Industrial Relations Commission of New South Wales CITATION: Health Services Union and others and Director-General, NSW Department of Health and another [2010] NSWIRComm 42 Health Services Union (Notifier/Applicant) PARTIES: Australian Salaried Medical Officer's Federation (New South Wales) (Notifier) New South Wales Nurses' Association (Notifier) Director-General, NSW Department of Health (Respondent) FILE NUMBER(S): IRC 598; 638; 1337 and 1380 of 2009 CORAM: Walton J Vice-President; Kavanagh J; Grayson DP CATCHWORDS: INDUSTRIAL DISPUTE - proposed fee increase for the private use of NSW Health motor vehicles - subsequent application to make an award - Memoranda of Understanding - preliminary issue in the industrial dispute proceedings - whether the proposed increase for private use of NSW Health motor vehicles falls within the "no extra claims" clause of the health industry awards and the Memoranda of Understanding (MOUs) - strict approach to the construction of the "no extra claims" provisions of industrial instruments should be adopted - MOUs apply to all parties to instruments - interpretation of awards - the health industry awards forbid the making of "extra" or "further" claims during the life of each instrument - the expression "no extra claims" has an industrial meaning which may be altered by the terms of any commitments given by the parties to the awards and MOUs - approach to the construction of awards and MOUs is consistent with the principle which requires the instrument to be considered in context - alteration to the motor vehicle policy of NSW Health could not be described as a wage claim or claim for improved conditions of employment - the proposed adjustment to the private rate of official motor vehicles is not caught by the terms of the "no extra claim" clause of the health industry awards or MOU - question of jurisidiction - claim essentially concerns a question as to the application or interpretation of the subject awards or the MOUs as to "no extra claims" provisions - ample power in s 175 of the Act for a determination to be made as to the effect of the "no extra claims" clauses of the awards - the "no extra claim" clauses are directly incidental to the relationship between the employers and employees - ample jurisdiction in the Commission to deal with those issues - application or interpretation of subject awards and MOUs as to "no extra claims" provisions - directions for filing of applications or further applications - further directions programmed LEGISLATION CITED: Industrial Relations Act 1991 Industrial Relations Act 1996 Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch v ADT Security Pty Limited and Others (1994) 54 IR 26 Australian Maritime Officers Union v Sydney Ferries Corporation [2009] FCAFC 145 Campbells Cash & Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 53 NSWLR 393 Electrolux Home Products Pty Limited v The Australian Workers' Union and Others (2004) 221 CLR 309 Fox v GIO Australia (2002) 56 NSWLR 512 CASES CITED: Metrocall Inc v Electronic Tracking Systems Pty Ltd (2000) 52 NSWLR 1 Re: Corrections Health Service Nurses' Award (1999) 90 IR 235 Re: Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award and another [2008] NSWIRComm 209 Re: NSW Education Employees (Non Continuing Contract Employment) Award (1998) 92 IR 239 Short v FW Hercus Pty Ltd (1993) 40 FCR 511 Zoological Parks Board of New South Wales v Australian Workers Union (2004) 135 IR 56 HEARING DATES: 1 December 2009 DATE OF JUDGMENT: 9 April 2010 Mr J Murphy of counsel Health Services Union (Notifier/Applicant) Mr J Nolan of counsel Australian Salaried Medical Officers's Federation (New South Wales) (Notifier) LEGAL REPRESENTATIVES: Ms C Howell of counsel NSW Nurses' Association (Notifier) Mr M J Kimber of senior counsel Director-General, NSW Department of Health (Respondent) JUDGMENT: - 30 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WALTON J, Vice-President KAVANAGH J GRAYSON DP Friday 9 April 2010 Matter No IRC 598 of 2009 NOTIFICATION UNDER SECTION 130 BY HEALTH SERVICES UNION OF A DISPUTE WITH THE DIRECTOR GENERAL, NSW DEPARTMENT OF HEALTH AND OTHERS RE CLAUSE 26 HEALTH EMPLOYEES CONDITIONS OF EMPLOYMENT (STATE) AWARD Matter No IRC 638 of 2009 NOTIFICATION UNDER SECTION 130 BY AUSTRALIAN SALARIED MEDICAL OFFICERS FEDERATION (NSW) OF A DISPUTE WITH THE DIRECTOR GENERAL, NSW DEPARTMENT OF HEALTH RE PROPOSED INCREASE IN FEES Matter No IRC 1337 of 2009 NOTIFICATION UNDER SECTION 130 BY NSW NURSES ASSOCIATION OF A DISPUTE WITH THE DIRECTOR GENERAL, NSW DEPARTMENT OF HEALTH RE REVISED FEE STRUCTURE Matter No IRC 1380 of 2009 NEW SOUTH WALES HEALTH SERVICE - PRIVATE USE OF OFFICIAL MOTOR VEHICLES (STATE) AWARD Application by Health Services Union for a new Award DECISION OF THE COMMISSION [2010] NSWIRComm 42 1 On 4 May 2007, NSW Health promulgated a policy for the use of official motor vehicles ("the policy"). The vehicles were acquired by NSW Health in order to carry out its business. The policy operated from that date until its review on 4 May 2012. The policy directive was said to be capable of variation, withdrawal or replacement "at any time". 2 The policy was "mandatory" for NSW Health. Its purpose was to establish principles for the "use of NSW Health motor vehicles by employees in line with the commitment by NSW Health to efficiently resource management through effective motor vehicle policies and management procedures". 3 The policy applied to employees of NSW Health (including all public health organisations, the Public Health Support Division, the Department of Health and the Ambulance Service of NSW) "who have access to official motor vehicles for business use, an official motor vehicle on a private/business arrangement, or who have access to an official motor vehicle for private use". 4 That policy also applied to award employees and provided that employees may privately use the official motor vehicles, where approval was given by the relevant agency, in accordance with certain conditions specified in the policy including a requirement that employees give written acceptance of the terms of the policy. An employee who was in possession of an official motor vehicle and approved for some private use was required to pay a fee for that private use in accordance with the policy. 5 There are approximately 7,000 NSW Health motor vehicles of which approximately 800 are made available for private use (11.5 per cent). In the context of the public health workforce this facility involves less than one per cent of staff, comprising around 500 white collar Health Service Managers earning in excess of $100,000 per annum, with the next significant group being doctors earning between $186,000 and $366,000 per annum and the remainder being nurses and trades staff. 6 It is the adjustment to that rate proposed by the Department of Health ("the Department") on 12 December 2008 for award employees in those classes, which is the foundation of the industrial disputes presently before us. However, and as we will later discuss, the issues requiring determination in this decision are more limited and governed by the desire of the parties to submit for consideration some preliminary issues. THE POLICY 7 The relevant parts of the policy are as follows: Motor Vehicles - Use of Within NSW Health … Publication date 04-May-2007 … Review date 04-May-2012 … This Policy Directive may be varied, withdrawn or replaced at any time. Compliance with this directive is mandatory for NSW Health and is a condition of subsidy for public health organisations. … 2. Scope This policy applies to employees of NSW Health viz. all public health organisations, the Public Health Support Division, the Department of Health, and the Ambulance Service of NSW, who have access to official motor vehicles for business use, an official motor vehicle on a private/business arrangement, or who have access to an official motor vehicle for private use. 3. . . . 