T0426 Dec 2336/95 S Print M6311

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Industrial Relations Act 1988

s.111(1)(b) application for an award

Australian Education Union

(C No. 32548 of 1995)

TEACHERS (VICTORIAN GOVERNMENT SCHOOLS - INTERIM) AWARD, 1994

(ODN C No. 31325 of 1993)

[Print L3637 [T0426]]

Teachers Educational services

Wage rates - classification - teachers, educational services - union sought rates for all classifications be increased by 4% as interim measure - claimed no longer any prospect of agreement being reached under Part VIB of the Act - Commission satisfied that there was no reasonable prospect of agreement being reached - employer in effect abandoned negotiations - unilateral establishment of three week negotiation period, `offer' of instruments akin to individual contracts not consistent with negotiations towards a certified agreement - not satisfied 4% should be awarded - not compatible with final determination of matter - interim increase of 1.8% granted.

JUSTICE MUNRO

DEPUTY PRESIDENT ACTON

COMMISSIONER FRAWLEY MELBOURNE, 16 OCTOBER 1995

DECISION

In this matter the Australian Education Union (the AEU) has applied for a variation of the Teachers (Victorian Government Schools - Interim) Award, 1994 (the Award) to increase all salary rates for the classifications set out in the Award by 4%. On 1 September 1995, after we had heard argument on the application over two days, we adjourned further hearing and issued a statement in the following terms:

"1. The Commission is persuaded, for a number of reasons, which it is not necessary to develop at this point, that before there is a determination of the application of the Australian Education Union (AEU) to vary the Teachers (Victorian Government Schools - Interim) Award 1994 by providing for an interim increase of 4% to salaries, there should be conciliation and an attempt by the parties to explore the possible negotiation of a certified agreement about classification structure and pay rates and such related matters as may be necessary or as may be agreed. Accordingly, the Commission will refrain from further hearing, or determining this matter, under section 113(4A) of the Industrial Relations Act 1988 (the Act), until the possibility of a certified agreement being reached has been explored, and it has formed a view as to whether there is no scope for conciliation of the matter. We intend to set out a program for that exploration and consideration.

2. As a preliminary step, the Director of School Education (DSE) and the AEU should formulate the certified agreement each would accept in relation to the subjects indicated above. The respective draft agreements should be exchanged with the opposing party by close of business 14 September 1995.

3. In formulating draft agreements and in developing their negotiating positions the parties are asked to take into account the Commission's provisional view that:

(a) any certified agreement should address the structure and content of the Professional Recognition Program (PRP) classification, and any further hearing of this matter should address the integration of the existing award classification structure into the PRP model;

(b) Victoria has acknowledged, and the Commission notes, that some changes to work and work organisation since 1992 are already assimilated and are of a character properly to be taken into account as productivity enhancing measures contributing to the classification changes and salary increases reflected in the PRP classification structure;

(c) it is axiomatic that work of the character to which a pay increase relates be in fact performed in a manner consistent with reasonable performance standards;

(d) thus, while significant net additions to work requirements may be among the changes made to the Victorian Teaching Service (VTS) operation since 1992, the Commission is unlikely to award increases related to that addition if in practice the performance of the relevant work is being contested in the field. Similarly it is not reasonable for the AEU to expect that the DSE should enter a certified agreement granting increased rates of pay, if the AEU and its membership withhold implementation of working arrangements upon which the pay increases are sought to be based;

(e) the Commission inclines to the view, but has not decided, that the Teachers (Victorian Government Schools - Interim) Award, 1994 is a safety net award made as a first award. The rates were set in 1991 by the Industrial Relations Commission of Victoria (IRCoV) on an "actual rates" basis after a Special Case component of an industrial arbitration process which adopted a national benchmark for teachers' salary in the IRCoV State Teachers Award and the Australian Industrial Relations Commission's ACT Teaching Service Award. The rates set for the VTS have not been independently evaluated by the Commission for changes since 1991, other than by the addition of two safety net adjustments. For the purpose of an interim application there is no adequate reason for contending the rates should now be adjusted unless it be accepted that there is a compelling special case, or at least a strong case based on some other available provision of the Statement of Principles. The Commission accepts that changes to teaching arrangements and requirements in Victoria since 1992 are among factors which may relevantly be taken into account for purposes of an enterprise agreement, or under the work value changes principle, or as part of a special case.

4. In exercise of the power under section 107(10) of the Act the Commission directs Commissioner Frawley to report to it on whether conciliation proceedings should be treated as having been completed for purposes of section 113(4A) of the Act and on the question of the scope for the parties arriving at a certified agreement in relation to the subjects indicated. Commissioner Frawley will be available on 21 September 1995 to conciliate the parties about the terms of a possible agreement, and will report by close of business 5 October 1995 to the Commission as now constituted as to whether there is any likelihood of any relevant agreement by the parties on terms of settlement.

5. The matter will be listed for report and directions as to further hearing on 9 October 1995 at which time the Commission will determine whether conciliation proceedings have been completed for purposes of section 113(4A) and, so far as it may be necessary to do so, section 103 of the Act, having regard to Commissioner Frawley's report and the submissions of the parties at that time."

On 6 October 1995 Frawley C reported on the matters referred to him in the terms set out in Attachment A to this decision.

