Industrial Relations Commission New South Wales Medium Neutral Citation: Re: Application for a New Award for Patient Transport Officers [2017] NSWIRComm 1024 Hearing dates: 25 January 2017 Date of orders: 11 May 2017 Decision date: 11 May 2017 Jurisdiction: Industrial Relations Commission Before: Newall C Decision: Award made Catchwords: INDUSTRIAL DISPUTE – application for award in context of dispute – power to make award in resolution of dispute – award made APPLICATION FOR NEW AWARD – principles – fair and reasonable terms of employment – changes in work arrangements can render a fair award unfair in application – award may become unfair because it does not contemplate new situation arising from change WAGE FIXATION PRINCIPLES – Principle 8.3 - meaning of 'substantial' and 'significant' contribution CRIB BREAKS – important amenity – loss of amenity of crib break may attract compensation by way of allowance WAGES AND ALLOWANCES – allowance to compensate for loss of amenity Legislation Cited: Industrial Relations Act 1996 ss.10, 11, 17, 130, 146C Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 Cases Cited: City of Sydney Wages/Salary Award 2014 (2014) 247 IR 386 In re Courtaulds (Australia) Limited Award (1955) 54 AR 250 In re Iron and Steel Workers (Australian Iron and Steel Limited) Conciliation Committee (1941) 40 AR 445 Re Crown Employees (Public Sector-Salaries 2011) Award (No 3) (2011) 210 IR 458 Re Operational Ambulance Officers (State) Award (2001) 113 IR 384 State Wage Case 2016 [2016] NSWIRComm 12 Category: Principal judgment Parties: Health Services Union NSW (applicant) Secretary, NSW Ministry of Health (respondent) Representation: Counsel: A. L. Slevin (applicant) M. J. Easton (respondent) File Number(s): 2016/113658 Judgment 1. These proceedings began as a notification of an industrial dispute pursuant to s.130 of the Industrial Relations Act 1996 ('the Act') by the Secretary, NSW Ministry of Health. 2. Without going over the processes by which the proceedings developed to this point, the matter now before the Commission is an application by the Health Services Union of NSW ('the HSU') for an award. The Commission is expressly empowered to make an award in resolution of an industrial dispute by the provisions of s.11(1)(b) of the Act. Nature of award sought 1. The award sought is an award providing for an allowance to be paid to patient transport officers ('PTO's') and trainee patient transport officers, as those classifications are characterised within the Operational Ambulance Officers (State) Award, in circumstances where those officers are required to take their paid crib break (or breaks, depending on the length of the shift worked) away from their station. 2. I do not replicate the whole of the award application here. The relevant, and contentious, clause in the proposed draft award is Clause 5, and in particular subclause 5.4, which provides in terms: An employee who is directed to have crib away from his or her station will be paid a crib away from station allowance as follows: (a) where an employee is entitled to one crib break per shift the payment for any crib directed to be taken away from station will be the rate prescribed in Item 1 of Table 1 – part B, Other Rates and Allowances for each occasion that the employee is so directed. (b) Where the employee is entitled to two crib breaks per shift the payment for any crib directed to be taken away from station will be the rate prescribed in Item 2 of Table 1 – part B, Other Rates and Allowances for each occasion that the employee is so directed. Reference to the tables discloses that the allowance to be paid is in effect an allowance based on the relevant hourly rate of pay. Context in which award is sought 1. The award is sought in the following context. In October 2015, the Minister for Health determined that the then-existing fleets providing non-emergency patient transport ('NEPT'), one fleet operated by NSW Ambulance and others operated by the Local Health Districts, would be combined into a single standardised NEPT fleet. As a consequence, those PTO's who had previously been engaged pursuant to the terms of the Operational Ambulance Officers (State) Award came instead under the control of HealthShare within the coverage of the Health Employees Conditions of Employment (State) Award. No evidence was able to be brought about how many actual employees were affected by this move, but it is accepted that 218 full-time equivalent ('FTE') PTO positions were brought from NSW Ambulance into the combined NEPT fleet. 2. That change was accompanied by a change in job allocation methods; all NEPT jobs undertaken by former Ambulance PTO's are now allocated by a centralised booking hub established by NSW Health. 3. HealthShare further determined that there was to be a change in the arrangement of crib breaks. 4. In the past the NEPT officers employed by NSW Ambulance returned to their home station for their paid crib breaks. NEPT officers employed by the Local Health Districts ('LHD's') officially did not return to their home station, but on the evidence they conducted their paid crib breaks at, if not always at their home station, a station within their own local area where they were known and knew the facilities. I observe that in the case of one NSW Ambulance station, Picton, a local agreement had been reached that NEPT officers would crib away from station, but that applied to a handful of officers in a particular and unusual geographic location. Otherwise, NSW Ambulance NEPT officers cribbed at station. 