Industrial Relations Commission of New South Wales CITATION: PSA v RTA [2010] NSWIRComm 1069 APPLICANT PARTIES: Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales RESPONDENT Roads and traffic Authority of NSW FILE NUMBER(S): 1845 of 2009 CORAM: Ritchie C Dispute notification section 130. PSA sought change to flexible working hours No consent from RTA CATCHWORDS: RTA believed what sought breached no extra claims clause Notice of Motion filed by RTA PSA acknowledged that what was being sought would result in a benefit to its members. Hearing found that what PSA sought breached no extra claims clause and Memorandum of Understanding. Notice of Motion upheld and PSA matter dismissed LEGISLATION CITED: Industrial Relations Act, 1996 CASES CITED: Public Service Association and Professional Officer's Association Amalgamated Union of NSW v Director General, Department of Premier and Cabinet [2010] NSWIRComm59. HEARING DATES: 11/11/10 DATE OF JUDGMENT: 8 December 2010 APPLICANT for Notice of Motion Mr S Meehan of Counsel LEGAL REPRESENTATIVES: RESPONDENT to Notice of Motion Mr P Krockenberger DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Ritchie C 8 December 2010 Matter No IRC 1845 of 2009 IN THE MATTER OF: Notification under section 130 by the Public Service Association and Professional Amalgamated Union of New South Wales of a dispute with Roads and Traffic Authority of NSW re flexibility working hours agreement. DECISION [2010] NSWIRComm1069 1 The Public Service Association and Professional Officers Association Amalgamated Union of New South Wales (PSA) filed a dispute under section 130 of the Industrial; Relations Act ,1996 (the Act) on 24 November 2009, against the Roads and Traffic Authority of NSW (RTA). 2 The dispute was expressed in the following fashion: 1. The PSA and the RTA have been negotiating a revised flexible working hours agreement since 2001 without agreement. 2. Throughout this period the PSA has sought the introduction of an agreement that compares favourably to the rest of the NSW public service. 3. The most recent draft proposal was distributed to PSA members for comment and on 15 September 2009 the PSA's RTA Departmental Committee voted to reject the draft proposal as inadequate. The PSA informed the RTA of this by letter dated 17 September 2009 and indicated a willingness to discuss an agreement with improved conditions. Despite requests the RTA has not replied to this letter. 4. By Human Resources circular dated 30 October 2009 the RTA advised salaried staff that the flexible working hours guidelines would change. The new guidelines are identical to those rejected by PSA members. 5. Examples of the deficiencies in the new guidelines include: the limited amount of hours carried over from one settlement period to the next, a limit of one flex day a month, the loss of accumulated "banked" days unused by 31 January each year. 6. The PSA still wishes to negotiate the introduction of a more flexible working hours agreement. 7. The PSA seeks the Commission's assistance in resolving this dispute. 3 The award involved is the Crown Employees (Roads and Traffic Authority of New South Wales-Salaried Staff Conditions of Employment) Award 2008. 4 Compulsory conferences were held on 27 November 2009, 15 February 2010, 19 May 2010, 3 June 2010, 21 July 2010, 17 August 2010, 10 September 2010 and 11 October 2010. 5 On 10 September 2010 Ms Viranna for the RTA stated that as a consequence of reviewing the draft Orders provided by the applicant it was the RTA's view that what was being sought by the PSA was an extra claim. Mr Cole for the PSA did not agree that it was an extra claim. 6 A Notice of Motion was filed by the RTA on 6 October 2010 in which it stated the Grounds and reasons the following: 1. By advancing its claims in these proceedings the PSA is contravening the no extra claims provision in cl. 6 of the Crown Employees( Roads and Traffic Authority of New South Wales-Salaried Staff Conditions of Employment) 2008. 2. The advancing of the claims by the PSA in the proceedings constitutes an abuse of process. 3. Such other grounds and reasons as appears in the supporting affidavit of Ms Cinda Viranna sworn on 5 October 2010. 7 On 11 October 2010 the Commission provided the parties with directions for the filing and serving of evidentiary material with respect to the RTA's Notice of Motion that what was being sought was an extra claim. A certificate of attempted conciliation was subsequently provided to the parties. 8 The date of the Hearing of the RTA's Notice of Motion was set for 11 November 2010. RTA's Case. 9 The evidence for the RTA was the MEMORANDUM OF UNDERSTANDING BETWEEN THE NSW GOVERNMENT AND THE PUBLIC SERVICE ASSOCIATION AND PROFESSIONAL OFFICERS' ASSOCIATION AMALGAMATED UNION OF NEW SOUTH WALES FOR THE PERIOD 1 JULY 2008 TO 30 JUNE 2011, and two affidavits of Cinda Viranna. Ms Viranna was not required for cross examination. 