Industrial Relations Commission New South Wales Medium Neutral Citation: New South Wales Local Government, Clerical, Administrative, Energy Airlines and Utilities Union v Warringah Council [2015] NSWIRComm 1012 Hearing dates: 30 June, 1 July 2015 Decision date: 20 July 2015 Jurisdiction: Industrial Relations Commission Before: Newall C Decision: Application for award under special case principle refused. Orders made in industrial dispute. Catchwords: APPLICATION FOR AWARD – long-standing enterprise agreement – 4 day on, 4 day off roster - employees relied on roster – secondary employment – family arrangements – employer gave notice of end of enterprise agreement – dispute notified – award application made SPECIAL CASE – principles – award will not automatically be made to replace enterprise agreement – award not to be framed to meet personal circumstances of employees - special case principles not met – award application refused ORDERS – orders may be made in dispute to preserve status quo ante and to fulfil the Objects of the Act – order made Legislation Cited: Industrial Relations Act 1996 ss.3, 10, 130, 136(1)(d) Cases Cited: Broken Hill Chamber of Commerce and CFMEU (NSW Branch) [2002] NSWIRComm 244 City of Sydney Wages/Salary Award 2014 [2014] NSWIRComm 49 Health Services Union NSW and Central Coast Local Health District re Regrade Policy [2013] NSWIRComm 44 NSW Teachers Federation v Department of Education and Training (2003) 121 IR 177 Re Operational Ambulance Officers (State) Award ([2001] NSWIRComm 331 Re Storeworkers – IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 ([2002] NSWIRComm 156 State Wage Case 2010 (No 2) [2011] NSWIRComm 29; 206 IR 218 Category: Principal judgment Parties: New South Wales Local Government, Clerical, Administrative, Energy Airlines and Utilities Union (Notifier and Applicant) Warringah Council (Respondent) Representation: Counsel: Mr R Crow (Respondent) Advocate: Mr M Dunstan (Applicant) Solicitors: Matthews Folbigg (Respondent) File Number(s): 43 of 2015, 193 of 2015, 194 of 2015 Judgment 1. Between 2002 and 2015 Warringah Council was a party to a series of Enterprise Agreements with what is now the applicant Union. The most recent of these was the Warringah Rangers Enterprise Agreement 2008. ('the Agreement') The Agreement was terminated unilaterally by Council on 21 January 2015. 2. Relevantly, the Agreement provided for shifts of 12 hours on each day of the week with unpaid meal breaks totalling one hour in each shift, and a weekly average of 38 hours of ordinary time work over an 8 week roster cycle. 3. These terms of the Agreement were given effect by two arrangements that assume importance in these proceedings. 4. The first was that Rangers employed by the Council worked a permanent roster spread over 16 weeks, pursuant to which Rangers worked four days on and four days off. 5. The second was that Rangers were paid an annualised salary which rolled up penalty rates that work under the roster might otherwise have attracted pursuant to the underpinning Award, the Local Government (State) Award as varied from time to time. 6. When the Council advised that it proposed to bring the Agreement to an end, discussions were entered into and the matter came before the Commission as a dispute (IRC 43 of 2015). Conciliation failed to resolve the dispute. It remains on foot before the Commission. 7. The applicant Union then made an application for an interim award, (IRC 193 of 2015) which application was in practical terms subsumed by an application for a permanent award, said to be brought under the Enterprise Arrangements Principle, or alternatively under the Special Case principle. (IRC 194 of 2015) 8. Council opposed the Award application. Its fundamental position was that it had terminated the Agreement in order to introduce a new roster that better suited its present requirements. In particular, it was said, it was proposed to roster Rangers in a manner that matched the numbers of Rangers at work at different times of the day with fluctuations in the workload throughout the day. 9. The award applications were referred to the President of the Commission. The President determined, pursuant to clause 8.1 of the State Wage Case 2010 Principles, that the matters, including any Special Case aspect of them, be dealt with by the Commission as currently constituted. 10. Proceedings to hear and determine the award application and to arbitrate the dispute notification were concurrently conducted, the evidence in one being the evidence in the other. 11. Notwithstanding that the Agreement has been lawfully terminated, the Council undertook to maintain the relevant provisions of the now terminated Agreement until the present proceedings are resolved. That undertaking has meant that the conditions available to the Rangers under the Agreement have continued in effect for a further six months after the termination of the Agreement in which they were contained. Facts 1. A deal of evidence was led in the Applicant's case going to the operation of the Agreement. Evidence was, most particularly, led from employees who had been employed pursuant to the Agreement, some for more than a decade, about the way in which they had arranged their personal lives. That included in a number of cases secondary employment that, those employees gave evidence, was essential to the economic and family fabric of their lives. Evidence was led from other employees that they had entered employment with the Council, including at a loss of salary, during the life of the Agreement because of the roster and annualised salary arrangements available under the Agreement. Each of those employees pointed to, amongst other matters, the need for certainty in rostering to maintain the arrangements they had in place. 