Industrial Relations Commission of New South Wales CITATION: USU v Blacktown City Council [2005] NSWIRComm 438 New South Wales Local Government, Clerical Administrative, Energy, Airlines, & Utilities Union PARTIES: Blacktown City Council FILE NUMBER(S): IRC 5593 of 2004 CORAM: Grayson DP CATCHWORDS: Industrial dispute - Dispute orders sought - Application by USU for increase in pay for plumbers - Use of plumber/gasfitter/drainer's licences - Contention that council does not comply with award requirements by not paying for use of licences - Whether plumber's licence is part of job requirement - Whether plumber's licence included in job description and salary system evaluates skills accordingly - Whether Wyatt evaluation system in breach of award by failing to correctly grade plumbers - Council contends Wyatt is established salary system in use over ten years, is objective system to evaluate job competencies - Wyatt developed out of enterprise negotiations agreed between unions and council - Union failed to make out claim council is non-compliant with award obligations - Whether there is jurisdiction to make orders sought - Application for orders refused - Directions made. Industrial Relations Act 1996 LEGISLATION CITED: CASES CITED: State Wage Case 2005 (2005) 142 IR 337 HEARING DATES: 10/24/2005; 10/25/2005 DATE OF JUDGMENT: 11/28/2005 Ms M Wilson United Services Union LEGAL REPRESENTATIVES: Mr R Macklinshaw Blacktown City Council JUDGMENT: - 14 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Grayson DP 28 November 2005 Matter No IRC 5593 of 2004 United Services Union v Blacktown City Council New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union of a dispute with Blacktown City Council re reimbursement for plumbers licences DECISION [2005] NSWIRComm 438 1 This matter proceeds on the basis of an amended application which was filed in court on the first day of hearing, 24 October 2005. 2 By its amended application, the notifying union for which Ms Wilson appeared, seeks orders under s 136(1)(d) of the Industrial Relations Act 1996 (the Act) as follows:- 1. Blacktown City Council is to pay all licensed plumbers in its employment, an allowance of $1.25 per hour for 41 hours per week, as consideration for Council's use of their plumber/gasfitter/drainer's licences. 2. Council pay the costs associated with obtaining and keeping such plumber/gasfitter/drainers licences - including the cost of continuing education required for the maintenance of such licences. 3. That any reasonable and necessary training or education required by plumbers employed by Blacktown City Council be performed in paid time, either single time, during normal working hours, or overtime, outside normal working hours. 3 Blacktown City Council for which Mr Macklinshaw appeared, contested proposed order 1. above and consented to proposed orders 2. and 3. 4 The grounds and reasons relied upon by the USU in support of the application are: a. Blacktown City Council (Council) changed the position description of plumbers so that a plumbers/gasfitters/drainers licence was an essential requirement. b. Employment at Council is regulated by the Local Government (State) Award 2004 (the Award). c. The Award makes provision for Councils to introduce a salary system to complement entry level rates of pay at Section 6 (iii). d. Section 7(i) of the Award, Salary Systems, obliges Council to pay the salary system rate of pay that recognises the skills the employee is required to apply on the job. e. Council's job evaluation system does not recognise the plumber/drainer/gasfitters licence as a skill. f. Council pays another employee the amount specified in Schedule A as an allowance for the use of his plumber/drainers/gasfitter's licence. and the claim is particularised in this way: a. The Union wrote to Blacktown City Council in May 2003 asking that Council pay the Supervisor of Trades, Mr Bruce Porter, an allowance for the use of his Plumber's Licence. b. Council began paying Mr Porter for the use of his plumber's licence in September 2003 at a rate of $1.25 per hour for forty-one hours equalling $51.25 per week. c. In 2004 plumbers employed at Council approached the Union to see if they were eligible to receive a plumber's licence allowance, as they had licences which they used for Council every day. d. The Union wrote to Council and met with Council's officers to no avail. e. A dispute was notified to the Industrial Relations Commission of NSW in September 2004. f. In a compulsory conference Blacktown City Council produced a Position Description of the position of plumber which included Plumber's Licence, Drainer's Licence and Gasfitter's Licence as essential criteria for the position. g. The Union and its members, until that time, were unaware that these qualifications were an essential requirement for the position of plumber at Council. h. A search of the Union's records revealed a position description for a plumber at Blacktown City Council dated July 2000. That position description did not list any of the licences listed in (f) above as essential criteria. i. Section 34(i) and (ii) of the Award guarantees that if Council decides to make major changes in organisation structure which will have significant effects on the employees, (significant effects including skill requirements), Council is obliged to both notify the employees and their Union and to discuss the changes with the employees and their Union. This has not occurred as Council denies there has been any change. j. Section 7(i) of the Award guarantees that an employee shall be paid the salary system rate of pay that recognises the skills the employee is required to apply on the job. k. Council claims that it cannot pay the plumbers extra because first, the evaluation system will not allow it and secondly, extra payment will destroy the internal relativities of the salary system. l. The Union submits Council's obligations under Section 7 of the Award should be a higher priority than compliance with Council's outdated evaluation system and that previous disputes about placement within the salary system have been resolved without reference to Wyatt. The Union further submits that if the licence allowance is separate to the plumber's ordinary pay, the salary system's internal relativities can be maintained. 