Industrial Relations Commission of New South Wales CITATION: Sydney Water Award, Re [2006] NSWIRComm 321 APPLICANT Australian Services Union of New South Wales PARTIES: RESPONDENT Sydney Water Corporation Ltd FILE NUMBER(S): IRC 527 of 2006 CORAM: Wright J President; Staff J; Stanton C CATCHWORDS: Award - Industrial dispute - Civil maintenance employees - Conditions of employment - Application for increase in afternoon shift allowance and reduction in ordinary hours of work from 38 to 35 - Circumstances exist to re-open Award - Special case - Application in part granted re afternoon shift allowance - Award varied. Industrial Relations Act 1996 LEGISLATION CITED: Occupational Health & Safety Regulation 2001 Workplace Relations Amendment (Work Choices) Act 2005 (Cth) Re Electrical, Electronic and Communications Contracting Industry (State) Award (No 2) (2005) 147 IR 187 Re Nursing Homes &c., Nurses' (State) Award (No 2) (2005) 138 IR 409 CASES CITED: Re Operational Ambulance Officers (State) Award (2001) 113 IR 384 Re Petrol and Oil Sellers (State) Award [1963] AR (NSW) 620 State Wage Case 2005 (2005) 142 IR 337 State Wage Case 2006 (2006) 153 IR 264 HEARING DATES: 30/03/2006, 31/03/2006, 12/04/2006, 31/05/2006, 08/06/2006, 15/06/2006 DATE OF JUDGMENT: 10/09/2006 APPLICANT Mr A Slevin of counsel Solicitor: Mr P Pasfield Slater & Gordon LEGAL REPRESENTATIVES: RESPONDENT Mr R Crow of counsel Solicitor: Mr J Mattson Bartier Perry JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J, President STAFF J STANTON C Monday 9 October 2006 Matter No IRC 527 of 2006 SYDNEY WATER AWARD 2004 Application by the Australian Services Union of New South Wales for Variation re Penalties and Allowances for Shift Work DECISION OF THE COMMISSION [2006] NSWIRComm 321 1 This matter concerns an application by the Australian Services Union of New South Wales ("the Union") to reduce the ordinary working hours for civil maintenance employees, employed by the Sydney Water Corporation Ltd ("Sydney Water") from 38 hours per week, Monday to Friday, to 35 hours per week, Monday to Friday. The application also includes a claim that employees working an afternoon shift be paid an extra allowance calculated at 60 per cent more than the ordinary rate for such shift. 2 There were also claims not ultimately pressed by the Union for increases in overtime and standby rates. 3 The application was opposed by Sydney Water. Background 4 A dispute was notified to the Industrial Relations Commission of New South Wales by Sydney Water in August 2005 (Matter No IRC 4459 of 2005). The dispute related to the intention of Sydney Water to introduce an afternoon shift for its civil maintenance employees. This was opposed by the Union, essentially on the basis that the new shift arrangements would result in a reduction in take home pay for the employees. 5 Extensive conciliation occurred before Staff J. On 31 January 2006, his Honour made the following orders by consent: (1) Sydney Water Corporation shall appoint an OH&S consultant to undertake a risk assessment to identify any foreseeable hazard that may arise from the introduction of an afternoon shift in the Civil Maintenance Section of the Water Services Division. (2) Sydney Water Corporation shall direct the consultant to consult with the Civil Maintenance Section OH&S Committee. (3) Sydney Water Corporation shall require the OH&S consultant to complete the risk assessment as soon as practicable and in any case no later than 20 March 2006. (4) Sydney Water Corporation, subject to the findings of the risk assessment, may commence an afternoon shift in the Civil Maintenance Section of the Water Services Division on and from 27 March 2006. (5) The ASU shall file any application to vary the Sydney Water Award 2004 concerning afternoon shift allowances and/or hours of work by close of business on Monday 6 February 2006. (6) The parties shall have liberty to apply on two days notice to vary the terms of these orders and the directions that I now make. 6 The Union's application was filed in accordance with order (5). 7 On 27 March 2006, provisions of the Workplace Relations Amendment (Work Choices) Act 2005 ("Cth"), ("Work Choices") which purport to oust the jurisdiction of this Commission to make orders or awards affecting constitutional corporations, commenced. 8 During the proceedings before Staff J on 31 January 2006, the parties agreed to accept the decision of the Commission regardless of the terms of the Work Choices legislation. Previous Work Arrangements 9 Sydney Water's Civil Maintenance section comprises approximately 460 workers. This group of workers performs maintenance work on water pipes and sewerage pipes. The work involves hard physical labour, digging trenches and operating small plant to access pipelines and carry out repairs. 10 The work is done on both a planned maintenance and unplanned emergency basis. The bulk of the work performed by the maintenance employees is carried out on an emergency basis; that is, it is repair work carried out in response to calls from Sydney Water customers. 11 The Civil Maintenance workers are organised into nine production areas which are geographically defined. Each area has a depot which operates as its base. The nine production areas are: i) South Coast ii) North Coast iii) Inner West iv) Northern Districts v) North West vi) City East vii) South West viii) Southern Suburbs ix) The Hills District 12 The need for emergency work is notified to Sydney Water by the public through a call centre. The workers are organised into crews at each depot and once notified work is assigned a priority and then allocated to the appropriate depot. From there the work is assigned to crews. The call centre operates 24 hours per day and work is performed 24 hours per day seven days per week. 13 The shift work arrangements for civil maintenance workers prior to the changes on 27 March 2006 were complex. Civil Maintenance employees have always been day workers. The span of ordinary hours of work of employees is set by Sydney Water Award 2004 ("the Award"). Ordinary hours are to be worked between 7.00 am and 6.00 pm. Work required to be done outside of day work hours was previously organised and remunerated in accordance with the standby, callout and overtime provisions in the Award. 14 The ordinary hours were worked in two shifts. The first shift was worked from 7.30 am to 4.00 pm in eight of the production areas. In the Hills District production area ordinary hours on the first shift were worked from 7.00 am to 3.30 pm. The first shift was supplemented by another ordinary hours shift which was worked from 9.30 am to 6.00 pm. This shift was known as the span shift. Span shifts also involved rostered overtime shifts of eight hours duration on Saturday and Sunday. 15 Ordinary hours are organised in such a way that employees are entitled to one rostered day off and one leisure day off each four weeks. Every Tuesday all employees work an additional two hours to accrue sufficient hours in a month to allow the leisure day to be taken. This is known as "Super Tuesday". 16 Before 27 March 2006 work which was performed outside of ordinary hours on Monday to Friday was performed either on a continuous overtime basis or through callouts. The Award has a standby provision which allows the employer to require employees to be in a state of readiness to be called out for work outside of their ordinary hours. A penalty payment of 26 hours per week was made for employees on standby. When on standby workers could be called on at anytime to attend work. Standby workers are provided with a Sydney Water vehicle. A standby week also covered work on weekends. 17 A roster system has operated and continues to operate which assigns employees to the various arrangements relating to work outside of ordinary hours. Under the previous arrangements workers were designated to work standby or span shift. Allocation occurred on a weekly basis such that a place on the standby roster meant the employee was required to be on standby for all of that week. The employees on the standby roster were also required to be in a state of readiness to work on the weekend. Workers on the span rosters were also required to work weekend overtime of two eight hour shifts from 7.00 am to 4.00 pm. Rosters were arranged at each depot and the frequency that an individual was required to work on the standby or span shift rosters was determined by the number of employees at his depot. 18 The Award provides for penalty payments for working outside of ordinary hours. Penalty payments relate to overtime (cl 14), callouts (cl 15) and standby (cl 16). Those penalty payments constituted a significant part of the take home pay of the employees. 19 The penalties in the Award for these arrangements are: a) Standby is paid at two hours pay for weeknights and eight hours pay for Saturdays, Sundays and Public Holidays. Employees receive 26 hours pay for a week on standby. b) Callouts are paid from the time the employee leaves home at overtime rates with a minimum payment of four hours at overtime rates. The minimum pay for a callout is seven hours pay. c) Overtime is paid at time and one half for the first two hours and double time thereafter on Monday to Friday, time and one half for the first two hours and double time thereafter on Saturday with all time after 12.00 noon on a Saturday at double time and double time on Sundays. The two, eight hour weekend shifts on span shift are paid 31 hours. 20 Sydney Water tendered a printout of an Excel Spreadsheet containing the full data of the earnings of all of the civil maintenance employees for the 2004/2005 financial year. The data in the spreadsheet provides a complete picture of the earnings of the employees under the previous roster. 21 Calculations based on that data show the average remuneration for employees for the 2004 and 2005 financial years to be as follows: Number of employees Average Gross Earnings less Overtime Average Overtime Average Gross Earnings Level 1 2 $31,956.39 $21,681.22 $53,637.61 Level 2 65 $43,434.42 $25,247.70 $68,682.12 Level 3 141 $45,307.74 $24,713.64 $70,021.38 Level 4 71 $46,959.86 $31,089.33 $78, 049.19 Level 5 68 $51,265.86 $36,905.13 $88,170.99 Level 6 111 $53,627.77 $32,922.80 $86,550.57 All employees 457 $48,143.31 $29,560.87 $77,704.18 22 These figures demonstrate the reliance of the employees on the penalty rates associated with the previous arrangements. New Work Arrangements 23 In accordance with the Orders made by consent in January 2006, Sydney Water introduced new shift arrangements on 27 March 2006. Under the new arrangements the span shift was replaced by an afternoon shift commencing at 2.30 pm and finishing at 10.54 pm. In those weeks when employees are required to work on the afternoon shift they are also required to work two overtime shifts on the weekend preceding the afternoon work. Employees are also required to work weekend overtime at other times during the roster cycle. A standby roster continues to be used but the number of employees on standby arrangements at any given time has been halved. All employees, except those who have been excused from shift work due to hardship, rotate through the new arrangements in accordance with rosters produced at each depot. 24 The changes can be described this way: the span shift, which included weekend overtime, is replaced by afternoon shift with weekend overtime. The numbers on the standby roster have been halved so employees work standby less frequently. A new stand alone weekend roster arrangement, known as weekend patrol has been introduced. Evidence 25 Mr A Slevin of counsel, who appeared for the Union, called the following witnesses to give evidence in the proceedings: Mr Colin Lynch, Assistant Secretary, Australian Services Union, NSW and ACT Branch (ASU). Mr Vaughan Francis, Maintenance employee, Civil Maintenance, Sydney Water Corporation. Mr Joe Villella, Maintenance employee, Civil Maintenance, Sydney Water Corporation. Mr Justin Ignacz, Maintenance employee, Civil Maintenance, Sydney Water Corporation. Mr Adam Clapham, Maintenance employee, Civil Maintenance, Sydney Water Corporation. Mr Stephen Grace, Maintenance employee, Civil Maintenance, Sydney Water Corporation. Mr Paul Broad, Maintenance employee, Civil Maintenance, Sydney Water Corporation. Mr Simon Golightly, Maintenance employee, Civil Maintenance, Sydney Water Corporation. Ms Kathryn Heiler, Occupational Health and Safety Services Co-ordinator, NSW Fire Brigades. Mr Bradley Fitzpatrick, Maintenance employee, Civil Maintenance, Sydney Water Corporation. 