Industrial Relations Commission New South Wales Medium Neutral Citation: Roads and Maritime Services Division of the Government Service of New South Wales - Consolidated Salaried Employees Award 2013 [2014] NSWIRComm 19 Hearing dates: 24, 25 and 26 March 2014 Decision date: 28 April 2014 Jurisdiction: Industrial Relations Commission Before: Staff J Decision: (1) The application by RMS for a Roads and Maritime Services Division of the Government Service of New South Wales - Consolidated Salaries Employees Award 2013 should proceed with APESMA as a party to the award; (2) RMS may include in the proposed consolidated award, provisions relating to employees presently covered by the Professional Engineers (Roads and Maritime Services Division of the Government Service in New South Wales - Salaries) Award 2012 which do not diminish any terms and conditions of employment for employees covered by the Professional Engineers Award; (3) The proceedings are adjourned for further conciliation at 10:00am Monday 28 April 2014 and Tuesday 29 April 2014 if required. Catchwords: AWARD - application for consolidation of awards - objection to consolidation by union - Principles - Statutory Provisions - application granted - ss 3, 10, 19, 20 and 146 Industrial Relations Act 1996 Legislation Cited: Industrial Relations Act 1996 Public Sector Employment Legislation Amendment Act 2006 (No.2) Cases Cited: Clarks in Retail General Shops Awards and other Awards [1997] NSWIRComm 118 Commissioner of Police v The Police Association of NSW re: Industrial Action [2001] NSWIRComm 89 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 Rail Corporation NSW v Brown [2012] NSWCA 296; (2012) 82 NSWLR 318 Re: Principles for Review of Awards [1997] NSWIRComm 118; (1998) 85 IR 38 Texts Cited: A Sayer and P Walker, The New Social Economy: Reworking the Division of Labour, (1992, Blackwell) Australian Bureau of Statistics, (1993), Australian and New Zealand Standard Industrial Classification (ANZSIC),ABS Cat No 1292.0 Australian Bureau of Statistics, (2009), Australian and New Zealand Standard Classification of Occupations, ABS Cat No 1220.0 Australian Bureau of Statistics, (2013), Australian and New Zealand Standard Industrial Classification (ANZSIC), ABS Cat No 1292.0 Australian National Engineering Taskforce, Realising and Innovation Economy: A Practical Roadmap to Ease the Australian Engineering Skills Shortage (2012, ANET) D Marsden, A theory of employment systems. Micro-foundations of Societal Diversity, (1999, Oxford University Press) D Marsden, The End of Economic Man? Custom and Competition in Labour Markets, (1986, Wheatsheaf) G Standing, Work after Globalization. Building Occupational Citizenship, (2009, Chelthenham) J Buchanan, S Yu, Leesa Wheelahan, J Keating and S Marginson, Impact Analysis of the proposed strengthened Australian Qualifications Framework, Australian Qualifications Framework council, Adelaide, July 2010 J Buchanan and M Jakubauskas, 'The political-economy of work and skill in Australia: insights from recent applied research' in Jane Bryson (ed), Beyond skill: Institutions, Organisations and Human Capability, (2010, Routledge) L Wheelahan, G Moodie and J Buchanan, Revitalising the 'vocational' in flows of learning and labour, (2012, NCVER) M Marchington, D Grimshaw, J Rubery and H Willmott (eds), Fragmenting Work: blurring organizational boundaries and disorganising hierarchies, (2004, Oxford University Press) M Maurice, F Sellier and JJ Silvestre, The social foundations of industrial power: A comparision of France and Germany, (1986, MIT Press) S Yu, T Bretherton, J Schutz and J Buchanan, Vocational trajectories within the Australian labour market, (2012, NCVER) S Yu, T Bretherton and J Buchanan, Defining Vocational Streams: Insights from engineering, fiannce, agriculture and care sectors, (2013, NCVER) Category: Interlocutory applications Parties: Roads and Maritime Services Division of the Government Service of New South Wales (RMS) Australian Maritime Officers Union of New South Wales (AMOU) Australian Services Union of New South Wales (ASU) Public Service Association and Professional Officers Association Amalgamated Union of NSW (PSAPOA) Maritime Union of Australia (New South Wales Branch) (MUA) The Association of Professional Engineers, Scientists and Managers Australia (New South Wales Branch) (APESMA) The Australian Institute of Marine and Power Engineers (AIMPE) Transport for NSW, Rail Corporation and Sydney Trains (RailCorp) Unions NSW (UNSW) Representation: Mr S Prince of counsel (RMS) Mr O Fagir of counsel (APESMA) File Number(s): IRC 413 of 2013 DECISION 1This matter concerns an application by the Roads and Maritime Services Division of the Government Service of New South Wales ("the applicant" or "RMS") for a new award to be known as Roads and Maritime Services Division of the Government Service of New South Wales (Consolidated Salaried Employees) Award 2013 (the Consolidated Award). The application, which was filed on the 24 May 2013 seeks to consolidate the award regulation previously provided for by the: (a)Crown Employees (Roads and Maritime Services Division of the Government Service of New South Wales - Salaried Staff Salaries and Conditions of Employment) Award 2012 (Salaries Award); (b)Crown Employees (Roads and Maritime Services Division of the Government Service of New South Wales - Salaried Staff) Award 2012 (Conditions Award); (c)Professional Engineers (Roads and Maritime Services Division of the Government Service of New South Wales - Salaries) Award 2012 (Professional Engineers Award); (d)Enterprise Agreement 11/5 Maritime Authority of NSW (trading as NSW Maritime) Enterprise Agreement 2010-2013; (e)Maritime Authority of NSW Award 2007; (f)Agreement Number 8411 of 1990 - The Roads and Traffic Authority of New South Wales and the Public Service Association of New South Wales (Inspector - Vehicle Regulation); and (g)Industrial Agreement for Inspectors Vehicle Regulation (contained in Personnel Circular Number 95/5. 2The following industrial unions of employees have agreed, in principle, to the making of a consolidated award: * The Public Service Association and Professional Officers Association Amalgamated Union of NSW; * The Australian Services Union of New South Wales; * The Australian Maritime Officers Union of New South Wales; * The Australian Institute of Marine and Power Engineers New South Wales District; and * The Maritime Union of Australia NSW Branch. 3The application is opposed by the Association of Professional Engineers, Scientists, and Managers Australia (New South Wales Branch) (APESMA). 4The issue, therefore, for resolution in this interlocutory hearing is whether the Commission, in the exercise of its discretion, should include professional engineers employed by RMS in the Consolidated Award or whether the Professional Engineers Award should be excluded from the Consolidated Award. 5For the reasons that follow, although finely balanced, in the exercise of my discretion, I have reached the conclusion that the Professional Engineers Award should be included in the Consolidated Award. History of the proceedings 6On 6 March 2013 APESMA notified an industrial dispute pursuant to s 130 of the Industrial Relations Act 1996 (the Act) in respect of negotiations with RMS for the making of a new Professional Engineers Award (IRC 163 of 2013). 7On 9 May 2013 APESMA filed an application for a new Professional Engineers Award 2013 (IRC 333 of 2013). 8On 15 May 2013 APESMA filed a notice of dispute regarding the incidentals allowance (IRC 351 of 2013). 9On 13 December 2013 APESMA filed an application for a variation of the salary rates contained in the Professional Engineers (Roads and Maritime Services Division of the Government Service of New South Wales - Salaries) Award 2012 (IRC 1034 of 2013) Grounds and Reasons 10The grounds and reasons relied upon by RMS may be summarised in this way: (1)On 1 November 2011 the Roads and Traffic Authority (RTA) and NSW Maritime were abolished and the Roads and Maritime Services (RMS) was created pursuant to the Transport Legislation Amendment Act 2011 (NSW). (2)The scope of the existing award arrangements applying to the new employer is different. For example, the Award is intended to cover staff formerly employed by the NSW Maritime Division of the Government Service who are currently employed by the RMS Division of the Government Service. The nominal term of the Maritime Authority of NSW (trading as NSW Maritime) Enterprise Agreement 2010-2013 expired on 30 June 2013. (3)The award, the subject of this application, applies to employees of the RMS Division of the Government Service. A new award should be made to reflect that the RTA and NSW Maritime have been abolished and that these employees are now employed by the RMS Division of the Government Service . It would facilitate the orderly and efficient operation of the RMS workforce to operate its entire salaried workforce pursuant to one inclusive consolidated award. RMS is bound by the NSW Government Public Sector Wages Policy (PSW Policy) and this application is intended to be consistent with that policy. The application is also consistent with the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011. The application is consistent with the PSW Policy in seeking a single, comprehensive industrial instrument. (4)The application sought a nominal term for the new award of up to 3 years and the insertion of a new No Extra Claims clause. Evidence 11Mr O Fagir of counsel, who appeared for APESMA, called the following witnesses to give evidence in the proceedings, who were required for cross-examination: * Professor John Buchanan, University of Sydney * Mr Erik Locke, Director of Marketing and Policy for Professionals Australia (previously APESMA) * Mr Samuel Rex Millie, Bridge Works Manager South-West (Engineer Level 4), RMS * Ms Margaret Buchanan, Senior Industrial Officer, APESMA * Mr Warren Stalder, until retirement in January 2013, held the position of Manager, Construction Quality for RMS; * Mr Patrick Joseph Kenny, Principal Engineer, Road Design Engineering, Engineering Technology Services at RMS; * Mr Lindsay Howard Nash, Senior Project Manager, Engineer Level 4 within major project implementation north, Pacific Highway office in the infrastructure development directorate of RMS; * Ms Alison Rose, Senior Industrial Officer, APESMA (filed witness statement in reply). 12Mr S Prince of counsel who appeared for RMS read the affidavits of the following who were required for cross-examination: * Mr Geoffrey James Fogarty, Director, Infrastructure Development Division of the RMS. Mr Fogarty has held this position since February 2012 and reports to the Chief Executive of RMS and is a member of the RMS Executive which consists of the Chief Executive and 5 other Directors in addition to himself; * Mr Mark Edwards, General Manager, Human Resources, RMS. Mr Edwards has held this role since September 2013. He is responsible for providing expert advice to the Executive on Human Resources Matters. 13Mr Prince read the affidavit of Ms Ann Adams, Industrial Relations Officer in the Workplace Relations Team of RMS, who was not required for cross-examination. Evidence of APESMA 14Professor John Buchanan is a professor of Work and Organisational Studies at the University of Sydney's School of Business and Director of the Workplace Research Centre (the "WRC"). In December 2013, the WRC was engaged by APESMA to prepare a short report drawing on Professor Buchanan's expertise that would assist the Commission in answering the following question: "Should professional engineers in the RMS maintain their current award arrangements, i.e. an enterprise specific occupationally-based award?" 15Under the heading "Key insights from relevant labour market research - the concepts of 'occupational labour markets' and 'occupational coherence'", Professor Buchanan stated that it was generally recognised that there were three potential reference points for defining award coverage: industry, occupation or enterprise. Industry is defined by what a workplace makes or does, occupation is defined by the skills held by a worker and which they bring to and take away from any particular job. Enterprise refers to the organisational (and especially managerial and legal) arrangements associated with coordinating flows of funds, goods and services for particular ventures. The Australian Bureau of Statistics provides helpful definitions for each of these aspects of social and economic reality. Industry is defined by reference to what specific physical locations make or do (or the major source of value added produced by a business entity) (ABS 1993), occupation is defined by qualifications and skill (ABS 2009), and enterprise is defined on the basis of formal business structures and units of activity (ABS 2013: 10 - 13). Professor Buchanan observed that a useful academic account of these different categories was provided by Sayer and Walker (1992: Ch 3). 16Professor Buchanan observed that when it comes to how labour market standards are defined in practice, they are rarely defined on an industry or an occupation or an enterprise basis alone. Rather, the labour market standards prevailing in a particular situation usually refer - implicitly or explicitly - to a combination of all these matters. As such the issue is not whether one has an 'enterprise' basis for regulation or an 'occupation' basis for regulation. The critical question is how are industry, occupational and enterprise factors to be recognised and connected. In recent times, industrial relations policy has privileged what has been referred to as 'enterprise bargaining'. As a matter of practice, however, occupational considerations still shape the system of labour standards. 17Professor Buchanan stated: "As Bray has noted about the situation at Federal level, of the 122 Modern Awards recently created 107 are industry based and 15 occupationally based (Bray 2011: 29)" 18Professor Buchanan observed that in recent years most focus has been on the 'enterprise' dimension of labour standards and their determination. It was important to appreciate, however, that occupational matters remain important. He proceeded to provide a summary of scholarly literature relevant to the Commission's deliberations which primarily concerned the origins and current status of occupation as a factor shaping the definition and management of labour. 19In observing that occupational regulation can take many forms, Professor Buchanan summarised David Marsden's seminal work, A theory of employment systems. Micro-foundations of Societal Diversity, Oxford University Press, Oxford (1999) as follows: (1)The nature of the employment relationship means that skills are developed and used in the context of a limited number of employment systems. Following Marsden, these are commonly specified in terms of: (a)how the demands of the job are defined i.e. primarily by the needs of production, or primarily by reference to the skills the worker brings to the job. This is commonly referred to as the difference between 'internal' and 'occupational' labour market arrangements (hereafter ILMs and OLMs); (b)how the approach to specifying accountabilities for work performed are defined i.e. on the basis of what a worker does (e.g. very specific duty statement) or on the basis of what the worker is expected to achieve (e.g. once promoted to a certain level, they are expected to perform all tasks at that level). These can be referred to as 'task centred' or 'function centred' approaches to systems of work coordination. (2)The dynamics of the employment relationship, therefore, commonly result in four employment rules, being: (i) 'work post' rule, being task centred with enforcement criteria being requirements of production (ie production approach); (ii)'competence rank rule', being function/procedure centred with enforcement criteria being production approach; (iii)job territory/tools of trade rule, being task centred with enforcement criteria being recognised skills of workers (ie training approach); and (iv)'qualification' rule, being function/procedure centred with enforcement criteria being training approach. 