5 In the course of hearing, and in addition to the documentary material tendered and relied upon by the respective interests, evidence was taken from the following witnesses: · Mr William MAGILL - licensed plumber employed by Blacktown City Council · Mr Darren GAUCI - licensed plumber employed by Blacktown City Council · Mr Steve DONLEY - at all material times an organiser with the USU at Blacktown City Council · Mr Wayne McCARTHY - a licensed plumber employed by Blacktown City Council · Mr Michael John WOWK - Coordinator, Staff Development and Human Resource Services employed by Blacktown City Council · Mr Douglas Leonard LEES - Manager, Building Construction and Maintenance employed by Blacktown City Council · Mr Robert Michael MACKLINSHAW - Manager, Corporate Industrial Relations and Employment Systems employed by Blacktown City Council 6 It is important to emphasise that the USU brings its case in reliance upon the existing provisions of the Local Government Industry (State) Award 2004 (350 IG 471) and expressly not in reliance upon either the work value changes principle or the special case principle of the Wage Fixing Principles most recently reaffirmed by the Full Bench of the Commission in State Wage Case 2005 (2005) 142 IR 337 at 352. 7 In particular the USU refers to and relies upon clauses 6, 7 and 8 of the award which provide as follows:- 6. Rates of Pay (i) The rates of pay are established for positions with the skill descriptors as defined in Clause 5, Skill Descriptors of this award. (ii) The rates of pay are set out in Table 1 of Part B of this award are entry level rates of pay only, except for Operational Band 1, Level 1, which are actual rates of pay. (iii) Council shall introduce a salary system to complement the skills-based structure and rates of pay of the award. (iv) An employee's current weekly rate of pay for the purposes of the Workers Compensation Act 1987 shall be the rate paid to the employee under the salary system. 7. Salary System (i) A salary system determines how employees are paid. An employee shall be paid the salary system rate of pay that recognises the skills the employee is required to apply on the job. (ii) The salary system shall have a structure that complements the entry level rates of pay and skill descriptors in the award by identifying grades. Each grade shall contain a number of salary points/steps for progression that are over and above the entry level rates of pay. (iii) Positions shall be assigned a salary grade(s) within the structure. A position may extend across more than one grade in council's salary system or level as prescribed by Clause 5 Skills Descriptors of this award. (iv) Progression through the salary system shall be based upon the acquisition and use of skills. Where skills based progression is not reasonably available within the salary range for the position, employees shall have access to progression based on the achievement of performance objectives relating to the position. Such performance objectives shall be set in consultation with the employee(s). (v) Subject to subclause (iv), skills for progression relevant to the position shall be assigned to each salary point/step within the grade, or set at the annual assessment provided that such criteria shall provide an opportunity to progress through the salary system. (vi) Employees shall be assessed for progression through the salary range for their position at least annually or when they are required to use skills that would entitle them to progress in the salary system. (vii) At the time of assessment, council shall advise the employee of the skills and/or the performance objectives required for the employee to progress to the next salary point/step and shall review the employee's training needs. (viii) The salary system shall include a process by which employees can appeal against their assessment. (ix) Employees shall have access to information regarding the grade, salary range and progression steps of the position. 8. Use of Skills (i) The parties are committed to improving skill level and removing impediments to multi skilling and broadening the range of tasks that the employee is required to perform. (ii) The council may direct the employee to carry out such duties that are within the limits of the employee's skill, competence and training. (iii) An employee shall be paid the salary system rate of pay that recognises the skills the employee is required to apply on the job. (iv) (a) The skills paid for shall not be limited to those prescribed by description and may, where appropriate, include skills possessed by the individual which are required by council to be used as an adjunct to the employee's normal duties. (b) Subject to subclause (xi) of Clause 13, Allowances, Additional Payments and Expenses, employees who are required by council to use such additional skill(s) in the performance of their duties shall have the use of these skill(s) considered in the evaluation of the position. (emphasis added) 8 It is common ground that the award underwent significant restructuring in about 1992 to provide among other things for the skills based classification of employees. The task of classifying employees was carried out using the skill descriptors prescribed by the award and by means of a consultative process between the award parties, by placing each employee at the relevant level within the relevant Band also prescribed by the award. 9 Each council was then required to develop a salary system at the local level which as the award prescribes, determines how employees are paid and as the award further prescribes, which complements the entry levels of pay and skill descriptors (competencies) mentioned in the award by means of individual grades. 