26 Mr R Crow of counsel, who appeared for Sydney Water called the following evidence: Professor Derek Viner, Managing Director for Viner Group International Pty Limited and Adjunct Professor in Risk Management in the School of Engineering and Science, Swinburne University of Technology, Victoria. Ms Jennie Thompson, Health and Safety Manager, Water Services Division and Southern Operations, Sydney Water Corporation (not required for cross-examination). Mr Daniel Fitzgerald, Industrial Relations Project Manager, Sydney Water Corporation. Mr David Hall, Manager, Finance, Water Services Division, Sydney Water Corporation. Mr Geoffrey Hogbin, Project Manager, Sydney Water Corporation. Mr John Werda, Business Relations Manager, Water Services Division, Sydney Water Corporation. Mr John Gillette, Operations Manager North, Civil Maintenance, Water Services Division, Sydney Water Corporation. Evidence of the Union 27 Mr Colin Lynch is the Assistant Secretary of the Australian Services Union, New South Wales and Australian Capital Territory Branch. Leave was granted by the Full Bench to allow Mr Lynch to give evidence in place of Mr Chris Nicholson, an organiser for the Union, by adopting parts of Mr Nicholson's affidavit as Mr Nicholson was away on special carer's leave. Mr Lynch gave evidence that: (a) since early 2005 he had the conduct of the matter in respect of the introduction of afternoon shift by Sydney Water; (b) the type of work performed by civil maintenance employees is physical and it consists of the repair of sewer and water pipes; (c) as work arises wherever there is a water pipe or sewer pipe, this has meant that civil maintenance workers are required to work on pipes in or near private homes. This causes disruption to the public through restrictions to water supplied to homes and noise caused from work; (d) routine work is undertaken during the day and only emergency work is undertaken at night; (e) in 1995 there were around 1300 civil maintenance workers. Following cutbacks in 2000, there were 500 workers. At present the number of civil maintenance employees is 460; (f) there are nine production areas and depots across the Sydney/Illawarra area; (g) most of the work is reactive. Teams are required to make repairs to pipes and lines in response to calls from Sydney Water customers. These calls range from Level 2 type repairs that do not require urgent assistance to Level 6 repairs which involve major breaks in the network or blocked sewers which require urgent repairs; (h) when required civil maintenance employees will perform continuous overtime at the end of a shift. Overtime is also available on weekends on a roster system. Mr Lynch accepted that in recent times there has been such a steady flow of overtime and that it is institutionalised; (i) civil maintenance employees are required as well to undertake after hours "standby" work. This has always been a feature of the maintenance roster. There are 76 employees on "standby" at any one time. The "standby" roster is worked by all employees on a rotating basis; (j) when civil maintenance employees are employed they are told that they will be working day work with reasonable overtime and that they will also be required to perform standby work after hours; (k) the civil maintenance workers are not and never have been considered as shift workers; (l) Sydney Water have shift workers in other areas of its operation. There are four groups of workers which work shiftwork: ocean outfall workers, those working at the System Operating Centre, Schedulers and call centre workers; (m) recently, Sydney Water entered into a separate agreement with ocean outfall workers and the ASU to work 12 hours shifts. This was executed after studies were undertaken about the impact of changes. The agreement included terms in respect of shift payments and restrictions on overtime. These employees receive a shift loading of 42.75 per cent; (n) with employees not on shift work, it is a term of their employment that they are available to work on standby. No one in Sydney Water who works on standby is also required to work on shift work; (o) the primary concerns of the civil maintenance employees about the introduction of afternoon shiftwork are the effect the change will have on family life and take home pay; safety concerns and fatigue about work at night; abuse from the public associated with work on private property late at night; the prospect of continuous overtime flowing into the early hours of the morning and increased work. 28 In cross-examination, Mr Lynch conceded that routine overtime work was done on rare occasions and that programmed maintenance work was done at times during the night. According to Mr Lynch, such work was emergency work, as traffic has to be blocked off despite its programmed nature. 29 Mr Lynch acknowledged in cross-examination that he was aware in most production areas, civil maintenance employees did not work continuous overtime after day shift as there was a callout crew who could undertake the work. It was his understanding that from time to time workers have worked continuous overtime to complete jobs. He denied that day workers refused to work overtime as it would deprive standby crews of callouts. Mr Lynch stated he was aware on occasions it was the practice for day workers not to want to work overtime and for standby crews to take on the work. 30 Mr Lynch was cross-examined on the Union's preference for Sydney Water to increase by 80 the number of people employed in the civil maintenance area as an alternative to the introduction of afternoon shift. He denied that an increase of 80 employees on day shift would not improve response times on repair jobs between 3.00 pm and 11.00 pm. 31 Mr Lynch stated that increases in employee numbers during the day shift would improve response times at night. He noted that the peak period for jobs is around 9.00 am and 11.00 am, and that there is a lag of two hours between jobs being reported and crews reaching the job site. With increased numbers of workers during the peak period, Mr Lynch stated that jobs would be attended by those in the day shift rather than afternoon shift workers. His evidence was that many of the grade 5 and grade 6 jobs (high priority) are reported during the day, but maintenance personnel are not able to attend to these matters as there are reduced staff numbers. 32 However, it was conceded by Mr Lynch that about 28 per cent of all jobs for civil maintenance are reported between 3.00 pm and 11.00 pm. 33 The evidence from the maintenance employees called by the Union (Mr Francis, Mr Villella, Mr Ignacz, Mr Clapham, Mr Grace, Mr Broad, Mr Golightly and Mr Fitzpatrick) was largely similar. The common issues that emerged from their evidence were as follows: Hours of work (a) Ordinary Hours of work are from 7.30 am to 4.00 pm Monday to Friday, except on Tuesdays when work commences at 7.30 am and finishes at 6.00 pm. This enables employees to be eligible for a rostered day off each fortnight. The Hills Depot employees work from 7:00 am to 3.30 pm Monday to Friday, except on Tuesdays when they work 7.00 am to 5.30 pm. (b) Span of Hours commences from 9.30 am and finishes at 6.00 pm Monday to Friday, except on Tuesdays when it commences at 7.30 am and finishes at 6.00 pm; on Saturday and Sunday, the span of hours is between 8.00 am and 4.30 pm. Span starts on Friday and finishes on Thursday. (c) Standby - the employees are on call for emergency work on a 24 hour basis from 4.00 pm Friday to 7.30 am the following Friday. The frequency of standby varies between each employee from one in every three weeks to one in every seven weeks. Income and penalty rates (d) The employees giving evidence ranged from Level 2 to Level 6. For the financial year 2004/2005, their incomes varied from $55,000 to $149,625. (e) The employees deposed that on standby, they normally received an extra 26 hours of pay in addition to their normal pay and a minimum of four hours for a callout; (f) Employees on standby were paid the following penalty rates: (i) first two hours at a time and a half; (ii) the balance is at double time; (iii) Sunday work is paid at double time. Concerns with the introduction of Afternoon Shift (g) employees were concerned that the frequency of standbys will be reduced with the introduction of afternoon shift, thereby decreasing their take home pay. On average, the frequency for standbys is expected to be halved; (h) the estimated loss of earnings ranges from $5,000 to $60,000 per annum. The majority of witnesses estimated their losses to be between $5,000 and $15,000; (i) the employees stated that they cannot afford any decrease to their income; (j) the employees were concerned that with the fall in standbys, they would have work on weekends and work continuous overtime to maintain their current level of income; (k) some employees reported that Sydney Water encouraged them to work continuous overtime at the end of afternoon shift to ameliorate the lost earnings from reduced standby. Other employees gave evidence that continuous overtime was expected by Sydney Water, that is an employee is expected to remain until the job is completed; (l) the employees evidence was that they would experience increased fatigue as a result of working longer hours to maintain the current income levels with the introduction of afternoon shift, as well as late finishing times on afternoon shift and continuous overtime; (m) evidence was given of increased risks to employees with the introduction of afternoon shift due to increased fatigue levels and chances of conflict with the public; (n) on afternoon shift, both high and low priority jobs will be done, where as only emergency jobs were done on standby. The work of maintenance employees involves the use of jackhammers and concrete saws which generate a lot of noise which can be disruptive to the public; (o) employees were apprehensive that the public will not accept a low priority job being undertaken at night and that afternoon shifts lead to increased chances that employees will have to deal with aggressive or violent persons at work; (p) at the conclusion of afternoon shift, employees will have to find their own way home if they are not allowed the use of Sydney Water trucks. This would create difficulties as it adds another financial burden and risk for the employees; (q) employees gave evidence of their concerns that the new rosters for afternoon shift would create discrepancies for employees. Examples of employees working 12 consecutive days on occasions were given; (r) further concerns of employees are that longer working hours and late finishing times will adversely impact when their family and social relationships. Employees are worried that they will not see their families and friends when working afternoon shift, unlike the current arrangements for standby which allows social interaction. 34 Mr Francis conceded during under cross-examination that he had not accounted for the increased opportunity to work substantial overtime under the new roster in calculating his loss of income under the new shift arrangements. His evidence was that he would suffer on annual loss of $6,500 per year, and this did not take into account fewer callouts on standby. 35 Mr Francis acknowledged that it was difficult to predict the nett effect of afternoon shift on the time spent in the evening with family. On span shift, he admitted that he would get home late from time to time. 36 Mr Ignacz acknowledged in cross-examination that under the old roster he had worked 12 consecutive days, but the difference was that he was working at night. 37 During cross-examination, Mr Clapham stated that after three weeks of the new shift arrangements, he found that he was not able to sleep until 2.00 am or 3.00 am at the earliest and often 4.00 am or 5.00 am if he had undertaken continuous overtime. He stated that he still woke up at approximately 6.00 am. Even if he tried to sleep more, his young children would wake him up. 38 Counsel for the ASU tendered a document titled "Mr Broad's loss using Actual Roster". 39 Mr Broad was cross-examined on the reduction of his earnings under the new shift arrangements. Mr Broad's evidence was that he would lose $7,500 in earnings. However, he did concede that he could not predict the incidence of overtime under the new arrangements. 40 It was submitted the example of Mr Broad demonstrates the unfairness associated with the new arrangements. He will have to work significantly more hours to receive the same pay. 41 Later in cross-examination, Mr Broad stated that the work coordinator had asked every employee whether they wanted to work continuous overtime. He stated that he had worked continuous overtime only when he was on standby. 42 Mr Broad stated that on the 19 week roster he worked six weekend overtime shifts, two standby weeks and three afternoon shifts. If these figures were calculated on a yearly basis it would be 15 weekend overtime shifts, five standby weeks and eight afternoon shifts. 43 In respect of his reduction in income, Mr Broad calculated that he would receive penalty rates under the new arrangements of $24,933.50 which is $24,572.24 less than the amount he received in the 2004/2005 financial year. 44 Mr Broad would lose $9,376.50 in callout payments. For weekend overtime, Mr Broad stated that he would lose $8,342.50 under the actual roster when compared against his earnings from February 2005 to February 2006. He would lose $3,666 on standby payments for that same period. Hence, Mr Broad's loss when costing the actual roster and comparing it with his February 2005 to February 2006 earnings is $21,385. 