TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s29 application for hearing of an industrial dispute

Health Services Union of Australia, Tasmania No1 Branch
(T13996 of 2012)

and

Minister administering the State Service Act 2000/Department of Health and Human Services

President Tim Abey	HOBART, 1 May  2013	

Industrial dispute - amalgamation of Commonwealth and Tasmanian Pathology Laboratories 1985 - transfer from Commonwealth to Tasmanian Public Service - Commonwealth and State agreement - decision T732 of 1987 – no disadvantage as consequence of transfer – meaning and extent of no disadvantage undertaking – clarification- application for orders declined

DECISION

(1)	On 26 November 2012 the Health Services Union of Australia, Tasmania No. 1 Branch (the applicant) on behalf of Mr Madden, applied to the President, pursuant to s.29(1) of the Industrial Relations Act 1984 (the Act) for a hearing before a Commissioner in respect of an industrial dispute with the Minister administering the State Service Act 2000/Department of Health and Human Services (the respondent) arising out of the employment of an employee from 1995 to present, which allegedly contradicts decision T732/1987 of TIC concerning the transfer of Commonwealth employees to the State system at the time 

(2)	This application was the subject of a conciliation conference on 17 December 2012. The matter failed to resolve and subsequently the parties advised that they wished the Commission to determine the matter through the medium of written submissions. Accordingly, Directions were issued with final submissions closing on 28 March 2013.

(3)	During the period between February 1985 and July 1986 Mr Madden was part of a group of Scientific Technical Officers who transferred from the Commonwealth to the Tasmanian Public Service as a consequence of an amalgamation of the Commonwealth and Tasmanian Pathology laboratories based at the Launceston General Hospital (LGH). This occurred on 28 November 1985.

(4)	There can be no doubt there was an agreement at the time between the Commonwealth and the State (the agreement) that the employees involved would not be ‘disadvantaged’ as a consequence of this transfer. What is in dispute is the meaning and extent of this ‘no disadvantage’ undertaking.

(5)	The agreement is not documented in any formal sense of the word. Mr Madden contends that the agreement covers both salary and conditions and was to remain in place indefinitely. There is also on the periphery an attendant issue relating to the 
appropriate classification for Mr Madden. The respondent maintains that the agreement relates to salary only and applied at single point in time. That is, there was no agreement that Mr Madden would be remunerated as if he was a Commonwealth employee indefinitely post the amalgamation.

The Claim

(6)	The applicant presented meticulously prepared calculations outlining the difference between what he was actually paid compared with that which Mr Madden maintains he should have been paid in accordance with the agreement. The latter is premised on a career path which (by inference) Mr Madden contends was a likely outcome had he remained a Commonwealth employee. The period in question is 1995 until 2012. (Note: The applicant maintains that the ‘disadvantage’ did not emerge until 1995, hence there is no claim for the period 28/11/1985 to 1995).

(7)	The claim is summarised as follows:

Cumulative difference in total income based on salary 			$91504
Loss of Award conditions							$51000
Interest @ 5% pa.								$53208
Less
MRDO paid on 30/1/2008				$439
Interest on MRDO					$120
Total										$195153

(8)	I accept Mr Sales’ submission that these calculations are based on a hypothetical career path involving a number of Commonwealth industrial instruments and promotions which is not at this point supported by evidence. However before turning to that question, it is necessary to determine whether or not the agreement was intended to have effect prospectively and indefinitely.

T732 of 1987 Hospital Employees (Public Hospitals) Award

(9)	Following the amalgamation it became apparent that former Commonwealth employees would be disadvantaged as the Technical Stream of the then Hospital Employees (Public Hospitals) Award did not extend far enough to cover the transferred Technical Officers at their previous Commonwealth salary level. Accordingly an application was filed by the Hospital Employees Federation No.2 Branch (HEF), the effect of which was to introduce new classification levels for Technical Officers into the State Award, which equated with the salary levels applicable under the relevant Commonwealth Award which previously applied to the transferred employees. The application clearly specified that the new levels only applied to the five officers transferred from the Commonwealth.

(10)	The application to vary was lodged on 1 April 1987 whereas the transfer occurred on 28 November 1985. This delay was the subject of considerable debate in the subsequent hearing before King C on 4 May 1987. Suffice to say that in his decision dated 3 June 1987, the Commissioner did not attach any blame for the delay to the advocates appearing in the case.