20It was noted that there had been a decline in classical ILMs and references to the best documentation of this was provided. It was also observed that OLMs have also been profoundly restructured. Professor Buchanan noted that there had been a major push in recent decades to undermine their coherence in the pursuit of ensuring greater 'flexibility' in how labour was defined and deployed. References to the most comprehensive documentation were provided in Standing (2009) and Marchington et al (2004). It was stated that in Australia these changes have been particularly acute since the 1980s. This has arisen in response to the need to ensure labour adjusts sufficiently to changing circumstances. For example, changes in labour supply (changing role of women, aging workforce and increasing levels of school retention), the changing role of Australia in the global economy, changing role of the public sector and changing employer-labour use strategies. 21Professor Buchanan addressed the benefits of a flexible OLM, referring to Marsden (1986: 234 - 242). He noted that OLMs are a public good that delivered at least three major benefits. (a)For employers they provide pools of skilled labour that can be drawn on under conditions of economic expansion. (b)For employees they give transferable capability that is an asset of value to a variety of employers, thereby increasing their mobility and security in the labour market. (c)For society they facilitate economic adjustment when workers are retrenched. 22Professor Buchanan noted that in recent times reports of skill shortages, especially concerning professional engineers have been widespread. He noted in a number of sectors initiatives have been undertaken to fragment occupations in an effort to get at least some partially competent labour that could be deployed. This development can be counter-productive, it was observed, smart in short run, but not so smart in the longer term. Contributing to the development and operation of clearly defined occupational labour markets could provide a major benefit to individual enterprises. Reference was made to a seminal study on this point conducted by a team of French scholars in the 1970s and 1980s (Maurice et al 1986). 23Professor Buchanan considered an occupational award and OLMs, noting there was little direct research on how awards contribute to the operation of OLMs. The research on OLMs in general, however, revealed that they need public support if they are to flourish. He observed while awards that take occupation as their primary reference point are not absolutely necessary for an occupation to flourish, such award arrangements would contribute to the array of factors supporting this public good. It was noted that it was difficult for public authorities to support occupational labour markets with interventions such as taxation incentives or programs of government expenditure. Professor Buchanan stated that the particular strength of the award system is that it can have primary reference to occupational factors, but vary them to take account of the needs of particular enterprises. The structure of the current award arrangement achieves this balance of maintaining occupational coherence but in a way that allows for the needs to this enterprise (RMS) to be acknowledged and managed appropriately. 24Under the heading "Implications for this case: factors to take into account in making a judgement call", Professor Buchanan observed that there is not one fixed answer to the question: should work be organised on an occupational or internal labour market basis, and if so, how? He stated the key issues to this are: (a) What is possible and (b) what is desirable. This was a matter that he and his colleagues at the Universities of Sydney and Melbourne have been examining actively over the past five years. Special attention has been given to the work in the agricultural, care, finance and engineering sectors (see Buchanan et al 2009, Buchanan et al 2010, Wheelahan et al 2011, Yu et al 2012, Yu et al 2013). 25The answer, Professor Buchanan posed, ultimately depended on balancing a range of factors. In this case, the key issues to note, he said, were: (a)Functional, flexible occupational labour markets provide major benefits for employers, workers and society. (b)The proposal under consideration from APESMA is for occupational coherence, not occupational closure. (c)Supporting such coherence requires public support. Because occupational labour markets are a public good, without such support, there will be under-provision of labour of this nature. (d)Erosion of OLMs is easily achieved but hard to rectify. (e)The benefits of administrative elegance at an enterprise level need to be weighed against the longer term costs of weakening OLMs as a public good. (f)Evidence of the gains of moving to an enterprise basis of operations is limited at best. At worst, this way of organising labour markets is more inefficient than well designed functionally flexible OLMs. This is a finding from international comparative studies on skills and economic performance conducted over the last 30 years. See for example, Maurice et al 1986, Prais 1994, Rubery et al 2003. 26Under the heading "Recommendation", Professor Buchanan stated: "It remains unclear how great the immediate and longer term benefits would be of moving award regulation of professional engineering labour in the RMS onto an enterprise basis. The current award coverage arrangements embody a sensitivity to enterprise requirements while supporting occupational coherence that does not result in occupational closure. On balance the smallness of the gains do not appear to warrant the costs of weakening the public good benefits of a coherent occupational labour market in engineering supported by current arrangements." 27In cross-examination, Professor Buchanan said he was not provided with a copy of the proposed consolidated award. In preparing his report and witness statement, Professor Buchanan acknowledged that the issue was how the different elements of industry occupation and enterprise interrelated. He acknowledged that the principle of wage determination enterprise bargaining had been settled since 1991, but if what he is talking about is a system of labour standards, it is not just a system of wage determination that is of concern, it is also how to specify what the reference point is for setting publicly defined standards. His evidence was that Australia has kept a strong tradition of industry and occupation and occupational reference points. He agreed that an occupational focused award was closer to the OLM model, whereas on the other hand, an enterprise award was closer to the ILM model. His evidence was from an empirical point of view. The big issue was how the different principles or definitions of the three concepts connected. Professor Buchanan's evidence was that he was not saying that one should necessarily be privileged over the other. 28Professor Buchanan acknowledged that the Professional Engineers Award for RMS only applied to one enterprise. He observed that that was not unique. Professor Buchanan accepted that there are extensive mechanisms established by professional bodies for mutual recognition and deployment of skills for people who are professionally qualified as engineers and it was a component that the flexibility and mobility of that type of labour rested on the mutual recognition of those skills. 29Professor Buchanan accepted that the highest his report went in relation to dealing with the RMS consolidated award was to note that the current form of the award provided a distinct occupational category for engineers and that, as a general matter, was a good thing. His evidence was "it is a contributing factor to occupational labour markets as a public good". 30Professor Buchanan stated that he was not asked to take the objects of the Act into account in providing his report. He recollected that the objects usually contained an array of concerns which called on the Commission to balance in reaching a decision in the particular circumstances. 31Professor Buchanan was referred to the Object found in s 3(c) of the Act which requires the promotion of participation in industrial relations by employees and employers at an enterprise or workplace level, and was asked: Q: So that a purist occupational labour market model would cut across that point? Professor Buchanan answered: A: No. I think you have got to deal with these concepts at different levels of abstraction. So in making sense of a labour market, you have got to work at initially the highest level of abstraction. What are the categories that one takes into account in making sense of a complex situation. At a lower level of abstraction, you have to note how those different categories cohere in any particular situation. So you can talk at a very high level of abstraction of matters. There is an abstract occupational labour market which has nothing to do with internal labour markets, but in conducting one's analysis of how labour market functions you always move from the highest level to a lower level of abstraction in conducting your analysis. So it is not as if you are either or in or you are out. As I said all along the key issue is how do you reconcile or how do you connect the different forces at work which shape labour markets. There's an occupational dynamic, there's an industry dynamic, there's an enterprise dynamic. At the highest level of abstraction, they have an independent effect. When you come to understand any particular situation, they interact. It is understanding how they interact that you need to balance when you are making your analysis of how things work. When you are making a policy decision, you have to make a judgment about which ones do you give prominence to in the particular circumstances. But that's a judgment from a policy point of view; there is no science in that. Q: So you haven't provided His Honour with any identification of what the ultimate difference in balance would be by reason of the replication of the existing terms and conditions under the Professional Engineers Award into a consolidated Award; have you? A: That's - look, I have. I'm mindful of the context of this report. That's why I have in paragraph [24] where I said it's ultimately arranged - you have ultimately got to balance a range of factors. I have listed (a) to (f) there in paragraph 24. ... You know, as I say, there isn't an absolute science on this point, but if you accept the reasoning that I have applied to that point there is a recognition in significant parts of the literature amongst highly respected researchers that there are significant public benefits of having occupational labour markets. Returning to your point where you probed me earlier, occupational labour markets can function either with a high degree of support from an array of public policy initiatives or a weak degree of support from public policy initiatives. It is a judgment call if you are interested in keeping the benefits going, what role does the Commission play in doing that. That's why I have listed the factors there that I think it needs to take into account. Q: You haven't identified in your report, how any particular provision of the proposed consolidated award would lead to a reduction in occupational coherence for engineers at RMS; have you? A: No, this is why - well, the reference point for setting the the standard shifts. So the formal reference point for setting labour market standards as enforceable through this jurisdiction will be defined on an enterprise basis. Now within that enterprise there would be recognition for particular occupational groups. That was also explained to me. My point is that if every enterprise goes down this route, which they have got to think about it in the longer term, you are in aggregate reducing the coherence in the way in which the engineering profession is recognised within the New South Wales award system. I do actually say that. Q: Even if the engineering classifications, roles, functions, privileges, rights, responsibilities all remain the same? A: Yes, but they are, if you like, they are traces within a different set of reference points and in terms of a judgment call, like I said there is no science on this point. Clearly currently RMS management doesn't have an anti-engineering culture. You do have a vulnerability if the current management changes and that's why we have awards that have certain types of coverage so that categories and reference points survive the immediate personnel. I have absolutely no doubt the current personnel are completely committed to an engineering culture, but if they all go, you are starting from a very different set of reference points. If a new set of managers come in and they don't have that engineering culture, their reference point will be, we have simply got an enterprise award here, we just want to have a common set of categories, that is a perfectly plausible and foreseeable set of circumstances. Q: Any such application though by the employer to amend or vary the award in that way requires the Commission and agreement of either all the parties, including APESMA or this Commission -- A: Of course. Q: --in arbitration, do you accept that? Would you accept that? A: Of course. Q: So that changing the classification structure as presently exists, whether it is in a consolidated award or a separate award, will ultimately involve the same process? A: Yes. Like I say, even if you keep the current arrangements that is no guarantee that engineering will be preserved. It is a matter of, like I say, an on-balance call - sorry, an on-balance judgment about what helps in keeping, nurturing an occupational labour market. It is like, if you like, an essential ingredient but it is neither a necessary nor sufficient condition for ensuring the overall health of an occupational labour market. Q: So that is why in paragraph 25 your conclusion is that it remains unclear how great the immediate and longer term benefits will be of a moving award regulation professional engineering labour in the RMS ultimate enterprise basis-- A: Yes, that's right. From an empirical point of view, whilst there is a lot of policy ink being split on the benefits of moving to an enterprise based model the hard data on what the benefits of that are is very hard to find. Q: The fact is at the moment RMS, so far as engineers are concerned, does have award regulation on an enterprise basis because it has a single award applying to the engineers working within its enterprise; do you accept that? A: I do. But it is with reference to the occupation. Q: You accept also that in a consolidated award where all the terms and conditions of the existing professional engineers are transposed across, that so far as engineers are concerned, that award still has a focus on the engineering occupation? A: For those classifications, yes. 32Mr Erik Locke is a Director of Marketing and Policy for Professionals Australia (previously APESMA). Mr Locke gave evidence that he became an employee of APESMA in January 2013. Before joining APESMA, he was an independent public policy consultant for approximately two years. During this period he was engaged by a number of organisations including the National Engineering Registration Board, Australian National Engineering Taskforce. In his work as a consultant and since commencing work with APESMA, he has had extensive exposure to the engineering profession, and conducted social research with engineers. He has also researched procurement practices and their impact on the engineering profession, supply and demand. 