[2013] FWC 7947

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 5, Item 6—Review of all modern awards (other than modern enterprise and State PS awards) after first 2 years

National Tertiary Education Industry Union
(AM2012/187 and another)

Educational services
DEPUTY PRESIDENT SMITH	MELBOURNE, 14 OCTOBER 2013

Modern Award Review 2012—Higher Education Industry—General Staff—Award 2010 [MA000007] and the Higher Education Industry—Academic Staff—Award 2010 [MA000006]—seeking to amend the coverage of both awards to include Research Institutes (as defined) into the awards.

Introduction

[1] These are applications by the National Tertiary Education Industry Union (NTEU) for a variation to the Higher Education Industry—General Staff—Award 2010 [MA000007] (the General Staff Award) and the Higher Education Industry—Academic Staff—Award 2010 [MA000006] (the Academic Staff Award).

[2] Clause 4.1 of the General Staff Award is sought to be varied to include the words “Research Institutes” as follows:

4.1 This industry award covers employers throughout Australia in the higher education industry as defined, Research Institutes and University Unions and Student Unions as defined, and their employees engaged as general staff in the classifications listed in clause 15—Rates of Pay in this award to the exclusion of any other modern award.

[3] Further it sought the addition of a definition of Research Institute in clause 3.1:

Research Institute means a corporate entity,

• whose primary activity is to undertake medical, health, scientific or social research, and,



• which is established for a charitable, educational or other public purpose, and



• which is either affiliated to, or has a like formal association with a university; or where employees hold academic titles associated with higher education, and



• where the supervision of the research work of postgraduate research student occurs,




but not including:

• any entity whose primary business is the provision of medical, health, social, or religious services to patients, customers or clients,



• any State, Territory or Commonwealth Department or Agency,



• any for-profit corporation.

[4] The Academic Staff Award is sought to be varied by including the definition of Research Institute in identical terms and by amending the application clause as follows:

This industry award covers employers throughout Australia in the higher education industry and research institutes, as defined and their academic staff in the classifications listed in clause 18 to the exclusion of any other modern award.

[5] It can be seen that the purpose of the applications is to amend the coverage of both awards to include Research Institutes (as defined).

[6] In the proceedings, Ms Kenna and Mr McAlpine appeared for the NTEU; Mr Ruskin, appeared, with permission, for the Association of Australian Medical Research Institutes (AAMRI); Ms Pugsley appeared for the Australian Higher Education Industrial Association (AHEIA) and Mr Howard appeared for Melbourne University, Monash University and the University of Western Australia.

[7] The substance of these applications is that the NTEU assert that work performed by staff at these institutes is analogous or the same as work performed at universities and therefore the same terms and conditions of employment should apply. At the opening of the proceedings AAMRI made application to dismiss the matter given that:

• The NTEU had sought to cover Research Institutes in the original award modernisation process.



• The modern awards did not cover Research Institutes.



• There had been no changed circumstances which would now warrant a consideration of the current application.



• There is no necessity to vary the award.

[8] At that time a ruling was given that I would consider the case as a whole and consider those issues in the final decision.

Award modernisation background

[9] The NTEU sought to cover research institutes in the award modernisation process but it was given little to no emphasis.

[10] The higher education sector was contained within the priority awards for the award modernisation process. In the submission of the Group of 8 Universities (Go8) made on 1 August 2008 it was put:

Further, there have been discussions between the Go8, the AHEIA, the NTEU and the CPSU about the scope of any award or awards made as part of the award modernisation process for industries on the priority list. With one main difference (relating to English language teachers employed by universities) there is broad consensus amongst those parties that in this priority list part of the process, that any award or awards made should focus on universities and should not extend to binding non-university employers, such as university controlled entities, research institutes, private providers of post-school education, student unions or TAFEs, as previously identified in exhibit NTEU1.

[11] On 12 September 2008 exposure drafts were released for comment and they did not include research institutes within the application clause. The decision making the awards was handed down on 19 December 2008 [[2008] AIRCFB 1000]. The issue of research institutes was not addressed as it did not create much focus in the proceeding. In short, little was said which required consideration by the Full Bench. The questions surrounding research as it impacts upon an academics time, together with fixed term contracts, were more the focus than external research institutes.