5. The Operational Ambulance Officers Award which, before the reconstitution of the fleet, applied to the ex-NSW Ambulance PTO's provided, at Clause 15(b), that an employee directed to have a meal away from his or her station was to be paid a crib/meal away from station allowance, but that that allowance was not to apply to crib breaks taken by NEPT Officers. That part of the clause which excluded NEPT officers must be seen in the light of the fact that, on the evidence, NEPT officers under the Operational Ambulance Officers Award (with the single minor exception noted above) did not crib away from base. 6. As I observe above, HealthShare has now decided that NEPT officers will not be automatically permitted to crib at their home station, but may instead be directed to crib away from their station. That decision has been put into effect. 7. The decision effects a significant change to the practice surrounding crib breaks. It means that former NSW Ambulance PTO's are at times required to crib away from base, when before they were able to crib at base. It also means that former LHD NEPT officers who previously cribbed at their home station or one nearby where they were known will now at times be required to crib away from their local area. On how many occasions this will occur to either category of officer is not clear, and will depend on operational requirements, but as a matter of fact it is occurring and will continue to occur. 8. This decision by HealthShare was vigorously disputed, particularly by the HSU, the applicant for the award in these proceedings, essentially on behalf of the former NSW Ambulance NEPT officers. Disputation about the decision and the way it was to be implemented persisted in various forms, including in proceedings before the Commission, from 2012 until the instant award application was made. 9. The change to crib practices to require officers to crib away from station where directed was expressly advanced by HealthShare as one taken in order to improve the employer's productivity and efficiency. 10. The dispute that led to the instant application being made also focussed on the provisions made by NSW Ambulance to counter complaints by PTO's of difficulty in transporting food in circumstances where employees were directed to crib away from base. These included the provision of a drink bottle, a plastic container and a freezer brick to allow food and drink - or at least cold or room-temperature food and drink - to be carried inside the ambulance. A deal of evidence was brought going to the appropriateness or otherwise, including the hygienic considerations, of this approach by the employer to the carriage of food and drink. 11. It is important to note, however, that the award sought before the Commission does not challenge the decision to require crews to crib away from station, or address issues concerning the transportation of food and drink. The contentions initially advanced by the HSU suggested that the proposed award 'clarifies the entitlement for [crib] breaks to be taken at base', but that is patently neither the term nor the effect of the award sought. The award sought does not seek to preserve any entitlement for PTO's to crib at base; the horse in that regard has bolted. Rather, the award seeks an allowance to be paid in circumstances where ambulance officers are required to take their crib away from base. 12. I observe that also sought in the arbitral proceedings were certain recommendations form the Commission going to matters prescribed by the Work Health and Safety Act 2011. I return to that aspect of the matter below. The case advanced assessed against Wage Fixation Principles 1. The argument in support of the allowance sought was essentially that the employer had, in the interests of efficiency and productivity and the achievement of its objectives, changed a very long-standing practice for a significant number of employees. As the applicant's argument was developed, this change did two things. 2. First, on the employer's own evidence, the change of practice on the part of employees – cribbing away from base – substantially contributed to employee productivity and efficiency. 3. Second, that change, while contributing to productivity and efficiency, imposed inconvenience and difficulty on those employees on the occasions when they were required to crib away from base, and that an occasional allowance in recompense for that inconvenience was appropriate. The allowance sought was of the same nature as that provided by Clause 15 of the Operational Ambulance Officers Award to ambulance officers who are directed to crib away from base. 4. Given those two limbs, it was said, the case for the allowance was properly to be considered pursuant to Principle 8.3, Productivity and Efficiency Considerations, of the current Wage Fixation Principles, and was not, contrary to the respondent's assertion, required to be considered pursuant to Principle 8.4, Special Case, of those Principles. 