2. A primary concern each of these advanced was that the new roster, while it appeared predictable, could be changed at minimal notice, in contrast to the certainty of the arrangement under the Agreement. In that regard Council's evidence was that there was no immediate intention to vary the proposed new roster, but that it may do so depending on operational requirements. 3. Council led evidence going to the premise that the proposed new rostering arrangements far better suited its present requirements. In particular, it led evidence going to the revenue producing activates of Rangers in relation to parking, and the times of day that that work is required. 4. While there was some dispute about the weight that should be placed on that evidence, the applicant submitting that parking revenue was by no means the only way to measure the deployment of Rangers, the evidence established that the Council's view that a new roster was necessary was not a view capriciously formed, but based on proper reasons. That, of course, does not decide the matter. 5. There was substantial debate about the precise terms of the proposed new Award, but for reasons that will become clear that debate need not be addressed here. Enterprise Arrangements Principle 1. I turn first to the submission that the award sought could be made pursuant to the Enterprise Arrangements principle. I do not see that it could. That Principle applies only to arrangements agreed between parties: Principle 10.3. Here there is no such agreement. The Enterprise Arrangements principle cannot be invoked in this case. Special Case Principle 1. However, the applicant also argued that the award it sought ought be made pursuant to the Special Case principle. 2. The Wage Fixing Principles published by the Commission in Appendix A to its decision in the State Wage Case 2010 (No 2) [2011] NSWIRComm 29; 206 IR 218 are the relevant Principles. 3. The applicant conceded, correctly, that the application does not fall within any of the categories of matters specified in Principle 2 that do not require consideration as an arbitrated case, and that it could not be processed as an arbitrated case under items 8.2 and 8.3 of Principle 8 based on work value, or productivity and efficiency, considerations. The application so far as it falls to be considered under the Special Case principle must be so considered under item 8.4 of Principle 8. 4. The requirements for a special case have been set out by the Commission most recently in City of Sydney Wages/Salary Award 2014 [2014] NSWIRComm 49. 5. To summarise what is said there, there is a twofold test for the establishment of a special case. Firstly, the provisions of the award sought must constitute fair and reasonable conditions of employment and, secondly, the matter must have special attributes, or be 'out of the ordinary', so as to take the matter outside the restrictions which otherwise apply under the Wage Fixing Principles. 6. I observe that what was said in City of Sydney is entirely consistent with the statement by the Full Bench in Re Operational Ambulance Officers (State) Award [2001] NSWIRComm 331 concerning the Special Case principle. 7. The onus to satisfy the Commission that the Special Case principle can be met in a given case lies on the applicant for the award, an onus which it is to satisfy on the ordinary civil test: Re Storeworkers – IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156. 8. The term 'fair and reasonable conditions of employment' is to be understood in the light of s.10 of the Act, which requires the Commission to make awards that set fair and reasonable conditions of employment for employees. Conditions of employment will be fair and reasonable when they represent a proper and proportionate balance between the entitlements afforded to employees and the interests of their employer. 9. In City of Sydney the Commission concluded: 62. So far as the USU's application seeks that the terms and conditions in the R & R Policy be translated into an award having ongoing coverage of all City employees, it must fail. 63. The application simply cannot satisfy the special case test. That must be clear when it is considered that it seeks that the Commission, in the exercise of its arbitral powers, to award 'fair and reasonable' terms and conditions of employment very much in excess of those that the Commission recently found to be fair and reasonable for employees performing work of the same nature in local government employment. The Local Government (State) Award 2014 containing those provisions was made as recently as June 2014. 1. What was said in City of Sydney does not mean that no Special Case can be made out where there is an underpinning award, however. In the case of the Local Government Award 2014 that is certainly not the case, as that Award expressly recognises the capacity of the parties to the Award to enter into locally-based agreements for conditions above or outside the Award; that is apparent from the provisions contained within the Award for local salary systems (clause 7) and Council Agreements (clause 40). 2. Indeed, the applicant correctly submits that numbers of local government bodies, whose employees are covered by the Local Government (State) Award, also have industrial instruments reached pursuant to the Enterprise Arrangement Principle which provide for pay and conditions above that Award. A number of councils have such agreements which cover all conditions of employment and pay. In some cases, for example Newcastle City Council and Blacktown Council, the enterprise agreements in place provide conditions of employment more favourable to employees than those in the Award. 