Legislative framework

[12] As a matter of convenience, in approaching these matters I have done so against the background of a number of Full Bench decisions which describe how a review under Item 6 of Schedule 5 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 should be approached. In particular, I have had regard to the decision of the Full Bench in the Modern Awards Review Decision 1 and the Modern Award Review 2012—Penalty Rates Decision.2 In addition, consideration has been given to s.134 of the Fair Work Act 2009 (the Act) and to ensure that awards are operating effectively without anomalies or technical problems arising from the Part 10A award modernisation process.

The contentions and evidence

NTEU

[13] The NTEU submitted that the number of employees which would be covered by the application was over 8000 and occupied roles such as academic researchers, technical and scientific staff, managerial and administrative staff as well as a small number of manual and trades employees. It submitted that because of the nature of the work, the labour market of the two areas—universities and research institutes overlap. Funding can come from similar sources; there was supervision of postgraduate students and efforts were made in annual reports to highlight linkages between universities and institutes.

[14] A point was made of the titles used by researchers in Institutes such as Professor and Research Fellow which are conferred by universities. NTEU added that a number of post graduate students are supervised by research institute staff.

[15] Significantly, NTEU submitted that the work performed by research staff in universities and in research institutes is substantially the same. Indeed, it was submitted that as many medical research institutes (MRIs) are affiliated with universities and that the funding is often the same, these persons are not part of the health industry but properly part of the industry of academic research.

[16] Attention was drawn to the fact that the Universities and Affiliated Institutions Academic Research Salaries (Victoria and Western Australia) Award 1989 [Transitional] [AT801440] was not terminated [[2011] FWA 6311]. The respondents to that award are:

• The University of Melbourne;



• Monash University;



• LaTrobe University;



• Deakin University;



• Howard Florey Institute of Experimental Physiology and Medicine;



• The Walter and Eliza Hall Institute of Medical Research;



• Ludwig Institute for Cancer Research;



• The Murdoch Institute for Research into Birth Defects Limited;



• Royal Children's Hospital Research Foundation;



• Baker Medical Research Institute;



• St. Vincent's Institute of Medical Research;



• The University of Western Australia;



• Curtin University of Technology;



• Murdoch University;



• Lions Eye Institute of WA (Inc.);



• The Australian Neuromuscular Research Institute;



• Princess Margaret Childrens’ Medical Research Foundation (Inc.); and



• The Western Australian Research Institute for Child Health Ltd.

[17] Two roping-in awards were made which added:

• Macfarlane Burnet Centre for Medical Research [Print M1011]; and



• the Bionic Ear Institute [PR963730].

[18] The NTEU submitted that given the history of sector, job titles, salary and classification structures are often similar. In addition, research staff are eligible to be members of UniSuper—the superannuation fund for the higher education industry.

[19] In support of its application the NTEU provided evidence from the following persons:

• Dr P. Higgs—Senior Fellow at the Burnet Institute.



• Mr D. Trevaks—Senior Technical Officer at the Howard Florey Institute of Neuroscience and Mental Health, University of Melbourne.



• Mr K. McAlpine—currently the education and training officer but with extensive history in senior industrial officer roles.

[20] The evidence of Dr Higgs and Mr Trevaks related their experience in the institutes in which they worked and the nature of their work. In the case of Dr Higgs, he was able to compare his work experience between universities and the institute. His evidence was that the job roles at the institute are equivalent to academic roles in universities. Dr Higgs is also an employee of Curtin University, the National Drug Research Institute and an adjunct fellow with Monash University. Mr Trevaks gave evidence about the integration of his Institute with the University of Melbourne and the fact that job titles are the same or similar to that of the university. He is classified as a higher education worker (HEW) level 6-5 under the Howard Florey Institute Union Enterprise Agreement 2011-2012.

[21] The evidence of Mr McAlpine went to his knowledge of the work performed at the universities and at research institutes. He dealt extensively with the nature of the work and the history of regulation and bargaining in MRIs. He was not cross-examined.