(11)	As previously indicated, there does not appear to be any clear documentary evidence which spells out the terms of the agreement. Hence the only means by which a 
conclusion might be drawn as to the intent of the parties at the time is an examination of the proceedings before King C. 
(12)	Mr Holden for the HEF submitted:

“….we will certainly be looking to the Commission to ensure that he employees, who are subject to this application, limited as they are, receive the protection that they expected when the transfer of control was to be effected. 

One of the major points of that transfer was that their income was to be maintained and guaranteed. 
The agreement is as set out in the application, as amended today.

The rates of pay specified in the agreement, in terms of the technical officer grade 1 and grade 2, are the rates of pay which apply in the Technical Officers, Medical Officers, Hospital General Staff Award, which is a Commonwealth award.

The rates of pay which apply in respect of senior technical officers are rates of pay which have been introduced by the parties to cover a particular situation which now applies.

The employees who in fact were appointed to those positions in November 1985, which I will prove by way of exhibit at a later stage, had, under their previous terms of employment, promotional opportunities available to them. Those promotional opportunities no longer exist and in effect a new classification has been introduced to cover those people.”

(13)	Correspondence dated 15 November 1985 from the LGH to one of the transferred employees was tendered. Relevantly it stated:

“As a result of the agreement between the State and Commonwealth Governments in respect of amalgamation of the Commonwealth Pathology Laboratory and the Hospital Pathology Laboratory, I have pleasure in advising that you have been appointed to the position of Senior Technical Officer, Position No. E2000/402, as from the 28th November 1985.

The salary classification for this position will be Hospital Technician, Class VII, Grade 2 $22,715 per annum plus an allowance of $2,293 per annum, i.e. a commencing salary of $25,008 per annum. The recently handed down national wage increase of 3.8% has not been included in the abovementioned salary.”

It is reasonable to assume that similar correspondence was sent to the four other employees subject to the transfer.

(14)	It was common ground that the allowance referred to in paragraph 2 was an amount to continue salary maintenance, presumably pending an appropriate Award variation. 

(15)	Ms Smith for the Minister submitted:

“In order to facilitate the amalgamation, the Director-General agreed that ex-Commonwealth staff should not be disadvantaged after taking up positions within the Launceston General Hospital Laboratory.

In practical terms this meant that their salaries would be maintained at the level they had previously received.

With the exception of those employees classified as technical officers, all other Commonwealth staff could be easily accommodated within the existing award structures.

Having due consideration for the nature of the duties performed by technical officers, the most appropriate classification within the Hospital Employees (Public Hospitals) Award was that of Hospital Technician.

It was at this point that the problem to which we address ourselves today became apparent.

The salary scale pertaining to the classification of Hospital; Technician does not extend far enough to cover all the technical officers at their previous salary level.

In order to achieve this, allowances have been paid to the technical officers.  However this situation was only ever intended as an interim measure and is obviously not satisfactory as a long-term solution.

It has always been the intention of the Director-General to address this matter and seek to have these employees adequately covered by the Hospital Employees (Public Hospitals) Award.”

(16)	The main focus during the hearing related to the application for retrospectivity to 28 November 1985, which was an agreed position. It would seem that the importance of retrospectivity (given that the employees were in receipt of a salary maintenance allowance) related to incremental adjustments which would not apply in the absence of retrospectively. Mr Holden said:

“If Mr Stevenson’s appointment is taken from November ‘85, and he was placed on the first year of incremental service as a senior technical officer from that date, he would now effectively be into his second year, and as of November 28, ’87, would move on to the top level, in effect the third year.

Similarly, other employees, whom this application is about, that is, employees whose employment was transferred from the Commonwealth to State control, will likewise be disadvantaged if the decision is not made retrospective to November 28, ’85.”

(17)	Ms Smith submitted:

“The delay in formalising this has been considerable and during this time the employees concerned have not been able to progress through the incremental steps that were previously available to them under the Commonwealth structure for technical officers.