4. . . . 5. . . . 6.2 Award Employees (NSW Health Service employees only) 6.2.1 Access to an official vehicles for business/private use Award-covered employees of the NSW Health Services who require the use of an official motor vehicle for official purposes during the normal course of their duties may be offered the allocation of a motor vehicle for private use. Private use of a NSW Health vehicle is not permitted unless such use is authorised by the relevant Chief Executive or delegate, or otherwise provided for under an industrial instrument or in this policy. When the offer is made, it must clearly indicate whether the private use extends to: · Travel to and from places of work; · Other after hours and general weekend running; · Travel during periods of leave. Private use includes the carriage of non-government passengers and/or non-business passengers. Private travel, in general, includes travel to and from home, to the normal place of work, but does not include: · Kilometres travelled which are associated with emergency on call arrangements, or the security garaging of the vehicle; or · Kilometres travelled that are associated with an employee performing duties in the field, and the employee proceeding to their home after completing duty in preference to returning to their normal place of work; or · Kilometres travelled when the employee proceeds to duty directly from home on the following day to a location away from their normal place of work. Fleet needs will determine whether a vehicle will be allocated on a business/private basis. Fleets are not to be expanded to cover allocations under this clause. Vehicles cannot be allocated on a 100% private basis under this arrangement. When an official vehicle is allocated to an Award employee for business/private purposes, it is subject to the following restrictions: · The car is not to be driven by any person other than the employee or his/her nominee, being another member of the employee's household. · This nominee must have a current State driver's licence which can include Learner or Provisional licensed drivers. Note: Notwithstanding the above, where specific methods of charging for motor vehicle use for particular classifications of employees have been determined by the health Administration Corporation prior to November 1997, those approved arrangements and methods of charging for the particular classifications of employees will prevail over the charges and methodology specified in this policy. 6.2.2 Contribution rate (for Private Usage) Award-covered employees of the NSW Health Service permitted private use of a NSW Health vehicle are required to contribute at a rate determined by the Director-General from time to time. Written acceptance of this must be provided by the employee (refer to Section 7.6 of this policy). Rates effective from 1 July 2006 are as follows: Up to and including 15,000 private kilometres per annum $2,342 p.a. Over 15,000 private kilometres per annum $3,903 p.a. The rates are currently based on the SES running cost rates for six cylinder motor vehicles as determined by Premier's Department. The rates are reviewed each year and advised separately by Information Bulletin. Annual registration, insurance, roadside service arrangements, maintenance and running costs including fuel will be paid by NSW Health. Cost for cleaning of vehicles is to be met by the officer and is not to form a charge against the organisation. The formula for assessment of the rate will be 15,000 kms or 25,000 kms times the applicable running cost rate per kilometre. … Charges are to be levied each pay cycle. If an employee ceases the arrangement, no adjustment is to be made to the rate of charge e.g. employee nominates the over 15000 kms, ceases the arrangement after 3 months after travelling 5000 private kms - this employee would be required to pay 3 months worth of the $3,903 rate. A pro rata calculation as follows is to be applied: Annual Rate X Number of Days used (divided by) 365.25 … The payment by the employee to the public health organisation is payment for a taxable supply, and as such 1/11th is payable by the public health organisation as GST. The rates are not to be grossed up as the running cost rate of 15.61 cents per kilometre used to determine these rates is inclusive of GST. The public health organisation can claim input tax credits on actual running costs (i.e. fuel, tyres, servicing and repair costs). 6.2.3 Access to vehicles during leave Approval must be given by the relevant Chief Executive or his/her delegate, for the car to be used by an employee during any leave period over four working days, subject to a limit of six weeks per annum for annual leave or other type of leave. In granting such approval, the Chief Executive or his/her delegate, must be satisfied the business needs to of the NSW Health organisation will be met during the period the motor vehicle is unavailable. Officers are required to pay for all fuel used during periods of leave greater than four (4) days. The organisation is to determine the most appropriate method of ensuring that employees pay for all fuel used during leave e.g. recoup petrol card expenditure from employee or inform the employee they are not to use the official fuel card during the period of leave. The applicable annual rate is not to be adjusted when the vehicle is returned to the pool during periods of leave. ... 7. GENERAL PROVISIONS 7.1 . . . 7.2 . . . . . . 7.6 Written Acceptance of Conditions There must be a suitable written acceptance by the employee acknowledging receipt of the relevant policy statement(s), and accepting the conditions and obligations under the terms of the policy. Written acceptances are required for employees under arrangements 6.1 (Health Executive Service), 6.2 (Award Employees of the NSW Health Service), and for those employees approved on an on-going basis under 6.3 (Official Pool Vehicles). Written acceptance is to include an express acknowledgement by the employee that continued access to a NSW Health vehicle for private use is conditional upon any future variations made to either charges or conditions of use of vehicles determined by the Department of Health from time to time. 8 Thus, approval for the private use of such vehicles is discretionary and made by the Chief Executives of the Area Health Services. An individual employee applies to have a vehicle for private use and it is within the discretion of the particular CEO whether the grant is made. The major determinate for private use is whether that use is compatible with the business needs of the relevant organisation. Vehicles cannot be allocated on a 100 per cent private basis. The conditions for private use are, therefore, characterised as follows: pool vehicles are purchased or leased by NSW Health according to business needs. The vehicles are to be available for use as pool vehicles for official use during business hours. If the Chief Executive of an Area Health Service approves, an employee may be offered private use outside of business hours. 