AAMRI

[22] AAMRI submitted that the variation sought would be contrary to the modern award objective for these reasons:

• The coverage of MRIs under the “one size fits all” Higher Education Awards will detract from flexible work practices that reflect the type of work performed by employees from a diverse range of professions and occupations;



• There will be an adverse impact upon employment costs and the regulatory burden, in that MRIs will be required to review and fundamentally change their employment arrangements with employees that are currently covered by occupational awards, in order to render their terms and conditions of employment consistent with the Academic Award or the General Staff Award, as applicable; and



• The work performed by employees of MRIs is not “equal work” to that performed by research academic staff of universities. In addition to the nature of the work being intrinsically different (that is, working towards the advancement of the cure, prevention and treatment of disease, as against developing research to inform curriculum), the work is funded by the government in a very different matter and at a lower level. (Written submissions at paragraph 13)

[23] In addition, AAMRI put that there are no submissions which would support a conclusion that the variations are necessary in order to meet the modern award objective.

[24] In turning to the merit arguments, AAMRI argued that there is no clear industry coverage as this reflects the nature of the activities of the research institutes. It argues that the existing coverage by six modern awards which cover key positions is sufficient. Those awards are:

• Clerks—Private Sector Award 2010 [MA000002];



• Health Professionals and Support Services Award 2010 [MA000027];



• Professional Employees Award 2010 [MA000065];



• Manufacturing and Associated Industries and Occupations Award 2010 [MA000010];



• Medical Practitioners Award 2010 [MA000031]; and



• Nurses Award 2010 [MA000034].

[25] It was conceded that employees of MRIs may hold honorary university appointments but they are not employed for the purpose of providing undergraduate and postgraduate teaching, leading to the conferring of accredited degrees and performing research to support and inform the curriculum.

[26] Whilst accepting that some universities have links with MRIs they also have links with other bodies and that funding for medical research is different and that some funding available to Universities is not available to MRIs; although, some MRIs obtain funding via Universities.

[27] Evidence was called from:

• Prof. T. W. H. Kay—Director of St Vincent’s Institute of Medical Research (SVI);



• Mr D. Lloyd—Chief Operating Officer of the Baker IDI Heart and Diabetes Institute; and



• Dr N. Den Elzen—Executive Officer of AAMRI.

[28] Professor Kay gave extensive evidence on the operation of SVI and the nature of its affiliation with the University of Melbourne and other bodies. The Professor dealt with the academic titles and the role they play as well as the function of supervising PhD students. On the issue of funding, the Professor outlined the relationships with the National Health and Medical Research Council (NHMRC) and the approach to this funding by Universities. It was the evidence of Professor Kay that MRIs have as their purpose preventing, curing and treating of disease and not the provision of education. He contrasted this with universities which exist to provide undergraduate and post-graduate teaching leading to accredited degrees and research to support and inform curriculum.

[29] Mr Lloyd was able to give evidence on his experience with governance, management, regulatory and funding environments both within Universities and MRIs. In his evidence, Mr Lloyd stated that MRIs don’t offer academic awards nor are they regulated or funded by any State or Federal Department. Mr Lloyd stated that representations had been made in the past for equity in relation to access to funding for educational purposes, although this had been denied on the basis that MRIs are not higher education providers. Again Mr Lloyd highlighted that MRIs have sought to be prescribed under the Higher Education Support Act 2003 to access Australian Research Council funding, but without success.

[30] In this connection, it may be considered that MRIs saw themselves as warranting access to similar funding given the nature of their work rather than whether they are educational providers or not. Importantly, Mr Lloyd’s evidence was that MRIs have a greater focus on clinical outcomes which can be commercialised, rather than the development and dissemination of knowledge which he saw as the function of a University. MRIs generally have a different governance structure and are mostly companies limited by guarantee.

[31] Dr Den Elzen gave evidence as to the nature of AAMRI membership and the diversity of that membership. She highlighted the governance of MRIs and the relationships with Universities and Hospitals. It was her evidence that:

19. The relationship between MRIs, hospitals, universities and industry are important to the sharing of knowledge, accessing patients in human tissue samples, and translating medical research into better health outcomes. The relationship of MRIs with hospitals is particularly important to provide an interface between medical research and better health service provision. Some MRIs, in addition to the core role of research also provide health services and community education linked to their research role. Many MRIs are also based within hospitals on hospital campuses.