5. It is appropriate to turn to the relevant elements of the Wage Fixation Principles as recently restated by the Commission in State Wage Case 2016 [2016] NSWIRComm 12. 6. First, I proceed on the basis that the instant application is an Arbitrated Case within the meaning of Principle 8.1. I note that the application was allocated to the Commission as presently constituted sitting alone by the then-President on 9 November 2016. 7. Second, this is not an application that falls within the work value principles set out at 8.2 of the Principles. 8. As I observe above, it was submitted by the applicant that the instant application fell to be dealt with under Principle 8.3. For its part the respondent asserted that the application must be dealt with as a Special Case under Principle 8.4. For ease of reference I here set out those Principles: 8.3 Productivity and Efficiency Considerations Productivity and efficiency measures that have delivered substantial costs savings and/or productivity or efficiency improvements or which have made a substantial contribution towards the attainment of the objectives of the employer (including departments and agencies of the Crown) in seeking to become more competitive and/or efficient, to which employees have made a significant contribution, may constitute the basis for increases to wages and salaries or improvements in employment conditions without the requirement to make out a special case, provided that such measures, savings or improvements have not already been taken into account in previous wage adjustments. 8.4 Special Case Considerations 8.4.1 A claim for increases in wages and salaries, or changes in conditions in awards, other than those allowed elsewhere in the Principles, and which is not based on work value and/or productivity and efficiency pursuant to this Principle, will be processed as a special case in accordance with the principles laid down in Re Operational Ambulance Officers (State) Award [2001] NSWIRComm 331; (2001) 113 IR 384 and the cases referred to therein at [165]-[168]. 8.4.2 All special cases shall be tested against the public interest. 1. It is to be noted that within the meaning of Principle 8.3, 'productivity and efficiency measures that have delivered substantial costs savings' are a discrete and separate category of productivity and efficiency measures to those 'which have made a substantial contribution towards the attainment of the objectives of the employer (including departments and agencies of the Crown) in seeking to become more competitive and/or efficient'. Either type of productivity and efficiency measure can be the basis for an application of this nature, and there is no requirement that both limbs be satisfied. 2. In my view, where the employer introduces and defends a change to work practices on the basis that the change improves productivity and renders the employer's operation more efficient and assists the employer toward the achievement of its objectives, both of which were said to be the case in this instance, an application for an award seeking increases to wages or improvements to working conditions can be considered under Principle 8.3, without, as that Principle posits, the requirement to make out a special case. That is not to say the application will succeed; the tests in Principle 8.3 must be met. 3. The respondent submitted that the instant application could not be considered under Principle 8.3 because the quantum of the proposed allowance has not been calculated by reference to identified cost savings, but rather was set by reference to another award of the Commission. I do not see that the Principle requires that there be established a precise relationship between the benefit of an efficiency which will be or has been achieved and the level of an allowance. Indeed, it would be impossible to quantify in dollar terms 'the attainment of the objectives of the employer', which is, as I observe above, a discrete and separate kind of productivity and efficiency measure. Not all efficiencies are quantifiable in dollar terms. The Principle cannot and does not require a dollar-for-dollar balance of an efficiency or a contribution toward competitiveness and/or efficiency in order for an increase to be determined. 4. It must be remembered too that the employees are required to make a 'significant' or 'substantial' contribution to the attainment of the objectives of the employer. Taking 'significant' and 'substantial' to have their ordinary natural meaning, they each mean something less than the whole. Employees are not required to make the whole of any contribution to efficiency or to the achievement of the objectives of the employer that might give rise to a wage increase. That is another reason why a strict dollar-for-dollar assessment of any increase sought is not appropriate. 5. The employer also advanced that a number of employees – between a third and a half – have not changed their practices, and put that that was fatal to any increase being contemplated. First, on the evidence, all employees have undergone some change in respect of cribbing; the LHD employees can now no longer assume they will be able to crib in their local area as they were able to assume before. But more, the Principle does not require that, in a group of employees on whose behalf an increase or improvement in conditions may be sought, each single one of the employees must have made a contribution to efficiency or achieving the employer's objectives. The test is, rather, whether the group of employees on whose behalf the benefit is sought have made that contribution. 