Industrial Relations Commission of New South Wales CITATION: USU v Tamworth Council [2009] NSWIRComm 1008 NOTIFIER PARTIES: NSW Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union RESPONDENT Tamworth Regional Council FILE NUMBER(S): 1932 of 2007 CORAM: Cambridge C CATCHWORDS: system of payment for on-call roster - higher duties payment claimed - custom and practice - recognition of skills and responsibilities - recommendation made. LEGISLATION CITED: Industrial Relations Act 1996 HEARING DATES: 4 and 5 November 2008 DATE OF JUDGMENT: 27 February 2009 NOTIFIER Mr N Martin LEGAL REPRESENTATIVES: RESPONDENT Mr A Britt, barrister DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES COMMISSIONER CAMBRIDGE 27 February 2009 Matter No IRC 1932 of 2007 Notification under section 130 by New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union of a dispute with Tamworth Regional Council and another re alleged failure to pay higher duties on call. DECISION [2009] NSWIRComm 1008 1 This Decision arises from proceedings that commenced by notification of an industrial dispute made pursuant to section 130 of the Industrial Relations Act 1996 [NSW], (the Act). The notification of dispute was filed on 16 October 2007, by the New South Wales, Local Government, Clerical, Administrative, Energy, Airlines & Utilities Branch of the Australian Services Union, (the USU). 2 The dispute notification identified that the industrial matter concerned "a) The failure of Tamworth Regional Council to pay higher grade duties whilst on call". The respondent to the proceedings has been identified as the Tamworth Regional Council (the Council). 3 Proceedings in the matter commenced in Tamworth on 20 November 2007. On 20 November 2007, the Commission endeavoured to assist the Parties achieve a conciliated settlement of the matter. There were further attempts to conclude a conciliated settlement of the matter undertaken during various proceedings held in the first half of 2008. Unfortunately the matter remained unresolved and has ultimately been pursued to a Hearing to enable arbitration of the dispute. The Hearing of the arbitration of the matter was conducted in Tamworth on 4 and 5 November 2008. THE SUBSTANCE OF THE DISPUTE 4 As part of the preparation for the Hearing of the arbitration of the matter, the Commission issued Directions which, inter alia, required the USU as notifier, to provide a brief outline of contentions together with any Draft Orders or other Relief sought. Consequently the USU filed an outline of contentions document that included a page headed Application for Orders. Relevantly the outline of contentions as filed on 25 July 2008, indicated that the subject matter of the dispute related to the alleged failure of the Council to pay higher duties in circumstances where operators perform on-call work which requires the exercise of functions, accountabilities and responsibilities which are said to be commensurate with the position of a Team Leader. 5 Team Leaders are paid at salary levels graded between grade 11 and grade 13 of an internal salary system. Consequently the dispute involved those employees (generally referred to as Operators) who are classified and paid at levels lower than grade 11 and who participate in call-out arrangements. These employees performed work associated with a particular call-out, and received a rate of pay less than the grade 11 rate which is the minimum applicable to Team Leaders. 6 Although it has not become entirely clear, the dispute seemed to be confined to the call-out arrangements that are applicable to the Water Enterprises section of the Council's operations. In this regard an emergency recall duty roster has been established for many years which involves individuals electing to participate in the on-call roster. 7 In brief, the on-call roster arrangements involve a particular individual taking control of the telephone that receives any emergency call relating to out of hours operational requirements. For example, if a water pipe was inadvertently broken outside of ordinary working hours, the relevant call for assistance would be directed to the individual in charge of the on-call phone in accordance with the rostered arrangements. If the particular individual on-call held a substantive grade of Team Leader or above (grade 11 or greater), no issue arises with respect to any higher duties claimed. However, if the individual is classified and paid at a rate lower than grade 11, the USU has contended that a higher duties payment to at least grade 11 should be made. 8 In part the claim made by the USU has historical support by way of operation of arrangements that applied at the Tamworth City Council before that entity became part of the amalgamated Council now represented as the Tamworth Regional Council. It appeared that prior to the amalgamation that created the Tamworth Regional Council, the Tamworth City Council applied an arrangement for payment when on the on-call roster whereby the Team Leader rate was paid when actually engaged on an emergency call-in via the roster system. There was, in more recent years, a modification of this arrangement that involved the payment of the higher Team Leader rate only in circumstances where the individual on-call was required to call other persons to assist in rectification of whatever particular emergency arose. 9 During the period that this arrangement operated there were no higher duties payments made unless the nature of the emergency work required the initial on-call individual to summons more people in order to properly remedy the particular problem. Consequently in circumstances where only the individual operator could, and did, rectify any particular emergency problem, then that operator was paid no higher duty and simply received payment in accordance with his/her substantive grade (although that could be at the Team Leader grade 11 rate). 