The Director-General therefore believes that it is both right and fair that the classifications be deemed to have effect from the date upon which these employees were appointed to positions within the health agency.”
(18)	In his decision dated 3 June 1987, King C noted:

“There is agreement between the parties to this matter that the award should be varied to include the earlier detailed classifications and salary scales.  There is also agreement that the award should be varied retrospectively to 28 November 1985.
The retrospective variation would allow the Minister to grant increments which have been withheld form three employees and the reclassification of the other two, to Senior Technical Officer form the November 1985 date.  This action is necessary it was submitted, to honour a commitment given to the employees at the time of their transfer.”

(19)	After noting certain administrative uncertainties associated with the history of this transfer, the Commissioner concluded:

“In the circumstances, therefore, I am prepared to vary the Award by inserting the classifications “technical Officer” and “Senior Technical Officer” along with the agreed salary scales and definitions.  I emphasize that I am doing so on the basis of the special and unusual circumstances involved and that such action cannot be used by other employees as grounds for salary claims.” 

(20)	However the Commissioner declined to accept the parties’ position in relation to retrospectivity. He said:

“I believe the matters addressed in this decision are important and should be given appropriate priority. If they are not given that priority it cannot be expected that this Commission will give award retrospectivity involving salary adjustments over a period of some eighteen months.

In all the circumstances the date of operation of the award variation will be 9 March 1987.  Also included in the order will be the updated salaries reflecting this Commission’s National Wage Case decision.” 

Conclusion

(21)	Throughout the proceedings before King C there is no reference whatsoever as to what arrangements were to apply futuristically. This is not entirely surprising. The then Wage Fixing Principle 12(c) read:

“(c)	In awards regulating the employment of workers previously covered by a Federal award or determination, existing rates and conditions prima facie will be the proper award rates and conditions.”

(22)	This principle was in my view widely accepted as meaning that prima facie, existing wage rates and conditions were the appropriate starting point for a new State award covering employees previously subject to Commonwealth jurisdiction. Thereafter adjustments and variations would be consistent with the award/jurisdiction subsequently prevailing, which in this case would be the Hospital Employees (Public Hospitals) Award.

(23)	If this general rule was not to be followed, a specific provision reflecting the intention of the parties and the Commission would be included in the industrial instrument. This would be an industrially unusual arrangement which more likely would be reflected in a discrete registered industrial agreement, although, potentially at least, such an arrangement could be reflected in an Award. Suffice to observe that in this case, no such provision exists, and hence the reasonable conclusion is that future adjustments would be consistent with the now operative award (Hospitals Award), not an industrial instrument which previously applied in another jurisdiction. Indeed King C noted in his decision:

“Also included in the order will be the updated salaries reflecting this Commission’s National Wage Case decision.”(my emphasis)

(24)	This is an important point in that whilst historically, National Wage decisions of this Commission tended to follow the Commonwealth pronouncements, this was not a slavish commitment and indeed became more and more tenuous in the years that followed. The $10 per week increase which King C incorporated in his order was in fact the first part of a decision which introduced a second component known as the ‘Second Tier’. This provided for wage adjustments of up to 4% on an award by award basis, dependent on efficiencies achieved and with variable operative dates. There then followed a series of decisions relating to concepts such as structural efficiency and minimum rates adjustments culminating in a move to enterprise based bargaining (with attendant differing outcomes). National Wage decisions were increasingly limited to a ‘safety net’ concept, which in many, if not most cases, had no application to Public Sector awards.

(25)	Some 28 years after the event, and in the absence of documentation, the Commission is asked to determine what was in the minds of the parties at the time. In such circumstances the appropriate course is to look for an arrangement which industrial parties would normally expect to apply.

(26)	There can be no doubt that the parties intended that at the time of the transfer, salaries that previously applied under Commonwealth employment should be maintained and reflected in the State Award. It was in my view an agreement to reflect an outcome at a given point in time, and there is no available evidence which supports the applicant’s contention that this arrangement should continue indefinitely. 

(27)	Accordingly I am unable to accept the applicant’s proposition and it is therefore unnecessary to examine the nature of the career path Mr Madden maintains would have applied had he continued in Commonwealth employment.

