Industrial Relations Commission New South Wales

• Medium Neutral Citation: Crown Employees (Public Sector - Salaries 2008) Award [2012] NSWIRComm 70
• Hearing dates: 7/06/2012
• Decision date: 06 July 2012
• Before: Backman J

Decision

(1) The Crown Employees (Public Sector - Salaries 2008) Award is varied to provide increases to salaries and salary based allowances of 2.5 percent per annum with effect from the first full pay period on or after 1 July 2012.

• Catchwords: AWARD - Application by Public Service Association and Professional Officers' Association Amalgamated Union of NSW (PSA) for variation of Crown Employees (Public Sector - Salaries 2008) Award (2008 Award) to increase salaries by 2.5 per cent from 1 July 2012 - no dispute between parties that salaries should be increased by 2.5 per cent - PSA's application confined to a claim for a single increase of 2.5 per cent with effect from the first full pay period on or after 1 July 2012 - counter-proposal by Department seeks further increases in salaries and relevant allowances contingent upon realisation of employee-related costs savings and the making of a new Crown Employees (Public Service Conditions of Employment) Award (Conditions Award) - residual claim of PSA arising from earlier proceedings - whether residual claim forms "the subject of the proceedings" under reg 6(1)(d) of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 (the 2011 Regulation) - ambit of "all issues the subject of the proceedings" - whether a requirement to include a no extra claims provision in the Award variation - whether increase of 2.5 per cent should be awarded by way of a variation of the 2008 Award or by making a new Award - Order made on 29 June 2012 varying the 2008 Award to provide increases to salaries and salary-based allowances of 2.5 per cent per annum with effect from the first full pay period on or after 1 July 2012
• Legislation Cited: Industrial Relations Act 1996; Industrial Relations Amendment (Public Sector Conditions of Employment) Act 2011; Industrial Relations (Public Sector Conditions of Employment) Regulation 2011
• Cases Cited: Health Employees Conditions of Employment (State) Award and other Awards [2011] NSWIRComm 129; Public Service Association and Professional Officers' Amalgamated Union of NSW v Director of Public Employment [2011] NSWIRComm 143; Re Crown Employees (Public Sector - Salaries 2011) Award (No 3) [2011] NSWIRComm 104
• Category: Principal judgment
• Parties: The Public Service Association and Professional Officers' Association Amalgamated Union of NSW (Applicant); Director-General; Department of Premier and Cabinet (Respondent); NSW Police Force (Respondent); Crown Solicitor's Office (Respondent); NSW Department of Education and Communities (Respondent); Roads and Maritime Services (Respondent); Taronga Conservation Society Australia (Respondent); The Presiding Officers; Parliament of New South Wales (Respondent); Greyhound Racing Authority; c/- Public Employment Office (Respondent); Australian Institute of Marine and Power Engineers New South Wales District (Respondent); Australian Services Union of NSW (Respondent); Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch (Respondent); Construction, Forestry, Mining and Energy Union (New South Wales Branch) (Respondent); Electrical Trades Union of Australia, New South Wales Branch (Respondent); New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union (Respondent); The Australian Workers' Union, New South Wales (Respondent); Unions NSW (Respondent); United Voice, New South Wales Branch (Respondent)
• Representation: Mr A Hatcher SC (Applicant); Mr P Kite SC with Mr A Britt of counsel (Respondents); WG McNally Jones Staff (Applicant); Crown Solicitor's Office (Respondents)
• File Number(s): IRC 410 of 2012

DECISION OF THE COMMISSION

1 On 29 June 2012, the Commission made the following order in this matter:

The Crown Employees (Public Sector - Salaries 2008) Award is varied to provide increases to salaries and salary based allowances of 2.5 percent per annum with effect from the first full pay period on or after 1 July 2012.

2 When the order was made, the Commission informed the parties that its reasons for decision would be published at a later date. I now provide those reasons.

3 On 9 March 2012, the Public Service Association and Professional Officers' Association Amalgamated Union of NSW (the PSA), filed an application (the PSA application) for a variation to the Crown Employees (Public Sector - Salaries 2008) Award (the 2008 Award) under s 17 of the Industrial Relations Act 1996 (the Act). The Director-General, Department of Premier and Cabinet (the Department), the respondent to the PSA application, filed a "counter proposal" to that application on 31 May 2012.