10 In May of 2006, the Council's Director, Water Enterprises sought, inter alia, to discontinue the practice whereby Team Leader rates of pay were applicable to persons on-call performing work that required assistance from other persons. This alteration is summarised by the following paragraph that appeared in a memorandum from Mr Bruce Logan, the Director, Water Enterprises dated 17 May 2006. "Some Water Enterprises staff have previously claimed Acting Team Leader when on-call, if another employee is called to assist. This practice is not included in the new conditions and will therefore cease as of the pay period ending 29 May 2006." Exhibit 5, page 2. 11 This change to the practice for payment in respect of on-call arrangements represented the genesis of the dispute that the Commission has been required to arbitrate upon. THE RELIEF SOUGHT 12 On 25 July 2008, the USU filed a document entitled Application for Orders. The Application for Orders document stipulated that the Commission was asked to make Orders under section 136(1)(d) of the Act, in the following terms: "a. That Tamworth Regional Council Operators that are required to assume the responsibility and accountability of a team leader position be recognised and remunerated at least the minimum grade for team leader's position at Grade 11 to Grade 13. b. That Council conduct an assessment of each individual to assess where each employee fits within the grade 11 to grade 13. c. Should the Commission deem to find in favour of the applicant then the Applicant reserves the rights of individuals to make an application for back pay. d. Any other order the Commission deems appropriated." 13 The Council opposed the making of the Orders as sought by the USU, or the making of any other Orders. The Council submitted that the Commission should instead make a Recommendation endorsing an arrangement that provided for payment to all individuals involved in the Water Enterprises on-call roster arrangements, to be paid a minimum amount equivalent to grade 8 for all on-call engagements whether or not other individuals were recalled to assist. THE HEARING 14 The Hearing of this matter commenced in Tamworth on Tuesday 4 November 2008. Mr N Martin appeared for the USU and Mr A Britt of Counsel, appeared for the Tamworth Regional Council. 15 At the commencement of the proceedings Mr Martin advised the Commission that the Parties jointly sought to have the Commission participate in some further attempted conciliation of the matter. The Commission acceded to this request and following off-record discussions the Parties recorded that agreement had been reached in order to provide for resolution of the higher duties claim in respect of two named individuals. The broad terms of agreement, and the particular arrangements that had been made for the two named employees were recorded in the transcript of proceedings. 16 Consequently the issues in dispute had been refined such that there was now two particular individuals with which no argument rose. The Commission was however required to continue the Hearing of the arbitration in respect of the remaining members of the Water Enterprises section of the Council's operation. 17 Mr Martin on behalf of the USU, called four witnesses who gave evidence in support of the claim. The first three of these witnesses were employees of the Council who gave evidence about their particular personal experiences in respect of the on-call roster arrangements that apply in the Water Enterprises section. The fourth witness called by Mr Martin was Mr Preston an official with the USU who had responsibility for Tamworth Regional Council. Mr Preston's evidence went to the negotiations that had taken place with the Council regarding the dispute about the payment of the Team Leaders rate when responding to call-outs. 18 Mr Britt tendered an affidavit of Quenten William Bailey, the Council's Senior Employee Services Officer. The affidavit of Mr Bailey was admitted without objection and Mr Bailey was not required for cross-examination. 19 Mr Britt called as a witness Mr Bruce Logan, the Council's Director of Water Enterprises. Mr Logan gave evidence about the history that preceded the dispute regarding the correct payment for individuals that participated in the on-call roster in the Water Enterprises section. 20 Mr Logan also gave important evidence about the proposition that the Council had developed which included an evaluation of the skills and responsibilities that were involved with performance of the on-call position. In this regard the Council accepted that there were identified skills that were required of a person who participated as the individual on the roster for any emergency calls. Mr Logan gave further evidence that supported the proposition that the Council had developed, whereby the person engaged on the on-call roster would receive a minimum remuneration rate at the grade 8 level irrespective of whether any emergency call required assistance from other individuals or not. THE CASE ADVANCED BY THE USU 21 Mr Martin urged the Commission to find in favour of the USU and make Orders requiring that the Team Leaders' rate at a minimum grade 11, be applicable to the on-call roster position in circumstances when other persons were called to assist. Mr Martin recounted the history of the Council amalgamation and the "default" position that had previously been in operation at the Tamworth City Council. Mr Martin submitted that historically there had been a payment made at the Team Leader grade 11 rate whenever the particular call-in emergency required assistance from other employees. 22 Mr Martin criticised the Council's attempt to alter the "default" position. Mr Martin said that there has been no agreement reached between the USU and the Council about the Council proposition whereby there was a removal of any payment at the Team Leader's rate. Mr Martin was particularly critical of what he asserted was the absence of consultation with the individuals that were directly affected by the changes that the Council sought to implement. 