10 In the first of her two affidavits Ms Viranna outlined the history of the RTA's flexible work arrangements which have a basis in the award and the "House Rules" which are noted in the award. 11 Upon successful negotiations with the Professional Engineers, Scientists and Managers, Australia (APESMA) in 2008 with respect to flexible working arrangements the RTA updated its policy guidelines, which supplement award conditions. In July 2009 a copy of the draft Current Guidelines was sent to the PSA for consultation purposes. The PSA rejected these draft Guidelines. 12 On 30 October 2009 the RTA advised the PSA that it was going to introduce the Current Guidelines. It was the view of the RTA that the Current Guidelines represent a more favourable set of entitlements for salaried staff in relation to flexible working hours. 13 As at 30 October 2009 a Snapshot of these Flexible Working Hours Guidelines is: Staff may accrue and take one flex day or two half days per four week settlement period up to a maximum of 13 per calendar year. Staff may carry forward a credit or debit of 10 hours at the end of a settlement period. Staff may vary their start and finish times to accommodate personal, travel and work demands. Staff are able to bank up to four untaken flex days per calendar year provided banked days are cleared by 31 January each year. Staff who have a genuine personal obligations may request to vary their core working hours. The RTA ESS Timesheet allows online recording of working hours , approval to flex leave and, if necessary, the costing of time worked. Information on how to complete an ESS Timesheet is located on the IMS Portal on the intranet. 14 It was Ms Viranna's view that what the PSA was in dispute over was : The RTA was not entitled to promulgate the new Current Guidelines without PSA consent. That the Current Guidelines should contain entitlements that are more favourable . The PSA sought: 1. A change from a 4 week (20 working day) settlement period to a 12 week (60 working day ) settlement period during which flex hours can be accrued. 2. An increase from the number of hours that staff can carry over from one settlement period to another from 10 hours to 20 hours. 3. An increase in the number of flex leave days that a staff member can take in a settlement period from 1 to 6 ( essentially this would generally equate to an increase of potential flex leave available to an employee from one day in a four week period to a 2 days in a four week period). 4. An increase in the number of days that can be banked in a settlement period from 1 to 3. 5. An increase in the cap on the number of days that can be banked from 4 to 12. 6. An improvement to the system so that banked days cannot be forfeited if not used within an agreed timeframe of one year. 15 In Ms Viranna's view the PSA's draft orders would represent a significant enhancement to the Current Guidelines. 16 Ms Viranna then went through the history of the NSW Government's State Wages Policy published in 2007 noting that any wage cost above 2.5 % must be funded by the individual agency and awards/agreements must contain a clear no extra claims clause. 17 In April 2008 the PSA filed a claim with the IRCNSW for a new award covering a number of non RTA salaried staff which sought to come into force on 1 July 2008. On 12 July 2008 the RTA filed a claim for a new award with the IRC NSW to cover salaried staff salaries and conditions providing for three 4% increase with changes in employment conditions. By this award the RTA was seeking to have one award to cover both rates of pay and conditions. Both applications were joined and were listed as a "Major Industrial Case" for arbitration in September 2008. 18 Prior to arbitration parties sought conciliation before Justice Boland. On 17 September 2008 Justice Boland issued a Recommendation which was accepted by the parties and the State Government. A Memorandum of Understanding(MOU) was entered into. Included in the MOU was a "No extra claims". As a result of the MOU a new award was made that covered RTA salaried staff. Notwithstanding that the aim of the parties was to have one award. There still exists two awards one covering conditions and one rates of pay. 19 It was Ms Viranna's view that clause 8 of the MOU was inserted to prevent claims such as what was before the Commission in this matter. The PSA claim would have a significant cost impact for the RTA and undermine the employee related cost savings. The examples given in her affidavit by Ms Viranna of the likely costs were not challenged by the PSA. 20 In Ms Viranna's affidavit in reply, she stated that the RTA through the "House Rules" has set the parameters for flexible working hours arrangements. She reiterated that there is no requirement to have the approval of the PSA. 21 Ms Viranna also rejected the statement of Mr Cole that the flexible working hours conditions in this dispute are not part of the Award and therefore the PSA attempt to negotiate improved conditions is not an extra claim. 