20. The affiliation of MRIs with universities provides post-graduate students with access to a vibrant research environment closely linked with health care. This is a very different environment to the nature of education and training provided to the student within their university education, reflecting the different aims and purpose of universities. [Exhibit R3]

AHEIA

[32] AHEIA confined its submission to the threshold question raised by Mr Ruskin although it did, at the invitation of the Fair Work Commission, advise that a decision to exclude the Research Institutes from the awards could not be used as a precedent by Universities on the basis that they conduct research of the same type as that undertaken by Research Institutes.

UNIVERSITY OF WESTERN SYDNEY, MONASH UNIVERSITY AND THE UNIVERSITY OF MELBOURNE

[33] These universities opposed the extension of the awards on a number of bases. To begin, it was submitted that application was beyond the scope of the review and the threshold argument should be upheld. Secondly, it was argued that the MRIs were not part of the Higher Education Industry and as such the awards should not be extended and finally, the definition of Research Institute was too broad and would create anomalous results. It was submitted that it would discourage universities from entering into beneficial arrangements and/or conferring honorary titles if this was going to be used a method for creating new award respondents.

Consideration and conclusion

[34] This is not an easy matter.

[35] The threshold argument has merit but I am far from satisfied that the modern awards adequately cover MRIs when it comes to those conducting research. From the proceedings it appears to me that the awards referred to for those in research would produce an awkward fit. The history of the Professional Employees Award 2010 [MA000065] would reveal that research scientists in MRIs were not in contemplation when consideration was given to the terms of that award. This is not to pronounce on the coverage of the award but simply to reflect the considerations which gave rise to the award.

[36] For those not conducting research, but who might be captured by the General Staff Award, they can more readily be placed under a modern award. However, consideration would have to be given to the benefit or otherwise of employers having to deal with a myriad of industrial instruments as well as segregating the staff into essential two or more separate “industry identities”. The efficiency sought to be achieved by award modernisation would not be evident in this area of employment.

[37] I shall return to this later, but at this stage I shall review the conflicting considerations.

[38] Almost universally MRIs have personnel who hold what are regarded as academic titles—Professor, Associate Professor, Research Fellow and the like. A review of any of the annual reports will show that to be the case. There is also no doubt that they play a vital role in the education of post-graduate students. PhD students who are fortunate enough to be supervised by eminent scientists obtain significant benefit. It is too modest to express the view that such supervisors are not engaged in imparting knowledge through their interactions. It is difficult on the one hand to seek to publicly embrace relationships with universities to add gravamen to the work and yet to suggest that universities are in some way incidental to that work. The work of MRIs are vitally important in Australian society and those who carry out this work must exercise the highest academic excellence, in the sense of something being learned or scholarly, to ensure outcomes are credible and for the public benefit. In making this observation, I don’t for one moment seek to disregard the financial advantage which might also be attracted to leading researchers. It is not by chance that academic titles are given and used. There is a public resonance and confidence in work which is subject of the academic rigour necessary to claim a successful outcome in research.

[39] To the disinterested observer, MRIs are no doubt seen as institutions which are designed to greatly benefit society by solving serious and important problems and therefore attract the best “academic” minds to undertake this task. But similarly, when they are viewed objectively they do not resemble a university because they are clearly not involved in teaching undergraduates or conferring academic awards.

[40] It also, in my respectful view, is idle to pretend that research which can be owned and developed by Australians for the benefit of Australia, is not sought by universities and MRIs alike, understanding the constraints of each.

[41] The integration of research institutes with universities varies enormously from being a part of the university, to relying on funding from a university and finally having nothing to do with universities. There are a number of awards which apply to research institutes and it is not unusual to find academic titles and classification descriptions which are not dissimilar to universities. There are agreements which have familiar classification structures to those contained in the modern awards covering universities. The NTEU has an active bargaining presence in the area and its members have, in large measure, experience in universities and MRIs. In this sense, it would be difficult to unscramble that part of the egg by declaring that MRIs are not part of universities.