33Whilst engaged by the Australian National Engineering Taskforce he was commissioned to write a report on revitalising the engineering profession and addressing skills shortages. The report, which was funded by the Commonwealth Department of Education, Employment and Workplace Relations was titled "Realising and Innovation Economy: A Practical Roadmap to Ease the Australian Engineering Skills Shortage". A copy of this report was annexed to Mr Locke's witness statement. 34In 2011 and 2012, the Senate Education Employment and Workplace Relations Reference Committee held an inquiry into the shortage of engineering and related employment skills. 35In 2013, Mr Locke prepared a submission for the National Commission of Audit. A copy of that submission was annexed. 36Mr Locke's observations regarding the engineering profession was that successive governments at a State level have attached value to certain public sector professions by increasing their wages, running awareness and recruitment campaigns and through the avenues provided by day-to-day public discourse. He gave as the examples, nursing and the teaching profession and said in his statement: ... 11. No such investment has been made in the engineering profession. [...] governments have outsourced much of their engineering capability to the private sector through the adoption of procurement models such as "design and construct" and public-private-partnerships. [...] Annexure 1 outlined what has evolved is a situation where governments have become uninformed purchasers of engineering services. 12. The undervaluing of engineers in the public sector is demonstrated, inter alia, by the fact that an experienced engineer working in a state public service earns an average remuneration significantly lower than their private sector counterparts. ... 14. The important role that engineers play in Australia should be a focus of government, and should be subject to similar public policy focuses as applied to other professions, for example, for science there has been the establishment of the Office of the Chief Scientist, and a similar office for architecture in the Office of the Government Architect [...] ... 15. State Governments can take the lead by increasing their overall engineering capacity in both policy and program areas, and by bringing the pay of their engineers into line with the private sector. [...] ... 16. Given the importance of engineers, providing career paths and enhancing the status of the profession in the public sector is a good investment. Providing a clear career path, definitions, support and protecting the integrity of the public sector engineering workforce is vital if the workforce is to remain engaged and growing. 17. An effective professional engineers' award and salary structure would contribute to that goal. Importantly, an occupational award promotes the accurate classification and market remuneration of engineers. Industrial instruments should protect and retain clearly articulated classification structures for engineers, rather than third party "job value points" based systems used by many organisations. Those "job value points" systems fail to recognise the depth of technical skill and experience that engineers require. They also fail to take into account the severe supply and demand forces that currently affect the engineering workforce when indicating suitable remuneration levels. 18. A dedicated award also acknowledges professional engineers as a distinct group of significant employees. This is not only a symbolic but a practical recognition that engineering is a profession and an important one. That recognition is valued by the profession and, conversely, any move away from a separate award is likely to be regarded as symptomatic of de-professionalisation and the undervaluing of engineers. 37In cross-examination, Mr Locke conceded that he was not a person who was independent of APESMA. He acknowledged that the construction stage of the mining boom involved a creation of infrastructure for the purpose of developing and exploiting minerals, which was likely to require engineers, particularly civil engineers. Mr Locke accepted that the demand for engineers has fluctuated from time to time, depending on the state and structure of the economy. His evidence was that it also fluctuated between jurisdictions. Western Australia had seen high demand for engineers and in the years to come, there will be an increased demand in both New South Wales and Victoria for civil engineers. Mr Locke acknowledged that he was not a qualified engineers and that his role with APESMA included advancing benefits for its members. 38The evidence from engineers employed by RMS and called by the union (Mr Millie, Mr Stalder, Mr Kenny and Mr Nash) was largely similar, although Mr Nash's understanding of the industrial ramifications of a consolidated award was different to the other witnesses. The common issues that emerged from their evidence were as follows: (a)In November 2013, the long restructure process in RMS, which involved the demerging of Country West Road Services to form Regional Maintenance Delivery (RMD) South West, under the new Asset Maintenance Division, concluded. The stated aim of the restructure was to introduce effectiveness and efficiency in the planning and delivery of RMS works by transferring more development work to the RMD unit, to allow the asset planning unit to focus more on planning the next 5 year program. (b)Professional engineers are a special, different and important group of employees within RMS because they are highly trained through a minimum 4 year engineering degree. (c)They have technical knowledge and skills to manage 5000 bridge structures and many thousands of kilometres of roads that are travelled over by 420,000 trucks in NSW per day. (d)Engineers must ensure that Regional Bridge Maintenance is competitive, focused on the delivery of its primary functions and continually improving its performance by implementing commercial systems and promoting innovation in the workplace; ensure that Regional Bridge Maintenance delivers its services with a high level of workplace health and safety and environmental management in accordance RMS policies; and ensure continuous improvement and quality management principles and legislative and statutory requirements. (e)Engineers are also required to have the knowledge to ensure that the regional delivery section contributes fully to the achievement of government and RMS objectives by providing strong leadership, aligning sections strategies, plans, processes, priorities and values to the RMS blueprint. (f)Customer service is the new focus for RMS. The risks for RMS and the community if the engineering profession declines within RMS is that the transport network will deteriorate into an unserviceable condition that is unable to meet current and future vehicle needs. Bridges and culverts may collapse, or load, or speed limits may be applied, or long detours implemented. (g)Engineers assist RMS in dealing with the impact of legislative requirements and changes including, for example, the introduction of the Workplace Health and Safety Act 2011; Civil Liability Act 2002; Heritage Act 1977' Protection of the Environment Operations Act 1997; and Waste Avoidance and Resource Recovery Act 2001. (h)There is a shortage of professional engineers in Australia. This shortage is currently impacting on RMS. RMS is experiencing difficulties in filling vacant professional engineering positions. (i)RMS is employing non-engineers in traditionally engineering roles. (j)The RMS Professional Engineers Award highlights the importance of the engineering profession within RMS, preserves engineer-specific conditions, pay and classifications, protects the definition of a "professional engineer" in a legal document, provides the opportunity to negotiate more engineer-specific conditions and pay rates in the future when state governments' wage policy changes, and ensures award negotiations are focused on issues for professional engineers. (k)A consolidated award does not offer long term guarantees for professional engineers' conditions, classification structure and pay scale; means that as a minority group, there is a significant risk that engineers' concerns will be ignored in negotiations affecting thousands of employees and five other unions; offers no benefits for professional engineers, and will allow RMS to keep engineers' conditions and wages strictly in that line with those of other employees at RMS. (l)Examples were provided of the consequences of a shortage of engineering expertise in the RMS. These included the Gungahlin Drive Bridge falsework collapse; engineering roles in the project development branch being filled with environmental scientists and planners; and the relocation of a Telstra cable at an estimated cost of $1 million. (m)RMS has been an engineering organisation where traditionally engineers have been leaders of the various other occupations. Specialist engineers or Specialist status is not available to other occupational groups. The Specialist Engineer provisions provide the capacity to recognise technical specialists performing above their position description and helps to mitigate the risk of losing technical expertise. RMS has traditionally been a needs-to-be-an-engineering organisation. (i)The (Professional) Engineers Award has real symbolic value in that engineers are recognised and are important to the organisation. Consolidating the engineers' award to a generic award signals to engineers that the organisation is devaluing engineering. (ii)Professional engineers generally have two career paths in RMS: a generalist path which flows through into management roles, or a technical specialisation. RMS also recognises some engineers through payment of a specialist engineering skill, by way of a specialist engineers allowance. (iii)The engineering shortage is not as extreme as at the peak of the mining boom, although it still persists. (iv)The consolidated award will contribute to a lack of professional identity for engineers in RMS. There will be less loyalty than has been shown in the past by engineers, many of whom have devoted their careers to public service. But it's very difficult to quantify the risks of the decline of professional engineering in RMS. 39During cross-examination, each of these witnesses was taken to a petition, distributed by APESMA, dated May and June 2012. The petition read as follows: "We, the underside professional engineers employed RMS express our concern about RMS' treatment of its professional engineering workforce in recent Award negotiations. RMS has indicated its intention to abolish the RMS Professional Engineers Award, the instrument that sets out the specific pay and conditions for engineers, and move engineers onto an RMS-wide generic "white collar staff" award. RMS has verbally agreed to retain the Professional Engineers Classification Structure, but without any guaranteed protection. We call on RMS to recognise the importance of engineering to the organisation via the following action: (1) Agree to protect and retain the RMS Professional Engineers Award, and guarantee its continued existence beyond 2013; and (2) Provide guaranteed protection for RMS professional engineers classification structure to ensure its continued existence beyond 2013. Abolishing the RMS Professional Engineers Award offers no benefit for RMS or its engineering workforce. RMS will lose substantial flexibility in the management of the professional engineers. RMS professional engineers are concerned at their diminished profile for the engineering profession at RMS and the potential to lose engineering-specific employment conditions. Strategies such as the abolition of the RMS Professional Engineers Award, which indicate a lack of understanding of or even disregard for the role of engineers, will result in more young and experienced engineers leaving RMS and greater stress for those remaining. As an engineering organisation, the technical excellence of RMS's professional engineers is the core driver of its success. Professional engineers are RMS's most important and indispensable resource for the safe, efficient and cost-effective delivery of major programs, projects and management of assets. During an acute professional engineering skill shortage, which is currently the subject of a Senate inquiry, RMS must recognise and reward its professional engineering workforce to retain unique analytical skills, knowledge and expertise, not to jeopardise our employment conditions. In this environment, it is critical that RMS take positive action to protect the RMS Professional Engineers Award and Classification Structure, and we seek your assistance with this as a matter of urgency." 40Mr Millie recalled signing the petition. His evidence was that he had been told by APESMA that the consolidation of the Professional Engineer's Award into one award meant that was no guaranteed protection of professional engineers classification structure. He said he had not made his own enquiries in respect of the legal effect of a consolidated award. He accepted that the fear of young and experienced engineers leaving RMS had come from what he had been told by the union. Similarly, his evidence was that he didn't have any independent experience of RMS behaving in an aggressive manner to abolish the Professional Engineers Award. His view was based on what he had been told by APESMA. Mr Millie acknowledged that he had read in RMS witness statements that the Consolidated Award would maintain all existing conditions for professional engineers as found in their award. He said that he had not been told that the Consolidated Award could be varied except by the consent of all parties to the award or alternatively, by arbitration in the Commission. 