Industrial Relations Commission New South Wales Medium Neutral Citation: Herning v DF& CS [2012] NSWIRComm 1008 Hearing dates: 12/04/12 Decision date: 14 May 2012 Before: Ritchie C Decision: Catchwords: Notice of Appeal -Public Sector Discipline-refuse increment-filed. Appellant had an increment deferred- investigation took place-increment deferred for six months-appellant transferred to another department-appellant's increment deferred and then approved with back pay to the point of end of first six months.- Respondent stated that IRC lacked jurisdiction to hear appeal as s.97(1)(a) did not apply. Appellant submitted that action to back pay occurred beyond six months therefore IRC had jurisdiction. Commission found that it did not have jurisdiction as deferment, and therefore payment did not go beyond six months. Legislation Cited: Industrial Relations Act, 1996 : Public Sector Employment & Management Act, 2009. Public Sector Employment & Management Regulation 2009. Government 7 Related Employees Appeal Tribunal Act. Cases Cited: Prehns and Director General of the Department of Environment & Climate Change (Appeal PSD/36/09) Director General of th eDepartment of Corrective Services v Mitchelson (1992) 26NSWLR648. David John Sheppard v Director General of Department of Community Services (55/ 2000) Category: Principal judgment Parties: Mr Andrew Herning (appellant): Department of Family and Community Services (respondent). Representation: Ms E Brus (respondent) Ms A Mc Robert - W G McNally Jones Staff-Solicitors. File Number(s): IRC 1387 of 2011 DECISION 1On 18 August 2011, Mr Andrew Herning (the appellant) filed a Notice of Appeal -Public Sector Discipline. The appellant crossed the box Refuse Increment. The Order sought was : That the increment be paid from the due date of 22 October 2010. 2The matter went before Bishop C on five separate occasions for conciliation until dates for the filing and serving of evidentiary material were provided to the parties. 3It was the respondent's submission that this Commission did not have the jurisdiction to hear the appeal. Respondent's case. 4The appellant was permanently appointed to the position of HR Consultant on 8 February 2010 At the time of his appointment he was being paid as a grade 9/10 level 3.The appellant's incremental date was 22 October 2010. 5The payment of an increment is subject to the following clause 12 of the Public Sector Employment and Management Regulation 2009 (the Regulation) which states: (1) This clause does not apply to executive officers. (2) The payment to any member of staff of an increment in accordance with any State industrial instrument or public service determination is, unless otherwise provided by the instrument or determination, to be made only with the prior approval of the appropriate Department Head. (3) The payment of an increment to a member of staff is subject to the satisfactory conduct of, and the satisfactory performance of duties by, the member of staff as determined by the appropriate Department Head. (4) A member of staff must be promptly notified in writing by the appropriate Department Head of any decision to defer payment of an increment. (5) The payment of an increment may be deferred from time to time, but may not be deferred for more than 12 months at any one time. 6The respondent had concerns about the appellant's job performance and therefore approval was not given until those concerns were clarified and resolved. The appellant was advised of this on 20 October 2010. 7A fact finding investigation then took place and the subsequent report was submitted to the respondent on 12 January 2011. The report recommended that the CEO of the respondent consider dealing with the matter as a disciplinary investigation. When the appellant was advised of this on 12 February 2011, a dispute notification was filed on 16 February 2011, with this Commission by his Union. 8On 16 March 2011, the respondent advised the appellant that his increment was deferred until 21 April 2011( a delay of exactly six months). 9An outcome of the dispute notification was the transfer of the appellant to another job( payroll systems and project) with the same grading. He commenced in this new position on 27 April 2011. 10On 29 July 2011 the appellant was advised that his conduct and services were satisfactory and that approval had been given to pay his increment from 22 April 2011. The subject matter of the original matter from 22 October 2010 to 21 April 2011 had yet to be resolved as at 29 July 2011. 11The applicant discontinued the dispute notification with the Commission and filed an appeal against the deferral of the increment under s 97 of the Industrial Relations Act, 1996. 12On 6 September 2011 the appellant was advised that no disciplinary action would be taken in respect of the alleged misconduct, however remedial action would be taken. 13The respondent stated that the appeal before this Commission purports to be an appeal against the deferment of an increment in excess of 6 months. Division 3 Disciplinary Appeals at S.97 (1) (a) states: a decision to defer, for a period in excess of 6 months, the payment of an increment to the employee. It was submitted that jurisdiction of the Commission only arises under the above section if the appeal pertains to a deferral of an increment in excess of 6 months. They stated that the above section is clear in its wording and is entirely consistent with what was expressed in the now repealed Government and Related Employees Appeal Tribunal Act at Section 23. 14In its written submissions the respondent questioned what remedy the applicant sought under S. 100D of the Act. If they sought payment for the period of 21 October 2010 to 22 April 2011, they must concede that this was the extent of the deferral, and therefore the Commission does not have the jurisdiction to hear the appeal or make an Order. 15The respondent quoted the appeal case Prehn and Director General of the Department of Environment and Climate Change ( appeal no. PSD/36/09) to defer the payment of an increment in excess of six months. It was determined that GREAT did not have jurisdiction because there was no evidence that the deferral of the increment was for disciplinary reasons. It was conceded that the deferment occurred so as to enable resolution of concerns pertaining to the appellants conduct and performance as required by clause 12(3) of the regulation. 