45 Under the new arrangements, Mr Broad would gain eight weeks on afternoon shift which is worth 64 hours pay or $1,504. If he works the average continuous overtime referred to by Mr Hogbin in his evidence, he will also gain continuous overtime of $10,152. By working the additional overtime Mr Broad was not working previously, he would have reduced his loss to $9,729. 46 The impact of the ASU's application on Mr Broad's income is that: (a) if the shift allowance is increased to 60 per cent, Mr Broad would gain $3,008 per annum; and (b) if the 35 hour week is introduced then he will receive three hours per week at overtime rates which is an additional $5,076 per annum. 47 Sydney Water filed a notice disputing Mr Broad's loss in income. It disputed the loss on the following grounds: (a) the amount of penalty payments under the proposed roster for Mr Broad should be $27,283.50; (b) Mr Broad worked standby on 12 occasions per year, not nine; (c) Mr Broad worked one more weekend than what was stated in his document; (d) Mr Broad earned significantly more than the average for the period February 2005 to February 2006. During this period Mr Broad had worked 17 additional callouts and seven additional times on weekend overtime. His earnings from callouts and weekend overtime additional to his roster for this period was $8,918.25; (e) If Mr Broad maintains the level of additional standbys and weekend work between February 2005 and February 2006, and if the miscalculation of penalties are corrected, the loss to Mr Broad caused by introduction of afternoon shift results an increase in wages of $1,539.25 per annum. 48 The ASU filed a reply to the Sydney Water's document and contended that: (a) Sydney Water is correct that under the proposed roster Mr Broad will receive $27,283.50 in penalty payments. This is still $22,222.24 less than what he received in 2004/2005; (b) there is no warrant to use Mr Broad's estimates in respect of frequency of standbys. These estimates were not referred to in his document; (c) whether Mr Broad has worked significantly above the average is not the issue in the document. It calculates his actual losses under the new arrangements and demonstrates the additional hours he will have to work to maintain his earnings. Mr Broad must work 17 additional callouts and seven additional weekends to maintain his earnings; (d) the incorrect calculation of his penalties for 2004/2005 does not affect Mr Broad's loss under the new roster compared to his earnings between February 2005 and February 2006; (e) the document suggests that actual losses can be reduced by working more weekend overtime and callouts. This supports the ASU's case; (f) Mr Broad's roster under the new arrangements is burdensome. He is scheduled to work on six of 19 weekends, this would mean he would work weekend overtime on 15 occasions. If he has to work seven additional overtimes as stated in Sydney Water's notice to maintain previous income levels, he would have to work 22 weekends in the year. From February 2005 to February 2006, Mr Broad worked only seven full weekends. 49 Ms Kathryn Heiler is employed as an Occupational Health & Safety Services Co-ordinator for the New South Wales Fire Brigades. Ms Heiler provides policy advice to the executive of the Fire Brigades and leads a team of OH&S advisors who provide advice and assistance to fire fighters. 50 Attached to Ms Heiler's affidavit was a report dated 3 April 2006 which dealt with the adequacy of the risk assessment undertaken by the Viner Group International Pty Ltd on behalf of Sydney Water in respect of the introduction of afternoon shift ("Viner Report"). Ms Heiler's concerns with the Viner Report may be summarised as: (a) the scope of work described by Sydney Water to the ASU is different to the actual scope of work contained in the Viner Report. (b) important issues were missing within the report including: (i) a review of current research into working hours, shift work, fatigue and other risks; (ii) a review of current industry practices and standards; (iii) a data analysis of incidents to employees; (iv) average distance travelled by employees. This element is an issue of great concern to employees. (c) Inadequacy of risk assessment; (i) hazard identification has not been thorough and the assessment of risk has been deficient in parts; (ii) the authors of the Viner Report assumed that an introduction of afternoon shift will consequently reduce the level of overtime on day shift and cause a decrease overall. Ms Heiler contended in her report that on the material she has received, overtime will not decrease with the introduction of afternoon shift, but rather it may increase. The mitigation of risk has been based on this assumption; (iii) the Viner Report does not provide evidence for a structured, transparent and systematic approach as in Sydney Water's own HIDRA (Hazard Identification and Risk Assessment). 51 In cross-examination, Ms Heiler stated that the hazards at the workplace to which employees are exposed while working between 6.00 pm and 11.00 pm did not purely depend upon whether they are on afternoon shift or callouts. The hazards depend on factors such as hours consecutively worked prior to afternoon shift or callout; the number of consecutive shifts; the nature of those shifts worked prior to the particular point in time; travelling distance; and the quantity and quality of those shifts. 52 Ms Heiler stated that the risk of travelling distances on afternoon shift would be similar to day shift if the employee does not have to commute long distances, arrives home and sleeps before midnight and is not awake before 6.00 am. 53 Ms Heiler asserted that she has been requested to look at the adequacy of risk assessment and not to undertake a risk assessment of Sydney Water's rosters. However, she did emphasise that a comprehensive risk assessment is still necessary. 54 When cross-examined on Sydney Water's fatigue policy, Ms Heiler stated that the current policy which allowed for employees who are fatigued to absent themselves from work is not an effective primary control. It is unreliable as it is behavioural and requires self-assessment of fatigue. Employees are allowed to work a maximum of 16 hours in every 24 hours. 55 Ms Heiler was asked to state the flaws in the afternoon shift roster. She asserted that in assessing the roster, it cannot be viewed in isolation and that regard must be had to the practices surrounding the roster including overtime. 56 Ms Heiler stated that she was uncertain whether overall levels of overtime for many employees will be reduced. Although she was aware that the frequency of standbys were reduced, it was her understanding that the frequency of weekend overtime would be increased to take place on those weekends when employees would have been on standby. Ms Heiler affirmed that this information was from the salary comparisons provided in the affidavit of Mr Geoff Hogbin, Project Manager for Sydney Water. The document was used to demonstrate to employees how to maintain their earnings. 57 During cross-examination, Ms Heiler conceded that she did not know how the conclusions in the Viner Report were reached. 58 Later Ms Heiler stated that the most important thing step an employer can take is to ensure adequate rest time between consecutive shifts. She acknowledged that the period between 10.54 pm on one day to 2.30 pm the next day was adequate rest time, but did qualify that by stating a combination of factors must be taken into account to determine the adequacy of afternoon shift. 59 Ms Heiler's primary concern with the introduction of afternoon shift is the extent of overtime worked by employees on afternoon shift. Even if overtime is managed properly, she still has concerns over the working of 12 consecutive shifts, which includes the days of weekend overtime. 60 When questioned by the Full Bench in relation to health issues with shift workers, Ms Heiler stated that there is evidence that shift workers tend to have a less healthy lifestyle because of sleep disruption and there does appear to be some association with increased consumption of alcohol. 61 Questioned by the Full Bench on the issue of 12 consecutive shifts, Ms Heiler stated that it is irrelevant whether the weekend shift was initially day or on afternoon shift. The problem, according to Ms Heiler, is the fact that afternoon shift is a part of the 12 consecutive shift pattern. Evidence for Sydney Water 62 Mr Derek Viner is the Managing Director of Viner Group International Pty Ltd. The Viner Group prepared the "Risk Assessment: Introduction of Afternoon Shift" for Sydney Water ("Viner Report"), which was a report undertaken in accordance with orders made by Staff J on 31 January 2006. 63 The purpose of the Viner Report is to identify the foreseeable hazards arising from the introduction of afternoon shift by employees in the Civil Maintenance section by undertaking risk assessments. It was denied that the report was an assessment of whether shift work has a positive or negative impact on family life. 64 The Viner Report concluded that amongst other things, the introduction of afternoon shift should lead to an overall reduction in fatigue as a consequence of reduced levels of overall overtime. The rate of change of the roster and the variability in roster allocations for individuals will not be on average significantly different and hence will not affect fatigue. 65 For most of the hazards in the workplace, the Viner Report determined that the new shift arrangements will either have no effect or reduce the risk of these hazards. However, the report suggested further assessments on muscle effort exerted by workers and the risk of assault on workers arising from changes associated with afternoon shift. 66 In response to Ms Heiler's criticisms of the Viner Report, Professor Viner provided a written response dated 3 April 2006. Professor Viner acknowledged that the conclusion reached by the Viner Group was that research in respect of working shift work was easier to apply to industries such as routine manufacturing in which people rotated between three shifts in a day than in an infrastructure maintenance industry as is the case here. 67 Further it was accepted that a data analysis of considerable detail is required for an analysis of incidents to employees. This could not be undertaken within the time constraints of the report. The Viner Group did not view this as essential to the risk assessment. 68 The response did concede that the emphasis on a 24 hour period within Sydney Water's Fatigue Policy and Guidelines may be inappropriate and needs review. 69 In cross examination, Professor Viner admitted that the overtime referred to in the Viner Report is continuous overtime during the Monday to Friday shifts. Although Professor Viner did accept that weekend work is overtime work, the Report did not make any comments in respect of weekend work "as it does not occur after a full shift and is unchanged (other than its frequency during the year) by the introduction of afternoon shift". 70 Professor Viner conceded that he had not viewed the final rosters that commenced on 27 March 2006. Although he had been provided with the rosters for all areas, due to time constraints he had examined only one for the purpose of preparing the Viner Report. 71 After examining the current roster for Mr Broad, which showed he had worked three weekend patrols in five weeks, Professor Viner agreed that the roster was different to the one he was shown by Sydney Water. In view of this, he stated that the conclusions in the Viner Report would have been different on the issue of overtime. 72 Professor Viner stated that travelling times for employees were not taken into account as it was viewed as not to be part of the scope of work, even though it was referred to in documents provided by Sydney Water and raised by employees as a matter of concern regarding the introduction of afternoon shift work. 73 Later in cross examination, Professor Viner was referred to a document entitled "2001 Code of Practice on Risk Assessment" published by WorkCover New South Wales. It provided in paragraph 2.1 as follows: "Once a hazard has been identified, an employer must assess the risk. This should include the following: (i) identify factors that may be contributing to the risk; (ii) review health and safety information that is reasonably available from an authoritative source and is relevant to the particular hazard; (iii) evaluate the likelihood of an injury occurring and the likely severity of an injury or illness that may occur; (iv) identify the actions necessary to eliminate or control the risk; and (v) identify records that it is necessary to keep to ensure that risks are eliminated or controlled." 74 Professor Viner conceded he had not complied with the practice under subparagraph (iii) as recommended by WorkCover. 75 An affidavit of Ms Jennie Thompson, Health and Safety Manager for the Water Services Division, Sydney Water sworn 17 March 2006 was tendered by Sydney Water. She was not required for cross-examination. 