41Mr Stalder agreed that during the period of his employment he had seen changes at the RTA and then RMS from an organisational perspective. The latest change, he acknowledged, was a move by RMS to customer focus which included a move from regional autonomous management to a process whereby central units have a more active role in projects. He also agreed that there had been a rise in the role of the environmental scientist. He accepted that the role of engineers is always changing, notwithstanding that there was a standalone Professional Engineers Award in place. He acknowledged that matters of professional reputation and the quality of an engineer's work was much more important to the professional status of an engineer than the particular legal form by which they were paid. His evidence was that some of the changes, for example, that regional managers were no longer called engineers, signalled a devaluing of engineers within RMS. He said that the threat of being part of the Consolidated Award would "water down the relative importance of engineers within the organisation, while by itself it may not be as seen as a big deal, but it has the gradual eradication of devaluing engineers coming into a generic award". Mr Stalder recalled seeing a petition although he could not specifically recall signing it. The petition included his name and signature. In re-examination, Mr Stalder said: "I think the reason why I feel [the Professional Engineers Award] is important is because it is symbolic and I think the legal form of it is probably a matter of concern personally to me as an engineer, but more the symbolism of having an engineers' award within RMS; it says engineers are valued as a professional body" 42During cross-examination, Mr Kenny's evidence was that he thought it was very positive that engineers had their own award, and that he would like to see that continued because it showed, without being precious, that the organisation valued what engineers did. Engineers were a significant group, and different from other groups, which had been recognised by RMS. Mr Kenny did not appreciate that if a consolidated award was made, APESMA had the ability to refuse to consent to a variation, and in such circumstances any disagreement could be determined by this Commission. 43During cross-examination, Mr Nash gave the following evidence: Q: Has it ever explained to you that an industrial award of this Commission can only be varied by the consent of all of the parties or alternatively, by an arbitration by the Commission? A: That wasn't my understanding. Q: That was not your understanding? What is your understanding? A: That the current industrial legislation didn't require the agreement of all parties involved. Q: But a majority could make changes binding? A: I don't know the exact details but I was under the impression that it wasn't a requirement for all parties to agree. Q: Did you obtain that impression from discussions with Ms Rose? A: Yes and discussions with other people. Q: Do you remember which other people you spoke to? A: It would be other people within APESMA. 44Mr Nash's evidence was that if engineers became part of the Consolidated Award it would lessen their voice as had occurred in areas such as State Rail and with Main Roads Queensland. This is what gave rise to his fear of a consolidated award, although he agreed he had not examined State Rail's industrial instrument or the award covering engineers in Main Roads Queensland. 45Mr Nash accepted that the ability to veto changes to variations to the Consolidated Award would give APESMA a powerful bargaining position. Mr Nash said that his fear was about the future once a consolidated award was made, in that the engineers may be overwhelmed by the numbers of other people covered by the Consolidated Award. 46Mr Nash acknowledged that he was the first engineer to sign the petition and that he had provided some feedback to Ms Rose about its content. Mr Nash's evidence was that at the time he signed the petition, he was unaware that APESMA could ask the Commission not to make any changes to the engineers' classification structure, even if it was included in a consolidated award. This was one of the reasons that he thought a consolidated award represented the least security to maintaining the engineer's classification structure. He said that engineers had been concerned about a diminished profile since the mid-1990s, notwithstanding their standalone award. 47The evidence of Ms Buchanan and Ms Rose, who are both permanent full-time employees of APESMA, was also largely similar. Ms Buchanan's evidence was that professional employees covered by a 2005 EPA who were employed by Rail Corporation of NSW, Rail Infrastructure Corporation and the State Rail Authority, contained classification structures specific to professional engineers. When the RailCorp EPA 2005 was certified, the parties had an undertaking given to the Australian Industrial Relations Commission that the classification structure would be rationalised and a new classification structure developed and implemented during the life of the agreement. This occurred, however, RailCorp's structure was simplified and flattened and did not provide classifications that were specific to professional engineers. Professional engineers employed at RailCorp who were members of APESMA were particularly dissatisfied with the classification structure that had been negotiated. 48Ms Buchanan said that the general classification structure, which was developed through the use of the Mercer Job Evaluation System, resulted in the devaluing of the professional engineer positions against other occupations incorporated within the proposed rationalised classification structure. Ms Buchanan's evidence was that RailCorp had effectively reset the salaries of professional engineers with no obvious consideration of market rates of pay for the profession. Ultimately, members of all unions took a vote and the majority of employees voted in favour of accepting the new classification structure. Ms Buchanan said that APESMA members, were advertent by the rest of the workforce, and were effectively forced into the new RailCorp classification structure. This resulted in some professional engineers leaving RailCorp. Approximately 12 months after the classification structure had been implemented, and as a result of a loss of engineers, senior engineering management took action to retain their professional engineers. Briefs were forwarded to Treasury for approval to put in place retention bonuses for those professional engineers who were identified as "critical" to the functioning of RailCorp. Retention bonuses were approved for key engineering personnel, which appeared to partly address the inferior remuneration offered by RailCorp compared to external private sector organisations. 49Ms Buchanan's evidence was that RailCorp also had great difficulty recruiting engineers as permanent employees at this time. 50These changes all occurred in the context of a global engineering skills shortage during a time where high demand was driving up private sector salaries for rail engineers, especially signal engineers. The award changes were not the only reason for RailCorp's difficulty in retaining engineers, however Ms Buchanan observed they exacerbated the problem. 51Ms Rose who is employed by APESMA as a Senior Industrial Officer, set out the history of industrial instruments applying to professional engineers. Professional engineers who were originally employed by the Department of Main Roads were employed under an engineer-specific federal instrument since what Ms Rose described as a landmark 1961 decision of the Commonwealth Conciliation and Arbitration Commission. In that case, the Association of Professional Engineers, Australia (a predecessor to APESMA), successfully mounted a work value case and created the first occupational award for engineers. Ms Rose observed that the case itself ran for two and a half years with 182 sitting days and two High Court challenges. She said that the decision significantly elevated the pay and position of professional engineers in Australia by removing professional engineers' pay from a level of non-professionals to a rate appropriate for professional employees. This award was subsequently replaced by agreements and/or awards over the years. 52As a result of the Public Sector Employment Legislation Amendment Act 2006 (No.2), employees of the then RTA were deemed to be employees of the Government Service of NSW. In February 2008, the RTA and APESMA agreed to negotiate an award in the NSW jurisdiction to replace the Federal instruments. The NSW Industrial Relations Commission assisted the parties in reaching an agreement and in February 2009 made the Professional Engineers (Roads and Traffic Authority Division of the Government Service of New South Wales - Salaries) Award 2008. This Award has been renegotiated in 2011, 2012 and 2013. 53Ms Rose detailed that through enterprise bargaining, APESMA and the RTA had negotiated a number of specific provisions for professional engineers which it is unnecessary to repeat in this judgment. Ms Rose's evidence was that as the strong wages growth for professional engineers in the private sector continues, RMS will be increasingly less attractive as an employer for professional engineers. By maintaining engineers in their separate award, RMS has a greater opportunity to provide engineer-specific employment conditions, allowances or pay increases that do not have to be flowed onto other groups of employees. 54Ms Rose annexed a copy of the current award to her statement. She referred to the announcement by RMS to merge six instruments into a single award and set out the unions affected. 55Ms Rose said that since RMS made clear its intention to abolish the Professional Engineers Award in early 2012, she has spoken to and met with and corresponded with hundreds of RMS professional engineers. She said that APESMA members had made clear that they do not want to lose the Professional Engineers Award and that they believe they will be disadvantaged if they are placed under the RMS consolidated staff award. Over a three and half week period in June 2012, APESMA members at RMS collected the signatures of 610 professional engineers on a petition to Mr Peter Duncan, RMS Chief Executive, expressing their opposition to the loss of the Professional Engineers Award. A copy of the petition was annexed to her statement. 56Ms Rose's evidence was that she had met with senior managers of RMS to raise APESMA's members' concerns and express its opposition to the loss of the Professional Engineers Award. 57Ms Rose's evidence was that a consolidated award would prejudice professional engineers' capacity to bargain effectively. Professional engineers will no longer be able to engage with RMS directly on issues that concern them, instead joint positions will be reached with all unions covered by the Consolidated Award. She contended that the interest of professional engineers can best be served through a separate award, contending that a consolidated award will have unfair and harmful consequences for professional engineers including that it will: (a)Undermine the fair and efficient conduct of bargaining by engineers; (b)Increase the likelihood that professional-specific issues of engineers are lost amongst the various issues of various professional and occupational groups covered by a consolidated award; (c)Undermine the engineering classification structure and engineer-specific employment conditions; (d)Limit RMS' capacity to be flexible and offering engineering-specific improvements to conditions of employment in response to the skills shortage or other factors; and (e)Tend to increase the disparity between private and public sector employment conditions, thereby exacerbating the effect of the existing skills shortage. 58Ms Rose also filed a statement in reply addressing the evidence of Mr Edwards and Mr Fogarty. Ms Rose rejected Mr Edwards' evidence that the RMS Professional Engineers Award "did not relate to the RMS consolidated organisation". She contended that RMS has had the opportunity to adjust the award since 2011, and has not put forward any changes or raise any concerns about problems with conditions. Her evidence was that if a consolidated award was made, there would be a number of different sets of employment conditions and arrangements applying to employees who work alongside each other at RMS. For example, employees who work under the Wages Award, the Traffic Signals Award and the School Crossing Supervisors Award. Ms Rose noted that RMS has not proposed to merge the Wages Award into the Consolidated Staff Award. A further example was employees working within RMS who are employed by Transport for NSW. 59Ms Rose put in issue Mr Edwards' contention that the terms and conditions of professional engineers would be maintained in the Consolidated Award. She set out 10 clauses that are currently found in their award which she contended would be lost. Ms Rose annexed a letter from Mr Peter Duncan, Chief Executive, Transport Roads and Maritime Services dated 17 March 2014, to Professionals Australia (formerly APESMA), which relevantly read: "RMS has given Professionals Australia, several times, an assurance that all existing award conditions for professional engineers will be preserved in the new award. Those specific conditions relating only to engineers are to be included in a separate part of the common award dealing with professional engineers only. The existing pay scale for engineers, which is different to the pay scale for other salaried staff, is also being maintained in the common award. Whether or not the arbitrated outcome results in a new consolidated salaried award, the conditions and rates of pay of professional engineers will not change. Moreover, the new award will have no impact on salary, reliability and community service, nor on staffing levels. However, RMS has a long history of supporting the development of professional engineers, including affiliations with Engineers Australia and sponsorship for a number of external postgraduate qualification programs. ... Also, I again refer you to the attached letter which outlines just some of RMS' initiatives to attract, retain and develop its engineers. RMS has always been, and remains, committed to the ongoing development of professional engineers. 60Ms Rose also contended that bargaining in relation to an award which covers a large number of non-engineers and a large number of other unions will inevitably limit APESMA's capacity to pursue engineer-specific improvements in award conditions. It will also create significant administrative difficulties and inefficiencies for APESMA, as it will be necessary to coordinate bargaining between the six unions. She rejected Mr Edwards' statement that it is preferable "to include engineering-specific conditions in a policy rather than the award", and that this approach "provides both RMS and APESMA a larger degree of flexibility to develop and amend programs as needed to suit the organisation and staff". Ms Rose contended that RMS' record of introducing engineering-specific programs through policies does not support the argument that these matters should be dealt with outside the award. 61In respect of Mr Fogarty's evidence, Ms Rose disagreed with his evidence that the loss of the Professional Engineers Award would not devalue engineering as a profession, or contribute to a loss of goodwill, commitment and loyalty of existing and potential RMS engineers. Her evidence, as set out earlier, was that no single engineer agreed with RMS' approach and that APESMA had collected 590 postcards and 227 signatures on the online petitions calling for Minister Duncan Grey to stop attempts to abolish the award. Ms Rose noted that the Schott NSW Commission of Audit Interim Report into Public Sector Management, which she annexed, recommended an increased focus on occupation-based awards. At 21.1, the Report stated: 21.1 "Recommendations: ...that the DPC should consider a process of rationalisation of awards including: consolidating multiple awards covering similar occupational groups ... Move distinct occupational groups out of the Crown Employees Award into separate awards to be administered by cluster Director General." (page 82) 62During cross-examination Ms Buchanan stated that she had not been involved in any of the negotiations with RMS relating to the Consolidated Award. 