9 The extent of private use varies but may cover journeys to and from work, during evenings, weekends and during annual leave (to a maximum of six weeks where the employee pays for the fuel used during annual leave). For that opportunity the employee is charged a fee depending on the kilometres travelled during the year. Written acceptance by the individual employees of the conditions for the grant is required: that acceptance includes a proviso that the employee accepts any future variations made to either charges or conditions of use of vehicles as determined by the Department from time to time. 10 The Department sets the usage charges for such private use from time to time. The current formula was introduced in 1998 following consultation with the unions. The formula had regard to a wide range of vehicles, ranging from small cars to large four wheel drives. The per kilometre rate for running costs set by the Department of Premier and Cabinet for a sedan (Commodore or Falcon) sized vehicle was adopted as a suitable 'middle of the road' figure. THE EMERGENCE OF AN INDUSTRIAL DISPUTE 11 On 12 December 2008, NSW Health wrote to the General Secretary of the Health Services Union ("HSU") notifying an intended significant increase in the charge to its employees for the private use of Department motor vehicles. It is appropriate to record the contents of that letter: Revised fee structure for private use of NSW Health motor vehicles The 2008-09 Mini Budget identified a range of strategies to improve the State Government's financial position and consolidate its AAA credit rating. One of these measures is to revise the fee structure for private use of motor vehicles by Award employees to more closely reflect the costs borne by NSW Health. Award covered employees of NSW Health are, subject to approval, able to utilise NSW Health owned/leased motor vehicles for private purposes. Employees approved under this facility are required to contribute at a rate determined by the Director General from time to time in order to qualify for such usage (Information Bulletin IB2008_021 refers). Review of the existing fee structure indicates that current changes fail to adequately recover the cost for use and are significantly below corresponding rates set by the NSW Government for authorised public sector employees and the Australia Tax Office for the Australian community. Accordingly, NSW Health considers that amendment of the existing fee structure is warranted. Existing rates are as follows: Private Usage Category Fee Up to and including 15,000km (private) p.a. $2,996 p.a. Over 15,000km (private) p.a. $4,993 p.a. The existing fee structure is based on a rate of 19.97 cents per km multiplied by either 15,000 or 25,000 km's. This rate reflects the official NSW State Government "running cost" rate for a large standard passenger vehicle. This rate is structured to meet various costs including fuel, tyres, servicing and repairs. However, this rate makes no allowance for the depreciable amount of the vehicle nor standing costs such as insurance, registration and other fixed costs. Existing NSW Government policy associated with other categories of staff approved to utilise Government owned or leased vehicles for private purposes require such staff to contribute to both the depreciable amount and standing costs in addition to the per km running rate. Accordingly, a revised fee structure has been developed to ensure consistency for all staff in addition to ensuring adequate cost recovery is achieved. To provide time for employees to consider future private use options partial fee adjustment will occur on 1 February 2009 with full implementation on 1 July 2009. Revised rates are: From 1 February 2009 - 30 June 2009 Up to 2600cc 2601cc and over Up to and including 15,000km (private) p.a. $5,292 p.a. $6,707 p.a. Over 15,000km (private) p.a. $7,050 p.a. $8,704 p.a. From 1 July 2009 Up to 2600cc 2601cc and over Up to and including 15,000km (private) p.a. $7,588 p.a $10,417 p.a. Over 15,000km (private) p.a. $9,106 p.a. $12,414 p.a. The following advice is provided in relation to the revised arrangements: · Staff choosing to exit existing private use arrangements will be able to do so without penalty. · The revised fee structure includes provision for the engine capacity of the vehicle to be taken into account when calculating the contribution rate. This provision effectively reduces costs associated with vehicles with engine capacities below 2601cc noting that the existing fee structure is based on the official NSW State Government "running cost" rate for a large standard passenger vehicle (i.e. over 2600cc). The structure ensures that employees are not required to contribute at the large passenger vehicle rate unless their vehicle falls within that category. · The revised rates are based upon employees travelling 10,000 or 20,000 private kilometres per annum (not 15,000 and 25,000 kilometres as is the case under the existing facility). This amendment reduces the fee for the employee. · Consistent with current policy, whilst logbooks are required for private usage to ensure employees stay within their respective band, it is not intended to charge employees based on actual private kilometres (other than for movement between the two bands). You are invited to make comments on the proposed arrangement in writing by 16 January 2009. Initial enquiries should be directed to Ms Annie Owens, Director, Workplace Relations & Management, on telephone … Ms Owens will be happy to meet with you to clarify or discuss any aspect of the proposed arrangement. 12 Thus, prior to that proposal there were two rates of charges, one for private travel of up to 15,000 kilometres per annum and the other for private travel over 15,000 kilometres per annum. Both levels of charges used the same calculator based on running costs of 19.97 cents per kilometre for a large family sedan, that is, 15,000 kilometres x 19.97 = $2,996 per annum and 25,000 kilometres x 19,97 = $4,993 per annum. These charges took effect from 1 April 2008 and are still current pending this application. The Department proposed a significant increase to those charges. 13 Following a number of Consultative Committee meetings with the HSU, the New South Wales Nurses' Association ("NSWNA") and the Australian Salaried Medical Officers' Federation (New South Wales) ("ASMOF") ("the unions"), the Department reviewed its original proposal and offered a modified calculation based on average actual kilometres travelled. Even then, this reflected an average 65 per cent increase for private use to 35 per cent increase in business kilometre split. 14 To soften the impact of the increase, the Department also proposed a two-phase implementation, with 60 per cent of the increased charges (payable from 1 September 2009 and the remaining 40 percent from 1 July 2010). The unions did not accept the compromise and moved to a further stage in the dispute resolution process. NOTIFICATIONS OF DISPUTE 15 On 27 April 2009, the HSU notified the Commission of the existence of an industrial dispute pursuant to s 130 of the Industrial Relations Act 1996 ("the Act"). ASMOF notified on 30 April 2009 and the NSWNA on 31 August 2009 (collectively described as the "dispute proceedings"). 