76 Ms Thompson deposed that Sydney Water has an Incident Notification and Reporting policy. This requires employees to immediately notify any threat to Sydney Water's employees or assets. All incidents reported by employees are recorded in a computerised database. Ms Thompson deposed that there were 775 incidents between September 2001 and 24 October 2005. Four of these incidents concerned attacks or threats to attack a civil maintenance employee. 77 Mr Daniel Fitzgerald is employed as the Industrial Relations Project Manager for Sydney Water. He has been employed in this position since July 2005 and has been with Sydney Water and its subsidiaries in various capacities since 1996. Annexed to Mr Fitzgerald's affidavit were the following documents: (a) a report on Award provisions for weekly working hours and on call and standby payments prepared by the Australian Centre for Industrial Relations Research and Training ("ACIRRT report"); (b) a summary of standard hours of work for public sector employees in New South Wales prepared by the Public Employment Office; (c) a document showing the ordinary weekly working hours of all classifications of Sydney Water employees for March 2006; (d) a schedule of earnings in the 2004/2005 financial year for all production employees in Civil Maintenance; (e) a summary of overtime work between February 2005 and February 2006 of Civil Maintenance employees who gave evidence in these proceedings; (f) a schedule of shift allowance provisions found in the Awards of this Commission regulating employment by Sydney Water and its predecessors ("Sydney Water Historical Awards"); (g) a schedule of ordinary hours provisions for wages employees extracted from the Sydney Water Historical Awards; (h) a schedule of ordinary hours provision for salaried employees extracted from the Sydney Water Historical Awards. 78 The ACIRRT report undertook an analysis of the ordinary hours of work, shift rates, standby and on-call allowances in a selection of New South Wales awards. 37 awards within the New South Wales jurisdiction were selected from various industries such as steelmaking, community and health services, water utilities, electrical maintenance, metal trades, construction, engineering and local government. 79 An examination of weekly hours of work in the ACIRRT report revealed that the majority of awards provided for a 38 hour week, with some awards providing for 35 hour week. In some cases, different weekly working hours applied to different groups of workers. A large proportion of awards also indicated that the weekly hours of work were to be averaged over four weeks. 80 Shift penalties were found to be paid as a flat amount per shift or a percentage of the wage rate. With the exception of the steel industry, the shift penalty rates and arrangements were similar within each industry. The steel industry contained two different arrangements; either as a flat amount per shift (with little variation in quantum between these awards) or as a percentage of the wage rate. 81 The ACIRRT report concluded that for ordinary weekly hours and shift rate provisions in respect of the Awards examined, there was a clear trend of consistency in entitlements, that is, there was little variability in the quantum between different awards. 82 In table 1.2 of the report which was titled "Ordinary hours provisions in selected NSW awards", the number of ordinary hours per week for the Award is listed as "35 or 38 with 1 RDO per four weeks". Importantly, the report stated that under the "Hunter Water Award", the number of ordinary hours per week was "38 for all full-time wages employees and all designated field supervisors, day workers and shift workers. Otherwise 35 hours per week." 83 The report disclosed that the majority of afternoon shift allowances paid as a percentage of the wage rate were between 10 per cent and 20 per cent. The afternoon shift rates for Sydney Water and Hunter Water were listed at 120 per cent and 117.5 per cent respectively. 84 In respect of on call and standby allowances, the report stated there was a diverse approach to such payments. It was noted that consistency in arrangements and quantum existed between awards from the same industries. 85 The summary of standard hours of work for public sector employees as at June 2005 annexed to Mr Fitzgerald's affidavit stated that the total number of public sector employees was 218,114. From that total, those listed as working 38 hours was 141,012 and the total for employees working 35 hours was 57,773. Relevantly, for the classification of Labourers and related workers, 10,088 worked 38 hours per week whilst only 1,052 worked 35 hours per week. 86 The document showing the ordinary weekly working hours of Sydney Water employees listed the numbers of employees working 35 hours per week compared with those working 38 hours per week. In the Water Services division, the total number of employees working 38 hours per week was 818 compared to 80 employees working 35 hours per week. Significantly, the maintenance workers relevant to these proceedings are classified as working 38 hours per week. Within the entire Sydney Water organisation, there were 2,394 employees working 35 hours per week and 873 employees working 38 hours per week. 87 The schedule for shift allowances extracted from the Sydney Water Historical Awards outlined the historical changes for the afternoon shift rate for employees of Sydney Water and its predecessors. Shift allowances for afternoon shifts was first included as a flat amount per shift in November 1971. Under the heading of "Shift Work (Regular Maintenance)" the Award provided that: (vi) employees working on afternoon or night shift, shall be paid an extra rate of two dollars and twenty-five cents per shift whilst so employed. 88 Loading for afternoon shift, of time and a half, was introduced in September 1976. This loading was changed to a 20 per cent allowance in addition to the ordinary rate of pay in June 1983. The 20 per cent loading for working afternoon shift reflects the current Award provision. 89 The schedule of hours of work extracted from the Sydney Water Historical Awards lists the historical changes in the hours of work for employees of Sydney Water and its predecessors. In November 1971, the relevant Sydney Water Historical Award under the heading "Hours of Labour" provided as follows: Subject to the provisions of this Award the hours of labour shall be as follows: (viii) maintenance man - sewerage, and other employees when working in sewers on night shift - 36 per week, to be worked in five shifts of seven, 1/5 hours each, with no crib time; (ix) maintenance men - sewerage, and other employees, in sewers not over three feet six inches in height, and in sewer shafts over 20 feet in depth - 36 per week; (x) maintenance men - dams, either (a) 40 per week, or 80 per fortnight, to be worked in ten shifts of eight hours each between 7.00 am and 5.00 pm, Mondays to Sundays, both inclusive, with not more than one Sunday on in every three, and with at least one clear day off in every roster week. Provided that for work performed on a Saturday or Sunday, as part of a regular roster, payment shall be made at the rate of time and one half. 90 In June 1973, an additional subclause was inserted in the "Hours of Labour" clause within the relevant Award which provided that: (xxiii) employees, male, not otherwise provided for - 40 per week. 91 The "Hours of Labour" provision was changed in June 1983 in the relevant Award. It stated: (8) maintenance employee - sewerage, and other employees when working in sewers on the night shift - an average of 34 1/5 ordinary hours per week over a 4 week period, to be worked in 19 shifts over the four week period of seven 1/5 hours each, with no crib time; (9) Maintenance employee - Sewerage, in sewers not over 107 metres in height, and in sewer shafts over 6.10 metres in depth - an average of 34 1/5 ordinary hours per week over a four week period to be worked in 19 shifts over the four week period of seven 1/5 hours each. (10) maintenance employees - dams, either (a) an average of 38 hour week over a four week period, to be worked eight hours each day except for one leisure day off in each four week period, or (b) an average of 28 ordinary hours per week over a 28 day cycle to be worked in 19 shifts over the cycle of eight hours each between 7.00 am and 5.00 pm Monday to Sundays, ... ... (23) Employees, not otherwise provided for - an average of 38 hours per week. 92 Subsequently, in June 1994, the clause for hours of work in the Award provided the following: 9.2 (a) The ordinary working hours will be: (i) 35 per week, seven hours per day, Monday to Friday inclusive, between the spread of hours 7.00 am to 6.00 pm; or (ii) an average of 38 hours per week over a four week period, Monday to Friday, eight hours per day between the spread of hours 7.00 am to 6.00 pm, except for one leisure day off in each four week period. 93 This ordinary hours provision has remained unchanged and is set out in the same form within the Award. 94 In cross-examination, Mr Fitzgerald agreed that during the negotiations for Award in 2004, the ASU had made claims for a 35 hour week. To resolve these issues, an agreement was made to introduce a leisure day. He stated that a 35 hour week was not an outstanding matter as the ASU membership had accepted the proposal. 95 Mr Fitzgerald denied that an introduction of afternoon shift was a part of negotiations for the 2004 Award and stated that Sydney Water's position was that it is entitled to introduce afternoon shifts under the current Award so long as Sydney Water followed the consultative procedures set out in Clause 52 of the Award. 96 In respect of the shift allowance for Ocean Outfall employees, Mr Fitzgerald stated that he was aware a study was undertaken before the introduction of shift work and its impact on the employees. He acknowledged that the only external study undertaken in respect of introduction of shift work for civil maintenance employees was the Viner Report. 97 In respect of the impact on employee earnings with the introduction of afternoon shift, Mr Fitzgerald acknowledged that it was a valid issue and it was raised by the ASU. He agreed that the examples of earnings provided to the union during the consultation process were model figures, not actual figures. These figures were prepared by Mr Geoff Hogbin. 98 Mr Fitzgerald acknowledged that Mr Lynch asked Sydney Water to provide information on the impact of the introduction of afternoon shifts on each maintenance employee, but Sydney Water were unable to provide such information due to the uncertainty in predicting the impact of shifts on each employee. He conceded that Sydney Water did not provide the actual earnings of employees during the consultation process. 99 Mr Fitzgerald denied that clause 9.5 of the 2004 award, "Variation of Hours", provides for an additional shift allowance. He stated that this clause relates to the short term requirements to perform work outside the ordinary hours, rather than rostered shift arrangements. 100 According to Mr Fitzgerald, the relevant Award clause that applies to working afternoon shift is clause 11 of the Award. Relevantly this clause states: 11.1 General Where the process of work requires continuity beyond the span of day working hours, such work will be organised by shift hours which may be worked by full-time, temporary, part-time or casual employees. 11.2 Regular Shiftwork (a) The hours for employees engaged on regular shiftwork will not exceed: (i) in the case of employees whose ordinary working hours are an average of 38 per week over a four (4) week period or over a twenty-eight (28) day cycle - 152 hours in twenty-eight (28) days of any twenty-eight (28) day roster period to be worked in nineteen (19) shifts of eight (8) hours each; (ii) in the case of employees whose ordinary working hours are 35 per week - 70 hours in fourteen (14) consecutive days of any fortnightly roster period to be worked in ten (10) shifts of seven (7) hours each. ... (g) Employees working on the afternoon shift or night shift, will be paid an extra allowance calculated at twenty (20) per cent more than the ordinary rate for such shifts, excluding overtime shifts. 101 Mr Fitzgerald believes that the afternoon shift proposed by Sydney Water is a "regular" shift work pursuant to this clause as it is rostered. Mr Fitzgerald stated that Sydney Water relied on clause 11.1 in coming to the view that the Award allows for the introduction of shift work. 102 Mr Fitzgerald stated that it was difficult to search the history of the hours of work and shift allowance provisions in the Sydney Water Historical Awards. In respect of the 34 1/5 hours per week provisions for employees in the 1983 award, Mr Fitzgerald understood that these hours were for employees working in tunnels for long periods of time. Subsequently, he stated that the nature of work had changed and that Sydney Water is no longer building off shore tunnels. Current civil maintenance employees are not required to work in tunnels for long periods of time. 103 Mr David Hall is employed by Sydney Water as the Manager of Finance within the Water Services Division. Mr Hall attached a schedule to his affidavit setting out the aggregate labour costs for Civil Maintenance production workers additional to their annual base wage for the 2004/2005 financial year. He recalculated those costs for different scenarios. These were: (i) an afternoon shift in operation for the entire year; (ii) an afternoon shift in operation throughout the year and weekly hours reduced to 35; (iii) an afternoon shift in operation throughout the year and weekly hours were reduced to 35 with the rate of pay increased as sought by the ASU application. 