way. In some cases, a second car had to be purchased and in others there were consequences for existing family arrangements. The evidence demonstrated that the weekly cost of petrol for such travel roughly approximated the rate of pay for a senior youth worker for 1½ hours per day. 40 The claim, however, paid no regard to other factors. The rate for casual employees, team leaders and assistant team leaders exceeded this amount. Some employees car pooled, thereby reducing their travel costs and one employee had had his travel costs and one infers travel time, considerably reduced because he had to travel 90 kilometres less a day, each way, than when working at Worimi. 41 The clause also envisaged that these payments would be ongoing whileever the employees worked at Gosford, even though under the applicable Transferred Officers award, if they chose to relocate their homes closer to Gosford, they would be entitled to compensation as to removal costs, conveyancing and stamp duty costs or excess rents. In those circumstances, their travel costs and travel time would of course be reduced. This entitlement exists for 4 years from the date of any appointment to Gosford in the case of a new home being purchased and is an ongoing entitlement in relation to rental accommodation. 42 It was submitted for the Union that if the Commission took the view that it had not made out its claim, but some compensation was appropriate in the circumstances, that the Commission could make an award on terms other than those claimed. That is undoubtedly true, but in my view there is a significant difference between, for example, a claim advanced on an ambit basis, where the Commission takes the view that something less than what has been claimed is appropriate on all of the evidence and a claim which is advanced on one basis and the Commission is invited to make an award on any different basis which it regards as being appropriate, once it has heard the evidence. The latter approach, in my view, does not pay sufficient regard to the ordinary processes of arbitration of disputed claims before the Commission under the Act, where the respondent is entitled to have an opportunity to know and meet the case advanced against it. This is particularly so in a special case where the approach discussed in the Occupational Health and Nurses' case must be applied. In my view, it follows that this case is not one where the Commission could properly take the course invited. 43 It is not for the Commission in a special case such as this, to itself conceive and craft an award provision which might have been available to be advanced as a special case, had the applicant elected to do so. It follows that it must be concluded that the onus which falls on an applicant in a special case such as this, has not been met. 44 In coming to this conclusion a number of other factors have influenced my decision. The closure of the Worimi centre occurred against the background of the 1998 agreement between the parties as to relocation of public servants. In these circumstances particularly, it cannot be overlooked that the reason why the employees affected by the claim are now travelling to Gosford to work is because they have had the benefit of the policy which assures public servants in this State of ongoing employment and no forced redundancies. 45 The evidence was that some employees applied for and were accepted for voluntary redundancy, having regard to the hardship which relocation to Gosford would give rise to in their circumstances. There was no evidence that any such application was rejected. Of those who did not seek redundancy, some four employees have accepted a permanent position in Gosford. 46 There was also evidence that some employees had earned less in their positions at Kariong and Frank Baxter, because they were working fewer shifts which attracted penalties or less overtime. Other employees were in receipt of higher pay or had continued to earn additional pay as the result of the performance of higher duties. None of these factors provide a proper basis for the grant of the claim. 47 Those employees working at Gosford who have not been permanently appointed there are in that position because, as displaced employees, they have availed themselves of the opportunity available under the relevant policy, to be given priority for appointment to suitable positions which become available in the public sector in Newcastle. In the meantime, they have the benefit of ongoing work at Gosford. Permanent positions are available for them at Kariong or Frank Baxter if they wish to accept them. That benefit cannot be ignored and, in my view, cannot provide a proper basis for the claim advanced here. This is not a circumstance which can properly be regarded as the employees working at a temporary location, simply to meet the employer's convenience. 48 In this case if employees relocate their homes to Gosford they are entitled to the benefits of the Transferred Officers award. In the Fisheries case, Bauer J took the view that the benefits of that award should be extended to the employees there in question, who were not covered by that award in the circumstances of the relocation of their workplace within the metropolitan area. In so concluding, his Honour had regard to the desirability of these officers living close to their place of work, both from their point of view and that of their employer. His Honour refused an excess travel allowance claim concluding that the circumstances did not require 'more generous treatment than for officers who are transferred' ((1987) 21 IR 100 at 102). Nor can I see this case as one in which new ground might be broken in the type of payments which should be made. This must particularly follow when it is considered that if the claim were granted, the benefit would continue even if the employees availed themselves of the benefits of the Transferred Officers award and relocated closer to Gosford. 