TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.29 application for hearing of industrial dispute

The Community and Public Sector Union
(State Public Services Federation Tasmania) Inc
(T11180 of 2003)

and

Minister Administering the State Service Act 2000

 

COMMISSIONER T J ABEY

HOBART, 26 February 2004

Industrial dispute - alleged refusal of employer to pay 'District Allowance' - General Conditions of Employment Award - Bass Strait Islands - award to be varied - order issued

REASONS FOR DECISION

[1] On 27 November 2003, The Community and Public Sector Union (State Public Services Federation Tasmania) Inc (CPSU) (the applicant) applied to the President, pursuant to Section 29(1) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with the Minister Administering the State Service Act 2000.

[2] This application concerns the refusal of the Department of Primary Industries, Water and Environment [DPIWE] to pay the "District Allowance" prescribed in the General Conditions of Employment Award to employees who were already resident on a Bass Strait island at the time of engagement by the Department.

[3] The matter was listed for a conciliation conference on 18 December 2003 and subsequently was listed for hearing on 12 February 2004. On both occasions Mr R Miller appeared for the CPSU. Ms K Steenhuis and Mr G Mason appeared for the Minister Administering the State Service Act 2000.

[4] Whilst the application was couched in terms of "... all eligible CPSU members ..." the material presented to the Commission related to two employees located at Service Tasmania, Whitemark, Flinders Island. They are:

• Mr Marc Cobham: Administration and Clerical Officer, commenced 8 May 2000.
• Lyn Wilson: Administration and Clerical Officer, commenced 1 September 2003.

[5] In both cases the employees were resident on Flinders Island prior to commencing employment with DPIWE.

[6] The relevant part of Clause 24 Location Allowances reads:

"(b)   District

(i) The purpose of this General Allowance is to compensate for excess costs necessarily incurred by an employee living in an 'isolated area' and without limiting the foregoing includes partial reimbursement for STD, freight, fuel and depreciation costs.

(ii) Where a person is stationed permanently in one or other of the following districts he may, on the determination of the controlling authority, be paid an allowance in accordance with the following rates:

[7] Mr Miller traced the history of the unsuccessful attempts by the two employees and the CPSU to have the allowance paid. E-mail from the DPIWE to the CPSU dated 19 November 2003 summarises the Department's policy position:1

"I can confirm DPIWE does not pay the allowance to employees residing on the Island at the time of appointment due to previous advice received from the Office of Industrial Relations. The advice is that only those persons who actually incur disadvantage by being posted to a remote location should have an entitlement for compensation.

We contacted the Office of Industrial Relations at the time of this latest query and were advised that nothing had changed in relation to their advice. As such the agency practice of not paying this allowance also remains unchanged.

On numerous occasions I spoke to the staff members concerned and advised them verbally of the reason behind us seeking the advice to confirm non payment of the allowance. In addition I relayed any information to them as and when I received it. They were advised in writing that DPIWE would not be paying based on advice received by the Office of Industrial Relations.

The advice is that only those persons who actually incur disadvantage by being posted to a remote location should have an entitlement for compensation."

[8] Mr Miller submitted that the words in the clause cannot be read down to support the proposition that the allowance is payable only to employees who are relocated to a remote location. He said that under various State Service Acts since 1984 the notion of permanent assignment is no longer a reality. Especially with the introduction of the State Service Act 2000 "the issue of permanency as it is commonly known has been removed in that a person doesn't own a position."2

[9] Mr Miller instanced the Department of Education which paid the allowance to all eligible employees, irrespective of place of residence at the time of recruitment.

[10] Mr Miller also referred to a decision of Robinson DP3 in which he determined that the allowance should be paid to an employee in circumstances that were very similar to the instant application.

[11] The position of the Department was summarised by Ms Steenhuis as follows:4

"Our position is though that the agency applies through administrative policy the payment of district allowances to those employees that have been recruited and relocated from places other than the islands to take up positions on the islands and who of necessity must live on the island as an implied condition to give effect to their employment. Policy stems from the discretionary element of the award clause expressed in clause 24(b)(ii) as:

May on the determination of the controlling authority.