104 Mr Hall deposed that the cost for Civil Maintenance production workers in 2004/2005 was $14,976,099. Under the first scenario, Mr Hall deposed that the effect on labour costs of the introduction of shift work would result in overall costs savings, mostly through a substantial reduction in callout payments and payments of the standby allowance. Standby allowance payments would reduce because there would be a reduction in the number of employees. These savings would be offset somewhat by the introduction of shift allowances. Mr Hall included additional overtime payments to day shift workers, in the expectation that they would still have to work some overtime to offset the loss of 54 employees to afternoon shift. 105 The cost under this scenario in 2004/2005 would have been $13,387,868. This would have resulted in a saving of $1,588,231 to Sydney Water. 106 Under the second scenario, there was an increase in all pay rates, as employees' ordinary weekly hours would fall by three hours with no reduction in their base wage or salary and a payment for an additional three hours of overtime per employee per week would be required in order to maintain the current level of labour hours. 107 The cost under this scenario in 2004/2005 would have been $17,301,317. This would have involved an increase of $2,325,218 in the actual costs in 2004/2005 and an increase in payments made under the first scenario of $3,913,449. There would be an overall increase in costs to Sydney Water. 108 Under the third scenario, the labour costs factored in overtime rates, standby and shift allowances. On these assumptions, the costs under this scenario would have been $23,401,909. This would have increased the actual costs in 2004/2005 by $8,425,810, and increased the payments made under the first scenario by $10,014,041. 109 Mr Hall deposed that he was involved in Sydney Water's submission to the Independent Pricing and Regulatory Authority ("IPART") in support of an application for a new operating licence to commence on 1 July 2005 and a new price structure. 110 IPART determines the prices Sydney Water may charge for its water and wastewater services. It makes recommendations to the Minister for Energy and Utilities about the granting of an operating licence to Sydney Water, and the imposition of conditions on the licence. 111 It was Mr Hall's opinion, the Award variations claimed by the ASU in these proceedings would eliminate the costs savings anticipated in IPART's determination of Sydney Water's license and price approval applications. The substantial increase in labour costs would prevent Sydney Water from meeting the labour costs targets accepted by IPART in its approval of Sydney Water's pricing structure to 2009. 112 Mr Hall believed that IPART would not approve further price increases that Sydney Water may seek as a result of Sydney Water's inability to meet improvements in labour cost and efficiency it had indicated to IPART. IPART concluded that the Water Services Division had opportunities for improving productivity which could lead to cost savings during the price period. Further, he anticipated that IPART would not excuse Sydney Water from its failure to meet labour cost and efficiency targets on the grounds of this Commission increasing Award entitlements. To meet additional labour costs flowing from the determination of this application by the Commission, Sydney Water will have to make savings in other areas. 113 In cross-examination, Mr Hall admitted that in his calculations for the introduction of afternoon shift included a reduction in standby allowance and callout payments. With more employees expected to be available for day shift, an anticipated reduction in stand down hours is expected. As a consequence, the number of hours would be reduced by 31,000 hours. 114 With less stand down hours under the introduction of an afternoon shift, Mr Hall agreed with counsel for the ASU that employees would have to work additional hours to earn the same level of ordinary pay under previous arrangements. 115 Mr Hall stated that he included an increase in continuous overtime hours of 54,285 upon the introduction of an afternoon shift. This was to ensure that there is the same level of work to compare the costs prior to the introduction of shift against costs after the introduction of shift. He accepted that to complete the same level of work, employees would be required to undertake additional continuous or weekend overtime. 116 In re-examination, Mr Hall stated that in Sydney Water's proposal to IPART, Sydney Water expected a saving of $6,000,000 from its civil maintenance division in the year 2008/2009. 117 Mr Geoff Hogbin is employed by Sydney Water as a project manager in its Water Services Division. Since April 2005, he has been involved with the introduction of an afternoon shift. He has been employed by Sydney Water in its various incarnations. He stated that there are approximately 460 production employees in the Civil Maintenance business. 118 Mr Hogbin deposed that under the new shift arrangements, he expects there to be an average of two callouts per employee per week on standby, despite the number of employees on standby being halved. The basis for this view was that high priority jobs arising prior to 11.00 pm each day will be performed by afternoon shift employees. Callouts are expected to occur only between 11.00 pm and 7.00 am, and the incidences of these are low and will continue to be low. 119 Under the new arrangements, a field supervisor will be the immediate supervisor of production employees. This employee will have the authority to callout a crew on standby, to complete an unfinished job. 120 Mr Hogbin stated that civil maintenance employees in most production areas refuse continuous overtime with, and following, ordinary or span crew work on weekdays. This was because they did not want to deprive their colleagues on standby of callouts. 121 With the new arrangements in place, Mr Hogbin expects that the occasions when a field supervisor finds it necessary to callout a standby crew will diminish. It will be only on rare occasions that continuous overtime after day shift will deprive other employees of callout payments, as the work will be transferred to afternoon shift workers. He anticipates that continuous overtime after day work will increase under the new arrangement as there will be a greater willingness and availability of employees to work continuous overtime after day work. 122 On 23 June 2005, presentations regarding the introduction of afternoon shift were made to production employees at the nine Civil Maintenance production depots. At these presentations, production employees were provided with draft rosters. Questions from employees were recorded and subsequently responses to all questions asked were circulated to employees. 123 On 7 and 8 February 2006, after discussions between the legal representatives of the parties, further presentations were given to employees at the production depots. In these presentations, documents were distributed to employees, including, a draft hardship policy, a draft roster for the depot and draft Rules and Guidelines for the introduction of shift. 124 Mr Hogbin deposed that team managers commented after the February presentations that employees had informed them that many employees had asked for rosters to be designed so that the weekend overtime shifts are in the same week as, and preceding the days on which they will work afternoon shifts. This is similar to the span crew roster arrangement. 125 Mr Hogbin stated that during his employment with Sydney Water he has developed an understanding of the hours worked and the conditions of employment of maintenance employees. According to Mr Hogbin, maintenance employees in general have worked 38 hours per week. However, at times some maintenance employees have worked less than 38 hours per week because of the conditions of their tasks. Since 1988, all maintenance employees have worked a 38 hour week. 126 Mr Hogbin annexed to his affidavit a special edition of "Frontline Connections", the newsletter for the Water Services Division of Sydney Water, published on July 2005. Under the subheading "Will there be a loss of pay?" the newsletter stated: "There is no change to anyone's base salary, however, there will be less work available that is paid at overtime, standby and callout rates. Optimising the use of continuous overtime to get jobs completed will be encouraged... Using the same roster... it is estimated that over a 12 month period, a typical employee may have less access to less overtime and penalty payments, and their take home payments could reduce by around $3,000..." 127 Mr Hogbin also annexed to his affidavit a schedule setting out for Level 3 and Level 6 employees an average salary comparison per annum working afternoon shift compared against the previous arrangements. This was provided to employees the week after the presentations in February 2006. 128 In respect of these comparisons, assumptions were made that under afternoon shift arrangements standbys and callouts would be cut in half; that weekend overtime would be doubled; and that continuous overtime would increase by 50 per cent and an afternoon shift worked once every eight weeks. These comparisons show that Level 3 employees are expected to gain $154 per annum and Level 6 employees are expected to gain $182 per annum under the introduction of an afternoon shift. 129 Mr Hogbin stated in cross-examination that the benefit for Sydney Water by the introduction of afternoon shift is increased productivity rather than financial. He went on to state that a callout would cost Sydney Water seven hours pay, for two hours worked, against the payment on shift of nine hours pay for nine hours work. 130 Mr Hogbin accepted that it was more cost effective for Sydney Water to have the afternoon shift employees work overtime for two hours than to have to callout a standby crew. 131 In respect of the frequency of callouts under the afternoon shift rosters, Mr Hogbin stated that the figures were being monitored since the introduction of the shift. Figures were due to be available at the end of July 2006. 132 Mr Hogbin stated that weekend overtime under the new shift rosters had changed from 7.00 am to 4.00 pm to 7.00 am to 6.00 pm. He accepted that the extended hours has the possibility that the number of callouts on weekends could be reduced. He also accepted that there were more employees working weekends under the afternoon shift arrangements. 133 The $1,500,000 savings that was anticipated with the introduction of afternoon shift was considered by Mr Hogbin not to be costs savings, but to be an amount that would increase Sydney Water's productivity through the reduction in callouts. He denied that one of the reasons for the introduction of afternoon shift was for Sydney Water to save costs. 134 Mr Hogbin stated that the estimated average of $3,000 lost in take home pay of employees was based on average earnings in a classification. It was not based on salary comparisons nor had he checked the figures. 135 Mr Hogbin's evidence was that Mr Lynch had stated to Sydney Water representatives in a meeting on 29 August 2005 that employees would not work afternoon shift unless there was an increase in remuneration. He also recalled Mr Lynch had stated to Sydney Water that he could not believe the estimated $3,000 wage loss provided to the employees. 136 Mr Hogbin denied that the ASU were refused access to the source data for employee earnings. According to Mr Hogbin, the request was never made. In addition, he admitted that after the ASU raised doubts over the estimated losses, he did not test his figures against the amounts that employees earned in the financial year 2004/2005. 137 Mr Hogbin stated that he had checked Mr Hall's calculations in respect of the impact of afternoon shift on the wages of civil maintenance employees. However, he could not recall when he had viewed the document. 138 Mr Hogbin admitted that his calculations of average salary comparisons had anticipated that overtime and standby would be available to the employees. He denied that he had calculated the estimated loss of wages of $3,000 by simply dividing the $1,500,000 saving by 460, the number of employees. 139 Later in cross-examination, Mr Hogbin was taken to a document titled "Further information on afternoon shift". Under the heading "loss of take home pay" it stated: "... Income can be made up by employees participating in continuous overtime on the day and afternoon shifts. It would only take two days additional time each week to recover the current average take home pay while less after hours disruption should be attractive." 