63Ms Rose during cross-examination acknowledged that any provisions of the Consolidated Award could not be removed or varied without the agreement of all the parties, or by decision of the Commission. She said that the Consolidated Award would give security to the classification structure than presently exists in the standalone award. 64Ms Rose was taken to a letter from Mr Duncan, Chief Executive of Transport, Roads and Maritime Services dated 26 July 2012, which was forwarded to all RMS engineers in response to the petition calling on RMS to maintain a separate Professional Engineers Award. Relevantly, it read: "Having a single award in RMS is a strategic decision taken in attempt to gain consistent conditions across the new organisation. The conditions applying to engineers in the former Roads and Traffic Authority (RTA) are, with a couple of exceptions, identical to the conditions applying to the Public Service Association (PSA) and (PSA) covered staff. The exceptions are recognition of engineering skills, specialist engineers, rollup annual leave loading and access to motor vehicles. RMS is not seeking to change these. Additionally, RMS has made a commitment that it will maintain a separate engineering classification structure in any future industrial instrument that applies to engineers. APESMA has advised its members that by not having a separate engineers award, RMS is downplaying the role of engineers in the organisation, in some ways, suggests that RMS does not recognise the value that engineers bring to the organisation. This is incorrect. RMS has always valued the important role that engineers play in delivering RMS' s commitments and incorporating APESMA into a single award in no way dimishes RMS's view of their continued importance to the organisation. RMS has introduced or reintroduced a number of initiatives over the past 5 years in order to attract, cover, retain and upskill engineers. Many of these initiatives occur outside the current engineers award, and none will be impacted by the inclusion of engineers in a single award. A list of examples in this regard is attached. You should also be aware that RMS has already made a number of commitments to APESMA for engineers under a single award: There will be a separate classification structure for engineers; A continuation of the few differences in conditions that engineers have, such as specialist engineers; RMS will continue to deal with the issues surrounding the skills shortages with engineers regardless of which they are covered by. 65Ms Rose acknowledged that upon receipt of this letter, APESMA did not write to the Chief Executive indicating that they did not believe what he said in this letter. Ms Rose's evidence was that at the time that she organised the petition, she had not seen any proposed consolidated award. Ms Rose said she was on maternity leave, from September 2012 until October 2013. She was aware that discussions continued between the APESMA and the other unions in respect of a consolidated award during this time, and after her return. Her evidence was that APESMA's position was that they wished to renegotiate a separate Professional Engineers Award. She agreed that meetings between the various unions and RMS were occurring within the context of a conciliation process within the Commission, and that APESMA made a decision not to engage in discussions in respect of the particular terms and conditions of the proposed consolidated award throughout the process within the conciliation because its position was that engineers should be covered by their own award. 66Ms Rose acknowledged that the first occasion that she had identified clauses in the Consolidated Award which she contended resulted in a loss of conditions for engineers from their existing award were set out in her witness statement in reply dated 24 March 2014. Her evidence was that she was not suggesting that the clauses referred to in her witness statement in reply were missing from the proposed consolidated award. Ms Rose accepted that minds can differ about whether or not, as a matter of substance, a clause in the Professional Engineers Award had, or had not been incorporated in the Consolidated Award. An example given was that the Professional Engineers Award provides for specific consultation arrangements for engineers. However, the Consolidated Award has a consultation provision which would apply to all parties to the Consolidated Award. 67Ms Rose acknowledged that if there was a particular dispute about a clause in the Consolidated Award, it would be up to the Commission to decide whether or not, in light of the concession made by RMS that it did not intend to diminish the existing terms and conditions of employment for engineers, to determine whether the proposed clause had a detrimental effect on engineers. Evidence of RMS 68Mr Geoffrey Fogarty is a Director of the Infrastructure Development Division of RMS, a position which he has held since 27 February 2012, when the Division was established. He explained the purpose of the Division was to develop and deliver new, enhanced or replacement infrastructure. The budgeted program of works to be delivered by the Division in 2013-14 is $2.1 billion. The Division has six branches and its key activities include integrated planning for development and delivery of road and maritime infrastructure enhancement programs; development and delivery of new and enhanced road or maritime capital infrastructure programs, including the Pacific, Great Western, Princess and Hume Highway upgrade program, Sydney Wharf upgrades and regional projects such as the Hunter Expressway. 69Mr Fogarty said that currently there are 731 professional engineers working for RMS. Of these 185 are allocated to the Division. The engineering staff work in project teams which includes many disciplines such as, engineering, environmental, road design, urban and landscape design, property estimators, administrative support and project officers. The teams are led by project development managers whose positions do not mandate engineering qualifications. 70In the project teams there is a great diversity of skills required and whilst engineering is an important and highly valued skill, there are roles for non-engineers. Mr Fogarty explained the important thing is to have the right mix of skills within a team to deliver the right outcome. This does not mean that RMS has been "de-engineered". The role of engineers is valued and recognised throughout RMS. Although the role of engineers has changed over time, this does not impact on the value which RMS places on the skills, knowledge and ability that engineers provide. 71In recognition of the importance of engineers to RMS, RMS sponsors a number of engineering programs. It has affiliations with Engineers Australia, The Peak National Professional Body for Engineers whose purpose is to advance the progression and standing of engineering. RMS has sponsored Engineers Australia's Engineering Excellence Awards every year since 2000. These awards are the pre-eminent awards in the industry. The dollar value of RMS' sponsorship of the awards in 2013 was $15,000.00. It also provides sponsorship for a number of external postgraduate qualification programs and invests up to $20,000.00 per participant. In 2012, there were 70 employees enrolled in nine different programs. 72Mr Fogarty has been part of the negotiating team that considered the Professional Engineers Award. In meetings with representatives from APESMA regarding the proposed consolidated award, his understanding was that the key conditions of the Professional Engineers Award will be retained in the Consolidated Award, including the current classification structure, the Specialist Engineers Allowance and the ability for employees who are working in positions that require engineering skills or qualifications to be recognised as a professional engineer and gain the benefit of the engineering-specific clauses in the Consolidated Award. In these circumstances, his evidence was, that he found it difficult to draw the conclusion that consolidating the Professional Engineers Award would have the effect of diminishing work conditions which would exacerbate any recruitment or retention difficulties. 73His understanding was that since the Specialist Engineers Allowance was introduced in RMS on or about July 2010, 53 applications had been received, 38 of which had been approved, 2 have been deemed ineligible, and 2 are awaiting determination. 74Mr Fogarty's evidence was that the consolidation of the industrial instruments will not affect the status of an RMS engineer. Engineers are valued in RMS as are all of the staff. His evidence was that the value or status of an engineer was not linked to the industrial instrument and by which they are covered. An industrial instrument is entirely about payment and conditions of employment and it is not in any way related to the value placed on engineers, their roles or their classifications. From his view, and that of the Executive, the consolidation of the Professional Engineers Award does not devalue engineering as a profession, or contribute to a loss of goodwill, commitment or loyalty, to existing and potential RMS engineers. 75Consolidation of the industrial instruments was in the interest of RMS because it would assist the efficiency of the organisation by simplifying the administration of RMS' industrial instruments by having a single instrument with common core conditions applying to RMS' salaried staff. It will be helpful in respect of the project teams because each member of staff will be covered by the same instrument. 76Mr Fogarty annexed the letter dated 26 June 2012 sent by the Chief Executive to engineers responding to the 2012 position to which reference has already been made in this decision. He noted the letter reiterates that RMS is maintaining the terms and conditions of professional engineers in the Consolidated Award and emphasised the value that RMS places on engineers. The letter also noted that pay increases provided by RMS and its predecessor to employees covered by the Professional Engineers Award and the salaried staff awards had been the same since 1990 (with the exception of the rollup of annual leave loading into the engineers pay scale in 1994). 77Mr Fogarty also attached a letter from the Chief Executive dated 26 June 2012, forwarded to APESMA. Relevantly, this letter read: "RMS acknowledges the depth of feeling among APESMA's members on the perceived loss of professional standing, but I believe that this feeling is misplaced. RMS does not believe that APESMA or its members will be disadvantaged from being included in a single award. With the exception of a small number of specific conditions, the employment conditions applying to engineers are identical to the conditions applying to PSA covered employees. Of these few specific conditions that apply to engineers (specialist engineers, recognition of engineering skills, rollup of annual leave loading, access to motor vehicles), RMS will not be seeking to remove these. It should also be acknowledged that, with the exception of the rollup of annual leave loading in 1994, the pay increases provided to PSA and APESMA-covered employees that have been the same since at least 1990. RMS is also committed to maintaining a separate engineers classification structure in future awards. RMS rejects APESMA's view outlined in its petition sent to its members that RMS is diminishing the profile of engineers, or disadvantaging the role of engineers in the organisation by including them in a single award. RMS and the former RTA have gone to great lengths to provide benefits outside of normal salary increases to attract and retain engineers in the organisation. These include an extensive catalogue of internal and external development programs for professional and personal development and career enhancement. RMS has also invested heavily to ensure that engineer priority is maintained in our organisation through promoting engineering to schools and university students and entry into engineering positions within RMS through cadetships, scholarships and graduate positions. RMS will continue to look at other ways that it can support its current engineers and attract new engineers into the organisation. This will not be impacted by the proposal to include engineers under a single award. It should also be acknowledged that within the Transport cluster, both RailCorp and Transport for NSW employ a significant number of engineers, and both organisations have industrial instruments in place that cover a number of different classifications, including engineers. Implementing a single award in RMS will provide some consistency with this approach and potential for mobility for across the Transport cluster" ... 78Mr Fogarty also annexed a letter from Mr Paul Hesford, Director of the Corporate Division of RMS, to APESMA. Relevantly, this letter read as follows: 1. Commitment to maintain a separate classification structure for professional engineers RMS is committed to maintaining a separate classification structure for Professional Engineers, as agreed with APESMA, which is to be included in any future industrial instrument applying to Professional Engineers. 79In his experience, Mr Fogarty said that in the construction industry, the demand for engineers and skills shortages tend to be cyclical. For example, during the period immediately before 2000 in the lead up to the Sydney Olympic Games, there was an engineering skills shortage, as many engineers were engaged on infrastructure and construction projects. After the Sydney 2000 Olympics, there was a lull in industry activity, and it was easier to recruit engineers. Similarly, from around 2008 to 2012, there was a skills shortage of engineers in Australia because of the resources and mining boom in Western Australia and Queensland, and a large number of major infrastructure projects in Southeast Queensland. 80Mr Fogarty recalled that in or around September 2012, a number of engineer candidates entered the employment market as a result of a fall in global prices for coking coal, which led to a fall in investment in mining infrastructure projects. His evidence was that skills shortages happen on a cyclical basis and are in no way linked to the type or format of an industrial agreement that sets out an engineer's terms and conditions of employment. He did not accept the proposition that consolidating the Professional Engineers Award into a proposed RMS consolidated salaries award would have any effect on whether or not an engineer accepts employment with RMS, or that it would exacerbate any recruitment or retention difficulties, particularly, where the fundamental terms and conditions of the Professional Engineers Award were being maintained. 