16 In each industrial dispute notification, the notifier complained, on behalf of its members, about the proposed fee increase for the private use of Department motor vehicles. For example, in its notification the HSU stated: The Health Service Union (HSU) on behalf of our members employed by The Director General of the Department of Health New South Wales (The Employer) is disputing the decision of the Department to increase Motor Vehicle rates for Private Use of Motor Vehicles and associated variations to the policy. The HSU is requesting that clause 26 of the Health Employees' Conditions of Employment (State) Award be invoked until such time as this dispute is resolved. As the Department has indicated that it intends to introduce the increased rates from the 1 May 2009. The amounts of the increases are excessive varying for individuals and in some cases amounting to a 252% increase in the costs associated with motor vehicle arrangements with their employer. COURSE OF DISPUTE AND RELATED PROCEEDINGS 17 After an attempted and unsuccessful conciliation before Ritchie C, the matters were reallocated to Kavanagh J. When the matters came before her Honour on 4 September 2009, ASMOF contended that the Commission arbitrate the question "whether the proposed increase for private use of NSW Health motor vehicles falls within the "no extra claims" clause of the Staff Specialist (State) Award and or the current Memoranda of Understanding (The Memoranda of Understanding shall be referred to as either "the MOU" or collectively as "the MOUs")". 18 The latter reference was to the MOU entered in settlement of the 2008 wage round by ASMOF (similar MOUs were entered by other health unions) and the consequent variations to health industry awards (and, in particular, to the Staff Specialist (State) Award) to, inter alia, increase wages and incorporate a "no extra claims" clause (the health industry awards, so described, are those referred to in paragraphs 30-34 of this decision). Those agreements, in the form of MOUs, which operated for the number of years, will be discussed further below. 19 On that same day, 4 September 2009, the HSU filed an application to make an award to be known as the "NSW Health Service - Private Use of Official Motor Vehicles (State) Award" under s 11 of the Act. By that application, it sought to incorporate the substance of the NSW Health motor vehicle policy into an award at the rate for private use existing prior to the Department's proposal of 12 December 2008. That matter was not formally before her Honour at the directions hearing, but was mentioned. The Department sought approval for an interim increase in the motor vehicle usage rate by way of an interim award and submitted that the "no extra claims" clause of the MOUs and health industry awards offered no barrier in that respect (a curious application in the light of a later jurisdictional challenge brought by the Department). 20 The dispute proceedings were referred to a Full Bench of the Commission and listed for call over before the Vice-President on 15 September 2009. The application brought by the HSU was joined to those proceedings. It was during the course of those proceedings the Commission determined, upon the application of the unions and with the consent of the Department, to hear a preliminary issue in the industrial dispute proceedings. That preliminary issue concerned a specific question, namely, whether the "no extra claims" clauses of the MOUs and health industry awards operated so as to prevent the Department's proposed increase in the rate for the private use of motor vehicles for the subject members of the HSU, ASMOF and NSWNA. 21 As to that issue, the Vice-President gave directions to file and serve contentions as to what the unions claim was, in relation to the "no extra claims" provisions, what the consequences of their claim would be and submissions in support of those propositions. Contentions in reply were required from the Department. 22 The Vice-President also issued a certificate of attempted conciliation pursuant to s 135(2) of the Act. 23 The Department filed submissions on 7 October 2008 (the unions also filed their submissions on that date) which, for the first time, raised a question of jurisdiction. The jurisdictional question was expressed as follows: The Director submits that the Commission has no jurisdiction to arbitrate any dispute or to make any award governing "the private use of (Department) motor vehicles". This is because the private use of such motor vehicles is not an "industrial matter" for the purposes of the Industrial Relations Act 1996 (" the Act "). ... The private use of Department motor vehicles by Health Service employees is not a matter or thing affecting or relating to work done or to be done, and nor can it be said that the private use of such motor vehicles constitutes a privilege, right, duty or obligation of either the employer or the employee in this case. Similarly so, by reference to the "examples" of industrial matters found in s.6(2) of the Act, such private use of Department motor vehicles does not constitute a "condition of employment": see s.6(2)(c) of the Act. This is because: (a) Save in the exceptional circumstances found to exist in Gillies and Ors v Health Administration Corporation and Anor [2003] NSW IRComm 243 (being s.106 proceedings), Health Service employees who access Department motor vehicles for "private use", do not do so pursuant to any term or condition of their contracts of employment with the Department. (b) Such employees do not have any "right" to such private use. It can be withdrawn by the Department at any time and, in turn, the employee can elect at any time to cease having any such "private use". (c) There is no suggestion that such "private use" constitutes a right or a privilege arising under contracts of employment or any existing industrial instrument, and there is certainly no basis for suggesting that such private use constitutes part of the "remuneration" or remuneration packages of the Department's employees (save as referred to in (a) above). (d) The terms and conditions upon which such private use occurs have always been regulated by Department of Health policy, with such policy being varied by the Director-General "from time to time". Accordingly, Department employees take up and/or retain such "private use" in circumstances where they are content with the cost and other terms of having such use and accept that those parameters may change. If, for any reason (obviously including cost), an employee decides to withdraw from such "private use" arrangement, then he or she has the unfettered right to do so. (e) Properly characterised, such "private use" arrangements constitute a licence at will, i.e. a simple commercial arrangement, beyond the boundaries of "industrial matters" even allowing for the accepted broad definition of that term: see Re Cram; Ex parte New South Wales Colliery Proprietors' Association Ltd (1987) 61 ALJR 401; but see Hot Copper Australia Ltd v Saab [2002] WASCA 190 (18 July 2002). In that case the Western Australian Court of Appeal said: "[27] I think it is impossible to attribute to the parliament an intention that the Commission should be a tribunal with power to deal with a full range of conflicts and causes of action that might possibly arise between master and servant, including