4 The PSA application initially sought an "interim" increase to salaries and salary-based allowances of 2.5 per cent per annum, "plus any amount justified by identified employer-related costs savings". On the day of the hearing the PSA informed the Commission that it no longer sought an increase of 2.5 per cent on an interim basis and no longer sought any additional amount. Accordingly, the PSA application is confined to a claim for an increase to salaries and salary-based allowances of 2.5 per cent with effect from the first full pay period on or after 1 July 2012.

5 The Department's counter proposal, on the other hand, seeks the making of a new award, entitled the Crown Employees (Public Sector - Salaries 2012) Award (the 2012 Award), which contains a provision (clause 3(iii)(a)) seeking a 2.5 per cent increase to salaries payable, "with effect from the first full pay period to commence on or after the date this Award is made by the Industrial Relations Commission of New South Wales on or after 1 July 2012". In addition to other salaries and allowances provisions, the 2012 Award also provides for:

(a) a no extra claims clause;

(b) (in addition to an increase in salaries of 2.5 per cent), an amount referable to a proportion of employee-related cost savings to be achieved from changes to conditions of employment and the making of a new Crown Employees (Public Service Conditions of Employment) Award and for increases beyond 2.5 per cent commencing on such date as the employee-related cost savings are realised;

(c) an increase to any relevant allowances, payable under clause 4 of the current award, of 2.5 per cent plus an amount referable to a proportion of employee-related cost savings to be achieved from changes to conditions of employment and the making of a new Crown Employees (Public Service Conditions of Employment) Award and such increases in respect of the 2.5 per cent to commence on and from the first full pay period after the new Salaries Award is made by the Industrial Relations Commission ("the Commission") on or after 1 July 2012 and for increases beyond 2.5 per cent commencing on such date as the employee-related cost savings are realised;

(d) the exclusion of the employees engaged/employed in Forests NSW as the Government has announced that Forests NSW will be corporatised and the industrial terms and conditions should be considered in the context of its translation into the federal jurisdiction; and,

(e) minor amendments to clauses 2 and 6 to reflect the change in name from the DPE to the Respondent.

6 There is no dispute between the parties that salaries and salary-based allowances should be increased by 2.5 per cent. What was in issue during the proceedings were the conditions under which the increase was to be awarded and when an order giving effect to that increase might take effect. The issues between the parties, adopting the Department's written outline, may be characterised broadly in the following way:

(a) the Commission lacks the jurisdiction to grant the increase sought by the Applicant by an order at this time since such an order fails to resolve all issues the subject of the proceedings;

(b) the Commission must include a "no extra claims clause" when increasing salaries by 2.5 per cent; and

(c) the Commission cannot or should not be satisfied that it is not contrary to the public interest to grant the application by way of a variation to an "expired" award.

Whether the Commission lacks jurisdiction to grant the 2.5 per cent increase at this time

7 Resolution of the first issue essentially involves consideration of two matters. The first matter was raised by the PSA during the proceedings. The PSA directed the Commission's attention to its application for salary increases made in March 2011 (the 2011 application), together with cross-applications made by the Department and other respondents which resulted in an award of a 2.5 per cent salary increase operative from 1 July 2011. This increase was awarded following the Full Bench decision in Re Crown Employees (Public Sector - Salaries 2011) Award (No 3) [2011] NSWIRComm 104 (the PSA case). At the time the Full Bench handed down its decision in the PSA case the 2011 application was not fully discharged by the award of a 2.5 per cent increase and remains on foot (the residual claim). In the proceedings before the Full Bench in the PSA case, the PSA sought, in addition to a 2.5 per cent increase further salary increases on grounds that may justify increases beyond 2.5 per cent. The Full Bench deferred hearing the application for salary increases beyond 2.5 per cent, until pending proceedings in which the PSA sought to challenge the validity of State legislation underpinning restrictions to salary increases in excess of 2.5 per cent, had been determined.