81Mr Fogarty's evidence was that he did not share the view expressed by Ms Rose in her statement that maintaining a separate award for engineers would allow greater opportunities to provide engineering-specific conditions. He noted that engineering-specific conditions were being maintained in the Consolidated Award, and that there was no impediment to negotiating particular conditions for particular groups of employees if there was a consolidated award. He further observed, in his experience, negotiations on employment conditions were based on industrial reasons, the needs of the employees and the organisation and the need to resource a project rather than for a particular role or status of a role. 82During cross-examination, Mr Fogarty acknowledged that there was no memorandum of understanding that recorded the commitment found in the letters from the Chief Executive to APESMA. He confirmed that on advice of "our industrial relations people" that the letter from the Chief Executive would not be enforceable in the Commission. Asked whether, in terms of the commitment given in the letter, there was a time limit on when it would expire, Mr Fogarty's evidence was that he didn't recall it being time limited in the discussions. His evidence was that it was a firm commitment at the time that RMS would retain the classification structure for engineers in the Consolidated Award. Mr Fogarty was asked: Q: Mr Fogarty, when did you think RMS would be released from the commitment contained in this letter? If you don't know, tell me you don't know. A: I don't know that there is a specific release from that commitment. Q: Tell me if this is right or wrong: the commitment was not for all time, was it? A: The commitment that we gave was unbounded. Q: It was unbounded? A: In the words that we used in the commitment, it didn't put a time limit on it. 83Mr Fogarty's attention was directed to the letter from Mr Hesford dated 26 June 2012, to which I have referred and which contained a commitment to maintain a separate classification structure for professional engineers. Mr Fogarty was asked: Q: When I use the term 'commitment', can you please take it that I'm talking about the commitment that's recorded in those words. The question is this: how long was the commitment to last? A: Well, the exact wording in the commitment is that RMS is committed, as it reads, in any future industrial instrument applying to professional engineers. Q: Any future industrial instrument? A: That's the correct interpretation of it. Q: What's the correct interpretation of it? A: I don't have any. You know, other interpretation other than reading the words. ... Q: [...] Do you know if RMS shares your view about the duration of this commitment? A: It's my understanding and my belief that the organisation is committed to ensuring that there is a separate classification for professional engineers. It is the view of the Chief Executive. It is the view of our HR. ... Q: And for how long? If you don't know, tell me you don't know. A: I don't know. I'd answer that as foreseeable. You know, personally we have a limited time span on this Earth, or involvement in an organisation. I can foresee that whilst we are in the circumstances, we are employing engineers doing the same sort of things that would be a legitimate reason to operate this way. If there was a wholesale change to the industrial structure and everything else, all bets would be off. Q: We can't tell from this letter how long the commitment is going to last; is that right? A: I think you can say it is for the foreseeable future under the circumstances. 84Mr Edwards has been the General Manager, Human Resources of RMS since September 2013. Mr Edwards explained the establishment of RMS and its profile within the broader Transport cluster of HNCs known as Transport for NSW. He also detailed RMS' staffing profile and set out the industrial instruments that RMS inherited from the RTA and the NSW Maritime Authority. Mr Edwards' evidence was that RMS was seeking a consolidated award be made to facilitate the orderly and efficient operation of the RMS workforce. He said that there were administrative and efficiency-related benefits which could be derived from a consolidated approach. The large number of industrial instruments that RMS had "inherited" from the RTA and the NSW Maritime Authority led to duplication and inefficiencies because those instruments did not relate to the RMS consolidated organisation and deal with many common terms. The consolidation and harmonisation of industrial instruments improves consistency across the entire organisation. 85His evidence was that during RMS' recent reform program, significant emphasis had been placed upon the creation of the "One RMS" culture. A consolidated award that encapsulates a core set of employment conditions for all employees was a key component to the embedding of an inclusive culture. It supported the notion that all employees are covered by the same core conditions of employment and that no one group is considered more important than another. 86Mr Edwards explained the Consolidated Award process and that conditions which were specific to particular groups of employees would be retained in separate sections and schedules of the Consolidated Award as follows: (a)Engineering staff would have specific conditions contained in section 8 and part 2 of Schedule A of the consolidated award and; (b)Maritime staff would have specific conditions contained in section 9 and part 3 of Schedule A of the consolidated award. He said on a smaller scale, the approach of having one industrial instrument containing different terms and conditions of employment for particular groups of staff already operated successfully within the RMS. He instanced clause 10 of the current Salaried Staff Award which contained terms and conditions that only applied to staff employed in Motor Registries or the Customer Service Centre. Clause 11 of that award contained terms and conditions that only applied to staff employed on the Drives Help Desk. 87His evidence was that the intention of the Consolidated Award was not to reduce any terms and conditions of employment of professional engineers. He set out examples of key clauses from the Professional Engineers Award that were replicated in the proposed consolidated award. Mr Edwards acknowledged that the Professional Engineers Award contained a unique salary scale for professional engineers and that this pay scale had been included in the Consolidated Award at part 2 of Schedule A. He also annexed an analysis of the Consolidated Award comparing the existing Professional Engineers Award and the existing salaried staff awards. 88Mr Edwards also observed that the Wages Staff Award, the Traffic Signals Award and the School Crossing Award would continue to operate separately after the consolidation process. The Wages Award was retained as a separate award because it covers RMS blue collar workers and their conditions of employment including hours of work and allowances were very different to the conditions of the salaried work force. For example, wages award staff work a 38 hour week and salaried employees work a 35 hour week. The Traffic Signals Award was being retained as a separate award because the function of work that was performed by this group of employees was scheduled to be outsourced by October 2014 and therefore, RMS saw no need to consolidate this award with the Wages Award. In respect of the School Crossing Award, it was being retained as a separate award because school crossing supervisors are employed on a part-time/casual basis, and their conditions of employment are different to salaried employees. Mr Edwards then detailed targeted employment programs at the RMS through cadetships and graduate programs, particularly for engineers and para-professionals. He also included evidence of part scholarships that are offered through various universities for students. 89In reply to Ms Rose's evidence, Mr Edwards stated that while there were numerous positions that strictly required an engineering degree, in recent years, there had been a move towards more generic position descriptions for some roles which traditionally were qualification or vocation-specific roles. Many engineering-specific roles still require that the person who fills it holds an engineering qualification. However, where appropriate, there are some roles in RMS which can be filled by those that hold other relevant tertiary qualifications. This evolution was entirely unrelated to the award consolidation process, the subject of these proceedings. Mr Edwards annexed a spread sheet showing each position description that required the incumbent to hold an engineering degree. 90Mr Edwards addressed Ms Rose's criticism that a number of specific provisions for professional engineers that had been negotiated by APESMA were not in the Consolidated Award. In relation to each particular provision, he stated as follows: (a)Rolling annual leave loading into annual salaries - the professional engineers pay scale in part 2 of schedule A of the consolidated award retains annual leave loading in the annual salaries; (b)Salary packaging the private use of an RTA (now RMS) motor vehicle - this is being maintained in clause 21.4.3(a) of the consolidated award; (c)Specialist Engineer Allowance - as mentioned in paragraph 34 above, the Specialist Engineer Allowance is retained in clause 45 of the consolidated award; (d)An updated professional engineers classification structure - this is being maintained in part 2 of schedule A of the consolidated award; (e)Personal salaries for the 'Former Grade 6' professional engineers - this operates outside of the current Professional Engineers Award and was agreed between the then RTA and APESMA via an exchange of letters. It will continue to operate as agreed but it is not included in the consolidated award; (f)Banking of accrued flexi days - this is maintained in the consolidated award at clause 22.2(d)(ix-x); (g)Special arrangements for banking accrued flex days for professional engineers working on Alliances and Major Projects - this is maintained in the consolidated award at clause 24.2(g); (h)Improved access to paid overtime for professional engineers at level 3 and above - this is maintained in the consolidated award at clause 24.2(g); (i)Expansion of the specialist engineer provisions - this is maintained in the consolidated at clause 45 (j)Recognition of Professional Engineering Skills clause - this provision is maintained at clause 46 of the consolidated award; and (k)Specific on-call provisions for professional engineers - this provision is maintained at clause 44 of the consolidated award. 91In respect of Ms Rose's criticism that private sector professional engineers received higher salaries than those employed at RMS, Mr Edwards' evidence was that in his experience, salary was only one of a number of reasons why a person may choose to work for a particular organisation. Other reasons included career opportunities, recognition, organisational reputation, leadership, a desire to provide a service to the public, flexible working arrangements or work life balance. He observed that RMS' ability to increase the salaries of its staff including its professional engineers was governed by the PSW Policy. 92Mr Edwards also disagreed with Ms Rose's contention that there was a greater opportunity for professional engineers to negotiate engineering-specific conditions or allowances if a separate award was retained, or that the interest of professional engineers would be better addressed by a separate award. He observed: (a)RMS holds the view that there is always scope for unions to negotiate or apply for a variation of specific conditions within an award, whether this be an occupation specific award or a consolidated award; (b)The nature of a NSW industrial award is that if the parties to it cannot agree on a change to the award, there is no consent. Without consent, the award or award variation will not be made without the matter being arbitrated by the NSW Industrial Relations Commission. This is the case whether the award is confined to a single group of staff such as professional engineers or a consolidated award; (c)Professional engineers are retaining their own pay scale in the consolidated award; (d)Professional engineers are retaining their own terms and conditions in a separate section (section 8) of the consolidated award; (e)Professionals Australia will be one of a number of unions that will be party to the consolidated award. However it cannot be assumed that the other union parties will withhold consent to future amendments of the engineer-specific provisions which do not apply to their members. As a result, the award consolidation should not have any impact on the ability of RMS and PA to negotiate successfully in the future in relation to professional engineers; and (f)Including engineering-specific conditions in an award is not the only way that initiatives for engineers can be implemented. Many initiatives can be introduced by policy and through employment programs, and it is often preferable to introduce initiatives that way. There are benefits in introducing initiatives through policy such as that policy initiatives provide both RMS and PA a larger degree of flexibility to develop and amend programs as needed to suit the organisation and staff. 93Mr Edwards said that he did not share the view that the status of engineers was being devalued in any way because of the proposal to consolidate their Professional Engineers Award with other salaried awards. He stated the consolidation process does not change the nature of engineering roles in RMS nor does it change the nature of other salaried roles in the organisation. The proposal to rationalise the salaried awards was to simplify and standardise core conditions of employment for all the salaried staff, and to maintain specific conditions for particular groups. This allows flexibility and mobility within the RMS workforce, and allows the organisation to respond to the changing nature of the work that it delivers. 94During cross-examination Mr Edwards confirmed that as part of the consolidation process, engineers would continue to enjoy their existing conditions of employment. If they differed from other salaried employees, there was no intention to diminish those conditions. He said he was not aware of whether there was a document which contained a commitment to maintain professional engineers' conditions which had been published in the last six months, being the period that Mr Edwards had been employed by RMS, although he acknowledged that he was bound by RMS' commitments prior to commencing employment with it. 95In reply, Mr Fagir tendered what was described as an RMS Management Committee Executive Note, which discussed the future award coverage for engineers. This document had been provided in response to a Notice to Produce. Although Mr Prince did not object to the tender of this document, he requested that it be treated as a confidential exhibit. It was received and dealt with on that basis. Relevant Statutory Provisions 96The Objects of the Act which are found at section 3 include the following: 3 Objects The objects of this Act are as follows: (a) to provide a framework for the conduct of industrial relations that is fair and just, (b) to promote efficiency and productivity in the economy of the State, (c) to promote participation in industrial relations by employees and employers at an enterprise or workplace level, (d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies, (e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments, ... 