It is those persons who have been recruited and relocated by appointment or transfer to the islands by the agency whom we consider as a consequence of having to relocate incur the excess costs referred to in clause 24(b) of the award. That is we assume excess cost, amongst other things STD, freight, fuel, depreciation, which they presumably would not otherwise have incurred had they remained for example in a metropolitan area of mainland Tasmania. For policy purposes these persons are to be distinguished from those persons who are recruited to work for the agency and who at the time of or prior to recruitment were resident on the islands and there was no causal link between that residency and subsequent agency employment."

[12] Ms Steenhuis acknowledged that employees recruited from the island also bore the additional costs identified in the clause, but did so "as a matter of residential choice".5

[13] Ms Steenhuis rejected the relevance of the practices of other agencies [Education] being "merely reflective of an alternative view arising from discretionary considerations".6

[14] Ms Steenhuis submitted that should the Commission be persuaded to a view which was contrary to that held by the Department, then the Commission should follow the path set in train by Robinson DP and require the CPSU to pursue an appropriate award variation.

T3218 of 1991

[15] This matter concerned the notification of an industrial dispute by the then TPSA relating to the refusal of the Department of Primary Industry to pay the "District Allowance" to Mrs K S Beeton, appointed as a temporary clerical officer at the Flinders Island office of the Department in October 1989.

[16] In his decision dated 4 September 1991, Robinson DP said:

"In my view the wording of Clause 8 of the General Conditions of Service Award contains expressions which are anachronistic and are in need of urgent review.

It is ludicrous for an award such as this to contain an important provision relating to the payment of a significant allowance to certain employees "on the determination of the controlling authority". Such type of expression is a carry-over from the pre-Industrial Commission times when the Public Service Board was both the employer and the wage and conditions fixing authority for the Public Service. That most unsatisfactory system was abolished over six years ago by legislation.

This Commission has the responsibility of determining award rights and obligations of employees and employers and it cannot delegate that responsibility to any single interested party to determine industrial matters.

The role of the Department of Primary Industry, acting as controlling authority, is completely different to the role of this Commission and it can hardly be objective in deciding such issues. This may be explained in its reasons for recruiting local residents of Bass Strait Islands and adopting a policy of not paying the District Allowance to "temporary" employees, even when they have been employed for a considerable period of time.

The Department of Primary Industry relies upon the wording of Clause 8.2.1 of the award to justify its position and in correspondence to the TPSA of 3 July 1990, said that there can be no "excess costs necessarily incurred" by an employee and posed the rhetorical question: "In excess of what?"

I have not the slightest doubt that the "District Allowance" is for living in the district concerned. And living in such district (i.e. Bass Strait Islands) is more expensive than living in other areas of Tasmania which are not so isolated. The award clause even nominates some such extra costs as are necessarily incurred by way of example.

The award then specifies different rates of allowance for persons either with or without dependent relatives living with the employee.

The allowance then forms part of an employee's rate of wage.

In my view the controlling authority has fallen into error in interpreting the award and is manifestly wrong in concluding that employees stationed at Flinders Island should not be entitled to be paid the "District Allowance" on the basis that they are classified as "temporary".

I find also that the employer concerned in this matter has misused a perceived discretion to refuse a payment contained in an award and in doing so has acted harshly and unfairly to its servant.

And as earlier stated I do not believe that the function of determining industrial matters which is given to this Commission by the Industrial Relations Act 1984 can be transferred to a controlling authority.

Accordingly I decide that in settlement of this particular dispute:

1. Mrs K.S. Beeton be paid the District Allowance prescribed in Clause 8 of the General Conditions of Service Award from the date of her appointment to a position located on Flinders Island in Bass Strait on 23 October 1989.

2. That the Tasmanian Public Service Association make immediate application to vary the said award clause to:

(a) Delete the word "permanently" from Clause 8.2.2; and

(b) Delete the words "may, on the determination of the controlling authority" and substitute the word "shall" in Clause 8.2.2.

The file will remain open until such time as I am satisfied that the terms of settlement imposed upon both organisations have been fully met."

[17] In a subsequent decision issued on 8 October 1991 the Deputy President noted confirmation that the dispute had been settled in the required manner. Accordingly, the file was closed.