23 When questioned by the Commission about precisely what arrangements the USU were seeking to have established, Mr Martin clarified that he sought to have a return to the "default" position. In that regard the Team Leaders' grade 11 rate would be applicable only in circumstances where the emergency required assistance of at least one other person. Further, Mr Martin confirmed that this proposition would also involve there being no minimum grade 8 payment in circumstances where the emergency call-in did not require assistance. THE CASE FOR THE TAMWORTH REGIONAL COUNCIL 24 Mr Britt urged the Commission to reject the Orders sought by the USU and for the Commission to refrain from making any Orders whatsoever. Instead, according to Mr Britt, the Commission should be prepared to adopt the proposition that has been developed by the Council which involved the payment of a minimum of the grade 8 level irrespective of whether the particular emergency required the re-call of additional individuals or not. 25 Mr Britt submitted that the Council proposition was, although not perfect, an averaging arrangement that saw all individuals rewarded for the identified responsibility of having to deal with an emergency call, evaluate the circumstances of the emergency, and make certain consequential decisions. Mr Britt submitted that the Council's proposition was one that involved "swings and round-abouts". Mr Britt said that although there may be an argument that a significant emergency requiring co-ordination of many people could justify the payment of the Team Leader grade 11 rate, the more mundane emergency task easily rectified by the individual on-call, would be paid at very least, grade 8 rate even if the individual had a substantive classification lower than grade 8. 26 Mr Britt made further submissions which criticised the USU Application for Orders document. Mr Britt submitted that the Commission could not make the Orders as sought as they would have no capacity to provide for practical implementation. Further Mr Britt strongly urged the Commission to reject the claim that had been made out. Mr Britt submitted that the onus in the matter was clearly upon the notifying entity, the USU, and that there was insufficient evidence to provide for any basis to make the Orders sought or any other Orders. 27 Mr Britt submitted that the Commission should recommend to the Parties that they adopt the proposal to provide for payment at a minimum of the grade 8 level, particularly having regard for the agreement that had been reached between the USU and the Council in respect of the two identified individuals that would be provided with payment at the higher Team Leader grade 11 rate. CONSIDERATION 28 In this matter there are a number of aspects that underpin the USU claim which would ordinarily support the intervention of the Commission in some form or another. Regrettably, and despite the Commission's request for a recasting of the Orders sought, the detail of the Relief sought lacks sufficient precision to provide a practical basis upon which the Commission might proceed. However it must be stressed that the claim is not without merit. 29 The evidence of the arrangements that applied at the Tamworth City Council reflected a simple but practical system that seemed to work without identified problem. The arrangement whereby a higher Team Leader rate was only available when the emergency required additional assistance from other individuals, appeared to operate without any artificial inflation of the nature of the event or unnecessary calling in of others so as to enliven the entitlement to the higher Team Leader rate. This particular arrangement appeared to rely to some extent, on the honesty and the integrity of the individuals that were on the on-call roster. It was a system that provided recognition for the additional work and responsibilities that would be exercised when dealing with supervision and control of a number of individuals required for a more significant emergency event. 30 Although this "default" arrangement as was operational at the Tamworth City Council, appeared to have worked without significant problem, it did not provide for any recognition for the actual skill and responsibility that was exercised by the individual staff member on-call, who had to evaluate the severity of a particular emergency event. Importantly the Council proposition which had been developed in response to the agitation of the dispute in this matter, recognised the need to provide for additional payment to an individual who exercises the skill an responsibility of evaluating an emergency event as the first point of call on the on-call roster. However, somewhat strangely, the USU position sought to have no recognition for the skill and responsibility exercised by any individual on the on-call roster unless it involved an emergency event that warranted the assistance of others. This was a curious position to adopt. 31 It would seem that the USU claim for grade 11 Team Leader rate (or above), in more significant emergency events and the Council's recognition of at least grade 8 remuneration for exercise of skill and responsibility as a member of staff who was on-call, are not issues that should be treated to being mutually exclusive. 32 There was evidence to suggest that the evaluation that fixed the grade 8 rate may not have been without some important omission. In particular, it appeared that no account was made of the absence of usual business hour infrastructure arrangements when considering the exercise of comparison of responsibilities vis-a-vis the on-call individual, and a Team Leader position. The absence of this particular consideration could mean that the grade 8 determination may represent an under valuation of the skill and responsibilities exercised by an individual in the on-call position. 33 Further, on balance, in respect to the USU claim for grade 11 or above, there was insufficient evidence to support that on any emergency event that involved assistance from at least one other individual, there was an exercise of skills and responsibilities commensurate with the Team Leader grade 11 rate. The evidence strongly suggested that in many instances the nature of the emergency event would not justify payment at the Team Leader grade 11 rate. However in fairness, there would be some particular events where the co-ordination of a number of different gangs and the severity of the emergency circumstances would probably warrant the payment of the Team Leader grade 11 rate or higher. 