Conditions of Employment 

(28)	Mr Madden asserts that at the time of the 1995 translation, award conditions were lost that were part of his previous Commonwealth arrangements. This he estimated was the equivalent of approx. $2000 per annum. This loss also applied to professional officers. However in the latter case the salary was increased by approximately $2000 per annum in compensation, an arrangement which did not extend to technical officers, Mr Madden submitted. The main award conditions involved were:

•	On call payments for third and subsequent calls.
•	On call allowance reduced.
•	Overtime payments reduced.

(29)	The respondent contends that Mr Madden seeks to be covered by “multiple awards concurrently, for the same work, essentially cherry picking the best parts of each.”

(30)	The letter of appointment to Mr Stevenson referred to in the preceding section, states:

“All other benefits relating to conditions of service are contained in the appropriate Hospital Awards.”

(31)	In my view this puts this matter beyond doubt. The relevant Award for conditions of employment was initially the Hospital Employees (Public Hospitals) Award as subsequently superseded and replaced, to the exclusion of all previously applicable Commonwealth instruments.

(32)	Whilst it is not relevant to this claim I observe that the State Award/s may well have other provisions which are more favourable than that which would otherwise have applied under Commonwealth law.

(33)	I am unable to accept the Applicant’s contention in relation to conditions of employment.

The Appropriate Classification

(34)	A recurring issue during Mr Madden’s period of employment is the matter of the appropriate classification. The HSUA submission states:

“During the span of years it has been erroneously argued as a classification dispute. Whilst it is clear that Mr Madden has previously had some legitimate arguments to be classified as a professional employee that is not the basis of the dispute.”

(35)	Nonetheless the submission goes on to deal with classification related matters including Mr Madden’s membership of the Australian Society of Microbiology and also contends that Mr Madden has always performed work greater than that assigned by his Statement of Duties.

(36)	This contention is refuted by the respondent, which makes the following points:

•	In 1996 the Hospital Employees (Public Hospitals) Award was superseded by the implementation of the Community and Health Services (Public Sector) Award. Mr Madden undertook a classification appeal pursuant to s66[1][c] of the then Tasmanian State Service Act 1984. This application was unsuccessful and Mr Madden was classified in the Technical stream at Technical Level 4, a position the HACSU contends Mr Madden never formally accepted. Nonetheless in correspondence from the Commissioner for Review to the Employer dated 13 August 1996 relating inter alia to Mr Madden, it states:

•	“You are advised that the above named members of your agency have accepted your offer to increase their classification to Technical level 4.This now resolves these appeals lodged with this office.’
•	As this agreement is now formalised you are directed to arrange payment of the salary at the higher level.”

•	In 2009, Mr Madden translated from Technical Level 4 to the General Stream Band 5 under the new Health and Human Services [Tasmanian State Service] Award. Mr Madden sought an internal review of his classification, with the outcome reaffirming his Band 5 status.

•	Mr Madden sought a review of the SOD through the Office of the State Service Commission. A Record of Outcome dated 27 July 2011 notes “The review concerned the accuracy of the applicant’s Statement of Duties.” Following conciliation conferences on 17 March and 9 June 2011, the Acting Commissioner states;

•	“On 26 July 2011 I was informed by the employee’s representative that no further action was required from the Office of the State Service Commissioner in this matter. As a consequence my file has been closed with the consent of the parties.”

•	A further internal assessment of the revised Statement of Duties reaffirmed Band 5. Mr Madden then lodged a review application with the TIC. However in a letter dated 18 April 2012, HACSU advised that “this dispute has now been resolved”… and requested the file be closed.

Conclusion

(37)	The Commission as presently constituted does not have a view as to whether Mr Madden should be classified in the technical or professional stream. The question simply has not been before the Commission. 

(38)	I do note however that Mr Madden has participated in two formal reviews as outlined above, and whilst he may well be unhappy with the outcome, I am unable to see how his claim can be pursued under the current application.

Order

(39)	In light of the above conclusions I decline to grant the orders sought by the applicant.

(40)	Pursuant to s 21(2)(c) I refrain from further hearing and close the file.

`

Tim Abey
PRESIDENT 

Appearances:
Mr L Digney for HSU1
Mr S Madden
Mr P Baker for MASSA
Mr T Sales for DHHS

Date and place of hearing:
2012
December 17
2013 Hobart
Written submissions closing 28 March 2013