3. Those awards and agreements are, however, instruments formed by agreement. They are not, and cannot be, precedents which can be taken into account in determining an arbitrated application for an award with another council, whether pursuant to the Special Case principle or no. 4. For the Special Case principle to be satisfied, the applicant for an award must, as set out above, not only put forward award terms that provide fair and reasonable terms and conditions of employment, but demonstrate circumstances having special attributes, or being 'out of the ordinary', so as to bring the application outside the restrictions which otherwise apply under the Wage Fixing Principles. 5. The applicant advanced certain specific matters – which are expressed to be non-exhaustive, but which appear to summarise all that was advanced in support on the application in submissions - as satisfying the relevant test. These were said to be that: (a) This application does not include any increases in wages and salaries or changes in conditions of employment. It merely seeks to preserve longstanding conditions of employment. (b) The affected employees were largely induced to take their current role by reference to the rostering arrangement and annualised salary which Council is seeking to discontinue. In most cases the annualised salary was included in the employee's letter of offer. In at least one case, the rostering arrangement was specifically referenced in the letter of offer. (c) There is no "countervailing gain" being proposed by the Council in exchange for the reduction in conditions of employment. (d) With respect to the safety provision in clause 7.4 of the proposed Award, the application seeks orders in accordance with previous decisions of the Commission in relation to ensuring a safe working environment. (e) The elimination of the annualised salary and roster will result in the loss of income and, for several employees, the loss of long standing secondary employment, which will impact severely on the financial position of those employees. 1. As arguments for a Special Case, these propositions cannot succeed. 2. First, they do not demonstrate that the award sought is required in order to provide fair and reasonable conditions of employment. That must be assessed against the award conditions that will otherwise apply if the award is not made. The provisions of the Local Government (State) Award 2014 cannot be and were not suggested to be unreasonable or unfair. 3. What was essentially pressed here was that individual employees will lose arrangements with which they are comfortable and which have allowed them to integrate their primary work, for the Council, with approved secondary employment. In other cases employees gave evidence that they had arranged the social and family fabric of their lives around the roster structure that has existed for over a decade. 4. Those are not matters to be taken lightly, and the arrangement of work as it impacts on the lives of employees can be a matter to which industrial tribunals properly have regard in framing industrial instruments; it is the reason for the existence of penalty rates, for example. 5. However, the respondent correctly submits that award conditions will apply to present and future employees who may have very different personal circumstances. The personal circumstances of the present individual employees cannot be a basis on which a Special Case application for a new award could succeed. 6. Secondly, the five points advanced by the applicant do not demonstrate that the award application has special attributes, or is so 'out of the ordinary', so as to take the matter outside the restrictions which otherwise apply under the Wage Fixing Principles. Again, I emphasise that the award making power, to which the Principles are necessarily subservient and in the context of which they must be understood, does not permit the making of industrial instruments binding on an employer and future employees in order to accommodate around existing employees' personal lives or their secondary employment, which was the primary basis on which the application was advanced. 7. There is no requirement for an employer to advance a 'countervailing gain' if it lawfully brings an Enterprise Agreement to an end. 8. I say again, there was and could not be any complaint that the terms of the underpinning Award were unfair, and they are not unfair. The complaint went almost entirely to the impact the change in terms and conditions arising out of the move from the Agreement to the underpinning Award would have on employees' arrangements outside work. 9. The application for an award pursuant to the Special Case principle must fail. I decline to make a new award in the terms sought or any award. 10. It follows that, subject to what I say below, the employment of the Rangers will be covered by the Local Government (State) Award 2014. Industrial dispute 1. There remains before the Commission an industrial dispute. 2. That dispute concerns the changing of workplace arrangements, which for more than ten years had been in a certain form under an Enterprise Agreement, and the timing of and approach to that change. 3. There is no doubt that the council is wholly entitled to bring an end to the Agreement, or any Enterprise Agreement to which it is a party. 4. Where, however, that Agreement has been in place for a significant number of years, and its terms have been held out in letters of offer to employees as being the terms on which they are engaged, the Commission may have regard to those matters in framing any recommendations or Orders it makes pursuant to the dispute. 