140 Mr Hogbin agreed that this statement reflected the information in average salary comparisons. 141 Mr John Werda is employed by Sydney Water Corporation as the acting strategic asset manager at the Liverpool Regional Office. 142 Mr Werda was concerned about "flow on" claims by employees in the other businesses of Sydney Water if the Commission granted improvements in Award entitlements. He deposed that there are other employees such as those in the Mechanical and Electrical maintenance business which work closely with the Civil Maintenance employees on various jobs as well as being rostered on standby for callouts. 143 It was Mr Werda's evidence that the Civil Maintenance business could not meet its performance targets if its employees' hours of work are reduced from 38 to 35. To meet performance targets, Sydney Water had to preserve the increases in labour availability created by the introduction of afternoon shift. It must also maintain rostered working hours at their present level to meet workload demands. Hence if the hours were reduced, Mr Werda stated, Sydney Water would not reduce the hours actually worked by employees, but would pay employees an additional three hours each week at overtime rates. 144 Annexed to Mr Werda's affidavit was a report by IPART into the prices of the services of Sydney Water dated May 2003. The report stated that Sydney Water can achieve further costs savings and identified a range of opportunities for Sydney Water to make savings. One of the most significant opportunities was stated to be reducing corporate overhead costs, which was found to be excessively high compared against other water agencies. Other opportunities included improving the productivity in the water services division. 145 In cross-examination, Mr Werda stated that in terms of the service level agreement within Sydney Water, there is no requirement in that agreement that an afternoon shift be provided. 146 Mr Werda was taken to Sydney Water's submission to IPART dated November 2004. He stated that he was unaware of the Centre for Efficiency and Productivity Analysis undertaken in 2003 ("CEPA") included in that submission. The CEPA analysis demonstrated that under comprehensive performance measurements, Sydney Water performs relatively well compared to other firms considered. The study indicated that Sydney Water was technically efficient. 147 Mr Werda recalled that there was a benchmarking exercise which defined Sydney Water as a high cost service provider. This benchmarking exercise involved only the civil maintenance business. 148 Mr Werda accepted that one of the consequences of the introduction of afternoon shift is that employees would receive less take home pay. However, he stated that it was not the motivating factor. 149 Mr John Gillette is employed by Sydney Water as Operations Manager, North in the Civil Maintenance business. 150 Mr Gillette deposed that at the present volume of priority five and priority six breakdown repair work, he expected that employees on afternoon shift would be fully occupied by these categories of work. Priority five and priority six breakdowns are considered to be emergencies. The Key Performance Indicators ("KPIs") for these breakdowns reflect their importance. For priority five breakdowns, the KPIs are to have 65 per cent of jobs completed in three hours and 85 per cent in six hours. For priority six breakdowns, the KPIs are to have 70 per cent of jobs completed in two hours and 90 per cent in three hours. Mr Gillette expects that afternoon shift employees will be able to attend all new breakdown jobs arising during their shift. 151 Mr Gillette recalled in cross-examination that for April 2006, approximately 29 per cent of jobs would have been priority four and 70 per cent of jobs were priority five or priority six. 152 Mr Gillette conceded he was aware that there are employees being called out who are not on the standby roster. Subsequently he stated that he was not surprised that there have been 60 callouts of employees who are not on the standby roster in the previous fortnight, as Sydney Water are going through an exceptionally busy period. 153 Furthermore, Mr Gillette admitted that on the basis of the new shift arrangements since its inception, he assumes that this callout of employees not on the standby roster will increase compared to last year. Submissions 154 Mr Slevin, submitted that the thrust of the union's case is that the employees should not lose earnings in circumstances where their working arrangements have been altered to their detriment and that working conditions should be fair and reasonable. 155 When questioned by the Full Bench in respect of the factors to be taken into account in determining the application, Mr Slevin agreed that the costs of the claim and the public interest should be considered. In respect of the costs of the claim, counsel submitted that the example of Mr Broad's situation before and after the introduction of afternoon shift well illustrates that the union's claims would restore his earnings to a fair and reasonable level, despite the changes to his hours. 156 It was the union's position that the afternoon shift arrangements are unusual and are attached to other work requirements, such as the working of weekend overtime and being available for standbys, hence it justifies a higher penalty rate than what is provided under cl 11 of the Award. 157 The Union submitted an example of what is required of the employees under the new work arrangement was the work pattern of Mr Broad. Under the roster Mr Broad is required to work: (i) 12 days straight from 20 March 2006 to 31 March 2006 (the last five shifts on afternoon shift); (ii) two days off on 1 and 2 April 2006; (iii) five days day work on 3 April 2006 to 7 April 2006; (iv) two days off on 8 and 9 April 2006; (v) five days day work from 10 April 2006 to 14 April 2006; (vi) two days off on 15 and 16 April 2006; (vii) 12 days straight from 17 April 2006 to 28 April 2006; (viii) two days off on 29 and 30 April 2006; (ix) 12 days straight from 1 May 2006 to 12 May 2006 (the last seven days on standby); (x) two days off on 13 and 14 May 2006; (xi) five days on day work from 15 May 2006 to 19 May 2006; (xii) two days off on 20 and 21 May 2006; (xiii) 12 days straight from 22 May 2006 to 2 June 2006; (xiv) two days off on 3 and 4 June 2006; (xv) 12 days straight from 5 June 2006 to 16 June 2006 (the last five shifts on afternoon shift); (xvi) two days off on 17 and 18 June 2006; (xvii) 12 days straight from 19 June 2006 to 30 June 2006 (the last five shifts on afternoon shift); (xviii) two days off on 1 and 2 July 2006; (xix) 12 days straight from 3 July 2006 to 14 July 2006 (the last seven days on standby); (xx) two days off on 15 and 16 July 2006; (xxi) 12 days straight from 17 July 2006 to 28 July 2006; (xxii) two days of on 29 July 2006 and 30 July 2006. 158 The roster indicates the work pattern over 134 days. Mr Broad is required to work on 112 of those days. He has 22 days off. 159 In the 40 day period from 22 May to 30 June Mr Broad has four days off. 160 The roster cycle goes over 19 weeks. Mr Broad is required to work on nine weekends. On six weekends he is required to work all weekend and on two weekends he is required to be on standby. 161 Mr Broad is on standby twice, which means he works five day shifts and must be ready to return to work on callout after hours and on the weekend. 162 Mr Broad is on afternoon shift three times which means on three occasions he will work a weekend and then five shifts from 2.30 pm to 10.54 pm. 163 Mr Gillett gave evidence that employees are also called out to work out of hours when not on standby and that practice is becoming more prevalent. 164 Mr Broad gave evidence that he has had 30 years service with Sydney Water. He has worked in civil maintenance for 16 years. He is classified as a Level 5 employee. He lives at Woy Woy. He estimated his earnings as $90,000 in 2004/2005. He is married with two children. 165 Mr Broad was cross-examined and gave evidence that when there is no traffic it takes 45 minutes to an hour to drive to and from work. 166 Mr Fitzgerald's affidavit evidence shows that Mr Broad's actually earnings for 2004/2005 were $98,903.67. It also shows that this figure included penalty payments of $49,505.74. 167 Mr Hogbin's evidence is that employees could be expected to be called out twice in a standby week. Sydney Water pays employees a 20 per cent loading for afternoon shift. Mr Hogbin's affidavit evidence sets out the penalty payments employees can expect to earn under the new work arrangements. They are: Standby 5wks x 26hrs 130 hours Callouts 7hrs x 2calls x 5wks 70 hours Weekend overtime 31 hrs x 10 times 310 hours Shift Allowance 20%x8hrsx5daysx6 48 hours Continuous overtime 6hrs x 1.5 x 48wks 432 hours Total 990 hours 168 Mr Broad's hourly rate in 2004/2005 was $23.50. His penalty rates under the new arrangements will be $23,265 (990hrs x 23.50). The difference between the penalty payments Mr Broad received in the 2004/2005 financial year, $49,505.74 and the projected penalties to be paid under the new arrangements ($23,265) is $26,240. 169 Under the new arrangements Mr Broad will be required to attend work for 38 hours on 48 weeks (excluding four weeks annual leave) or 1,824 ordinary hours plus weekend overtime of 160 hours plus continuous overtime of 288 hours and 70 hours on callouts. A total of 2,324 hours. 170 Mr Fitzgerald's Affidavit evidence provides a week by week breakdown of the penalty payments made to Mr Broad from February 2005 to February 2006. This evidence shows that Mr Broad worked: d) 61 callouts between 4.00 pm and 11.00 pm; e) six callouts between 11.00 pm and 6.00 am. 171 Mr Hogbin's estimate is that the callouts will reduce to 10 per year. Mr Hogbin says each callout is worth seven hours pay for four hours work. The loss in income from callouts for Mr Broad can be estimated to be a reduction of 57 callouts at seven hours pay or 399 hours pay. This equates to $9,376.50. 172 Mr Fitzgerald's affidavit evidence also detailed the weekend overtime worked by Mr Broad in the 12 months from February 2005 to February 2006. It shows that Mr Broad worked 423 hours on weekends. He worked 26 Saturdays. His weekend overtime earnings were therefore 26 x 2hrs at 1.5 and the remaining hours at double time. Mr Broad was paid for (52 x 1.5 + 371 x 2) 820 hours of weekend overtime. Using Mr Hogbin's estimates this will reduce to 310 hours. A reduction in 510 hours pay or $11,985. 173 It also appears from Mr Fitzgerald's evidence that Mr Broad worked 11 weeks on standby so would have been paid 11 x 26 hr or 286 hours in standby allowance. The new arrangements will reduce this to 130 hours. Mr Broad will lose 156 hours pay in standby allowance or $3,666. 174 The losses in the preceding three paragraphs amount to $25,027.50. Mr Broad will gain $1,128 in shift allowance making potential his loss $23,899.50. 175 Mr Broad gave evidence that he did not work continuous overtime and that he did not intend to work continuous overtime under the new arrangements. Consequently, differences in overtime rates have not been considered in these calculations. 176 Mr Broad's projected income under the new arrangements is $26,240 less than his earnings in the 2004/2005 financial year and $23,899.50 less than his earnings from February 2005 to February 2006. 177 In terms of the hours worked by Mr Broad from February 2005 to February 2006, Mr Fitzgerald's affidavit shows that Mr Broad worked 949.49 hours outside of ordinary hours. He was required to work 1,824 hours ordinary time (48 weeks x 38 hours). 178 Although he could not be required to work ordinary hours without having a 10 rest period (see clause 13 of the Award), when he worked a callout on Sundays to Thursdays and he finished before than 9.00 pm he could be required to attend work at the start of his ordinary shift. If he finished after 5.00 am he could not be required to attend his ordinary shift at all. The evidence shows that Mr Broad could not have been required to attend work at the start of his shift on 38 occasions. The total hours of stand down would have been 216. 179 This evidence shows that Mr Broad spent 1,824 ordinary hours less 216 stand down hours plus 949.49 overtime hours at work in the year February 2005 to February 2006. His total hours at work were 2,557.49. Under the new arrangements he will be required to work 2,324 hours. 180 To retain his February 2005/2006 earnings Mr Broad would have to be paid a further 1,017 hours (1,017 x $23.50 = $23,899). A four hour overtime shift equates to seven hours pay. Mr Broad would have to work a four hour overtime shift 145 times to make up his loss. In other words he would have to work 580 additional hours for a total of 2,904 hours to maintain his take home pay under the new arrangements. 181 Mr Crow submitted that the Award should only be reopened on special and extraordinary circumstances. However, counsel did submit that Sydney Water did not oppose reopening the Award . 