16A disciplinary investigation was conducted into and about these concerns, no disciplinary decision was made with regard to the appellant and as such the Commission lacks jurisdiction about a decision which is not a " disciplinary decision". Appellant's case. 17It was the appellant's submission that this Commission did have jurisdiction to hear the appellant's appeal. In their written submissions the appellant's legal representative stated that the appellant was advised on 20 October 2010 that his increment due on 22 October 2010 would be deferred. The correspondence stated that this was to be done under Clause 12 of the Public Sector Employment and Management Act 2009 (PSEM Act). 18 On 5 May 2011 the appellant was advised that the payment was to be further deferred for a further period of up to six months from 22 April 2011.Within that period the deferment would be reviewed. The correspondence also stated that as the matters referred to in the correspondence of 16 March 2011 had not been addressed and as the appellant had only commenced duties in his temporary position on 27 April 2011, there had been insufficient time to assess his conduct and services in the alternate duties. 19 In July 2011 the payment of the increment was reviewed and was retrospectively approved and backdated to 22 April 2011. 20Notwithstanding the retrospective approval of and back dating of the payment, it was submitted that the respondent did not approve the payment of the appellant's increment until 29 July 2011, a period in excess of six months. 21 Accordingly it was submitted that the Commission did have jurisdiction to hear the appeal under s 97(1) (a) of the Industrial Relations Act, 1996( IR Act). 22In response to the respondent's submission that the Commission only has jurisdiction to hear an appeal under s 97(1)(a) if the decision to defer the payment was a disciplinary decision and relied upon a decision in PSD/36/09 Annette Prehn against a decision of the Director General the Department of Environment and Climate Change (Prehn). It was the appellant's submission that Prehn was decided wrongly and could be distinguished from the present case. That decision relied upon the findings in the Director General of the Department of the Corrective Services v Mitchelson (1992) 26 NSWLR 648. That case dealt with the annulment of probationary appointment which is now found in s 97(1)(d) of the IR Act. It was their submission that the decision of an appeal under section 97(1) (a) had to be for a disciplinary reason for a right of appeal to arise. 23They stated that under Part 2.7 of the PSEM Act, the deferral of the payment of an increment is not a disciplinary sanction (or a remedial sanction ) that can be imposed on an employee. There is no power for an employer to do so as a disciplinary (or remedial) action. This is in contrast to the Mitchelson case where the decision to annul the appointment of a probationary employee is a disciplinary penalty that an employer can impose under part 2.7 of the PSEM Act. 24It was submitted that in this case the decision to defer the appellant's increment was made by the respondent as a result of the appellant's failure to respondent to allegations of misconduct. 25It was also raised the case of David John Sheppard against a decision of the Director General of the Department of Community Services( matter no 55 of 2000). In this case Chairperson Noonan stated: I am inclined to the view , however , that the respondents action in not approving the payment of the appellant's increment until 18 February 2000 constitutes, for the purposes of an appeal under s 23(1) (a) of the GREAT Act, the deferring of the payment of the increment for some fourteen months after it was due. This gives support to Mr Corrigan's contention that there was a decision to defer the payment for a period in excess of twelve months. However, as i am dealing here only with the question of jurisdiction, it is unnecessary for me to come to any concluded opinion on that issue. Consideration and Decision. 26The payment of an increment to a public servant is subject to certain criteria being satisfied as set out in the following clause from the Public Sector Employment and Management Regulation (2009). 12 Increments (1) This clause does not apply to executive officers. (2) The payment to any member of staff of an increment in accordance with any State industrial instrument or public service determination is, unless otherwise provided by the instrument or determination, to be made only with the prior approval of the appropriate Department Head. (3) The payment of an increment to a member of staff is subject to the satisfactory conduct of, and the satisfactory performance of duties by, the member of staff as determined by the appropriate Department Head. (4) A member of staff must be promptly notified in writing by the appropriate Department Head of any decision to defer payment of an increment. (5) The payment of an increment may be deferred from time to time, but may not be deferred for more than 12 months at any one time. 27An appeal may be made by a public servant against the deferment of an increment in excess of six months in the Industrial Relations Act under section 97 : (1) This section applies to the following decisions made by a public sector employer in relation to a public sector employee: (a) a decision to defer, for a period in excess of six months, the payment of an increment to the employee. (b) a decision to reduce the rank, classification, position, grade or pay of the employee, (c) a decision to impose a fine or forfeit pay, (d) a decision to annul the appointment of an employee appointed on probation, (e) a decision to suspend the employee as a punishment where the employee is held to be guilty of misconduct or contravention of any law or any rule or direction of the employer, (f) a decision to dismiss the employee, (g) a decision to direct