8 It should be explained at this juncture that following the Full Bench decision in Public Service Association and Professional Officers' Amalgamated Union of NSW v Director of Public Employment [2011] NSWIRComm 143, in which applications to declare invalid the Industrial Relations Amendment (Public Sector Conditions of Employment) Act 2011 (the Amendment Act) and the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 (the 2011 Regulation) were refused, the PSA applied for special leave to appeal the decision to the High Court. On 11 May 2012, the High Court granted special leave. Hearing dates for the appeal have not been allocated.

9 The second matter relevant to the jurisdictional issue was described by the Department as a contingent aspect of the counter proposal. It emerges only by reason of the provisions in the 2012 Award which foreshadow further increases in salaries and allowances following a determination in the Crown Employees (Public Service Conditions of Employment) Award (the Conditions Award). That Conditions Award is set down for directions on Thursday, 19 July 2012.

10 Before setting out the respective submissions of the parties on these two matters, it is necessary to set out the relevant provisions of the Amendment Act and the 2011 Regulation which govern these proceedings.

11 On 17 June 2011, the Amendment Act amended the Industrial Relations Act 1996 by inserting s 146C. That section provides:

(1) The Commission must, when making or varying any award or order, give effect to any policy on conditions of employment of public sector employees:

(a) that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission, and

(b) that applies to the matter to which the award or order relates.

(2) Any such regulation may declare a policy by setting out the policy in the regulation or by adopting a policy set out in a relevant document referred to in the regulation.

(3) An award or order of the Commission does not have effect to the extent that it is inconsistent with the obligation of the Commission under this section.

(4) This section extends to appeals or references to the Full Bench of the Commission.

(5) This section does not apply to the Commission in Court Session.

(6) This section extends to proceedings that are pending in the Commission on the commencement of this section. A regulation made under this section extends to proceedings that are pending in the Commission on the commencement of the regulation, unless the regulation otherwise provides.

(7) This section has effect despite section 10 or 146 or any other provision of this or any other Act.

(8) In this section:

award or order includes:

(a) an award (as defined in the Dictionary) or an exemption from an award, and

(b) a decision to approve an enterprise agreement under Part 2 of Chapter 2, and

(c) the adoption under section 50 of the principles or provisions of a National decision or the making of a State decision under section 51, and

(d) anything done in arbitration proceedings or proceedings for a dispute order under Chapter 3.

conditions of employment-see Dictionary.

public sector employee means a person who is employed in any capacity in:

(a) the Government Service, the Teaching Service, the NSW Police Force, the NSW Health Service, the service of Parliament or any other service of the Crown, or

(b) the service of any body (other than a council or other local authority) that is constituted by an Act and that is prescribed by the regulations for the purposes of this section.

12 The "regulations" referred to in s 146C is the 2011 Regulation. It declares, for the purposes of s 146C, aspects of government policy that are to be given effect by the Commission when making or varying awards or orders. The relevant clause of the 2011 Regulation, for present purposes, is clause 6, which provides:

6 Other policies

(1) The following policies are also declared, but are subject to compliance with the declared paramount policies:

(a) Public sector employees may be awarded increases in remuneration or other conditions of employment that do not increase employee-related costs by more than 2.5% per annum.

(b) Increases in remuneration or other conditions of employment that increase employee-related costs by more than 2.5% per annum can be awarded, but only if sufficient employee-related cost savings have been achieved to fully offset the increased employee-related costs. For this purpose:

(i) whether relevant savings have been achieved is to be determined by agreement of the relevant parties or, in the absence of agreement, by the Commission, and

(ii) increases may be awarded before the relevant savings have been achieved, but are not payable until they are achieved, and

(iii) the full savings are not required to be awarded as increases in remuneration or other conditions of employment.

(c) For the purposes of achieving employee-related cost savings, existing conditions of employment of the kind but in excess of the guaranteed minimum conditions of employment may only be reduced with the agreement of the relevant parties in the proceedings.

(d) Awards and orders are to resolve all issues the subject of the proceedings (and not reserve leave for a matter to be dealt with at a later time or allow extra claims to be made during the term of the award or order). However, this does not prevent variations made with the agreement of the relevant parties.

(e) Changes to remuneration or other conditions of employment may only operate on or after the date the relevant parties finally agreed to the change (if the award or order is made or varied by consent) or the date of the Commission's decision (if the award or order is made or varied in arbitration proceedings).