between corporations and their highly paid executives and top management. In my opinion, a line must be drawn at some point to mark out the boundary beyond which it was never intended that the Commission's power to settle disputes should be exercised and I think that line must be drawn by reference to the intrinsic nature and circumstances of the particular dispute, the question being whether it is or is not really and truly a dispute of an industrial nature, susceptible of just resolution under the Act." 24 The "no extra claims" question raised by the unions was addressed by the Department, in this context, as follows: In such circumstances, the issue concerning the "no extra claims" term in the MOU document signed with the Applicant Unions does not come into play at all. In any event, the Director submits that even if the Commission had jurisdiction to deal with this particular dispute, that the "no extra claims" provision in the said MOU documents provides no obstacle to the Department proceeding to alter the basis upon which such private use charges are set, and to otherwise increase those charges as the Director-General sees fit. 25 The Department then developed contentions in support of that submission which are unnecessary to presently record. MEMORANDA OF UNDERSTANDING AND CONSEQUENTIAL VARIATIONS TO AWARDS 26 Each MOU entered between the Department and the unions arising from enterprise bargaining in 2008 indicated that the document sets out "the understanding and agreement of the parties in relation to wages and condition outcomes for employees covered by the relevant awards". 27 The HSU executed an MOU with the Department on 23 September 2008. The ASMOF MOU was executed on 17 December 2008. Both of those MOUs operated for the period 1 July 2008 to 30 June 2011. On 4 July 2008, NSWNA signed a similar MOU but it operated for the period 1 July 2008 to 30 June 2010. 28 Those MOUs are expressed in similar terms. The HSU MOU shall suffice to illustrate the relevant terms for the purpose of deciding the preliminary issues raised in the dispute proceedings. The principal clauses of the HSU's MOU are extracted below: 1.3. The parties agree that the increases provided for in this Memorandum arise from the Public Sector Wages Policy 2007 and, together with increases previously provided to members of the NSW Health Service covered by the Union arising from earlier Memorandum of Understanding and from increases awarded by the decisions of the Industrial Relations Commission of New South Wales, reflect the amount appropriate to compensate for work value changes, special case considerations, productivity and efficiency improvements across NSW Health up to 1 July 2007. 1.4. This Memorandum of Understanding will be implemented through awards of the Industrial Relations Commission of New South Wales where applicable and specified. 1.7. There shall be no further salary or conditions claims made during the term of this Memorandum of Understanding, that is from 1 July 2008 to 30 June 2011, other than provided under Clause 9, Leave Reserved... 8. No Extra Claims 8.1. The parties agree that during the term of this Memorandum of Understanding, there will be no extra wage claims, claims for improved conditions of employment or demands made in respect of the employees covered by the Union and employed under the Awards, and further that no proceedings, claims or demands concerning wages or conditions of employment in respect of those employees will be instituted before the Commission or any other arbitral tribunal. 8.2 The agreement in the preceding paragraph does not prevent the parties from instigating any proceedings with respect to the interpretation, application or enforcement of this Memorandum of Understanding or existing provisions in the Awards or other Awards applicable to employees covered by this Memorandum of Understanding. 10. Understandings and Undertakings 10.1 The parties have developed this Memorandum of Understanding in good faith based on information shared by the parties during the negotiation process. To the extent that other exigencies arise which the parties have not anticipated, or other circumstances warrant, the parties will confer and if necessary and or/desired make an application to vary the Awards by consent. 29 In accordance with cl 1.4 (similar clauses appear in the MOUs for ASMOF and the NSWNA) various provisions were incorporated in health industry awards to reflect the terms of the MOUs both as to increased wages and conditions and a provision for "no extra claims". 30 We note, in passing, that it was contended by ASMOF that the industrial dispute also concerned the issue of whether the increase in the fee for private use of motor vehicles proposed by NSW Health was precluded by the "no extra claims" clause of the Staff Specialist (State) Award. The NSWNA submitted that the question to be determined was whether the "no extra claim" provision in cl (2) of the Public Health System Nurses' and Midwives' (State) Award 2008 precluded the Department from changing the manner in which nurses are charged for private use of work vehicles during the term of the award, that is, up to 30 June 2010. Thus, the preliminary question in the case concerns the "no extra claims" provisions of both the health industry awards and the MOUs. 31 The "no extra claims" clause incorporated into the Staff Specialist (State) Award was in the following terms: Subject to Clause 29, Leave Reserved there will be no extra claims until 30 June 2011. The salary increases provided by this Award compensate for and extinguish all work value, special case or other claims referable to any period prior to the date of the making of this Award. 32 Clause (2) of the Public Health System Nurses' and Midwives' (State) Award 2008 was as follows: There shall be no further salary or conditions claims made during the term of this Award, that is, to 30 June 2010, except as provided for in the Memorandum of Understanding between the NSW Department of Health and the NSW Nurses Association dated 4 July 2008. 33 The HSU did not make any submission regarding the "no extra claims" provisions of relevant awards to which it is a party. However, the MOU entered into by that union covers the following health industry awards: · Health and Community Employees Psychologists (State) Award · Health and Employees Medical Radiation Scientists (State) Award · Health Employees Pharmacists (State) Award · Health Employees (State) Award · Health Employees Technical (State) Award · Health Managers (State) Award · Health Professional and Medical Salaries (State) Award, excluding Career Medical Officers · NSW Health Service Health Professionals (State) Award · Public Hospital Residential Services Assistants (State) Award · Royal Rehabilitation Service - Weemela Unit - Residential Care Staff (State) Award. 34 Each of these awards contain a similar "no extra claims" provision found in the aforementioned health industry awards to which ASMOF and NSWNA are a party. CONSIDERATION "NO EXTRA CLAIMS" PROVISIONS 35 The preliminary issue, thus raised for adjudication, is whether or not the "no extra claims" clauses in the health industry awards or the MOUs reached in settlement of 2008 wages round have the effect of preventing or limiting the Department from altering the rate charged for the private use of motor vehicles assigned to employees or the formula used to fix that rate. The Department also raised a jurisdictional issue going to issues of broader character to which we will later return. The Union's Case 36 In summary, the unions made the following written submissions in relation to the issue as follows: 1. The proposed fee increase for the private use of Department motor vehicles was precluded by the "no extra claims" clause of the respective union awards. 