34 In addition to these competing considerations there existed the unfortunate anomaly that the Council proposition of payment at the grade 8 level in all emergency circumstances, would provide for potential that the individual in charge of the particular job might be supervising other employees who were paid at a higher rate. As was the subject of some debate during the Hearing, this particular circumstances does seem to offend the long standing principle that the person that is in charge giving the orders might be paid more than those he or she is directing. 35 In addition to the competing merits issues as advanced by the respective Parties, one other matter relating to the history of the underlying dispute requires mention. The evidence of the manner in which the Tamworth Regional Council sought to establish changes to the on-call arrangements as they previously existed for the Tamworth City Council, regrettably reflected an inadequate approach to contemporary employee relations practice. It appeared that in large part the Council sought to unilaterally impose the changes that were identified in the on-call conditions document attached to the memorandum of 17 May 2006 (Exhibit 5). 36 There was an unfortunate enduring approach to the on-call issue that appeared to have its genesis in the voluntary nature of the participation in the on-call roster. In simple terms the approach was akin to the notion of "like it or lump it". Although participation in the on-call roster was entirely a voluntary arrangement, it represents an important indeed, vital, component of Council operation and therefore requires proper and mature employee relation practices in order to establish the regulated details of the rostering arrangements. CONCLUSION 37 The Commission has made a careful examination of the evidence in this matter in order to establish the details of the competing merits questions which underpin the industrial dispute. An examination of these issues has revealed important deficiencies in the respective solutions that were advocated by both Parties. 38 The Orders sought by the USU were unfortunately cast with some imprecision so as to render them impractical and undesirable. The broad proposition advanced by the USU that the leading hand grade 11 or above rate apply to emergency events that require the assistance of an additional individual, fails to recognise the skills and responsibility of the decision making required in each instance that an emergency event arises. Further, there is no evidentiary basis to support the proposition that in every case where an additional person is called in to assist, the responsibilities and skills that are exercised would warrant the payment of the Team Leader grade 11 (or above) rate. 39 On the other hand the proposition as advanced by the Council appears to have established a grade 8 rate by way of an evaluation that omitted at least one important consideration regarding the absence of ordinary operational hours infrastructure support. The Council proposition also leads to the potential anomaly whereby an individual who may be in charge of a significant emergency circumstance could be required to direct and supervise employees paid at a higher rate. Notwithstanding this potential anomaly it must be recognised that the Council proposal does have an averaging element attached to it. However the Commission was provided with little evidence about the actual financial impact that an application of the averaging arrangement would have on the various individuals who participated in the on-call roster or the overall costs to Council. 40 In summary therefore the Commission is not disposed to adopt either of the solutions advanced by the respective Parties. In particular the Commission is not prepared to make Orders in this matter as the USU has not established proper basis for the intervention of the Commission by way of force of an Order. 41 The secondary proposition advanced by the USU concerning higher duties payment at Team Leaders grade 11 to 13 rates has similarly not been made out. 42 The Council's proposition involving a minimum of grade 8 remuneration for an employee on the on-call roster has some merit but does not represent a complete solution. Consequently the Commission proposes to make a Recommendation that essentially involves a modified version of the Council's proposition. 43 The Recommendation that is made effectively encompasses the Council's proposition to provide for payment at a minimum grade 8 level, including the adaptation in circumstances as identified in paragraph 61 of the Affidavit of Bruce Logan (Exhibit 9), and the Recommendation supplements this proposition with an additional arrangement to apply in circumstances that satisfy the definition of a significant emergency circumstance. In a significant emergency circumstance the individual responsible on the on-call roster who is required to supervise and direct other employees and/or contractors should be remunerated at a level that properly reflects the additional responsibilities and skills that are exercised. 44 The Recommendation in no way affects the agreement reached between the Parties to accommodate specified individuals as recorded in transcript at the commencement of proceedings on 4 November 2008. RECOMMENDATION This Recommendation is made in respect to employees of the Tamworth Regional Council who participate in the on-call rostering arrangements in the Water Enterprises section of the Council operation. The Commission Recommends as follows: 1. That the minimum rate of pay applicable to any employee rostered on-call in the Water Enterprises on-call roster shall be that equivalent to the grade 8 rate. The minimum grade 8 rate will apply such that any employee who is substantively classified below grade 8 will receive an increase in their rate of pay which is equivalent to the difference between the entry rate of pay for their position, and the entry rate of pay for grade 8. 2. In significant emergency circumstances (as defined below), the employee rostered on-call will receive minimum payment at the grade 11 rate. 3. Significant emergency circumstances means an occasion where the emergency event(s) requires that the rostered on-call employee supervises and directs the work of three or more individuals. oooOOOooo 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.