6. Lastly, it was said that the effect of the proposed allowance would be to 'penalise' any productivity or efficiency improvements. That equally cannot, with respect, be right; any claim for an increase in wages or improvements in conditions under Principle 8.3 could be so characterised, because the Principle permits contributions toward efficiency to be recognised, in the appropriate circumstances, by wage increases or improvements in conditions, necessarily increasing costs. 7. I understand why that latter submission was put; it referred to some evidence given by a union official that he thought the allowance would act as a 'disincentive' to the employer to direct people to crib away from base. Given the employer's assertions of the significant degree of efficiency being obtained from the change in crib practice, I do not see that that will be so. 8. As I say above, in my view this matter falls to be considered within Principle 8.3 and is not a special case. That means that the requirements of Principle 8.4, as they are elaborated in Re Operational Ambulance Officers (State) Award (2001) 113 IR 384 at [165]-[168] are not required to be met. 9. It is the case, as the respondent correctly submitted, that the Commission has held the Principles to require a 'stringent' examination of whether there have been productivity or efficiency improvements such as to justify the grant of wage increases: see Re Crown Employees (Public Sector-Salaries 2011) Award (No 3) (2011) 210 IR 458 at [35]. Here of course what is sought is not a wage increase in any across-the-board sense but the introduction by way of an award of an allowance which will apply on an occasional basis. That does not loosen the degree of stringency which is to be applied in examining whether the requirements of the Principle are met; they are either met or they are not, there being no half-way house. However, as I note above, the assessment is whether a 'substantial' contribution has been made to efficiency or meeting the employer's objectives, not the whole of that contribution. Each case will necessarily turn on its own facts, both as to the contribution made and as to the degree and nature of wage increase sought. The fact of the allowance here sought being an occasional allowance will be a part of that consideration. Section 146C of the Act 1. In determining this application the Commission must give effect to any relevantly declared policies on conditions of employment of public sector employees: Act, s.146C(1). This award, if made, has a capacity to increase employee related costs as that term is defined in Clause 8 of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014. 2. It is impossible on the evidence to determine as a matter of certainty that there will be such an increase. However, while, somewhat surprisingly, no data was put before the Commission going to the frequency of occasions when employees are directed and might in future be directed to crib away from station, I am prepared to accept that the practice is happening and will continue to happen. To the extent that it occurs at all, it can be said that there will be an increase to employee related costs. However, in the absence of the kind of data to which I refer, it is entirely impossible to say how much that increase might be, save that its potential upper limit was identified by the employer. 3. Ms Van Cleef, State Manager, Non-emergency Patient Transport for HealthShare, estimated that the base cost of the proposed allowance would be $1.82m pa if it extended only to NEPT PTO's, and $2.54m pa if it extended to all employees, including nurses. 4. From her calculations it is evident that these figures represent the uppermost figure, arising if every employee is directed to crib away from station, and therefore paid the proposed allowance, on every shift, allowing for authorised absences. Equally it might be said that the allowance will cost nothing at all if no employee is so directed. As I say, I proceed on the basis that the practice is occurring and will continue, so that there is and will be a cost; to what degree and extent the practice will occur, and the level of cost within the outer limit advanced in Ms Van Cleef's evidence, it is simply not known. 5. I was also not given any insight into what $1.84m might mean in relation to the NSW Ambulance annual wages and salaries bill. Certainly it was not suggested that even the maximum amount that Ms Van Cleef estimated would, if required to be paid, equal or exceed 2.5% of that bill. In those circumstances I am unable to see the Commission would be prevented from making the award sought by the provisions of s.146C. Requirements of s.10 of the Act 1. Section 10 of the Act provides that an award must set 'fair and reasonable terms of employment'. 