2. Each of the MOUs also contained a "no extra claims" clause and do not provide for any "claims" concerning an increase to the rate of private vehicle use. 3. There can be no extra claims in favour of either party whilst a "no extra claim" provision is operative in the awards unless by agreement: Re: NSW Education Employees (Non Continuing Contract Employment) Award (1998) 92 IR 239. 4. The "no extra claim" clauses are essential to the settlement of award (and non-award) disputes in Australian wage fixing and a strict approach to their construction should be applied: Corrections Health Service Nurses State Award (1999) 90 IR 235. 5. The "no extra claims" commitment covers both employers and employees for the term of the awards or MOUs' duration. 6. The combination of the awards and the MOUs demonstrated that the Department should await the expiry of the present awards and MOUs before reviewing the motor vehicle issue otherwise the Department is in breach. 7. The HSU's MOU states "there will be no extra wage claims, claims for improved conditions of employment or demands made in respect of the employees covered by the Union and employed under the Awards...". The HSU submitted that the words "demands made in respect of employees" are of "wide import" and operate to exclude the demand by the Department to make its employees pay higher fees for private use of motor vehicles. 8. ASMOF submitted cl 10 of their MOU - Leave Reserved, nominated specific matters (including award and non-award matters) which the parties may raise during the MOU's currency (see cl 10.1 (a)). They further submitted that cl 1.1 of the ASMOF MOU specifically addressed unanticipated "exigencies" and contained a mechanism for dealing with these by consent. Accepting for the purposes of argument only that the 2008 "mini budget" created such an exigency (this is rejected by the unions), the Department would be required to approach it strictly in accordance with this clause but has failed to do so. The Department's Case 37 The Department's written submissions with respect to the "no extra claims" provisions of the health industry awards (and the corresponding provisions in the MOUs) was as follows: (a) The "no extra claims" commitment is directed to the unions and not to "the Department". (b) In any event, even if the "no extra claims" commitment was said to apply to "the Department" as well as to the unions, the proposed alterations to the "private use" policy obviously does not constitute a proceeding, claim or demand concerning wages or conditions of employment of the employees covered by the various awards. (c) The "no extra claims" provision is designed to ensure that agreements reached with respect to matters already in the respective awards, or added (either as new or varied) matters will not be revisited during the life of the MOU (and respective awards), save in the absence of further agreement between the parties. Such an industrial "status quo" arrangement was clearly not intended to prevent the Department from otherwise conducting the Public Health System in such manner as it sees fit, and in accordance with directions from the New South Wales Government (in this case via the November Mini-Budget). (d) The fact that it is common ground that increases in "private use" charges were not "on the table" during the last round of wage/condition negotiations, only serves to confirm the fact that such private use charges do not form part of the contracts of employment of Department employees, and have not ever been the subject of industrial agreement or regulation via industrial award. The absence of "private use" from such negotiations also serves to confirm that the usual operation of the Department's "private use" policy was not intended to be the subject of the "no extra claims" provision (even if, which is denied, it applied to the Department as well as to the unions). 38 In summary, the Department made the following oral submissions: 1. The private use of motor vehicles is an individual arrangement between the employee and employer. The individual had expressly agreed that the employer had the right to unilaterally vary the rates of the private use of vehicles. This was never intended to be overseen by the "no extra claims" commitment. 2. It makes no logical sense to suggest that everything is "frozen" in time because of the "no extra claims" commitment. It is not a sensible construction of the "no extra claims" commitment in this context. Consideration 39 We agree with contentions advanced by the unions that the "no extra claims" clauses of the health industry awards hereunder consideration operate so as to commonly bind all parties to the awards. The Full Bench in Re: NSW Education Employees (Non Continuing Contract Employment) Award (1998) 92 IR 239 at 245 expressed that conclusion thus: In an industrial relations context the purpose of a no extra claims clause in a consent Award is that for the period of [sic]duration of the Award there will be no extra claims in favour of either side unless by agreement (emphasis added). 40 We also agree with the contentions advanced by the unions that a strict approach to the construction of the "no extra claims" provisions of industrial instruments should be adopted by the Commission. Wright J in Re Corrections Health Service Nurses' Award (1999) 90 IR 235 at 245 described the correct approach to construction in such cases (with a necessary caveat) as follows: It should be emphasised that the Commission must ensure the integrity of not only its own wage fixing principles but also the strict observance of agreements and undertakings given by parties compliance with which, properly considered, are important and indeed essential to the integrity to the principles. Undertakings such as no extra claims provisions are crucial parts of the integrity of the system of wage fixation which occurs in the New South Wales system of industrial regulation. Therefore, nothing in this decision should be seen as providing any precedent for any other award or for any other part of the public sector. It is to be emphasised that this decision is arrived at in the light of the very particular and unusual set of circumstances of the present application. Any other consideration of such matters would necessarily depend on its particular facts. In approaching the construction of no extra claims provisions, or provisions such as those contained in the Heads of Agreement, a strict approach of [sic] their construction should be applied consistent with the necessity of maintaining the integrity of the wage fixation principles. Nevertheless, a strict construction (that is, one which would be alert to ensure inappropriately brought claims do not proceed) does not require the Commission to ignore actual words used in the provision or to ignore a clear attempt by the parties to limit the terms of the commitment. 41 However, we do not consider the "no extra claims" clauses have the effect of constraining the determination by the Department to vary the private use of motor vehicles policy as proposed by the unions. 