22 With respect to the loss of flex time as alleged by Mr Cole no facts were provided by him to support such a claim. 23 Ms Viranna stated that it was her understanding that discussions between the PSA and the Department of Premier and Cabinet ( on behalf of the NSW Government) have occurred in relation to standard parameters for flexible working hours agreements as envisaged by clause 5.7 of the MOU and agreement was not reached. 24 In cross examination Mr Cole was asked the following: Q. And given what will be sought is what is articulated in the draft order ? A. Given the current state of this case, yes, it will be now. Q. Thank you . And you accept, I take it , that the benefits set out in the draft order and indeed set out in the document MFI 1 , provide for more beneficial entitlements to employees than they currently enjoy. Do you accept that ? A. I do. 25 In final submissions Mr Meehan for the RTA stated that what is being sought by the PSA in its draft order is to vary clause 2 of the Crown Employees (Roads and Traffic Authority of New South Wales Salaried Staff) Award 2008. That award was made in March 2008. The award made by the Full Bench on 3 October 2008 is entitled Crown Employees (Roads and Traffic Authority of New South Wales Salaried Staff Salaries and Conditions of Employment) Award 2008. The no extra claims is found in Clause 6 Conditions of Employment. This was a consent document and it is this clause which forecloses on the PSA 's ability to advance their claim. The issue of flexible working hours was a live claim at the time. 26 Both the awards made were made under the NSW Public Sector Wages Policy 2007. The no extra claims provision was specifically included in the MOU and ultimately the award to give effect to the strictures imposed by the NSW Public Sector Wages Policy. The applicable policy provisions in relation to flexible work hours have historically been referred to as the House Rules. This is noted in the award at clause 2 (2) were it is stated: Where approval has been given for employees to observe flexible working hours, the "House Rules" promulgated by the Authority from time to time shall apply. The 30 October 2009 guidelines are now the House Rules. They were an improvement on what preceded it. 27 Mr Meehan also stated that what the PSA seeks is an attempt to obtain beneficial changes which can be seen from the comparison document( Exhibit B tab 6). This he said was conceded by Mr Cole in cross examination. 28 Attached to the Recommendation of 17 September 2008 by Justice Boland was a table of recommendations which at points 7 and 8 outlined what had been agreed between the parties which became the basis of the MOU. Clause 8 of the MOU is enshrined into clause 6 Conditions of Employment of the Crown Employees (Roads and Traffic Authority of New South Wales- Salaried Staff Salaries and Conditions of Employment) Award 2008. 29 Leave reserved in the award was expressed to only cover Probation and Parole Officers. 30 In Mr Meehan's submission the motion should be upheld and the proceedings should be dismissed. Case for the PSA 31 Mr Evan Cole filed a statement and was subject to cross examination. Mr Cole is an Industrial Officer with the PSA. Mr Cole stated that he did not believe that the RTA was in a position to introduce amended flexible working hours guidelines without the express agreement of the PSA. 32 Also Mr Cole stated that the PSA sought through conciliation, agreement on improvement on flexible working hours. His communication with the RTA of the 'Draft Orders" were on a without prejudice basis. He also stated that he provided the "Flexible Working Hours Scheme Comparison " document at the request of the IRCNSW during conciliation. 33 Mr Cole did not accept that what was being sought by the PSA was an extra claim as the flexible working hours conditions are not currently part of the award. As the RTA unilaterally changed the flexible working hours guidelines then the PSA is seeking to amend and improve a pre-existing condition, not make an extra claim. 34 Employees are currently accumulating an excess of flexible working hours "credit" and if not given the opportunity to take this time , it is lost. 35 Time off taken under flex leave can only be taken with the approval of the employer and the RTA assumes that project officers will work sufficient hours to accumulate extra leave. Accumulated flex leave can therefore be taken at a time that suits the employer's needs as well as the employee's. 36 The taking of greater leave over a longer settlement period would allow employees to take flex leave during quieter work periods and not loose the credit accumulated. 