(f) Policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments.

(2) Subclause (1) (e) does not apply if the relevant parties otherwise agree or there are exceptional circumstances.

(3) The relevant parties in relation to a matter requiring agreement under this clause are the employer and any other party to the proceedings that is an industrial organisation of employees with one or more members whose interests are directly affected by the matter.

13 Returning to the first of the two matters relevant to the jurisdictional question raised by the Department, the PSA submitted that the residual claim is not an issue which forms the subject of these proceedings under reg 6(1)(d). Rather, it is an application made before the Full Bench in the PSA case which was not fully discharged by the award made by the Full Bench of a 2.5 per cent increase. The fate of the residual claim is linked to the PSA's challenge to the validity of the Amendment Act and the 2011 Regulation to be determined by the High Court. It remains on foot on the basis that if the PSA succeeds in obtaining orders that the challenged 2011 Regulation is invalid, it will be in a position to proceed with the residual claim before the Full Bench, a different proceeding from the proceedings before the Commission.

14 In response, the Department contended that the PSA is seeking to keep alive an earlier claim in these proceedings. Adopting a broad construction of the phrase, "all issues the subject of the proceedings" in reg 6(1)(d), the Department contended that "issues" arise between the parties in the proceedings and the Commission is not confined by the form of an order sought in granting relief. More detailed submissions on this matter are set out in the Department's written submissions extracted below:

The Commission must first determine what the subject matters of the proceedings are. Unlike the facts in Health Employees Conditions of Employment (State) Award and other Awards [2011] NSWIRComm 129 (see Director-General Department of Premier & Cabinet v HSU East [2012] NSWCA 111 at [9] and [13-15]) the Application foreshadows further increases based on employee related cost savings and the counter proposal also foreshadows further increases in salaries and allowances following a determination in the Crown Employees (Public Service Conditions of Employment) Award. The Commission in these proceedings unlike in the Health Employees Conditions of Employment (State) Award and other Awards has before it more than an application merely seeking an increase of 2.5 per cent in salaries and allowances.

The view that the Commission may subsequently vary the award following an increase in wages and salaries notwithstanding reg 6(1)(d) is possibly erroneous (see Director-General Department of Premier & Cabinet v HSU East at [12]).

The issues in the proceedings are the matters set out in both the application and the counter proposal as summarised at [2]-[3] and [6] above.

The notion of an interim award increase of 2.5 per cent (whether by new award or variation to an existing award by order) is clearly at odds with the requirements in cl 6(1)(d). An issue in these proceedings is quite clearly what further salary increases ought be paid to employees covered by Award either in light of proposed changes to the Crown Employees (Public Service Conditions of Employment) Award or on the Applicant's claim. In making an interim increase the Commission would not be resolving all issues the subject of the proceedings but leaving a conditions and salary claim for another day and therefore acting contrary to cl 6(1)(d).

15 The Department's submissions refer to interim increases sought by the PSA said to be at odds with the requirements of reg 6(1)(d). The PSA at the beginning of the hearing, however, moved its application on the basis that it was confined to an increase in salaries and allowances of 2.5 per cent per annum in final disposition of the proceedings, that is, the increases sought were not sought on an interim basis, but on a final basis.

16 The residual claim emerged before the Full Bench in the PSA case when an application for an interim increase of 2.5 per cent was granted operative from 1 July 2011. At the same time, the Full Bench noted that the proceeding before it was not fully discharged. It determined to deal with the residual aspect of the PSA's application at a later stage following the determination of proceedings in which the validity of the Amendment Act and the 2011 Regulation are under challenge. In this regard, the Full Bench said (at [42]-[44]):

This leaves the question of what to do with the PSA's application. If the PSA is successful in challenging the validity of s 146C or the validity of the Regulation, there would seem to be no bar to the Commission proceeding to deal with the application in accordance with the Wage Fixing Principles.