[18] Subsequent events are clouded in uncertainty. Ms Steenhuis provided the following explanation:7

"The particular term of the Deputy President's order was complied with by the organisation by filing the required application T3424 of 1991 and shortly thereafter was followed by a counter section 23 application to vary the award from the employer, T3526 of 1991, the terms of which I understand sought to distinguish between the local and off-shore recruitment as the determination for payment of the allowance and consistent with the approach adopted to date by DPIWE. Those matters went before the president for hearing during the course of which it was agreed that the issue of district allowances be, for want of better terminology, put on the agenda of the sub-Committee which had been formed to review public safety conditions of service in the context of implementing the terms of the then structural efficiency principle which I am sure some of us remember.

The work of the Committee lapsed as a consequence of the formal abandonment of the then service-wide process for dealing with award restructuring. Conditions reform and workplace efficiency issues to which the Full Bench decision of 23 April 1993 in matter T2399 of 1990 relates. Mr Commissioner, the matter has lain dormant in a formal sense since 1991 until re-ignited, I suppose, by the current application."

[19] It follows that whilst there has been technical compliance with the Deputy President's direction [the application was lodged], it has not been pursued to finality.

Findings

[20] Neither the parties nor the Commission through its own research could throw any light on the rationale behind the District Allowance clause at the time when it was first incorporated in the award, or more likely, the award predecessors.

[21] The purpose of the allowance as described in subclause (b)(i) "is to compensate for excess costs necessarily incurred by an employee living in an 'isolated area' and without limiting the foregoing includes partial reimbursement for STD, freight, fuel and depreciation costs".

[22] On the plain meaning of these words there is no basis for distinguishing between categories of employees based on place of residence at the time of recruitment.

[23] In my view, had the allowance been intended to apply only in circumstances whereby an employee is relocated, the clause would have clearly said so.

[24] To that extent I agree with the finding of Robinson DP in the earlier matter.

[25] I turn now to the discretion vested in the controlling authority pursuant to subclause (b)(ii) and upon which the Department relies. It is clear that this discretion remains in the award and, as such, it would not be open to me to conclude that the award had been breached in terms of an offence against the Act.

[26] However the application before me does not assert that the award has been breached in a legal sense. The matter to be determined relates to an industrial dispute, for which a remedy pursuant to s.31 is available.

[27] I agree with Robinson DP that the expression "on the determination of the controlling authority" is anachronistic and has no place in a clause of this nature. Whether or not an allowance is paid should depend solely on whether an individual qualifies, not the unfettered discretion of the Agency.

[28] In supporting the Deputy President's conclusion, it does not necessarily follow that I endorse the entirety of his reasons and observations.

[29] I have no doubt that the allowance should be paid to the two employees in question. The only question that remains is the operative date.

[30] Where there is some doubt as to the application of an award provision I would, absent special circumstances, be reluctant to award retrospective application beyond the date when the matter was first raised.

[31] In this case there are however special factors that justify a different approach.

[32] Firstly, the words in the award are clear and in my view cannot be read down to support the policy position of the Department. Indeed Ms Steenhuis' submission relied solely on the discretion open to the agency, rather than the words of subclause (b)(i).

[33] Secondly, the decision of Robinson DP was clear and precise, both in terms of the payment of the allowance to Ms Beeton, and the manner in which the award variation application was to be couched.

[34] Whilst it does not specifically say so, it is reasonable to conclude that the Deputy President's direction in relation to the award variation was made pursuant to s.31(3) of the Act. The Deputy President did not close the file until he was satisfied that the terms of his decision had been satisfied. The fact that the application was not subsequently pursued was of course a matter beyond his control.

[35] It is however pertinent that no alternative award variation which might have supported the Department's policy position was subsequently pursued by the employer.

[36] In the circumstances I am surprised that DPIWE has apparently not observed the spirit and intent of the Deputy President's decision in employment arrangements subsequent to that of Ms Beeton.

[37] For the above reasons I have decided that the allowance should be paid retrospective to the date of engagement in both cases.

ORDER

Pursuant to s.31 of the Industrial Relations Act 1984, I hereby order that:

Tim Abey
COMMISSIONER

Appearances:
Mr R Miller for The Community and Public Sector Union (State Public Services Federation Tasmania) Inc.
Ms K Steenhuis and Mr G Mason for the Minister Administering the State Service Act 2000

Date and Place of Hearing:
2003
December 18
2004
February 12
Hobart

1 Exhibit A3
2 Transcript PN 53
3 T3218 of 1991
4 Transcript PN 103
5 Transcript PN 106
6 Transcript PN 107
7 Transcript PN 114