Industrial Relations Commission of New South Wales CITATION: Crown Employees (Public Sector - Salaries 2008) Award and another [2008] NSWIRComm 193 APPLICANT (IRC 445 of 2008) Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales RESPONDENTS (IRC 445 of 2008) Director of Public Employment, Department of Premier and Cabinet Commissioner of Police Department of Education and Training Roads and Traffic Authority of New South Wales Presiding Officers Parliament of New South Wales PARTIES: Zoological Parks Board of NSW APPLICANT (IRC 879 of 2008) Roads and Traffic Authority of New South Wales RESPONDENTS (IRC 879 of 2008) Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales Director of Public Employment, Department of Premier and Cabinet Australian Services Union of New South Wales Liquor, Hospitality & Miscellaneous Union, New South Wales FILE NUMBER(S): IRC 445 of 2008; 879 of 2008 CORAM: Walton J Vice-President; Sams DP; Murphy C; McLeay C CATCHWORDS: Awards - Application for new awards in public sector - Joinder - Recommendation under s 134(2) - Memorandum of Understanding - Consent - Significance of consent - Industrial merit - Statutory requirements - Awards made LEGISLATION CITED: Industrial Relations Act 1996 Charitable Sector Aged and Disability Services (State) Award Re (2000) 103 IR 263 Crown Employees (Public Sector - Salaries 2008) Award Re [2008] NSWIRComm 142 Crown Employees (Roads and Traffic Authority - Salaried Staff Salaries and Conditions of Employment) Award 2008 Re [2008] NSWIRComm 139 CASES CITED: Operational Ambulance Officers (State) Award and others Re [2008] NSWIRComm 156 Review of the Principles for Approval of Enterprise Agreements (2000) 101 IR 332 State Wage Case 1999 (1999) 88 IR 363 State Wage Case 2008 [2008] NSWIRComm 122 Transport Industry (State) Award Re (2002) 120 IR 151 HEARING DATES: 2 October 2008 DATE OF JUDGMENT: 16 October 2008 APPLICANTS IRC 445 of 2008 Mr A Hatcher of counsel with Mr M Gibian of counsel Solicitors: Ms A McRobert, W G McNally Jones Staff IRC 879 of 2008 Ms C Viranna with Mr S Doran Roads and Traffic Authority of New South Wales LEGAL REPRESENTATIVES: RESPONDENTS IRC 445 of 2008 Mr R Kenzie QC with Mr P Ginters of counsel Solicitors: Ms J Burton, Crown Solicitors IRC 879 of 2008 Mr A Hatcher of counsel with Mr M Gibian of counsel Solicitors: Ms A McRobert, W G McNally Jones Staff JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WALTON J, Vice-President SAMS DP MURPHY C MCLEAY C Thursday 16 October 2008 Matter No IRC 445 of 2008 CROWN EMPLOYEES (PUBLIC SECTOR - SALARIES 2008) AWARD Application by Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales for a new award Matter No IRC 879 of 2008 CROWN EMPLOYEES (ROADS AND TRAFFIC AUTHORITY OF NEW SOUTH WALES - SALARIED STAFF SALARIES AND CONDITIONS OF EMPLOYMENT) AWARD 2008 Application by Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales for a new award REASONS FOR DECISION [2008] NSWIRComm 193 1 By an application filed on 2 April 2008, the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales ('the Union') sought the making of a new award to be known as the Crown Employees (Public Sector - Salaries 2008) Award which would have the effect of, inter alia, increasing the rates of pay prescribed in the Crown Employees (Public Sector - Salaries 2007) Award by three successive 6.5 per cent adjustments commencing 1 July 2008. The proposed award was intended to apply to public sector employees, including persons engaged by the Roads and Traffic Authority of New South Wales ('the RTA'). 2 On 28 July 2008, after contested interlocutory proceedings, a Full Bench joined proceedings arising out of the aforementioned application to an application for a new award brought by the RTA: Re Crown Employees (Roads and Traffic Authority - Salaried Staff Salaries and Conditions of Employment) Award 2008 [2008] NSWIRComm 139. The RTA's application (filed on 12 June 2008) sought to establish an enterprise award which would prescribe the rates of pay and conditions of employment for its salaried staff with some specified exceptions. 3 Following an interlocutory ruling by a Full Bench as to a motion to set aside a summons: Re Crown Employees (Public Sector - Salaries 2008) Award [2008] NSWIRComm 142, the matter was referred to conciliation before the President, Justice Boland. At the final stages of that conciliation process, his Honour made a Recommendation under s 134(2) of the Industrial Relations Act 1996 ('the Act') aimed at resolving the then existing impasse with respect to the joined applications. That Recommendation was issued on 17 September 2008 and contained a narrative as to the steps taken in conciliation, a summary of the key issues dividing the parties and particular observations concerning agency level negotiations, together with an annexed table of recommendations ('the Recommendation') . 