2. The fundamental principles of award making have been recently set out in City of Sydney Wages/Salary Award 2014 [2014] 247 IR 386: [11] In determining an application to make a new award to replace an existing award, the applicable test, pursuant to s 10 of the Act, is whether the award to be made will set fair and reasonable conditions of employment for employees: Re Club Employees (State) Award (2002) 122 IR 272 at [102]. [12] The presumption is that the existing award, covering the same field, already sets fair and reasonable conditions of employment for employees because it was made in conformity with the obligations imposed upon the Commission under s 10 of the Act: Re Pastoral Industry (State) Award (2001) 104 IR 168 at [14]. [13] However, that presumption is rebuttable where an applicant for different terms can demonstrate, on the evidence, that the existing award does not provide fair and reasonable conditions of employment: Re Storeworkers – IGA Distribution Pty Ltd (2002) 124 IR 1 at [42]. [14] Factors constituting a proper basis for the rebuttal of the presumption will include whether the conditions in the current award are no longer fair and reasonable having regard to changed circumstances, including changes in the respective positions or conduct of the parties; developments in a business, industry or the economy generally, and where changes have occurred in the factors which underpinned the conditions found in the current award, the subject of review: IGA Distribution at [44]. 1. The Full Bench went on to hold: [19] The terms "fair" and "reasonable" in s 10 of the Act import a requirement that the conditions of employment set represent a proper and proportionate balance between the entitlements afforded employees and the interests of those employing them. [20] Consideration of what is fair and reasonable for an employee will necessarily involve a consideration of what is fair and reasonable having regard to the nature and circumstances of the employment afforded to the employee by an employer. That inquiry cannot be made in a vacuum. It must also extend to the broader context in which the employment occurs and ultimately, by effect of s 146 of the Act, the state of the economy in New South Wales. [21] The assessment required by s 10 will often involve consideration of collective relations between unions and employers or employer associations and, in appropriate cases, consideration of the history of terms and conditions that the parties chose to apply, formally and informally, to employees who will now be covered by the proposed award. [22] In particular cases, the Commission may be required to take into account not only differences between employers or industries in which employment is undertaken, but relevant differences between employees or classes of employees in a workplace, enterprise, project or industry. What may represent a fair and reasonable condition for one set of employees may not be for another, even where the employees are engaged by the same employer. That particular assessment may depend on the history as well as consideration of the present circumstances of the work to be performed. Consideration 1. All that can be derived from what I have set out above is that neither the Special Case Principle nor the Act stand as barriers to considering the instant application. It falls to be determined on its merits, including its satisfaction of the provisions of Principle 8.3 and of s.10 of the Act. 2. The substantive elements of the case may be distilled to the following. 3. The employer has made a change to its arrangements for scheduling transportation of patients which, on the evidence of Ms Van Cleef, has resulted in significant efficiencies. As a part of that rearrangement PTO's are required to crib away from base, which ex-Ambulance PTO's had not been required to do before. That requirement extended to ex-LHD PTO's as well as ex-Ambulance PTO's, but the degree of change is greater in its effect on the ex-Ambulance PTO's who comprise about two-thirds of the new fleet. 4. That change itself is a contributor to the efficiencies which HealthShare has achieved. 5. On the evidence, particularly that of Mr Flynn, I accept that cribbing at home base provides certain specific benefits: access to dining, access to toilets and wash rooms, a safe and known place to relax, a place to have social interaction with workmates, and email and printing facilities. Some or all of those benefits are lost when crib is unable to be taken at one's base station, or taken at no fixed location, the degree depending on the location where crib is actually taken. 6. It is to be remembered that the crib break is 30 minutes. I am prepared on the evidence to accept that cribbing in an unknown location, or even a location which is known but is not the officers' own base, imposes significant disadvantages in the context of the purpose of a crib break, which is to be free of work responsibilities for a short time in order to rest, eat and drink, relieve oneself and deal with such short personal matters as checking emails and talking to workmates. There is a real likelihood, on the evidence, that part of the crib time will be lost in unfamiliar or crowded locations, and in locations where the PTO's are outsiders. I do not accept, as it was submitted by the respondent, that the difficulties arising from cribbing away from home station about which evidence was given were merely transitional. 