If the PSA is unsuccessful, such that the legislation is held to be valid, the PSA will be provided with the opportunity of putting its case that the increase of 2.5 per cent does not represent the maximum amount that may be awarded by way of an increase in remuneration under the Regulation. Otherwise, by force of the Regulation it seems to us, the increase of 2.5 per cent that has been granted by way of variation in the awards that are the subject of the counter-applications is to be regarded as the amount of increase in employee-related costs under those awards for a period of 12 months from 1 July 2011. In those circumstances, given it has been conceded that the evidence filed in support of the PSA's application would not satisfy the requirements for employee-related cost savings as specified in the Regulation, no further increase in remuneration would be available prior to the expiry of the 12 months' period. The issue of whether a no extra claims clause should be inserted into the awards will be further considered by the Full Bench in the course of determining the disposition of the PSA's application.

The PSA submitted we should proceed immediately to hear the evidence relating to its application. We do not propose to take that course. As matters currently stand, the Regulation is valid. The evidence the PSA proposes to call has no relevance given the requirements of the Regulation. It would not be appropriate for the Commission to proceed to hear that evidence on the basis of a possibility that the Regulation might be found to be invalid. In this regard, we agree with the submissions of the DPE.

17 What was contemplated by the Full Bench in the PSA case was that following the resolution of the issue of validity of the legislation, the PSA's residual claim would be disposed of in the proceeding before it. It follows that the PSA's contention that the residual claim is not an issue the subject of the present proceedings must be upheld.

18 The second matter relied upon by the Department in relation to the jurisdictional question arises from proposed further increases in salaries and allowances contained in the 2012 Award, the subject of the Department's counter proposal. That aspect of the Department's "application" for further increases is contingent upon the making of the Conditions Award which, according to the respondent, will produce a degree of costs savings, a proportion of which will flow back to the employees by way of salary increases. The Department's primary submission in relation to the proposed increases set out in the 2012 Award was that in respect of the prospect of conditions changes occurring "in the not too distant future", and, the basis upon which salary increases might flow, the Commission would not make an order at this stage because the "salaries issue" is not capable of resolution at this stage.

19 The PSA vigorously opposed the Department's contention that by reason of the "further issues" raised in the counter-proposal the proceedings cannot be resolved to finality at this stage. The Conditions Award, according to the PSA, is a discrete application yet to be heard by the Commission, and contains only vague references to further increases some time in the future constituting an insufficient basis for not dealing with the proceedings to finality.

20 The Department contended in oral submissions that the "proceedings" are to be defined by the PSA's application for variation, the residual claim, and the counter-proposal, and, in accordance with the requirements of Regulation 6(1)(d), all of these matters constitute issues the subject of the proceedings which must be resolved to finality. Given that the Department's counter proposal seeks the further increases to be awarded at some future stage, in one sense the Department argued against its own position. It sought to resolve this apparent dilemma by proposing two solutions. The first was that the Commission effectively reject its "application" for further increases above 2.5 per cent by making the 2012 Award containing a "no extra claims" clause. The second was that the Commission decline to make any orders at this stage, and stand over the proceedings pending the outcome of the proceedings concerning the Conditions Award. The Department favoured the second alternative, acknowledging that if the Commission acceded to the first alternative, it may be difficult for it to prosecute any changes to the Conditions Award during the life of the Award.

21 The Department advocated the same approach before the Full Bench in Health Employees Conditions of Employment (State) Award and other Awards [2011] NSWIRComm 129 (HSU East case). The Full Bench rejected the approach. It first set out the contentions of the Department (at [16]):

[16] Counsel for the DPE submitted that the effect of s 146C and the Regulation was that only one award or order could be made by the Commission and that award or order had to deal with all issues that were the subject of the proceedings. Further, the provisions did not allow for any matter to be reserved to be dealt with at a later time and also required a provision excluding the making and/or granting of extra claims during the term of the award or order. The effect of that submission, if accurately reflecting the operation of the Amendment Act and Regulation, would require each application before the Commission to be either granted a 2.5 per cent final increase in salaries or wages and allowances, together with a no extra claims clause or, in the alternative, if the applicants wished to proceed with a case for an increase beyond 2.5 per cent, to adjourn that case so that the issue of the initial 2.5 per cent and any increase above that could be dealt with at the same time. It was submitted that such proceedings, as required by the Amendment Act and the Regulation, would finalise all the issues between the parties and leave no outstanding question or issue to be later dealt with and would also require the final award or order to contain a no extra claims clause. It was asserted that, if the Commission proceeded to make interim awards in the present applications, the requirement to insert a no extra claims clause would prevent a further hearing for increases above 2.5 per cent.