4 Two days later, the parties reported to the Full Bench that they had accepted the Recommendation, so made, and the matter had, thereby, settled, subject to the drafting of a Memorandum of Understanding and the refinement of the terms of any instruments which would reflect the Recommendation. In the result, the matter was adjourned for hearing on 2 October 2008, at which time the Full Bench considered and granted the then consent application of the parties for the making of two awards: the Crown Employees (Public Sector - Salaries 2008) Award ('the Public Sector Award') and the Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Salaries and Conditions of Employment) Award 2008 ('the RTA award') (collectively, 'the awards') in terms of draft instruments exhibited in the proceedings. 5 In short reasons given at the time of the making of those determinations, the Full Bench indicated that, in reaching its decision, account had been taken of the consent of the parties and the fact that the awards were predicated upon a Memorandum of Understanding executed by the Union and the New South Wales Government on 2 October 2008 which, in turn, reflected the Recommendation (we shall refer to that Memorandum of Understanding as 'the Memorandum'). The Full Bench indicated that full reasons for decision would be provided in due course. We now provide those reasons. 6 The consent of parties to applications to new awards or variations to awards is a factor which will often be important in the consideration of such applications, but it is not determinative: State Wage Case 1999 (1999) 88 IR 363 at [394]; Re Charitable Sector Aged and Disability Services (State) Award (2000) 103 IR 263 at [3] and [4] and Review of the Principles for Approval of Enterprise Agreements (2000) 101 IR 332 at [55]. Nevertheless, we consider that the consent of the parties in this matter is of particular significance for the following reasons. 7 First, the consent of the parties enables the respective applications to be considered under the wage fixing principles without recourse to the Special Case principle, notwithstanding the substantial salary increases involved in them. Principle 2(e) provides that such an application for wage increases outside State Wage Case adjustments may be granted, without requiring consideration as a Special Case, where the application is consented to by the parties (provided that it conforms with the requirements of the Act: State Wage Case 2008 [2008] NSWIRComm 122 (at [336(1)] and Annexure A) (and see Re Transport Industry (State) Award (2002) 120 IR 151 at [6] - [8]). 8 Secondly, the consent arrangements in these matters derive not only from compromises reached between the parties by their bargaining or through conciliation processes conducted under the auspices of the Act, but from an acceptance of the Recommendations made by the Commission under s 134(2) of the Act. It must be a corollary of provisions of s 134(2) which permit the Commission to take into account the rejection of a Recommendation in exercising its dispute resolution functions under the Act that it may have regard to affirmative steps deriving from the same source. Here, we think it is incumbent upon us to have particular regard to the Memorandum between the parties because it has as its genesis those recommendations. 9 There is a further factor involved in this matter which we consider requires particular comment. The Recommendation and the Memorandum which follows it represent an intricate balancing of the respective industrial interests of the Union, its Members and the New South Wales Government. As was emphasised in the Recommendation (at para [4]), a real prospect arising from the failure of the conciliation process would have been that the New South Wales Government's employment reform agenda may not have received attention in the way that it did during the course of the conciliation process, or, ultimately, the Recommendation. Whilst the Structural Efficiency Principle still remains part of the wage fixing principles enunciated by this Commission (see State Wage Case 2008 [336(1)] and at Preamble, Annexure A), those observations must be correct, having regard to the limits of the applications advanced in these proceedings. When seen in this light, the proposed awards have an overwhelming industrial merit (although we do not rule upon the merits of the reform process itself, as that matter is strictly not before us). 