37 The MOU states at 5.7 The parties agree to the development by 31 December 2008 of standard parameters for flexible Working Hours Agreements which will allow for consistency across the sector. Therefore all parties accepted that there could be changes to flexible working schemes. The PSA has always stated that the RTA scheme is poor compared to elsewhere in the public sector. 38 In final submissions Mr Krockenberger for the PSA sought to lay out a test where context is important and remaining within the bounds is important. He raised the issue that the subject of flexible working hours (found at 5.7 0f the MOU) was in the minds of the parties. He conceded that as the date of 31 December 2008 has now passed this is defunct. 39 Whilst the parties had set themselves the task of only having one award instead of the current two, and had yet to achieve this goal, the no extra claims only covered salaries not conditions. Therefore what the PSA is seeking is not an extra claim but well within the terms of the MOU. Consideration and Decision 40 It was accepted by both parties that what the PSA is seeking is to improve the flexible working hours for particular staff. 41 Staff are employed under two awards. One is the Crown Employees (Roads and Traffic Authority of New South Wales -Salaried Staff) Award (Conditions Award) made by consent on 3 March 2008. The other award is the Crown Employees ( Roads and Traffic Authority of New South Wales - Salaried Staff Salaries and Conditions of Employment) Award 2008 (Salaried Award) which was made again by consent before a Full Bench on 2 October 2008. 42 It is the RTA's position that such a claim is an extra claim contrary to the MOU and clause 6 of the Salaried Award and therefore should not be allowed. This clause is expressed as: 6. Conditions of Employment (i) The parties agree that they will have further discussions and negotiations regarding the conditions of employment which will apply to the employees covered by this award with the objective of achieving consolidated conditions of employment for all employees to be provided for in this award. (ii) Subject to the outcome of discussions and negotiations referred to in subclause (i) of this clause existing conditions of employment as provided for in the instruments set out in Schedule A of this Award and applicable policies of the Authority and agreements between the parties shall continue to apply. (iii) This Award provides pay increases of 4% with effect from the first full pay period that commenced on or after 1 July 2008, a further increase of 4% with effect from the first full pay period to commence on or after 1 July 2009, and a further increase of 4% with effect from the first full pay period to commence on or after 1 July 2010. (iv) These increases arise from the agreement of the parties contained in the Memorandum of Understanding between the NSW Government and the Association for the period 1 July 2008 to 30 June 2011 entered into on 2 October 2008 ("Memorandum of Understanding"). (v) The pay increases under this Award are provided on the basis of the "no extra claims" commitment contained in clause 8 of the Memorandum of Understanding, provided that this shall not prevent the parties from applying for the award changes identified in the Memorandum of Understanding or subclause (1) of this clause. 43 As I understand there was an intention to combine both of these awards to form one consolidated award. This has yet to take place. 44 Included in the MOU are the following clauses: 6. Agency Level improvement initiatives The parties commit to the implementation of further agency level improvement initiatives during the life of the Memorandum. As soon as practicable, agencies will identify these initiatives and then consult with the PSA. This is to include consideration of: 6.1 Agency specific initiatives to deliver further efficiencies in the Conditions areas identified in this Memorandum; 6.2 Initiatives to reduce excessive accrued leave liabilities; 6.3 Initiatives to reduce workers compensation liabilities including future premiums; and 6.4 Agency reduction in the use of labour hire agencies through more efficient use of initiatives arising from this Memorandum; 6.5 Any other initiatives as relevant. The Government will pursue stream lining and reorganisation of services and functions at an agency level to achieve further efficiencies in operations if the above process does not meet the objectives of the Memorandum Where agency level restructuring is required, the parties agreed that it will be dealt with in accordance with the consultative mechanisms and dispute resolution provisions of the relevant award of each agency and other relevant policies. Consistent with the IRC recommendation in matter 445 of 2008, of 17 September 2008 the parties commit to this process of agency level negotiations. Should any dispute arise during this process