22 After referring to some principles of general application to statutory construction, set out in a number of authorities, the Full Bench continued:

[49] The approach encapsulated in these decisions necessarily leads to a consideration of the policy and purpose of the amendment and how that may assist in the determination of the operation of cl 6(1)(d) of the Regulation. Reference to the Minister's second reading speech demonstrates a Government concern, in the prevailing economic conditions, for the level of its public sector wages bill and how a "highly skilled and effective public sector" can be built with wage increases made available each year to "hard-working public sector employees" while maintaining "fiscal restraint" via the Government's wages policy. At the heart of the provisions to give effect to that policy is the availability of 2.5 per cent per annum as a reflection of the median point of expected cost of living increases and the requirement that anything over 2.5 per cent requires costs off-sets equal to the increases sought before any increase can be granted by the Commission in salaries, wages, allowances and conditions involving employee-related costs.

[50] Adopting the approach of the DPE, "hard-working public sector employees" would be denied the assured first tranche increase of 2.5 per cent until the entire matter was completed when they wished to claim or arbitrate a higher level of increase. It is unlikely that this result was intended under the Regulation. The approach of the DPE also leads to the unusual circumstance that if an applicant wishes to arbitrate more than the first tranche of 2.5 per cent, but accepts an award of 2.5 per cent and persuades the Commission to grant the first tranche separately, then that event would prevent the proposed arbitration. This follows, firstly, because such an order or award would have to finally determine the whole proceeding and, on the argument of the DPE, would require the insertion of a no extra claims clause that would itself prevent the second tranche being dealt with by the Commission or render ineffective any further award or order made by the Commission in excess of the initial 2.5 per cent.

23 This Commission remains bound by the HSU East decision of the Full Bench. The Department appealed the Full Bench decision in the HSU East case to the Court of Appeal which dismissed its application. Bathurst CJ, with whom Basten and Barrett JJA agreed, found (at [10]-[13]):

It follows from the procedural history to which I have referred above, that all the Commission had before it at the time it made the orders was the amended application seeking an increase of 2.5 percent in pay and allowances. That is what the Commission ordered. There is no issue that it had jurisdiction to make such an award.

However, in the course of its determination the Commission considered the question of whether it had the jurisdiction to make an interim award. It concluded that a two-stage process involving interim increases was permissible (Decision par [42]-[46]). Notwithstanding this, the orders of the Commission are not, in their terms, cast in the form of an interim award. They simply give effect to what the Commission was empowered to do, namely grant a 2.5 per cent increase in pay and allowances.

In these circumstances, the order made was an order within jurisdiction. The fact that the Commission, during the course of its reasoning process, expounded the possibly erroneous view that notwithstanding reg 6(1)(d) it had a general power to vary the award in the future does not affect the position. In this regard it is important to remember that the subject matter of the review is not the steps taken preliminary to the exercise of the power to make an award, but the legality of the award itself: c/f Attorney General for State of NSW v Quin [1990] HCA 21; (1989) 170 CLR 1 at 26.

In these circumstances, in my opinion, the order made was within jurisdiction. There is no application for prohibition and no suggestion that there is any application pending to vary the award. The question of whether the Commission has power to vary the award in the manner it suggested can be dealt with when the question arises. It follows that the application should be dismissed. The applicant should pay the costs of the first and second respondents.

24 What follows from these two decisions is that the Commission has jurisdiction to make the orders sought in the PSA application for a 2.5 per cent single increase to take effect from 1 July 2012. Although some doubt was expressed by Bathurst CJ as to the jurisdiction of the Full Bench to vary the Award in the future notwithstanding reg 6(1)(d), this aspect was not determined. What is clear from the Court of Appeal decision is that "proceedings" was given a narrow construction, that is, it was confined to the application actually before the Commission. The only application before this Commission is the PSA application for a single increase. The counter-proposal is relied upon by the Department not as a formal counter-application but as a "response" to the PSA application.