42 Each of the health industry awards forbid the making of "extra" or "further" claims during the life of each instrument. The expression "no extra claims" has an industrial meaning which may be altered, in particular instances, by the terms of any commitments given by the parties to the award (either by the terms of the award itself, or, as is often the case, by a preceding, inter-connected agreement recording the settlement of wage and conditions claims for a specified period of time). 43 The industrial meaning of the expression "no extra claims" was provided by the Full Bench in Re: Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award and another [2008] NSWIRComm 209 at [15] and [16], in a discussion as to the purpose of such provisions, as follows: 15 We would observe that no extra claims undertakings were adopted in the early 1980s in the federal Metal Industry Award 1971, as a device to prevent further award, but particularly over award, claims being made for an agreed period. Such undertakings have become a standard feature of wage fixing arrangements both at the federal and State level, especially through the mechanism of wage fixing principles. Commendably, employees, unions and employers have regarded their commitments to make no extra claims during the life of an award or agreement as solemn undertakings and rarely have they been breached. The commitments have been regarded as morally, as well as legally binding. 16 The purpose of no further claims commitments is to ensure certainty during the life of the relevant industrial instrument. That is to say, all matters agreed or arbitrated upon represented a settled arrangement for the term of the award or agreement. Depending on the terms of the commitment, employers could plan and act on the basis that during the life of the award or agreement, they would not incur any additional labour costs or industrial action in support of extra claims, nor would they be required to divert resources to dealing with such claims. Employees and their unions would not face claims to cut wages or alter to their detriment employment conditions prescribed by the award or agreement. 44 Whilst this passage and the judgment of the Full Bench in Re: NSW Education Employees (Non Continuing Contract Employment) Award (1998) 92 IR 239 (at 244) make clear that the union's contention as to the operation of the "no extra claims" provisions of the health industry awards may not be defeated merely because there is no specific provision in the subject awards for the private use of motor vehicles, we do not consider the determination made by the Department with respect to the rate charged for such usage may be described as a claim to reduce the employment conditions provided by award or agreement. Whilst, the ordinary literal meaning of the word 'claim' may contemplate any demand for something as due, or as to a right, in an industrial context the provisions do not have such a wide meaning or scope. 45 A determination by the Department to exercise a right to vary the private rate for motor vehicles in accordance with an agreement made with a particular employee could not, in our view, be described as a claim for the purposes of the "no extra claims" provisions of the health industry awards. 46 Whilst such a determination may, in appropriate cases, and subject to jurisdictional questions, be challenged on grounds of fairness or reasonableness, it neither has the effect of reducing an existing award entitlement nor advancing any new or additional claim or demand over those existing at the time the parties entered into the award provisions (or the pre-existing agreements in the form of the MOUs). 47 This same conclusion may be reached by reference to the "no extra claims" provisions of the MOUs. We have already indicated why recourse to those agreements is appropriate. To that may be added two considerations. First, in an industrial context the MOUs might, by their own force, serve to restrain claims made contrary to the "no extra claims" provisions of those agreements. Secondly, this approach to the construction of the health industry awards is consistent with the principle which requires the instrument to be considered in context: Fox v GIO Australia (2002) 56 NSWLR 512 at [46]. This has been applied by Full Benches in Campbells Cash & Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 53 NSWLR 393 and Metrocall Inc v Electronic Tracking Systems Pty Ltd (2000) 52 NSWLR 1. That context may include in the appropriate case reference to the source from which the award derived. As Burchett J (with whom Drummond J agreed) stated in Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518-519 "when the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground" (see also Zoological Parks Board of New South Wales v Australian Workers Union (2004) 135 IR 56 at [44]). 48 The appropriateness of this approach in the present case is reinforced by the provisions of the MOUs themselves, which provide that the agreements do not prevent the parties from instigating any proceedings with respect to the interpretation, application or enforcement of the MOUs or existing provisions of awards or other awards applicable to employees covered by the MOUs. 49 When considered in the light of the MOUs, the "no extra claims" commitments are said to prevent two types of claims or actions. First, the parties committed to precluding "claims for improved conditions of employment or demands made in respect of the employees covered by the Union and employed under the Awards". Secondly, the "no extra claims" provisions of MOUs provide "that no proceedings, claims or demands concerning wages or conditions of employment in respect of those employees will be instituted before the Commission or any other arbitral tribunal". (The provisions are very similar in each case with some minor but immaterial differences such as in the NSWNA's MOU which states that "no proceedings, claims or demands concerning wages or conditions of employment in respect of those employees will be instituted before the Commission or any other arbitral tribunal except as provided in the Leave Reserved Clause below".) 50 When seen in this context, we do not consider that it is conceivable that a proposed adjustment to the private rate of official motor vehicles is caught by the terms of the "no extra claim" clause of the health industry awards (or the MOUs). The amendment or alteration to the motor vehicle policy of NSW Health could not properly be described as a wage claim or claim for improved conditions of employment on any reasonable analysis. Nor do we consider that it could be described as a demand made in respect of employees because we consider that expression to be plainly devoted, both by its terms and in its context, to demands made by the unions for the advancement of conditions of employment for employees. In fact, there did not seem to be a strenuous argument put on behalf of the unions as to this first plank. 51 The same conclusion follows as to the second component of the "no extra claims" provisions. This outcome may be reached by one of two routes. At the simplest level the second component is excluded because there is nothing in the alteration of the policy, which involves the institution of proceedings before the Commission or any other arbitral tribunal as required by the second condition. The adjustment of the policy cannot meet that description. 