Industrial Relations Commission New South Wales Medium Neutral Citation: NSW Ambulance Death and Income Protection Benefits (State) Award [2015] NSWIRComm 42 Hearing dates: 7 and 9 December 2015 Decision date: 15 December 2015 Jurisdiction: Industrial Relations Commission Before: Walton J, President; Stanton C; Murphy C Decision: The Full Bench determines that the proceedings will be split into two stages. In relation to stage one, the Full Bench considers, subject to stage two of the proceedings, that a new award should be made which will provide for income protection benefits in lieu of lump sum payments for total and permanent disability and partial and permanent disability. The Full Bench directs that each party indicate whether conciliation is desired with respect to stage two of the proceedings, as discussed above, by email communication to the Principal Associate to the President transmitted no later than 12 noon Wednesday 16 December 2015. If the parties agree upon conciliation, Murphy C will communicate with them as to prospective dates. In that event, or if conciliation is opposed by any party, the Full Bench delegates its powers and functions to Murphy C to fix a program for the hearing of the matter. Catchwords: AWARD – death and disability award – provision for review – income protection alternative – proceedings divided into stages – stage one to determine whether disability benefits or income protection scheme – income protection scheme appropriate – further conciliation – statement issued Legislation Cited: Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 Category: Procedural and other rulings Parties: Secretary, NSW Ministry of Health (applicant) Health Services Union NSW (first respondent) Australian Paramedics Association (NSW) (second respondent) Industrial Relations Secretary (intervener) Representation: Counsel: M Easton (applicant) I Latham (second respondent) A Perigo (intervener) Solicitors: NSW Ministry of Health (applicant) W G McNally Jones Staff (first respondent) Australian Paramedics Association (NSW) (second respondent) Crown Solicitor's Office (intervener) File Number(s): IRC 904 of 2015 STATEMENT 1. The Ambulance Service of NSW Death and Disability (State) Award ('D and D Award') was first made by consent of the parties in 2008. The scheme established pursuant to that award provided for lump sum payments to paramedics in the case of death, total and permanent disability ('TPD') or partial and permanent disability ('PPD') suffered as a result of injury or disease incurred on or off duty ('the scheme'). 2. Death and TPD benefits are paid through an insurance arrangement established between First State Super and Zurich Financial Services Australia. PPD benefits are managed by the Ambulance Service of NSW ('the Service') and are paid directly from the scheme funds. 3. The scheme is funded by contributions from officers, generally of 1.8 per cent of salary (cl 5 of the D and D Award), and the Service. The Service's contribution is limited to 3.6 per cent of total paramedic salaries (cl 10.1 of the D and D Award). Clause 14 of the D and D Award, dealing with award review, provides that, in the event the long term cost to the Government of maintaining the scheme is likely to exceed 3.6 per cent of salaries, the following will occur: … there will be an immediate review of the benefits and/or the officer contributions of the scheme. Appropriate steps will then be taken by the parties to implement a revised scheme that maintains a maximum cost to Government of 3.6% of salaries. 1. It is common ground between the parties that the review provisions in cl 14 of the D and D Award have been triggered, meaning that the scheme must be reviewed and appropriate steps taken by the parties to implement a revised scheme which maintains a maximum cost to the Government of 3.6 per cent of salaries. Despite extensive negotiations over an extended period of time, the parties have been unable to agree on the terms of such a revised scheme. Competing Applications 1. The initial application filed by the Secretary, NSW Ministry of Health ('MOH') was for a new award to be titled NSW Ambulance Death and Income Protection Benefits (State) Award ('the proposed award'). The proposed award retains the entitlement to a lump sum benefit in the case of death. In the case of TPD or PPD, the proposed award would replace the lump sum benefit with payments in the form of income protection. The proposed award contained no detail as to matters such as the waiting period for the commencement of the income protection payments, the quantum of the income payable or the duration of such payments. As part of the proposed income protection scheme, officers would no longer be required to contribute any part of their salaries. 2. The Health Services Union NSW ('HSU') filed an application to vary the current D and D Award so as to retain the existing lump sum benefits, but with the Service effectively becoming a self-insurer for the whole of the scheme as it currently is for the PPD component of the scheme. 3. The application filed by the Australian Paramedics Association (NSW) ('APA') seeks to vary the current D and D Award by effectively removing the limitation of 3.6 per cent of salaries on the cost to the Government of maintaining the existing scheme. 4. All parties filed evidence and outlines of submissions in support of their respective positions. Two Stage Process 1. On Monday 7 December 2015, the first day of the hearing of the matter, the Full Bench raised with the parties the prospect of splitting the adjudication of the proceedings into two parts. The first part of the proceedings would concern the essential point of difference between the two unions and the MOH, namely, whether the current scheme of lump sum payments in the case of TPD and PPD should be retained or replaced by an income protection scheme. The second stage of the proceedings would then deal with the myriad considerations which would flow from the determination made at the first stage. 