49 In this case the Transferred Officers award, of course, already applies to these employees. That the cost of such relocation might involve employees in purchasing more expensive houses is not a factor which, it seems to me, can be persuasive in relation to the travel allowance claim. That possibility is embraced by the provision made in the Transferred Officers award, so as to encourage relocation to a new place of work. 50 The evidence of the three employees called by the Union who have chosen not to relocate their homes closer to Gosford, was that each of them is still seeking work in Newcastle. As displaced employees, they have that right under the applicable policy. Their circumstances were such as to demonstrate in each case sound personal reasons for their decision. I accept those decisions unhesitatingly. Those employees cannot be criticised for them, indeed the Department did not seek to do so. The position remains however, that the only reason that their permanent work location is not at Gosford, is because of the decision they have each taken. 51 It is regrettable that any employee is in a position where they have to incur substantial time and expense in travelling to their place of work. It is a fact, however, for very many people that they are in such a position, often through no fault of their own. I can sympathise with the position of these employees, particularly those who had work close to their homes and now do not, with resulting consequences for their personal lives. None of them sought the closure of the Worimi centre, indeed they were unhappy about it. 52 Nevertheless, it cannot be overlooked that they also have had the benefit of guaranteed employment with the Department, while they pursue other public sector work in Newcastle. They have priority in respect of such work both over other public servants and those not presently employed as permanent public servants, who might otherwise have competed with them for such positions on a merit basis. As Mr Jennings explained, he was seeking such work because of the security which his public sector employment provided him and the job satisfaction which he derived from it. Nor can it be overlooked that they have each enjoyed the benefit of an ongoing wage increase applying across the public sector, which was funded by an agreement in relation to relocation. 53 As I have already noted, there was no issue that other employees, including other public servants, have to travel similar distances to work as some of the employees in question here. One of the witnesses, before obtaining a permanent position at Worimi, was working as a casual at Kariong. Indeed, it may well be the case that other employees who are not covered by the claim are presently working at the two centres in question and are also travelling similar distances, but would have no entitlements to payment under the award if made. There was no evidence about this, but also no contest that this might be the case, now or in the future. 54 While it cannot be doubted that these employees have had to relocate to these centres at Gosford through no choice of their own, nor can it be doubted that other employees who have to travel similar distances to work and incur similar costs in doing so, would not also find it more congenial and less expensive to work closer to home, if such work were available to them. It will not often be the case that an employee will choose to work a long distance from home, thereby incurring cost and travel time, if some closer alternative is available. Nor can it be inferred that other people who travel long distances to their workplaces have had any real choice in the matter. 55 In that context particularly, two factors militate against the award sought. The first is that it would apply to an employee whose travel time and costs must inevitably have been reduced by the move, because of that employee's residence at the Central Coast and would continue to apply to him whilever he worked there. The second is that it would continue to apply to other employees even if they chose to move closer to their new workplace in future. This too provides a proper basis for the conclusion that the award sought would not set fair and reasonable conditions of employment. That is a matter which cannot, after all, be determined by a consideration of the position of the twenty-one employees affected by this claim alone. 56 Those twenty-one employees include temporary and casual employees. It cannot be overlooked that they too have had the benefit of ongoing work as well as the 2% wage increase agreed in 1998 in relation to relocation. The nature of their employment does not permit a different conclusion to that reached in relation to the permanent employees. Conclusion 57 For all of these reasons the Union's claim is dismissed. ------------------------ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.