[42] When consideration is given to a family of work, it is the nature of the work which is important, not the funding source although the funding source can be used to fortify the type of work performed and its relationship or otherwise to the higher education sector. Whilst organisational structures and objectives may be relevant, funding vulnerabilities do not go to work value. AAMRI makes the point that there is also similar research performed at the CSIRO and Hospitals and they are not in higher education.

[43] There is an issue which seems to be one of the central areas of concern to the members of AAMRI and that relates to the provision of fixed-term employment. It is arguable whether or not the full provisions in the awards would apply to the detriment of MRIs but in any event in its 19 December 2008 decision the Full Bench said:

[173] Of particular concern to employers was the inclusion in the exposure draft of the terms of the Higher Education Contract of Employment Award 1998  (the HECE award). This was an award made by a Full Bench following extensive evidence and submissions. In resolving the merits of the argument, certain conditions were placed on the extensive use of fixed term contracts. These conditions were peculiar to the universities and related to their employment practices. Nothing has been advanced which persuades us to revisit the decision of the Full Bench or to call its findings into question.

[174] With one exception, we have decided to maintain the approach in the exposure drafts. The exception is that we have limited the operation of the clause to the universities covered by the original HECE award. Other universities covered by the modern awards were not before the Full Bench. We are not prepared to assume that their employment practices and procedures match those of the universities against whom the award was originally made. [[2008] AIRCFB 1000].

[44] This is clear on the face of the academic award which states:

12. Incidents of fixed-term contract of employment

This clause only applies to those employers who were bound to the Higher Education Contract of Employment Award 1998 [AP784204].

. . . 

[45] Simply put, if the award was varied then the provisions of the fixed-term clause would not apply.

[46] I have reached the conclusion that this is such an irregular background of award and agreement regulation that to seek to declare that MRIs have no natural home with universities or vice versa, would take this matter beyond what was contemplated by this review. In the absence of agreement, the depth of the conflicting expectations and practical approaches could not be properly understood until all the evidence and submissions were presented. Whilst, it might be a matter of regret to those opposing the applications that time was taken with submissions and evidence, it has provided the parties with a level of detailed material upon which discussions can (and should) take place before the four yearly review.

[47] Whilst AHEIA stated that a decision in favour of the MRI submission would not impact upon universities, it is difficult to see how any merit determination would not impact on the type of work which is common in universities and MRIs. The extent of that commonality is another reason why I have taken a more cautious approach. Whilst the parties have sought to provide the four corners of the argument, I remain concerned about finding one way or the other given the possible ramifications.

[48] Section 134 of the Act sets out the modern award objective:

(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a) relative living standards and the needs of the low paid; and

(b) the need to encourage collective bargaining; and

(c) the need to promote social inclusion through increased workforce participation; and

(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and

(e) the principle of equal remuneration for work of equal or comparable value; and

(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

[49] There are real issues in relation to ensuring that an award provides for equal remuneration for work of equal or comparable value given the interaction between universities and MRIs, but this must be done in full view of the other awards and this is not a matter contemplated for the review. Further, I am not confident that industrial regulation in this area is simple, easy to understand, stable and sustainable, nor am I confident that some of the awards referred to by AAMRI have been set, having regard to fair and relevant safety net of terms and conditions of employment in MRIs. However, again this is a wider question than those contemplated by this review. The matters before me go beyond technical matters or anomalies.

[50] Without determining the merit of the matter and for the purpose of this review I dismiss the application.

DEPUTY PRESIDENT

Appearances:

S. Kenna with K. McAlpine for the National Tertiary Education Industry Union.

N. Ruskin, Solicitor with K. Sweatman on behalf of Association of Australian Medical Research Institutes.

C. Pugsley on behalf of the Australian Higher Education Industrial Association.

L. Howard on behalf of Melbourne University, Monash University and the University of Western Australia.

Hearing details:

2013.

Melbourne:

April, 29 and 30;

May, 1; and

June, 25.

Final written submissions:

N. Ruskin, Solicitor, DLA Piper Australia—4 July 2013.