97Section 19 of the Act provides as follow: 19 Review of awards (1) The Commission is required to review each award before September 2001 and subsequently at least once in every 3 years. (2) The purpose of a review is to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards. (3) The Commission must take account of the following matters in the review of awards: (a) any decision of the Commission under Part 3 or any other test case decision of the Commission, (b) rates of remuneration and other minimum conditions of employment, (c) part-time work, casual work and job-sharing arrangements, (d) dispute resolution procedures, (e) any issue of discrimination under the awards, including pay equity, (f) any obsolete provisions or unnecessary technicalities in the awards and the ease of understanding of the awards, (g) any other matter relating to the objects of the Act that the Commission determines. (4) The Commission must also take account of the effect of the awards on productivity and efficiency in the industry concerned. (5) During a review of awards, relevant industrial organisations and any other parties to the awards may make submissions on any of the matters being reviewed. (6) The Commission is to make such changes to awards as it considers necessary as a result of a review. 98Section 20 of the Act is in the following terms: 20 Consolidation of awards and rescission of obsolete awards (1) The Commission may make an award consolidating, with or without amendments, related awards. (2) The Commission may rescind an obsolete award or an obsolete part of an award, whether or not in connection with the consolidation of awards. (3) The Industrial Registrar may, in accordance with the rules of the Commission, exercise the functions of the Commission under this section. Applicant's Contentions 99RMS contended that: (a)RMS seeks a consolidation of the RMS Awards. In doing so, it does not seek to diminish any of the existing terms and conditions of employment contained in current RMS Awards. (b)The purpose of the proposed consolidated award is to modernise and consolidate the awards. (c)There has been an extensive process of conciliation with the assistance of the Commission to ensure that the consolidation does not disadvantage or diminish any terms or conditions of employment under existing awards. (d)The only union which has raised a fundamental objection in principle to the consolidation process on any terms is APESMA. (e)If APESMA can identify any particular aspect of the proposed consolidated award which would reduce terms and conditions of employment from the Professional Engineers Award, then RMS would make any amendments necessary to ensure that there was no such reduction, as it has in relation to other awards. (f)Consolidation will provide efficiency and administrative benefits to RMS and will streamline seven existing industrial instruments that apply to salaried staff into one instrument. These existing instruments are the legacy of two former government agencies being the NSW Maritime Authority and the RTA that were merged to form the Roads and Maritime Services in November 2011. (g)The large number of existing industrial instruments that RMS has "inherited" from the RTA and NSW Maritime led to duplication and inefficiencies, deal with many common terms and do not relate to the RMS consolidated organisation. (h)Approximately 5,043 staff will be covered by the Consolidated Award, only 731 of these are professional engineers (or 14.5% of the staff to be covered). (i)66 Unions will be covered by the Consolidated Award, with APESMA being the only union challenging the consolidation process. (j)RMS is seeking to maintain the current terms and conditions of the Professional Engineers Award in the Consolidated Award, including: (i)Section 8 of the Consolidated Award contains conditions that only apply to professional engineers in RMS; (ii)Professional engineers will maintain a separate pay scale in the Consolidated Award in part 2 of Schedule A (iii)The specialist engineers allowance which allows engineers to gain personal promotion to any engineer level in the pay scale is being maintained in clause 45 of the Consolidated Award (iv)There is provision in the Consolidated Award for employees who are not covered by the engineer-specific condition in section 8 to apply under section 46 of the Consolidated Award for recognition as a professional engineer and then gain the benefit of those specific conditions. (k)There is no intention on the part of RMS to diminish terms and conditions of employment for professional engineers through the consolidation process. (l)The relative scarcity of engineers is not a fact in dispute, and is independent of the format of the industrial instrument applying to them. (m)Engineers are a valued group of staff in RMS, and this is independent of whether they are covered by one industrial instrument or otherwise. APESMA's Contentions 100APESMA contended that: (a)The work of RMS engineers is important not only to the organisation but to the community in general. (b)There is a shortage of engineers and of engineering capacity at RMS and across Australia. (c)The RMS engineers are implacably opposed to the loss of their occupational award, which is important to their professional identity and sense of value within RMS. (d)The occupational award is one factor supporting an occupational labour market, which in turn has public benefits. (e)The absorption of 700 engineers into a group of 5000 miscellaneous white-collar workers with whom they share no community of interest will disempower them in bargaining and is likely to result, over time, in diminution in their working condition. (f)The disadvantages of a consolidation therefore, include that: (i)It is destructive of the occupational coherence and sense of value and recognition of professional engineers. (ii)It will disempower engineers in bargaining and will, over time, lead to a diminution in their working conditions; and (iii)It will limit the industrial party's capacity to introduce engineer-specific conditions directed to particular exigencies (including difficulties in recruitment and retention). (g)Each of those matters is to be avoided first, as a matter of industrial fairness; and second, they will exacerbate existing recruitment and retention difficulties. (h)There is no evidence sufficient to ground a finding of administrative advantage of any substance flowing from consolidation. (i)Having regard to the significant disadvantages of consolidation compared to its marginal, or non-existent advantages, the Commission should reject the application to consolidate. 101Mr Fagir also contended that the following were not part of the respondent's case: (a)An award which has historically been separate cannot be consolidated. The history of the award is relevant in the sense that it demonstrates that the separate engineers' award was not the product of some historical accident. It wasn't a matter of a demarcation dispute or some idiosyncratic settlement of an industrial dispute. The separate award was established after serious consideration and for good reasons which should continue to obtain; (b)The case isn't fought on the basis that amalgamation would immediately lead to a major reduction in working conditions, although there would be some losses if the proposed award remained in its current form. The contention is that including a small group of engineers in a much larger group of miscellaneous salaried staff, with whom they have no community of interest, is a structural change that will lead to long-term disadvantage to the engineers and limit their capacity to improve their award conditions. (c)It is not suggested that maintaining a separate engineers award will of itself, solve the engineering crisis. The problem is complex and not amenable to simple solutions. However, the continued existence of a separate occupational award for engineers is one "lever" which is available to deal with that issue. (d)There is no dispute that the Commission has the power to make a consolidated award. The question is the proper exercise "of a fairly large discretion". Consideration 102As I have already observed, the question for determination in these proceedings is whether the Commission should, in the exercise of its discretion, proceed to make a consolidated award in accordance with the application by RMS with APESMA as a party to that award with the terms and conditions currently found in the Professional Engineers (Roads and Maritime Services Division of the Government Service of New South Wales - Salaries) Award 2012 being included in the Consolidated Award. 103RMS accepted that, as a party moving the Commission for an order, that it bears the onus of proof. 104The application by RMS is made under s 10 of the Act. Section 10 empowers the Commission to make awards which sets "fair and reasonable conditions of employment for employees". Section 146 of the Act requires the Commission to exercise its functions having regard to the Objects of the Act, which I have set out earlier in this decision. 105Also relevant from a statutory perspective are the provisions of ss 19 and 20 of the Act. The proposal to modernise, consolidate and rescind obsolete awards is consistent with the statutory objectives found in ss 19 and 20 of the Act. It was common ground that the proposed consolidated award would have the effect of consolidating awards relating to the same industry. Glynn J in Clarks in Retail General Shops Awards and other Awards [1997] NSWIRComm 118 in granting an application that varied two main awards and rescinded two splinter awards observed that: "consolidation of awards will have obvious benefits to the parties involved and indeed, is legislatively encouraged by section 19, review of awards every 3 years and section 20, consolidation of awards, of the Industrial Relations Act 1996 ..." 106Mr Prince submitted that the changes sought to be made by the RMS consolidated award included substantial harmonisation of language and modernisation. 107The desirability of rationalising a multiplicity of awards in relation to one employer can be seen from the decision of the Commission in Commissioner of Police v The Police Association of NSW re: Industrial Action [2001] NSWIRComm 89. Although in that matter the award was ultimately made by consent, there was obviously efficiencies and the desirability of making a new award that rescinded and replaced six current awards that covered both non-commissioned and commissioned police officers which was consistent with the scheme of the Act. The award was the first to cover both the commissioned and non-commissioned police officers. I do not agree with Mr Fagir's submission that ss 19 and 20 have little, if any bearing, on the present case. Mr Fagir referred to the Full Bench's decision in Re: Principles for Review of Awards (1998) 85 IR 38 at 74, submitting that s 19 referred to periodic reviews of awards. Counsel submitted that consolidation was to occur "where appropriate" and focused on splinter awards such as wage adjustment awards and single matter awards such as superannuation and training awards. The Full Bench observed at 74 as follows: Consolidation of awards 19. For the purpose of award review process 'conciliation' means the consolidation of awards relating to the same industry, where appropriate. This may involve consolidating: (a) splinter awards (such as wage adjustment awards); or (b) single issue awards (such as superannuation and training wage awards) with their parent award. 20. There is a presumption in favour of consolidating splinter and parent awards. 21. Award consolidation may be dealt with by the parties, independent of the review process, under s 20 of the Act. 108It follows that the correct approach to an application to consolidate awards is the "consolidation of awards relating to the same industry where appropriate". There is no question that the award sought to be consolidated by RMS, including the Professional Engineers Award, relate to the same industry. Furthermore, the submissions of APESMA are inconsistent with the correct approach to statutory construction expressed by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382, where the High Court said a Court should strive to give meaning to every word of the provision of an Act and must strive to give each provision meaning which best gives effect to its purpose and language "while maintaining the unity of the statutory scheme". See also the decision of the Supreme Court of NSW Court of Appeal in Rail Corporation NSW v Brown [2012] NSWCA 296; (2012) 82 NSWLR 318 at [39]-[40]. 109I turn to consider the evidence of the parties. APESMA contended that the striking feature of RMS' evidence was its failure to lead any evidence of substance in respect of the nature and the scale of any administrative advantage gained from the consolidation of its awards. 110RMS' evidence, in my view, given by Mr Fogarty and Mr Edwards, establishes that consolidation of awards will provide efficiency and administrative benefits to RMS and will streamline seven existing industrial instruments that apply to salaried staff into one award. The existing instruments are the legacy of two former agencies which were amalgamated into RMS in November 2011. 111Mr Edwards' evidence was that the large number of existing industrial instruments leads to duplication and inefficiencies. A consolidated award was suited to RMS, according to his evidence as it would establish "One RMS" culture. 112Mr Fogarty's evidence was that a consolidated approach would suit project teams working on major infrastructure projects where there was a mix of salaried staff who were both engineers and non-engineers. There are only 731 professional engineers of approximately 5,043 employees who would be covered by the Consolidated Award. In addition, six unions would be covered by the Consolidated Award, with APESMA being the only union opposing the consolidation. 113In my view, and I find RMS' evidence is clear that there are advantages in having core consolidated terms applying across the organisation in relation to administrative matters where it is appropriate to do so. Needless to say, it is, albeit impossible, for RMS to advance evidence of some further advantages that would happen in the future. Unsurprisingly, much of the submissions focused on RMS' contention that advantages would flow from consolidation and APESMA's contention that disadvantages would flow and that those disadvantages outweigh any advantages. I do not accept that RMS' evidence was so meagre, as characterised by APESMA, that it demanded an inference to be drawn that the applicant could not prove any advantage. True it is that Mr Fogarty was not prepared to agree to the proposition that the consolidation of employment conditions would be "unequivocally beneficial for RMS". However, in my view he cannot be criticised for declining to agree to such an open-ended proposition. It was not RMS' case that there would be unequivocal benefits in all cases of consolidation. However, in respect of engineers, it has consistently and unequivocally given an undertaking that the proposed consolidated award will not diminish any terms or conditions of employment for those covered by the existing Professional Engineers Award. 114APESMA's case for opposing the consolidation award was based on the following contentions, which counsel submitted were proven overwhelmingly on the evidence. 