the parties recognise the process laid out by the Full Bench in Operational Ambulance Officers (State) and others [2008] NSWIRComm 156 and commit to addressing any disputes or difficulties that arise at the agency level in such a way. 7. Roads and Traffic Authority (RTA) The parties agree that the specified salary increases and initiatives under this Memorandum will be equally applicable to RTA staff under the Crown Employees (Roads and Traffic Authority of New South Wales - Salaried Staff Conditions of Employment) Award and that the salaries and conditions applicable to those employees will be given effect through the making of a new stand alone industrial instrument 8. No Extra Claims Subject to clause 6, the parties agree that during the term of this Memorandum there will be no extra wage claims, claims for improved conditions of employment or demands made in respect of the employees covered under the Award, and further, that no proceedings, claims or demands concerning wages or conditions of employment in respect of those employees will be instituted before the Commission or any other arbitral tribunal. The agreement in the preceding paragraph does not prevent the parties from taking any proceedings with respect to the interpretation, application or enforcement of existing award provisions, or this Memorandum. The PSA is to have leave reserved to pursue its filed application in respect of probation and parole officers. The parties further agree that during the Term of this Memorandum consent variations to the awards can proceed. 45 The Commission was taken by the RTA to the decision of Boland J President in Public Service Association and Professional Officers' Association Amalgamated Union of NSW Director General, Department of Premier and Cabinet [2010] NSW IRComm59. In this case the Commission was asked a number of questions in conjunction with the interpretation of a MOU between the public sector union and government. 46 In the approach to be taken in interpreting the MOU Boland J stated: the context in which the words used in any agreement (particularly an industrial agreement ) must be understood includes the circumstances in which the agreement was made. and the task is ultimately one of ascertaining the intention of the parties to the agreement by reference to the words and the surrounding circumstances. The intention is judged objectively. and The Commission should ensure that the sanctity of good faith bargains are adhered to and therefore considerable weight should be placed upon the actual terms of the agreements reached where those words are capable of a clear and unambiguous meaning. 47 The RTA submitted that the parties to the MOU turned their mind to the subject of leave reserved provisions and noted that of Probation and Parole Officers. Nothing was expressed with respect to flexible working hours. 48 I do not see how changes to flexible working hours that would be clearly beneficial to the employees could be addressed under Clause 6 Agency level improvement initiatives of the MOU. Such considerations as listed go to the reduction of costs not to the increase of costs. 49 When one considers clause 8 No Extra Claims which is " Subject to clause 6", and it expresses "claims for improved conditions" or that "no proceedings or demands concerning wages or conditions of employment in respect of those employees will be instituted before the Commission"...... . In my view, it is clear in its expression what action is caught by this clause. 50 Whilst the MOU allows either party to take proceedings with respect to the interpretation, application or enforcement of existing award provisions or by consent award variations it is my finding that the MOU prevents a party from seeking a benefit through arbitration. The RTA is not in consent with the PSA with respect to changes sought to flexible working hours. 51 Pay increases of 4% per year were agreed on a particular basis. That agreed basis included a no extra claims undertaking. 52 What is being sought by the PSA if successful would result in benefits flowing to employees with respect to better flexibility working hours at a cost to the RTA. I do not accept the submission of the PSA that the MOU only covers the Salaried Award and not the Conditions Award. The PSA sought by consent to make changes to flexible working conditions. Consent was not achieved and therefore the matter would have to be arbitrated. It would be a contested matter. It is my finding that general arbitration is not available to the PSA in this matter. 53 I accept the submissions of the RTA and it is my finding that what is being sought by the PSA is in breach of the MOU and therefore must be dismissed. 54 As a consequence of my finding I uphold the Notice of Motion and dismiss the proceedings as found in the PSA's dispute matter. D. 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