10 As may be seen by reference to the award itself and to the broad description above as to how at least in part, the award is intended to operate there is a basic or entry level classification structure which is intended for more or less uniform operation across the local government industry and there is, in addition to that, an enterprise focussed grading structure which is developed for and by each council to be superimposed over the industry structure and to provide in the result, for the actual rates paid within the particular enterprise. 11 In the case of Blacktown City Council an enterprise focussed structure or salary system as it is described in the award was developed and following protracted negotiations, was agreed between the council and unions (including the USU) with coverage of council employees. 12 That agreement was embodied in a document entitled the Blacktown City Council Enterprise Agreement 1998 which was approved by the Commission on 11 January 1999 in proceedings No IRC 6749 of 1998. 13 The enterprise focussed classification structure which remains to the present time, contains twenty-four grades with five steps in each grade. Each grade has an allocated points value as a predeterminant to placement of employees within a particular grade. 14 The structure is set out at Table 1 to the enterprise agreement as follows: SALARY STRUCTURE POINTS ALLOCATION AWARD BANDS GRADES POINTS RANGE Operational Band 1 100-140 Level 2 2 141-160 Operational Band 3 161-210 Level 3 4 211-240 Operational Band 4 5 241-280 and/or 6 281-320 Administrative/Technical 7 321-350 Trades Band Level 1 Administrative/Technical/ 8 351-380 Trades Band Level 2 9 381-400 and/or 10 401-420 Professional Specialist 11 421-440 Band Level 1 Admin/Tech/Trades/Band 12 441-480 Level 3 13 481-520 and/or 14 521-550 Prof/Specialist Band Lvl 2 15 551-580 Professional/Specialist 16 581-610 Band Level 3 17 611-640 18 641-660 Professional/Specialist 19 661-700 Band Level 4 20 701-730 21 731-750 22 661-700 Executive Band Level 1 23 701-730 24 731-750 15 The development and implementation of the above structure was carried out under the auspices of a joint consultative committee entitled the Council Award Restructuring Consultative Committee (CARCC) whose task in broadly stated terms was to oversight and validate the points based system of job evaluation and although the exercise of re-aligning each and every position within the council's establishment took a considerable amount of time, the result in the case of each employee was backdated to 1 January 1998, the notional commencement date of the new system. 16 The various newsletters published by the CARCC and the evidence generally indicated that the implementation phase of the new salary structure involved the completion of a questionnaire entitled Job Evaluation Questionnaire for each position the purpose of which was to capture detailed and specific information about the skills and responsibilities required of each position. 17 That information was then entered by means of electronic data entry into a computerised programme entitled the Wyatt Job Evaluation Scheme which was said to have "measured the job in terms of the agreed method contained in the Award" (Consultative Committee Newsletter No 4). 18 Relevantly, plumbers were evaluated as coming within a points range (281-320) which resulted in their placement at Grade 6 of the structure set out above. The evidence indicates that placement at the Grade 6 level in the new salary structure generated weekly increases in pay of between $30.17 and $42.64 with scope for further advancement in accordance with the system's criteria. 19 The evidence further indicates and it is central to this dispute in my opinion, that the rate settled upon for plumbers took into account and applied the instruction set out in a comprehensive manual entitled Local Government Award Restructuring Implementation Kit published by the Local Government and Shires Association of NSW at the time. 20 The instruction states: As the new award is based on the application of acquired skills then skill-related allowances regularly received are incorporated into the rates of pay. This includes qualification allowances. If an employee regularly receives an allowance for skill, the allowance should be added to the employees rate of pay. and it goes on thereafter to set out the numerous skill-related allowances prescribed by predecessor awards including relevantly the Plumbers Licence Allowance prescribed by clause 7 (xv)(a) of the Municipal and Shire Council Wages Staff Award, one of the predecessor awards. I note that over-award payments existing at the time were also to be incorporated into the salary rates by individual councils within the framework of the new award thus demonstrating the intention of the industrial parties to formulate and bring into existence within the framework of the restructured award a global approach to the determination of the value of individual positions in individual enterprises throughout the local government industry. 21 Clearly, it was a major industrial exercise and one which was carried out in a highly consultative environment. Equally clearly, it was an exercise which once completed, generated different outcomes in different enterprises and it makes the task of revisiting individual components of individual rates (as in this case for plumbers) extremely problematic on the evidence as it stands, particularly by reference to salary systems operating in other councils or by reference to individual rates being paid for example to Mr Porter. 22 On that basis and one can readily appreciate with the everchanging regulatory environment in which plumbers are required to operate, why it might be thought by the union, that Blacktown City Council is making use of licences gained by plumbers in it's employ (for example in the installation and servicing of thermostatic mixing valves and backflow prevention devices) without any recognition in money terms. 