or to require the employee to resign. (2) A public sector employer who makes a decision to which this section applies in relation to an employee must give the employee notice, in writing, of the decision as soon as practicable after the decision is made, except as otherwise provided by an order made under subsection (4). (3) If the employer is unable to give the employee notice of the decision within 14 days after it is made, the employer may apply to the Commission for an order as to the giving of the notice. (4) On receipt of an application under subsection (3), the Commission may make such order as the Commission thinks fit as to the giving of the notice or may make an order dispensing with the giving of the notice. (5) A notice may be given, or the giving of a notice may be dispensed with, in accordance with an order made under subsection (4). (6) In subsection (1) (f): "dismiss" includes dispensing with the services of an employee (including under any right or power of the Crown to dispense with the services of an employee). (7) For the purposes of this Division: (a) a decision of a kind referred to in subsection (1) (d), (f) or (g) is a decision that may, subject to this Act, be appealed against under section 98 regardless of whether the decision was made for disciplinary reasons, and (b) a reference to a public sector employer making a decision of a kind referred to in subsection (1) includes a reference to any other person (including the Crown) who is authorised by or under any law to make that decision or to carry it into effect. 28Under the IR Act, the following is expressed: 100D Orders by Commission with respect to payment of salary and continuity of employment (1) Without limiting section 100C, if the Commission decides to allow a disciplinary appeal, the Commission may: (a) if the employee has paid a fine imposed by the employer or his or her pay has been forfeited-order the employer to repay the amount of any such fine or forfeited pay, and (b) order the employer to pay the employee an amount stated in the order that does not exceed the remuneration the employee would, but for the decision of the employer, have received from the employer, and (c) order that any period of employment of the employee with the employer is taken not to have been broken by the decision of the employer. (2) Any such order by the Commission must be given effect to by the employer. (3) Nothing in subsection (1) enables the Commission to make an order for compensation in the case where a person is not reinstated or does not continue in employment. 29It was the submission of the appellant that if they were successful in this jurisdiction argument, then they would be seeking to have an Order made for the payment of the increment which they say is still outstanding for the period from October 2010 to April 2011. 30The appellant's incremental date fell on 22 October 2010. Two days before that date he was advised that his increment would be deferred. The reason for the deferment was due to allegations into his conduct and services. 31As expressed earlier in this Decision, an investigation took place with the outcome being that his increment would be deferred for a period of six months until 21 April 2011. Later in May 2011 the appellant was advised that a further deferment for up to six months from 22 April 2011 would occur due to the limited time the appellant had spent in his new temporary duties. On 29 July 2011 the appellant was advised that his increment would be paid from 22 April 2011. In that correspondence the appellant was also advised that : " In respect to the period 22 October 2010 to 21 April 2011, the matters subject to examination , which resulted in the initial deferment , still remain unresolved. Payment of this increment for this period remains subject to the outcome of the examination and will be reviewed when the matters are finalised." 32In accordance with Regulation 12 a Department Head has the power to defer an employee's increment for not more than twelve months. The basis for the deferment is found in Regulation 12(3). An employee may appeal this deferment if the deferment is more than six months. The respondent states that the deferment was not more than six months, the appellant states that it was, in that the decision to pay the increment was made on 29 July 2011 and then payment back dated to 22 April 2011. 33When one considers the words found in s. 97 (1) (a) I find that it has three elements. The first is that a decision to defer is made by the employer. The second is that the period of deferment determined by the employer must be greater than six months and the third is, the subsequent payment of the increment is attached to that period of deferment which is greater than six months. In my view the deferment and the actual payment take place at the same time and to access to appeal , that period of time must be beyond six months. 34It is my finding that an employee would have the right to appeal under this section where his employer has made a decision not to approve a payment of an increment to an employee and that period of non payment exceeds six months. That is, the employee does not obtain the economic benefit of the increment at all, for a period exceeding six months. 35 In this case, the appellant did not receive the financial benefit of his increment commencing on 22 October 2010, but he did receive it( back dated) commencing from 22 April 2011. In essence the appellant did not experience an economic loss beyond six months. That the decision to pay the appellant took place beyond the six months and was then backdated I do not find relevant, because as I have found in accordance with s. 97(1)(a), the payment received was not deferred beyond the six months. 36In reaching my findings I have taken into consideration where appropriate the previous cases provided by the parties. 37As a consequence of my conclusions, it is my finding that this Commission does not have the jurisdiction to hear the appellant's appeal. 38This matter is therefore dismissed. D.Ritchie Commissioner 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. Decision last updated: 14 May 2012