No Extra Claims clause

25 The second matter in issue between the parties is whether the Commission is required to include a "no extra claims" clause when granting an increase in salaries of 2.5 per cent.

26 The counter-proposal proposed the inclusion of a "no extra claims" clause in the 2012 Award in the following terms:

8. No Extra Claims

The parties agree that, during the term of this Award, there will be no extra wage claims, claims for improved conditions of employment or demands made with respect to the employees covered by the Award or the Awards, Agreements and Determinations listed in Schedule A of this Award, and, further, that no proceedings, claims or demands concerning wages or conditions of employment with respect to those employees will be instituted before the Industrial Relations Commission of New South Wales or any other industrial tribunal.

The terms of the preceding paragraph do not prevent the parties from taking any proceedings with respect to the interpretation, application or enforcement of existing award provisions.

27 The clause is identical to the "no extra claims" clause which was considered by the Full Bench in the PSA case. The Full Bench had reservations regarding the validity of the "no extra claims" clause in the terms proposed by the Department. In the decision, it was said (at [38]):

If we were to make new awards in response to the counter-applications and include in those awards the no extra claims provisions that are sought, it would have the effect of precluding any consideration of the PSA's application, even in circumstances where s 146C and the Regulation were found invalid. Moreover, we have reservations regarding the validity of the no extra claims provisions proposed by the DPE and RTA. The DPE's provision is predicated on the basis of an agreement between the parties that there will be no extra claims. There is no such agreement. Further, both the DPE's provision and that of the RTA provide that no "proceedings, claims or demands concerning wages or conditions of employment ... will be instituted before the Industrial Relations Commission of New South Wales or any other industrial tribunal." We do not know how the Commission may make an order precluding claims being made before a tribunal other than itself. Moreover, in the absence of legislative backing, the power of the Commission to order a party not to make claims it is entitled to make under the statute must be in doubt. We also note that the proposed no extra claims provisions, on their face, would preclude claims otherwise permitted under the Regulation (for example, claims relating to equal remuneration).

28 In the present proceedings, the PSA's application does not include any extra claim or claims for further increases beyond the single claim of a 2.5 per cent increase. Moreover, the PSA has sought to emphasise in oral submissions that its application, if granted, deals entirely with the subject matter of the proceedings which is the pursuit of a 2.5 per cent increase in accordance with the policy. There is therefore, no aspect of its application which would remain alive in these proceedings if the Commission were to grant the single increase.

29 The Department contended that the Commission is required to include a "no extra claims" clause in the 2012 Award, or, "in the order varying the Award" and a failure to do so is inconsistent with the Commission's obligations under s 146C, specifically s 146C(3). With regard to the findings of the Full Bench in the PSA case concerning the issue of inclusion of a "no extra claims" clause, the Department contended:

The Respondent recognises that the Full Bench in Re Crown Employees (Public Sector - Salaries 2011) Award (No 3) [2011] NSWIRComm 104 did not include a no extra claims clause in the relevant award variation (or order to vary the award) but left open that issue of such a clause until the Full Bench determines the future disposition of the PSA's application (at [43]) which has never been resolved. This course of action would itself appear to be inconsistent with cl 6(1)(d) since whether a "no extra claims clause" should be included in the relevant award was a matter the subject of those proceedings and indeed one of the real areas of differences between the parties to those proceedings.

The obligation on the Commission to impose a "no extra claims" provision in an award or an order (which would include an order varying an existing award) is derived from the terms of the Regulation and from cl 6(1)(d) of the Regulation in particular. This subparagraph provides the statutory requirement for inserting into awards and orders the no extra claims provisions. This clause relevantly provides that awards and orders are to resolve all issues the subject of the proceedings and are not to allow extra claims to be made during the term of the award or order.

30 As I understand the reasons of the Full Bench in the PSA case, the decision not to include a "no extra claims" clause was based on a number of factors. The Full Bench identified problems with the wording of the proposed clause. It was predicated upon agreement between the parties where there was no such agreement. It also, in terms, sought to impose a requirement that no proceedings, claims or demands will be instituted before "... any other industrial tribunal". The Full Bench identified an obvious difficulty with this requirement, namely, the power of the Commission to make an order precluding claims made before other Tribunals. Another difficulty identified by the Full Bench was that the terms of the "no extra claims" provision on their face would preclude claims otherwise permitted under the 2011 Regulation. These difficulties arise directly in the present proceedings. Given these matters, no sufficient basis has been established to warrant the inclusion of a "no extra claims" clause when awarding a final increase in salaries of 2.5 per cent.