5. As is noted above, in evidence most Rangers who gave evidence said that their concern was principally about uncertainty, uncertainty about the permanence of the new roster and uncertainty as to how much they would be paid. 6. That evidence must be understood in the context of the Council having conveyed to employees that, while a roster projecting 48 weeks into the future had actually been created and distributed, and there was, it was heavily emphasised in evidence brought by the Council, no present intention to change the roster within that time, the roster might nevertheless be changed on no more notice than the Award requires if Council saw fit. 7. That evidence must also be understood in the context of the Council having advised Rangers in writing that, notwithstanding that the annualised salaries they had been paid were to cease, application of the new roster to their wage structure would in each case provide an annual sum not very different to (and in a minority of cases slightly more than) the sum formerly provided as an annual salary. These new projected annual sums were provided to individual Rangers in emails dated 21 May 2015. 8. While that was conveyed to employees in writing as a means of assuaging their concerns, it emerged that if the Council were to change the roster from the presently proposed version, employees might well receive substantially less than the figure they were advised in writing due to loss of penalty payments which would accrue under the presently-proposed roster. 9. In my view the industrial dispute before the Commission ought be resolved by the making of Orders. 10. Orders can be made arising out the arbitral phase of any industrial dispute. Quite apart from dispute orders under Part 2 of Chapter 3 of the Industrial Relations Act 1996 ('the Act'), which is expressly not the kind of order that I here propose to make, the Commission may pursuant to s.136(1)(d) make any other order that it is authorised to make. 11. I am conscious that the Commission's arbitral powers in s.136 are not at large: NSW Teachers Federation v Department of Education and Training (2003) 121 IR 177 at [31]. 12. However, in my view the Commission is authorised to make an order that the parties to an industrial dispute maintain the status quo ante in relation to, for example, terms and conditions of employment that have operated between them: Broken Hill Chamber of Commerce and CFMEU (NSW Branch) [2002] NSWIRComm 244. The Commission is equally able to make an order that operates to provide fairness: Health Services Union NSW and Central Coast Local Health District re Regrade Policy [2013] NSWIRComm 44, which in this case would hold parties to representations they have made to each other in relation to the subject matter of a dispute. Were I wrong about that, the Commission has in my view power to make orders as it sees appropriate to fulfil the Objects of the Act, in this case particularly the Objects set out in subs.3 (a), (g) and (h). 13. Employees have a proper basis in fairness to seek certainty about the roster under which they will be working, after more than a decade of such certainty has allowed them to arrange their affairs around such a certainty, with, so far a secondary employment is involved, the Council's certain knowledge. 14. In circumstances where the Council has sought to reassure employees about potential loss of wages by holding out to them an annual sum which they will receive under the new roster, together with an assurance that at present there is no intention to alter that roster, the employees ought be able to proceed on the basis that the sum held out to them as an annual sum is in fact the sum that will be received, as a matter of fairness, and that the new roster, presently projected forward for 48 weeks, will not in fact change in the immediate future. 15. A period of a year must be ample to permit the Council and its employees to test the new roster arrangement. Employees need certainty for a period, as I say above. Equally, the Council is not required to arrange its affairs into the indefinite future on the basis of employees' arrangements outside their principal employment, that is, with the Council. Orders 1. I intend to make Orders providing for the following: 1. That the new roster developed by the Council and provided to employees be brought into effect on and from the commencement of the first full pay period commencing 21 days from the date of this decision. 2. That the roster be used without variation for a period of twelve months from the date that it commences to operate. 3. That the annual salary sums advised to individual employees in the emails of 21 May 2015 be paid to employees for the twelve months after the roster has been introduced, subject to any award increases that would vary those sums. 4. That in the 30 days before the end of the 12-month period of the roster's operation, the Council and the applicant Union meet with a view to discussing whether any variations to the roster are considered necessary based on the experience of its first 11 months of operation. 5. That in the event of any disagreement about that matter, the question be brought before the Commission. 6. That after that period of twelve months of the roster's use the council will be entitled to, as it sees fit but subject to consultation with the applicant Union as set out in order 4 above, vary the roster and pay employees according to the terms of the Local Government (State) Award 2014 or its successor. 1. If I were thought to be wrong in my view that power lies to make Orders in the above terms, I would express the terms set out in paragraph 57 above as a strong recommendation to the parties to the dispute. 2. I require the parties jointly to draft a single set of Orders reflecting what is set out in paragraph 57 above and file them in the Commission within 14 days of the date of this decision. The Orders will then be made in chambers and published forthwith. PETER NEWALL Commissioner ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 July 2015