52 Further, and secondly, we agree with the contention of the Department that the alteration of the private use policy does not constitute a proceeding, claim or demand concerning wages or conditions of employment covered by the various awards. The "no extra claims" provision is designed to ensure the agreement is reached in respect to matters already in the health industry awards (either as new or varied). Those matters will not be revisited during the life of the MOU save by agreement. 53 The alteration of the private use does not constitute any such thing and in any event the variation to the policy is proposed to be made in accordance with the existing terms of the policy and what it permits. In that respect, it cannot constitute a proceeding, claim or demand as the action is consistent with existing entitlement. We reiterate that we make no reference, in this respect, to the fairness or reasonableness of the adjustment proposed by the Department but merely as to whether the alteration of the policy is caught by the "no extra claims" commitment. 54 In our view, there is no substance to the claims made by the unions that the proposed alteration to the private use policy or the rate or formula described therein is precluded by the "no extra claims" provisions as found in either the relevant awards or the MOUs. JURISDICTION 55 Given that the issue currently before the Commission only concerns whether the MOUs have the effect of precluding a variation to the private use rate, the conclusion we would have reached as to the limit to the operation of the "no extra claims" provisions in the health industry awards and the MOUs would makes it unnecessary to rule upon any jurisdictional issue raised by the respondent. We do, however, propose to make some brief remarks in this respect. 56 The determination of a jurisdictional question of the kind raised in this case depends upon a question of classification or characterisation of the subject claim or term: Electrolux Home Products Pty Limited v The Australian Workers' Union and Others (2004) 221 CLR 309 at [55] and [204] and Australian Maritime Officers Union v Sydney Ferries Corporation [2009] FCAFC 145 at [20]. In the particular contest presently before us, we consider the claim essentially concerns a question as to the application or interpretation of the subject awards or the MOUs as to "no extra claims" provisions and, on a wider basis, an industrial issue as to whether provisions of that kind can or do have the effect of impeding the employer in making adjustments to the motor vehicle policy. On either basis, we consider that there is ample jurisdiction in the Commission to deal with those issues. 57 So as far as the interpretation or application of the subject awards is concerned there is ample power in s 175 of the Act for a determination to be made as to the effect of the "no extra claims" clauses of the awards. The issue raised as to the "no extra claim" clause plainly involves a question concerning the interpretation, application or operation of an industrial instrument, namely, an award (see definition of industrial instrument in s 8 of the Act) and that question arises for the purposes of the Commission exercising its functions in relation to a matter before it, namely the industrial disputes. 58 In our view, the section allows the Commission to declare the true meaning and intent of a particular provision of an award: Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch v ADT Security Pty Limited and Others (1994) 54 IR 26 at [41]. (That matter concerned the interpretation of s 198 of the then Industrial Relations Act 1991 but, in our view, it is equally applicable in the present context). 59 The interpretation of the MOU is directly incidental to that process and indeed represents an important component in the process of construction of the "no extra claims" clauses of the health industry awards. In any event, the parties agreed, as part of the MOU itself, that proceedings might be brought to interpret or apply the terms of the MOU or related awards. 60 We also consider that a question as to the operation of the "no extra claims" provisions of the MOU relevantly falls under the definition of industrial matters. No extensive analysis is required in that respect as, in our view, a question as to the operation or application of the "no extra claims" provisions of the awards and the MOUs are matters or things affecting or relating to work done or to be done in an industry by the provision and regulation of rates of pay and conditions therein. In any event, the "no extra claim" clauses are directly incidental to the relationship between the employers and employees by the fixing of remuneration or the putting into place of an instrument which is subsidiary to the regulation thereof. It may be that the "no extra claims" clauses of the MOUs (and ultimately the awards) also fall within the description appearing in s 6 (2)(g) of the Act in that they concern "procedures for the resolution of industrial disputes". 61 We should acknowledge that the Department raised a jurisdictional issue on a much broader basis (earlier described in this decision), namely, whether the Commission had jurisdiction to deal with a question or claim concerning "the private use of (Department) motor vehicles". However that is not an appropriate characterisation of the issue raised by the unions vis a vis the MOUs (and the "no extra claims" provisions of the awards) and does not presently arise for determination in this preliminary stage of proceedings. 62 The application brought by the HSU in matter IRC 1380 of 2009 might invoke such a consideration and questions as to reasonableness and/or unfairness but even then the question will ultimately depend upon the precise, final nature of the claim and its characterisation. As we have noted that matter is not before us for the purposes of the determination of the present issues and ASMOF and the NSWNA have not, as yet, formulated specific claims in relation to that broader issue outside of their contentions in relation to the MOUs. FURTHER COURSE OF THE PROCEEDINGS 63 We accept that the ruling we have made will raise a significant question as to the further conduct of the proceedings and the proposed variation to the policy. 64 We consider that the most suitable course would be to provide an opportunity for the unions to consider this decision, and then file any application they may intend to bring in relation to the proposed adjustment to the private use of motor vehicle policy. The time allowed for this initial course will be necessarily modest so as to allow a prompt evaluation as to whether any implementation of the policy (in part or in whole) should occur at this stage (subject to any award provisions). 65 We propose to give 14 days for the parties to confer and for any such applications to be filed and served (or amended) or agreements notified. For that purpose we shall list the proceedings for directions on Thursday 6 May at 9.30 am. In the meantime we expect the existing undertakings provided by the Department in relation to the rates will be maintained although this question will be revisited at the future directions hearing. __________________________ 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.