Variation or Award

31 The remaining issue in contention is whether the Commission should award the 2.5 per cent increase by way of a variation of the 2008 Award or by making a new Award.

32 The 2008 Award is beyond its nominal date. Any amendment to the now "expired" 2008 Award, requires the Commission to be satisfied in accordance with s 17(3)(d) of the Act. According to the Department, an assessment of the public interest must be undertaken in the context of the relevant legislative framework which includes s 146C. The Department made further written submissions on this issue extracted below:

The Regulation, anticipates an "award or order" having a "term" (in Reg 6(1)(d)). An award that has expired by passing its nominal date no longer has a term and any variation to that award (as distinct from the making of a new award to replace it) can have no term.

Secondly, consistent with the terms of the Regulation, the Act also anticipates the making of awards rather than the continual variation of awards beyond their nominal term (see ss 3, 10, 16, 19 and 20).

The public interest is not served by undermining the Regulations or budget certainty and fiscal restraint that the Regulation is intended to provide.

No ground or reason is advanced to justify a variation of an award as opposed to the making of a new award.

33 In response, the PSA contended that there are no requirements in the 2011 Regulation for a new Award to be made as opposed to a variation. The PSA also contended that a new Award should not be made in circumstances where, with the authorisation of the Full Bench in the PSA case, its residual claim is extant in those proceedings. The PSA, it was said, should have the capacity to pursue that claim. The PSA also took issue with the Department's contention that the Act anticipates the making of Awards rather than continual variations. According to the PSA, there is no jurisdictional basis upon which a party may be barred from making an application for a variation. The making of a variation is contemplated under the terms of the Act.

34 In the Commission's view, reg 6(1)(d) provides no necessary foundation for making an Award instead of a variation. The Act provides for variations to Awards, whether or not beyond their nominal terms: see, for example, ss 17, 52 and 136. These sections confirm a legislative scheme which does not give precedence to the making of an Award over the making of a variation. Both are equally available. The objects of the Act (s 3) do not suggest the contrary. Notably, the Department has not supported its proposition with the benefit of any authorities. The suggestion that the 2011 Regulation is "undermined" by the making of a variation to an "expired" Award is not supported by any further submissions. It is not said how the 2011 Regulation would be "undermined". The suggestion is unsustainable when regard is had to s 17(3)(d) of the Act which expressly provides for variations to be made to Awards beyond their nominal date.

35 In the PSA case, the Full Bench proposed to vary the Awards, the subject of the counter applications, rather than make new Awards. The Commission proposes to adopt the same course.

Other matters

36 During oral hearing, the parties made submissions about the nature of reg 6(1)(a). The PSA contended that it was mandatory in nature notwithstanding the appearance of the word "may". According to the PSA, the regulation is to be read by reference to s 146C of the Act and reg 4. Reg 4 provides that matters set out in the 2011 Regulation, which are declared for the purposes of s 146C to be aspects of government policy, "... are to be given effect to by the Industrial Relations Commission when making or varying awards or orders". The effect of these provisions according to the PSA is that the Commission is required to grant an application which conforms to the terms of the policy. The Department agreed that reg 6(1)(a) was mandatory, but contended that the regulation should be read as vesting a discretion in the Commission to award increases and if the Commission exercises its discretion to award an increase it is obliged under the terms of the regulation to ensure increases do not exceed employee-related costs by more than 2.5 per cent (the mandatory component).

37 It is not necessary for this Commission to reach any concluded view as to the nature and construction of reg 6(1)(a) since both parties agreed to the single increase of 2.5 per cent per annum.

38 As for the Department's counter-proposal which sought that Forests NSW employees be excluded from the 2012 Award, as well as proposing minor amendments to clauses 2 and 6, these are matters that may be considered if and when any formal application is made.

Decision last updated: 06 July 2012