23 That proposition, however, is strenuously resisted by the council having regard to the background matters outlined above and further, to the fact that the council has been and remains willing to meet the cost of such licences although it does not require all plumbers to hold licences. 24 There is furthermore, the proposition for which the council vigorously contends namely, that the Wyatt Job Evaluation System which has been in use for a decade or more is a system which takes into account by means of data captured in the questionnaire, the skill descriptors (competencies) prescribed by the award as well as key responsibilities pertaining to the particular position being evaluated and any comment the job holder wishes to make by way of additional information. 25 The questionnaire and hence the job evaluation system is expressed to be about assessing the job rather than the personal attributes, characteristics or performance of the job holder and it is important to note at this point that not only, as I have said, did the system produce a grade 6 result for plumbers when it was initially employed but it generated the same result - that is, placement at the grade 6 level on subsequent occasions that the job evaluation exercise has been carried out. The evidence of Mr Wowk who was responsible for carrying out the job evaluations is extracted below and is instructive in that regard: 23. In respect of plumbers, whilst being licensed was not considered an essential criteria, this was considered a desirable component, and the positions were evaluated and approved by the Manager of the section Mr Doug Lees on the basis of requiring the possession of plumbers, gasfitters and drainers licences. The plumbers requested a review of their original evaluation and this was made in March 2003 with a plumber's representative Mr Wayne McCarthy and their supervisor. No perceptible change to the original placement was evidenced albeit a small increase to the points value of two (2) points from 294 to 296 points still within the allowable range of 281-320 for a grade 6 placement as afforded the majority of trades personnel including the plumbers at Blacktown City Council. A further review was made of the position in October 2004 however, resulting in no change to original position placement. Section (7.1 & 7.2) of the Questionnaire used to evaluate positions using the Wyatt System captures all data surrounding qualification and experience requirements for a position. Section 7.1 is a matrix that combines the actual qualification and experience required for a position. In the case of plumbers it was recognised that whilst a trade certificate would be sufficient to carry out the duties associated with the position, additional qualifications in the form of post trade certificates related to their position would be beneficial and therefore it was agreed that evaluations would include a higher level of qualification together with up to three (3) years of job related experience outside of apprenticeship. Section 7.2 captures any additional accreditations and/or special licences that may be required for each position and in the case of plumbers it was agreed that they be required to hold a plumbers/gasfitters/drainers licence. Thereby evaluations for plumbers at Blacktown City Council had as a requirement that all plumbers were post trade trained i.e. additional specialised certificates and possess a Plumbers Licence (see Attachment 3). 26 In my opinion, the USU contention as to failure on the part of Blacktown City Council to comply with its obligations under the award has not been made out although it may readily be observed that the job evaluation system which has been in use for a decade or more for the purpose of giving effect to the requirements of the award, appears to have lost the support of one of the union parties namely, the USU in at least one of the industry enterprises covered by the common rule award namely, Blacktown City Council and in respect of one classification within that enterprise namely, plumber. 27 I am far from persuaded that the USU has established a basis upon which a conclusion might rest to the effect that the job evaluation system has in some way, failed to value the plumber's post trade qualification or more relevantly for the purpose of these proceedings, that there has been non-compliance with the award. 28 The industrial parties to this award, after all, have invested a substantial amount of bargaining capital and plainly, no small amount of physical and financial resources in bringing into existence firstly, salary systems as contemplated by the award and secondly, the methodology and the means of their implementation. 29 If there are perceived shortcomings or imperfections in the present system of job evaluation or more importantly, if there is thought to be a better system of job evaluation then it is entirely appropriate for the parties to the relevant industrial instrument to collectively approach the matter with a view to resolving the issue. In that regard, I sensed no unwillingness or reluctance on the employer's part to enter into such discussions. 30 I would further observe before leaving the matter that although not raised by either side in the course of argument, there may well be a jurisdictional limitation to the Commission's power to make order 1. and 2. given the provisions of s 137(3) of the Act which proscribe orders for the payment of compensation, lost remuneration or any other amount. In concluding the proceedings and again noting the employer's consent, I make the following directions: 1) That Blacktown City Council pay the costs associated with obtaining and keeping plumber/gasfitter/drainers licence including the cost of continuing education required for the maintenance of such licences. 2) That any reasonable and necessary training or education required by plumbers employed by Blacktown City Council be performed in paid time, either single time, during normal working hours or overtime outside normal working hours. 31 For the reasons set out above, the union's application is otherwise 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.