2. The parties filed further written submissions in response to the Full Bench's proposal and spoke to those submissions when the hearing resumed on Wednesday 9 December 2015. No party opposed the splitting of the proceedings into two stages. However, the HSU and the APA maintained their opposition to the award proposed by the MOH and emphasised the lack of any detail as to the quantum of the proposed income protection benefits and other issues impacting on the operation of the scheme. It was in that light that the MOH was granted leave to file and serve an amended application and for the HSU and the APA to file and serve supplementary submissions as to stage one of the proceedings. 3. On Thursday 10 December 2015, the MOH filed an amended application. In addition to the matters set out in the original proposed award, the amended application contained a requirement for the Service to take out an insurance policy including, at a minimum, the following terms: 4. A disability benefit which tops up any other income received by the officer so that the officer receives 75 per cent of pre-disability salary; 5. A waiting period of 90 days before any benefit is payable; and 6. A maximum benefit period of two years. 7. On Friday 11 December 2015, the HSU advised the Commission that it did not propose to file submissions in relation to the amended application of the MOH. The APA filed a short submission which acknowledged that the amended application resolved some, but not all, of the "vices" originally identified by the APA. The APA complained that the amended application did not explain the process of assessment of the insurance claims. The APA maintained its opposition to the making of an award in the terms proposed by the MOH in the amended application. 8. On Monday 14 December 2015, the MOH filed a short reply submission in which it was stated that the Commission did not need to descend into the minutiae of the process of assessment in order to evaluate the fairness and the reasonableness of its proposed award Determination of Stage One 1. The Full Bench determines that the proceedings will be split into two stages as outlined above. 2. In relation to stage one, the Full Bench considers, subject to stage two of the proceedings, that a new award should be made which will provide for income protection benefits in lieu of lump sum payments for TPD and PPD. Whilst we will provide more detailed reasons in our final decision, it is appropriate that we provide, in advance, the preliminary reasons upon which we have formed this opinion: 1. There is compelling evidence that the existing scheme, if allowed to continue as it is, will cause the long term cost to the Government of maintaining the scheme to exceed, by a substantial degree, 3.6 per cent of salaries from February 2016; 2. In such circumstances, the D and D Award requires the parties to take steps to implement a revised scheme that maintains a maximum cost to the Government at 3.6 per cent of salaries; 3. The proposal of the APA to simply remove this cap would, if allowed, constitute a repudiation of the commitment of the parties to the D and D Award and, overall, the objectives of that Award. The application would, in our view, offend the terms of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014; 4. We accept the evidence of the MOH that the proposal of the HSU for the Service to effectively become a self-insurer of the existing scheme will not prevent the long term cost to the Government of maintaining the existing scheme from exceeding 3.6 per cent of salaries. It is most likely the application would offend the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014; 5. Although the current D and D Award provides for it, we do not favour an outcome which would maintain the cap on the cost to the Government of the existing scheme by reviewing the level of officer contributions. The MOH does not propose such an outcome and it is strongly opposed by both unions. Employee opinion seems to be against such a course; and 6. A fair and reasonable income protection scheme will provide officers with a level of benefits that is sustainable within the 3.6 per cent cap on the cost to the Government and, in the circumstances, may offer some advantage in terms of injury management and rehabilitation. 1. We should not be taken as expressing any view one way or another on the amended application filed by the MOH, other than to say that any new award would, if made, contain specific detail as to income protection arrangements such as waiting time, quantum of benefits available and duration of the payment of those benefits as well as appropriate transitional arrangements. 2. The amended application filed by the MOH does contain specific detail on these issues, however, we express no view, at this stage, as to the fairness or reasonableness of those specific proposed provisions. We are yet to form any final view about the HSU's application for an injury management scheme. 3. There are additional matters relevant to stage two of the proceedings. 4. We apprehend that the parties would seek a further program for the hearing of stage two of the proceedings given that the amended application and the views expressed in this Statement may require, for the purposes of any further arbitration, the filing and service of further evidence and submissions. Any such program will necessarily have to comprehend the present grant of expedition in the proceedings. 5. Before taking steps to further program the proceedings, however, we propose to pause to give the parties an opportunity to evaluate whether there should be further conciliation in the proceedings in the light of this Statement. We do not require the parties to take that course. Rather, if the parties unanimously indicate a willingness to do so, and no issue of potential disqualification exists, we would make a member of the Full Bench available to conciliate the balance of the proceedings. Given the urgency of the matter, such a conciliation process would necessarily need to occur in early January 2016. 6. We direct that each party indicate whether conciliation is desired with respect to stage two of the proceedings, as discussed above, by email communication to the Principal Associate to the President transmitted no later than 12 noon Wednesday 16 December 2015. If the parties agree upon conciliation, Murphy C will communicate with them as to prospective dates. In that event, or if conciliation is opposed by any party, the Full Bench delegates its powers and functions to Murphy C to fix a program for the hearing of the matter. ********** 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: 15 December 2015