182 Counsel submitted that the essential feature of Sydney Water's submissions is that the earnings lost by employees through the introduction of afternoon shift is overtime earnings and that the loss of overtime earnings is not a proper basis awarding general increases in the Award rates of pay or allowances. Further counsel submitted that if the Commission sought to rely on some figures in respect of the loss of earnings, it should use the estimates provided by Mr Hogbin. 183 Counsel disagreed with the submissions of the ASU that employees would work more hours or a more onerous shift pattern under the afternoon shift arrangements. However, Mr Crow did concede that employees are likely to receive less remuneration as a consequence of replacing overtime with ordinary time. 184 Counsel submitted that Sydney Water is not planning to require employees to work excessive overtime. It will take steps to manage the working of overtime so that excessive overtime is prevented. 185 In opposing the claim for a 35 hour week, Mr Crow submitted the Commission is bound to give force to its wage fixing principles, including principle seven which precludes the reduction in weekly working hours below 38. 186 Mr Crow submitted that the future earnings of civil maintenance employees would be impossible to predict as their earnings are dependant upon a number of uncertainties such the incidence of callouts and overtime after the introduction of afternoon shift. 187 In respect of Mr Broad's loss of income, Mr Crow submitted that this is a loss of overtime earnings and that no employee was guaranteed overtime income. In addition, counsel submitted that civil maintenance employees have been working excessive amounts of overtime which needs to be managed by Sydney Water, particularly in light of its occupational health and safety responsibilities. Consideration 188 We propose to consider first the Union's claim for an afternoon shift loading of 60 per cent and then to consider its claim for a reduction in ordinary hours of work from 38 to 35. We also propose to make some observations regarding the expert evidence called by each of the parties about the adequacy of a risk assessment undertaken by Sydney Water in respect of the introduction of afternoon shifts. 189 Although Work Choices came into effect in March of this year, Mr Crow submitted that the Full Bench should determine this matter in accordance with the terms of the Industrial Relations Act 1996 and the Wage Fixing Principles adopted by this Commission in the State Wage Case 2005 (2005) 142 IR 337 (see now State Wage Case 2006 (2006) 153 IR 264). 190 The starting point is the requirement imposed by s 10 of the Industrial Relations Act 1996 that the Commission make awards setting fair and reasonable conditions of employment: In Re Operational Ambulance Officers (State) Award (2001) 113 IR 384 at [164] - [166]. 191 The Award clauses which are relevant to shiftwork are cl 9 Hours of Work, cl 11 Regular Shiftwork and cl 12 Other Shiftwork. Clause 9 Hours of Work provides that the ordinary hours of fulltime employees will be an average of 38 per week over a four week period, Monday to Friday inclusive, eight hours per day between the spread of hours 7.00 am to 6.00 pm. 192 Clause 11 Regular Shiftwork provides: 11. Regular Shiftwork 11.1 General Where the process of work requires continuity beyond the span of day working hours, such work will be organised by shift hours which may be worked by full-time, temporary, part-time or casual employees. 11.2 Regular Shiftwork (a) The hours for employees engaged on regular shiftwork will not exceed:- (i) in the case of employees whose ordinary working hours are an average of 38 per week over a four (4) week period or over a twenty-eight (28) day cycle - 152 hours in twenty-eight (28) days of any twenty-eight (28) day roster period to be worked in nineteen (19) shifts of eight (8) hours each; (ii) in the case of employees whose ordinary working hours are 35 per week - 70 hours in fourteen (14) consecutive days of any fortnightly roster period to be worked in ten (10) shifts of seven (7) hours each. (b) Time worked in excess of the ordinary shift hours as contained in (a)(i) and (ii) above, will be paid at overtime rates, except time worked:- (i) by arrangement between the employees themselves with the consent of the Employer; or (ii) consequent upon the periodical change from day to night shift; or (iii) owing to the replacement employee reporting for duty later than the appointed time. … (g) Employees working on the afternoon or night shift, will be paid an extra allowance calculated at twenty (20) per cent more than the ordinary rate for such shifts, excluding overtime shifts. 193 Clause 12 Other Shiftwork provides: 12. Other Shiftwork 12.1 General (a) Except as provided in Clause 9 (Hours of Work), this subclause will have application to all employees other than those covered by Clause 11 (Regular Shiftwork). (b) When on any work other than regular shiftwork and two or more shifts are worked per day, they will be worked during the hours as fixed by the Employer. Each week's work will as far as practicable be arranged on a rotational basis and completed between midnight Sunday and midnight Friday. 12.2 38 Hour Per Week Employees (a) Employees who work 38 hours per week, or less than 35 hours per week as prescribed by Clause 9 (Hours of Work), will be subject to the following conditions when two (2) or three (3) shifts are worked:- (i) the two (2) or three (3) shifts shall be of equal duration; (ii) when any one of the shifts is of four (4) hours duration or more, crib time to the extent of thirty (30) minutes on each shift shall be allowed and paid for as time worked. … 12.5 Rates (a) All time worked on the second (afternoon) or third (night) shifts will be paid for at the following rates: (i) For work carried out at a construction site (not including a recognised office or depot) time and one half. (ii) For work carried out at a recognised office or depot, time and one-quarter. For the purpose of this subclause "recognised office or depot" will mean all premises occupied by the Employer other than temporary construction site accommodation, erected on a construction site for the exclusive use of a construction workforce. (b) All time worked in excess of the ordinary shift hours as herein prescribed will be paid for at the rate of time and one half for the first two (2) hours and double time thereafter. 194 Sydney Water contended that cl 11 applies to the new arrangements and has been applying a 20 per cent loading in accordance with cl 11(g). The Union contended that the employees are not working on a regular afternoon shift. Consequently, it was submitted cl 12 applies and the relevant penalty is time and one half, as provided for in cl 12.5(a)(i). The Union contended that employees are required to work afternoon shift on an irregular basis. We do not agree with this submission. Although the present rosters show that the frequency with which employees are required to work for a week on afternoon shift varies greatly from two in 18 weeks to six in 36 weeks, the working of the afternoon shift is regular, as that word is defined in the Macquarie Dictionary, 4th Edition. It is "usual, normal and customary". It is not haphazard or irregular, but rather it is rostered. Clause 11 would therefore apply to such work. 195 The Union submitted the essential basis for the claim for an increase in the afternoon shift loading was the effect that the introduction of afternoon shift would have on employees' earnings. Mr Hogbin's evidence was that an average Level 3 employee earned $65,000 in the financial year 2004/2005. An average Level 6 employee earned $77,577 in the same year. Mr Hogbin contended that a Level 3 employee who worked under the new arrangements and also did two hours continuous overtime each shift would earn $65,715 and a Level 6 employee, assuming the same work pattern, would earn $77,759. However, the Excel Spreadsheet tendered by Sydney Water, which includes the earnings of all civil maintenance employees in the 2004/2005 financial year showed the average earnings of all Level 3 employees in the relevant period was $70,021.38. The average earnings of all Level 6 employees for the period was $86,550.57. 196 The Union further submitted that the assumptions made by Mr Hogbin were that employees would work one week in 10 on standby, two callouts per standby roster, one week in five on weekend overtime and one week in eight on afternoon shift. Mr Hogbin also included in his estimates six hours of continuous overtime each week. This is an increase of two hours per week in continuous overtime on the new arrangements. The comparison between the projected earnings by Mr Hogbin and the actual average earnings of employees at Level 3 and Level 6 results in a loss of $4,306.38 and $8,791.57 respectively. Sydney Water contended that this claim is unsound for three reasons. First, the Excel Spreadsheet shows that some employees are particularly high earners. It contended that a comparison of earnings of employees at the same grade and production area showed that it was not the roster that produced the high earnings but the pursuit of extra overtime. The high earners lift the average significantly. Second, it was contended that the comparison is unsound because Mr Hogbin's evidence was based on averages for the entire workforce and individuals present or past earnings comparison to projected earnings does not allow the conclusion to be drawn that the individual will lose earnings of a particular amount. Third, it was contended the comparison was unsound because the gross earnings in the Excel Spreadsheet included earnings not included in Mr Hogbin's calculation, such as meal money and annual leave loading. 197 The evidence showed that overtime work had increased in recent years. One maintenance employee's earnings in the 2004/2005 financial year increased from $49,397.93 to $98,903.67. This employee doubled his earnings by working overtime. This employee had calculated a loss of $7,500 from lost overtime. However, he agreed, in cross-examination, that he did not really know what the incidence of overtime would be in the future. Another employee earned a total income of $149,625 in the 2004/2005 financial year. This was approximately $103,000 above his base salary of $46,688. 198 We propose to treat this evidence with caution as it is, at best, a prediction of future losses of income as none of the figures provided in evidence, particularly in respect of future earnings could be substantiated. The difficulty with Mr Broad's evidence is whether he can be treated as a typical employee in terms of the amount of overtime that he worked in a previous year or whether he falls outside that category. Mr Broad may well fall into an atypical category because he received approximately $49,500 in overtime payments in the 2004/2005 financial year. Mr Slevin acknowledged that it was difficult to determine who was a typical employee. However, we accept that the impact of the introduction of afternoon shifts will mean less standby and callouts. Some income that will be lost because of this may be made up by employees participating in continuous overtime on day and afternoon shifts. However, we would observe that employers have a responsibility to ensure that an employee does not work excessive overtime, notwithstanding the financial pressures there may be on the employee. 199 Sydney Water acknowledged that the introduction of afternoon shifts would provide cost savings. These cost savings are anticipated to flow from the new rosters in a number of ways. There will be a significant reduction in the number of employees standing down on full pay at the start of a shift in order to complete the minimum rest period after overtime, as required by the Award. The reduction in night callouts anticipated under afternoon shift arrangements will significantly reduce these unproductive paid hours. Also, work on callouts on weekday evenings that was formerly performed at overtime rates, and for which a minimum payment for four hours was required by the Award in respect of the first callout on a day even when the job was completed in less than four hours, will now be done by afternoon shift employees. 200 Whilst Sydney Water submitted that it expected, on average, the effect on employees would be a reduction in overtime payments, this does not account for all the cost savings Sydney Water expects, and was not the main or only purpose of the introduction of afternoon shift. 201 Sydney Water contended that representations made to employees by Sydney Water during the consultation process referred, among other things, to the better management of fatigue, improved response times to leaks and breaks in pipes, improvements in productivity, increases in productive hours, operating licence requirements, water restrictions and community expectations; the evidence did not support the Union's submissions that "contrary to the representations to employees it was clearly Sydney Water's aim in introducing the new arrangements to reduce salaries". 