10 We should pause at this juncture to briefly record some of the key elements of the Memorandum and the awards mentioned by Mr A Hatcher of counsel, who appeared for the Union at the hearing of the matter. Those considerations were: 1. Save for some drafting alterations for the purposes of clarity, the Memorandum is intended to reflect the Recommendation; 2. The Memorandum sets out the understanding and agreement of the parties in relation to wages and conditions outcomes for employees covered by the Crown Employees (Public Sector Salaries - July 2007) Award for the period 1 July 2008 to 30 June 2011. This is to be achieved by the making of a new award known as the Public Sector Award and a variation of the Crown Employees (Public Sector Conditions of Employment) Reviewed Award 2006 together with other relevant variations to public sector legislation and instruments; 3. The Public Sector Award provides pay increases of 4 per cent with effect from the first full pay period that commenced on or after 1 July 2008 and two further 4 per cent increases effective from the requisite pay period on or after 1 July 2009 and 1 July 2010 respectively; 4. The parties to that award are bound by a No Extra Claims Clause which is found in cl 8 of the Public Sector Award and reflected in cl 8 of the Memorandum. That No Extra Claims Clause is, however, subject to cl 6 of the Agreement relating to agency level improvement initiatives, cl 9 of the award providing leave reserved with respect of Matter No IRC 63 of 2008 and certain consent arrangements, including those relating to changes in conditions of employment reflected in the Memorandum; 5. The Memorandum contemplates that further award changes will be implemented by way of fresh applications made by the executing parties. The Memorandum also contemplates future processes relating to managing displaced persons which will require the involvement of a wider range of industrial interests than those affected by the Memorandum. It is intended that those issues will be resolved by means of compulsory conference proceedings before the Commission initiated by a notification of dispute by Crown interests pursuant to s 130 of the Act; 6. As earlier mentioned, cl 6 of the Agreement envisages a review at the level of individual agencies. There are 50 such agencies potentially affected by the Memorandum. It is envisaged that any disputes associated with the implementation of this part of the Memorandum will be undertaken via dispute proceedings under Pt 1 of Ch 3 of the Act. The parties have agreed that the methodology employed to resolve such disputes will be the 'Bluescope Model' as described by the Full Bench in Re Operational Ambulance Officers (State) Award and others [2008] NSWIRComm 156; 7. The parties to the Memorandum agreed that the salary increases and initiatives required by the Memorandum would be equally applicable to the RTA, albeit that the relevant changes should be given effect through the making of a "new stand alone industrial instrument"; 8. The Area, Incidence and Duration Clause of the Award excludes persons employed by the RTA. This reflects the terms of cl 6 of the RTA Award which provides (consistently with the Recommendation) that the parties will endeavour to establish consolidated conditions of employment for all employees of the RTA. Thus, it is the objective of the parties to establish a separate consolidated salaries and conditions award applying to salaried employees of the RTA. 11 We are satisfied that the awards conform with the requirements of the Act. In particular, having regard to the salary increases afforded public sector employees under the awards, we consider that the awards satisfy the requirements of s 10 of the Act. We have also reviewed the awards under of s 19 of the Act, and consider that they satisfy the requirements of that section. 12 We confirm the making of the following awards: 1. Crown Employees (Public Sector - Salaries 2008) Award in terms of exhibit 1; and 2. Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Salaries and Conditions of Employment) Award 2008 in terms of exhibit 2 (with altered numbering in cl 9). ____________________________ 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.