7. In my view it is fair and reasonable that a person who is deprived of the ability to crib at base station, or in the case of the ex-LHD PTO's at a known nearby station, be compensated for that disadvantage. That is not to say that the existing award does not provide fair and reasonable conditions of employment. It means that in the face of the change that has been effected by the employer, a variation to the award is appropriate to maintain fair and reasonable conditions of employment. Terms and conditions of employment must be seen in their historical context; the change of a work practice or the removal of an entitlement can give rise to a need to make or vary awards to maintain fairness. 8. It is apparent from what is said in City of Sydney that changes in circumstances are properly to be considered in assessing whether an award furnishes fair and reasonable conditions of employment. That means that an award provision which was entirely fair may be rendered unfair in its application by changes to circumstances, including changes to, for example, work patterns. The same applies in the negative; an award may be rendered unfair in its particular application where it does not countenance something which formerly it had no need to countenance, but a change in circumstances renders it necessary to address if the award is to maintain fairness. 9. That is in my view the situation here. A change has been imposed on the work patterns of the employees proposed to be covered by the claimed award. It is a change which, I am satisfied on the evidence, reduces the amenity of their crib break on the occasions they are directed to crib away from base. Crib breaks have long been recognised as an amenity which ought not be encroached upon: In re Iron and Steel Workers (Australian Iron and Steel Limited) Conciliation Committee (1941) 40 AR 445 at 456-7. The provision of an allowance to compensate for loss of amenity of one kind or another in the workplace is a long-established feature of award-making: see for example In re Courtaulds (Australia) Limited Award (1955) 54 AR 250, and indeed the current provisions of the Operational Ambulance Officers (State) Award. The award here sought will, by providing an allowance where the amenity of the crib break is reduced, restore a proper and proportionate balance between the entitlements afforded employees and the interests of those employing them, to adopt the words of the Full Bench in City of Sydney. 10. The quantum of the allowance is in my view fair; it draws upon an allowance which the Commission has determined to be fair in analogous circumstances in a comparable award dealing with work of a similar or related nature. 11. I am also satisfied that the application, on the employer's evidence, meets the test of Principle 8.3, as it must do if the award is to be made. Productivity or efficiency improvements which have made a substantial contribution towards the attainment of the objectives of the employer in seeking to become more efficient have been achieved, and on the evidence employees have made a significant contribution to them. That must be so, as the efficiencies depend upon employees operating and participating in the new arrangements. 12. I am satisfied that s.146C does not prevent the award being made. There was no suggestion at all that the maximum cost impost that might possibly arise if the award were made would meet or exceed 2.5% of employee costs. The pay increase of 2.5% extended across Health from 1 July 2016 has not been extended to NEPT PTO's. 13. I propose to make the award in the terms sought. I return to the appropriate Orders below. Recommendations concerning aspects of the Work Health and Safety Act 2011 1. It was also sought in the context of these proceedings that the Commission make certain recommendations or statements about the consultation, as prescribed by the Work Health and Safety Act 2011, which took place in the course of the changes to work practices that have been effected by the employer. I sought some specific submissions from the parties on certain aspects of these questions. 2. Having considered those submissions and the question at large, ultimately I am persuaded that any observations or recommendations I were to make, given that I am expressly not conducting proceedings under the Work Health and Safety Act, would be obiter, and that to make remarks without the rigour of an obligation to hear and determine a case under that Act would be unhelpful and unwise. I do not propose to make any observations or recommendations going to the requirements of the Work Health and Safety Act and the parties' adherence to those requirements in the factual circumstances of this case. 3. In saying that I make the observation that, as Mr Hatter conceded in his evidence, there was no concrete evidence of any risk to safety put before the Commission in these proceedings. Orders 1. I make the award sought in the terms filed by the applicant on 14 June 2016, save that the date of effect of the award will be on and from the first pay period commencing on or after today's date, 11 May 2017. 2. I direct the applicant to file the award, amended to reflect that date of effect, in hard copy and electronic form with the Industrial Registrar within 7 days of today's date. 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: 11 May 2017