202 The Award was made by consent. It remained in force until 30 June 2006. It could only be re-opened in special and exceptional circumstances. This is a long established principle of this Commission and its predecessor. The rationale for the principle was explained by Beattie J in Re Petrol and Oil Sellers (State) Award [1963] AR (NSW) 620 at 624 - 625 as follows: "The principle on which this appeal is to be determined is clear: except in special and exceptional circumstances, an award made by consent should not be re-opened during the period for which it is specified to operate. The relevant cases are referred to in the judgment of McKeon J in Re Sydney Daily Newspapers Agreements [1960] AR 271. It is sufficient to refer to the Moulders Case [1928] AR 566 at 607 in which, after referring to the legislative policy disclosed in the Industrial Arbitration Act that conciliation should pay an important part in the settlement of conditions, a Full Bench said – "We can conceive of nothing which would tend to discourage the settlement of industrial differences and disputes in conference and by amicable discussion, more than the knowledge that any party to an award, during the period which it was agreed it should remain in force without variation, may successfully apply to have the terms of it varied. Only in special and exceptional circumstances should a variation in such a case be granted."' 203 We consider that such circumstances exist in this case. We also conclude that the agreement between the parties for this matter to proceed to arbitration was itself a matter that would allow the reopening of the Award pursuant to s 17 of the Act. Although the Award already permits and provides compensation for working on afternoon shift, civil maintenance employees have not worked such a shift under the Award. On Sydney Water's own analysis, Level 3 employees will potentially lose a minimum of $4,306.38 and Level 6 employees will potentially lose a minimum of $8,791.57 in their take home pay. The compensation currently provided by the Award for the disability of working afternoon shift is, in our view, inadequate. We have determined that, in these circumstances, the loading currently provided in cl 11 for civil maintenance workers engaged on afternoon shift, does not reflect a fair and reasonable condition of employment sufficient to compensate employees for the disability of working an afternoon shift that has been introduced to replace long standing working arrangements which provided a level of remuneration through callout and standby arrangements that will now, on the evidence of both parties, be reduced. 204 The next question to be considered is whether the Union has established the existence of a special case in these proceedings. We consider that the Union has done so. As the Full Bench observed in Re Nursing Homes &c., Nurses' (State) Award (No 2) (2005) 138 IR 409 at [18]: The special case and work value principles have been recently considered in a number of decisions of the Commission, including, in particular Re Social and Community Services Employees (State) Award (2001) 113 IR 119 at 128 - 130; Re Operational Ambulance Officers (State) Award (2001) 113 IR 384 at 418 - 420; Re Public Hospital Nurses (State) Award (2002) 115 IR 183 at 186 - 190; Re Health Employees Pharmacists (State) Award and other Awards (2003) 132 IR 244 at [23] - [27]; Re Public Hospital Nurses (State) Award (No 4) (2003) 131 IR 17 at [16] - [22]; and Re Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award (2004) 133 IR 254 at [30] - [32] and [86] - [96]. It is unnecessary, in light of those recent decisions, to reconsider the principles except to emphasise that: 1 In order to satisfy the requirement for a special case, the applicant must demonstrate that the case has "special attributes" or is "out of the ordinary" so as to take it outside the restrictions which may otherwise apply under the wage fixing principles: Re Operational Ambulance Officers at [166]. 2 An applicant to a special case needs to establish an "adequate evidentiary foundation" to establish the special factors that warrant an award variation in order to set fair and reasonable conditions of employment: Re Operational Ambulance Officers at [168]. … See also Re Electrical, Electronic and Communications Contracting Industry (State) Award (No 2) (2005) 147 IR 187. 205 There is plainly a significant public interest in the changes in work patterns initiated in the area of work by Sydney Water being successfully implemented. We consider that these changes will result in a more efficient and cost effective service for members of the public in an important area of the State's public sector. Subject to necessary fine tuning, the changes should also result in more appropriate patterns of work for affected employees. In reaching this conclusion we are mindful that the pattern of work is far from ideal but so too was that which it is replacing which involved the working (particularly by some employees) of unnecessarily long periods of overtime. It must also be accepted that because of the nature of the work, it involves an essential public service which often has to be carried out at short notice and subject to constraints as to the times when it may be carried out. Any working pattern will therefore involve some compromise between levels of inconvenience to affected employees and the need to ensure proper service to the community and cost effective service delivery. It is in this context that the question of what are fair and reasonable conditions of employment for the employees must be determined. The evidence in these proceedings shows that a unique set of circumstances exists. Regard must also be had to the consideration that the employees have had particular levels of income and related expectations arising therefrom from the previous pattern of work which the employer had maintained for many years. It would therefore be unfair if the employees were not provided with a measure of protection in this unique situation in respect of their earnings albeit on a cushioned basis. We consider that the appropriate course to be adopted to ensure the mitigation of the potential unfairness to employees is to increase the level of shift penalties on a tapering basis; that is, a basis which will be phased down over a reasonable period. 206 We therefore propose to vary cl 11 of the Award to provide as follows: 1. Civil maintenance employees working afternoon shift from 27 March 2006 until 31 December 2006 shall receive an afternoon shift loading of 40 per cent for working that shift. 2. Civil maintenance employees working afternoon shift from 1 January 2007 to 31 December 2007 shall receive an afternoon shift loading of 35 per cent. 3. Civil maintenance employees working afternoon shift from 1 January 2008 until 31 December 2008 shall receive an afternoon shift loading of 30 per cent. 4. On and from 1 January 2009, civil maintenance employees working an afternoon shift shall receive a 25 per cent loading. It will be noted that we have fixed the operative date for this provision as 27 March 2006. This is the appropriate commencing date for the new provision since that was the operative date of the introduction of the new system of work provided by the consent orders made by Staff J in January this year. 207 We turn now to consider the Union's claim for a 35 hour week. The starting point for this consideration is the wage fixing principles adopted by this Commission in the State Wage Case 2005. Principle 7 Standard Hours, is in the following terms: In approving any application to reduce the standard hours to 38 per week, the Commission will satisfy itself that the cost impact is minimised. Claims for reduction in standard weekly hours below 38 will not be allowed; and also the changes we have made to shift penalties. 208 The reasons advanced by the Union for a reduction in hours are: (a) a 35 hour week will recognise the inconvenience to employees of the new roster. The other employees of Sydney Water work 35 hours per week; (b) the cost of the claim will be offset by savings on the introduction of afternoon shift. 209 It must be recognised that to grant the 35 hour week claim in addition to the changes we have made to shift penalties would involve a significant degree of "double-counting" or double compensation. In any event, the evidence before us is that the Sydney Water employees who have a 35 hour week are predominantly clerical, administrative and managerial. Trades and labouring employees predominantly work a 38 hour week. The practical effect of a reduction in weekly working hours from 38 to 35 would be that three hours of work at ordinary rates of pay would become three hours at overtime rates. This would result in a wage rise for each employee of five hours per week at the current overtime rate of time and a half for the first two hours and double time thereafter. 210 It was submitted on behalf of the Union that a reduction in hours would bring civil maintenance employees into line with other Sydney Water employees. We are not satisfied, on the evidence, that the granting of this claim would cure what may be an historical anomaly as is suggested by the Union in its submissions. If the claim was granted, it would be likely to disturb a long standing and settled situation. Mr Werda's evidence of the potential for "flow on" if this claim was granted was not challenged. Furthermore, we are satisfied that the costs of reducing weekly hours from 38 to 35 would far outweigh the savings in labour costs associated with the introduction of afternoon shift. Those savings are approximately $1,6000,00. A reduction in weekly hours to 35 would add approximately $4,000,000 to Sydney Water's payroll. 211 The Act has among its objects, the promotion of efficiency and productivity in the economy of the State (s 3(d)). The evidence of Sydney Water demonstrates that the grant of this claim would add substantially to the operating costs of Sydney Water and would thereby nullify the productivity and efficiency improvements Sydney Water seeks by the introduction of an afternoon shift. 212 We are satisfied that civil maintenance employees will be properly compensated for the inconvenience of afternoon shift by the shift allowance which we have determined earlier in these reasons. The claim as to the 35 hour week is refused. The Expert Evidence 213 During the proceedings, the Union was given leave to adduce evidence about the adequacy of a risk assessment required to be undertaken by Sydney Water in respect of the introduction of afternoon shift and in compliance with orders (1) - (4) made by Staff J on 31 January 2006. Sydney Water engaged Professor Derek Viner to undertake the risk assessment. Sydney Water objected to the Union being permitted to call evidence in response to Professor Viner's evidence submitting that it was not relevant to the determination of proper and fair weekly hours and the question of an afternoon shift allowance. 214 The Commission allowed that evidence and expert evidence to be called by the Union because it was not feasible to conclude, at that stage of the proceedings, that the material was entirely irrelevant. We have used the evidence of Professor Viner and Ms Heiler as background material in determining the claims before us. It is not necessary in these proceedings for us to determine whether a proper risk assessment was undertaken by Professor Viner. 215 Regulation 9(2)(b) of the Occupational Health & Safety Regulation 2001 requires Sydney Water to identify hazards arising from shift working arrangements. Regulation 10(1)(a) requires Sydney Water to assess the risk of harm to the health or safety of employees from any hazard it identifies. If the Union can identify risks that employees are exposed to, these should be drawn to the attention of the Civil Maintenance Section's Occupational Health & Safety Committee. Enforcement processes available pursuant to the Occupational Health & Safety Regulation 2001 could also be activated. We also note that Professor Viner conceded in his response to Ms Heiler's evidence that the emphasis on a 24 hour period with the Sydney Water's Fatigue Policy and Guidelines may be inappropriate and needs review. ORDERS 216 The Commission orders that: 1. The afternoon shift loading for civil maintenance employees employed pursuant to the Award shall be varied as follows: (a) Civil maintenance employees working afternoon shift from 27 March 2006 until 31 December 2006 shall receive an afternoon shift loading of 40 per cent for working that shift; (b) Civil maintenance employees working afternoon shift from 1 January 2007 to 31 December 2007 shall receive an afternoon shift loading of 35 per cent. (c) Civil maintenance employees working afternoon shift from 1 January 2008 until 31 December 2008 shall receive an afternoon shift loading of 30 per cent. (d) On and from 1 January 2009, civil maintenance employees working an afternoon shift shall receive a 25 per cent loading. 2. This variation shall take effect on and from 27 March 2006. 217 The parties are directed to confer as to the appropriate method of implementing the orders made in this decision. We direct the Union to file and serve short minutes of order and draft Award variation reflecting this decision by Friday 20 October 2006. 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.