115Firstly, the implacable opposition on the part of engineers to the Consolidated Award. APESMA pointed to the evidence of Messrs Kenny, Millie, Nash and Stalder, together with that of Ms Rose and the petition signed by the engineers. However, what emerged from the evidence was that the opposition from engineers was primarily based on misinformation or misunderstandings that were not corrected by APESMA. Mr Nash's evidence was that he did not understand that APESMA could withhold consent if it was a party, to a variation to the Consolidated Award. Mr Nash, who is the president of APESMA, said that his misunderstanding of APESMA's position arose from discussions with Ms Rose who had no actual recollection of having told Mr Nash that the consolidation of the award would allow the terms and conditions of engineers to be overwhelmed by other unions, giving effect to variations by consent even if APESMA did not consent to the variation. 116Mr Nash accepted, once he was informed by Mr Prince of the position and rights that APESMA would have if a consolidated award was made, that it would give it significant bargaining power. That is, APESMA's ability to exercise its right to veto any consent variation would provide it with the opportunity to protect its conditions for engineers. 117Mr Millie also gave evidence that his concern about the Consolidated Award was based on what he had been told by the union about the effect of the change of format of the award, as did Mr Stalder. Similarly Mr Kenny accepted that he did not understand that if APESMA was a party to a consolidated award, it could effectively block the making of any consent variation by withholding its consent, and that this had not been explained to him. 118In light of this evidence, it is clear that at least some of the fears that underlie the engineers' concerns are a result of a failure by the union to properly advise its members of the true effect and nature of the Consolidated Award. 119In my view, the terms of the petition which was prepared by Ms Rose and Mr Nash was capable of misleading the engineers. It clearly created a sense of fear among the engineers which was not corrected by a true statement of the correct effect of the Consolidated Award. This failure to provide clarification and a proper explanation of the effect of the Consolidated Award must lie with APESMA. 120Furthermore, on one analysis of the engineers' evidence in support of a separate Professional Engineers Award, it rose no higher than a separate award had symbolic value. This basis for a separate award is unconvincing. 121Secondly, APESMA placed weight on the crucial importance of engineers to RMS and to the community generally, submitting that this was comprehensibly established by the evidence of RMS engineers. Mr Fagir submitted that the evidence demonstrated that the skill of RMS engineers was fundamental to the safe and economical establishment and maintenance of infrastructure in NSW, and that the loss of that skill carried with it financial and safety risks. Counsel submitted that the Commission should be alert to avoid any step which increased the chance of any diminution of RMS' engineering capacity. 122The professional status and value of engineers derives from their expertise, training, skills and professional status. None of these factors are dependent on the particular form of an industrial instrument that regulates their employment, whether it is a separate award or a consolidated award. Change will continue to occur in the RMS as it does in all workplaces. Furthermore, the proposed consolidated award cannot result in a loss of engineering capacity in terms of public safety and efficiency because RMS proposes to maintain the status quo for the classification and designation of engineers. 123There was no evidence that the consolidating of the Professional Engineers Award into a consolidated award, whilst preserving the unique classification structure and particular terms and conditions of employment for engineers, could have any rational impact on the professional standing or value of engineers. There was no evidence that the Consolidated Award may result in some "financial and safety risks" by reason of a loss of skills of engineers. 124Thirdly, APESMA relied on the existence of a shortage of engineering skills affecting Australia generally and the RMS in particular. It was common ground that there was a shortage of engineers in Australia. This was confirmed by the report of the Australian National Engineering Task Force titled "Realising an Innovation Economy" annexed to Mr Locke's statement. APESMA's contention was that award coverage in this particular matter is a factor which has some bearing on RMS' capacity to attract and retain engineers. Mr Locke accepted that since 2012, there had been a change in the mining boom from an infrastructure phase, which was suited to civil engineers, to a delivery phase, which is less suited to the demand for civil engineers. 125The consolidation award involves a move from an enterprise award for engineers, which is narrowly focused on occupation, to an enterprise award which encompasses a range of occupational roles and jobs, whilst acknowledging and maintaining occupational-specific differentiations. An example of this is the classification award structure and the engineers-specific allowances. 126Professor Buchanan's evidence in respect of the utility of occupational awards ultimately came down to having occupational awards spreading across a range of employees so that the terms and conditions, experience and skills, could be recognised and mobility could be encouraged. RMS' Professional Engineers Award and the Consolidated Award is not in this category. It does not allow movement across the Transport cluster. At its highest, Professor Buchanan's evidence was equivocal as to whether there could be any real practical advantage to the recruitment or retention of engineers by reason of the adoption of an Internal Labour Market model or an Occupational Labour Market model. Professor Buchanan had not conducted any analysis of the proposed consolidated award or research into what contributions to the mobility of labour the RMS Professional Engineers Award structure allowed. 127The fourth issue relied upon by APESMA was the prejudice to its bargaining position. It relied on the evidence of Ms Rose which it contended, was not challenged and should be accepted "in toto". In summary, Ms Rose contended that engineers would not be able to engage directly with RMS on award issues but instead, would need to reach joint positions with other unions; there was an increased likelihood that engineer-specific concerns would be lost amongst those of the various professional and occupational groups covered by the Consolidated Award and RMS' capacity to offer engineer-specific improvements to conditions of employment in response to skills shortages would be more limited; negotiation as a single bargaining unit inevitably involves compromises and administrative costs and such difficulties would be exacerbated by the incongruence between the bargaining approaches of the various unions and pressure to avoid holding up wage increases given the prohibition on backpay. 128As I have already observed, there was no evidence of any diminution of APESMA's bargaining position. If it became a party to the Consolidated Award, APESMA would remain protected by the provisions of the Act and, as these proceedings demonstrate, APESMA's ability to pursue their own interests in a multi-union environment would remain. It is open to APESMA to pursue its own members' interests regardless of the approach taken by other unions involved in the process. The evidence of Ms Buchanan that was relied upon as an example of where engineers employed by RailCorp had suffered a diminution in conditions occurred under the Federal legislation, where a majority of employees could overwhelm and bind a minority of employees in respect of the making of an enterprise agreement. The provisions of the Act preclude this occurring during the award making process in this State. In any event, Ms Buchanan accepted, even in the context of the Federal enterprise bargaining, that APESMA remained free to challenge the implementation of the structure of an agreement if it did not agree. 129Mr Nash's accepted that APESMA's ability to veto changes to variations to an award by consent would give it a powerful bargaining position and if it failed and a consent position was not reached, it would have the ability to pursue a case before this Commission. 130More importantly is the undertaking of Mr Duncan, Chief Executive of Transport, Roads and Maritime Services in his letter to engineers dated 26 June 2012. It will be recalled that Mr Duncan rejected the contention by APESMA that by not having a separate engineers award RMS was downplaying the role of engineers in the organisation. Mr Duncan confirmed that RMS valued the important role that engineers played in delivering RMS' commitments and incorporating APESMA into a single award in no way diminished RMS' view of the continued importance to the organisation. He also observed that RMS had introduced or reintroduced a number of initiatives over the past five years in order to attract, retain and up-skill engineers, many of which occurred outside the current Professional Engineers Award. Similarly, in a letter to APESMA of the same date, Mr Duncan confirmed that "with the exception of a small number of specific conditions, the employment conditions applying to engineers are identical to the conditions applying to PSA-covered employees." Of these few specific conditions that apply to engineers (specialist engineers, recognition of engineering skills, rollup of annual leave loading, access to motor vehicles), RMS will not be seeking to remove these. It should also be acknowledged that, with the exception of the rollup of annual leave loading in 1994, the pay increases provided to PSA and APESMA-covered employees have been the same since at least 1990. RMS is also committed to maintaining a separate engineers classification structure in future awards. 131APESMA received a similar commitment by letter dated 26 June 2012 from Mr Hesford, the Director of the Corporation Division of Transport, Roads and Maritime Services, where he said "RMS is committed to maintaining a separate classification structure for professional engineers as agreed with APESMA, which is to be included in any future industrial instrument applying to professional engineers". 132The evidence of Mr Fogarty was that the commitment that RMS had given to APESMA to retain engineer-specific conditions "was unbounded". He confirmed that his understanding was that RMS was committed to ensuring that there was a separate classification for professional engineers and that this was the view of the Chief Executive and of HR. Pressed on how long the commitment was going to last, his evidence was that it was for "the foreseeable future under the circumstances. If there was a wholesale change and everything else, all bets would be off. However, whilst we are in the circumstances, we are employing engineers doing the same sorts of things that would be a legitimate reason to operate this way". 133Mr Edwards' evidence was that he regarded himself as bound by the organisation's commitments given to APESMA prior to him commencing in the role of General Manager, Human Resources of RMS. 134Despite the fears expressed by the engineers who gave evidence regarding a consolidated award, in light of RMS' evidence, the terms and conditions of the engineers, if included in a consolidated award, cannot be diminished unless this Commission is persuaded that a change or changes should occur. Engineers are no less secure in respect of their current terms and conditions of employment if they were included in a consolidated award as they would be if they continued with the status quo. The ultimate protection of the terms and conditions comes from the fact that they are contained in an award of this Commission and, whether that is in a standalone or a consolidated award, the nature of that security remains the same. 135I have given weight to the views of the engineers that would be covered by the Consolidated Award. Such views are not the sole factor to be considered but are a factor in the overall consideration of this matter. I have also given weight to the contention that APESMA would be prejudiced in respect of its bargaining position if engineers were covered by the Consolidated Award. I am not persuaded in light of the undertakings provided by RMS that the engineers would suffer prejudice to their bargaining position. I have also given weight to the importance of engineers to RMS and the evidence in respect of skills shortage. However, on balance, I am not persuaded, particularly taking into account the overall evidence of the parties, the Objects of the Act and ss 19 and 20, that APESMA's objection to being part of the Consolidated Award should be upheld. 136I am not prepared to find that the inclusions of the engineers' award into the Consolidated Award would be "another blow to engineering at RMS". I accept that departure from the status quo must be justified and that weight should also be given to the history of the engineers' award. This is not a case where the evidence demonstrates that the consolidation of the award would come at a cost for employers or engineering employees. Unlike the award modernisation process in the Federal sphere, where employees, for example Transport Workers in NSW, suffered a reduction in their safety net entitlements, that cost to Transport Workers was regarded as justifiable by reference to the benefits of rationalisation of thousands of sets of conditions into modern, simplified instruments. A consolidated award including engineers will not result in any dramatic reduction to their conditions of employment or salaries. 137For these reasons, in endeavouring to balance the factors identified as supporting and opposing consolidation, and the overall competing interests and consequences of consolidation, I find that the balance lies in favour of consolidation. 138In reaching this conclusion, I also note the written submissions of Unions NSW that supported the retention of the Professional Engineers Award so as to ensure efficient and effective conduct of bargaining and industrial relations at RMS. Unions NSW submitted that their affiliates who were parties to the various awards at RMS also supported the retention of the RMS Professional Engineers Award. Orders 139I make the following orders: (1)the application by RMS for a Roads and Maritime Services Division of the Government Service of New South Wales - Consolidated Salaries Employees Award 2013 should proceed with APESMA as a party to the award; (2)RMS may include in the proposed consolidated award, provisions relating to employees presently covered by the Professional Engineers (Roads and Maritime Services of the Government Service in New South Wales - Salaries) Award 2012 which do not diminish any terms and conditions of employment for employees covered by the Professional Engineers Award. (3)The proceedings are adjourned for further conciliation at 10:00am Monday 28 April 2014 and Tuesday 29 April 2014 if required. ********** 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: 28 April 2014