On the resumed hearing before us Mr. K. Bell, of counsel, who continued his appearance for the AEU, asked the Commission to conclude from the conduct of the State of Victoria and the Director of School Education (the DSE) that there was no longer any reasonable prospect of the parties making an agreement under Part VIB of the Industrial Relations Act 1988 (the Act) to deal with the subject matter of the proposed variation of the Award. In particular Mr. Bell pointed to the action of the DSE, under direction from a Cabinet Committee, to disclose the terms of an "offer" outside the negotiation framework. That action was associated with a reinvigoration of the DSE's campaign to secure individual employee acquiescence in the PRP classification structure. The completion over three weeks of that consultation is a preliminary to any acceptance by the DSE of any form of agreement with the AEU. Many aspects of the "offer" are not acceptable to the AEU. The Commission should find there is no reasonable prospect of the matter being dealt with by an agreement. The Commission should arbitrate the AEU's claim for an immediate 4% interim increase to all award rates, and should issue directions as to the further hearing of outstanding matters.

Mr. Bell was supported in those submissions by Mr. T. Pallas who appeared in place of Mr. J. Cairns for the Australian Council of Trade Unions (the ACTU) and Mr. K. Heaney who continued his appearance for the Minister for Industrial Relations (Commonwealth) intervening. Mr. K. Fenton, for the Victorian Affiliated Teachers Federation (the VATF), which had earlier supported the AEU's application, indicated that it no longer considered that the Award should be the vehicle for an interim increase.

For the State of Victoria and the Minister for Education (Victoria), Dr C. Jessup QC contended that the DSE had not walked away from negotiations. The Commission should dismiss the AEU's response as pique. The Commission should insist that the AEU adhere to negotiations and to the enterprise bargaining process being followed in a mature way by the parties. The AEU did not come with clean hands in impugning the good faith of the DSE's bargaining practice. The AEU had through the actions of its delegates telegraphed an intention to resort to industrial action.

With respect to the last paragraph of the report of Frawley C, Dr Jessup advised, contrary to the advice previously given to the Commissioner, that a document "Extended Offer - Additional 3%" (Exhibit AEU 14) rather than the document "Proposed PRP Package" had been sent to all teachers by the DSE and the direction to send the document was given by a Cabinet Committee rather than Cabinet.

On the basis of what has been put to us we are not satisfied there is a reasonable prospect of the parties making an agreement under Part VIB of the Act. In coming to this conclusion we have been particularly influenced by the fact that the "offer" made by the DSE, which extends the PRP, is unacceptable to the AEU. Further, we consider the DSE has in effect abandoned negotiations for an agreement with the AEU. The unilateral establishment of a three week consultation process with employees about the extended PRP "offer" and the simultaneous unilateral promotion of the PRP through instruments akin to individual contracts or agreements with employees are not realistically compatible with the maintenance of negotiations toward a certified agreement in the circumstances.

We are far from suggesting that there should be no further attempts by the parties to reach a settlement through an agreement, but we are forced to conclude that there is no reasonable prospect of an agreement at this time. We find that there is no longer a basis for refraining from further hearing under section 113(4A). We consider conciliation to be at an end for the purposes of the application before us. Accordingly, in the circumstances we determine that we should arbitrate upon the AEU's application.

In relation to the AEU claim for a 4% interim increase we are not satisfied we should make an award in the terms sought. It is not necessary or appropriate at this stage of the proceeding to develop our reasons other than to state that we are not persuaded that the movement of existing classification rates by 4% on an interim basis is compatible with a proper final determination of the matter. However, we are satisfied in all the circumstances that a modest interim increase to the current award classification structure should be made. We consider that the minimal outcome of our arbitration of a final award will be an increase in excess of 1.8% to the existing interim salary rates. Accordingly, we will grant an interim increase to award rates of 1.8%.

We are satisfied that on the material presented to this point, an increase of that dimension to award classification salary points is justifiable by reference to considerations of significant net additions to work value. There is no issue about there having been work changes since October 1992; it is the character and impact of the general changes in application to the work value principle which are challenged by the DSE. We consider that there is a strong case that there have been significant net additions to work of a character which demonstrably have warranted consideration as factors consistent with upgrading within the existing attenuated classification structure for teachers under the Award. The DSE has acknowledged that work value changes are among the factors taken into account in the decision to introduce the new PRP classification structure as an overaward payment available on election by individual teachers. We note that the effect of an increase of about that size will be that the rates of employees at award classification level Sub 12 will have been adjusted by about 4% over the period which has elapsed since the first arbitrated safety net adjustment of the rates in the Award in December 1994. The annual salary of such employees will be just below the current salary Level 2-11 of the PRP classification structure. Two $8.00 safety net adjustments are also reflected in but absorbed in the PRP classification structure rates currently on offer.

The grant of the increase will be conditional upon the AEU undertaking that no reliance will be placed upon the interim increase for purposes outside the context in which it has been awarded. It will also be conditioned upon an undertaking that changes to work and work organisation since 1992 to this point will be given effect without bans or limitations. The increase will take effect from the first pay period commencing on or after the date of the order. The order will be settled by Frawley C, and subject to the conditions that apply to it.

We indicate that we consider the introduction of the PRP and the promotion of it at the expense of the existing interim classification structure is a fact which will need to be addressed in any further arbitration. To ensure there is progress toward arbitration in that form we will issue directions under section 107(10) to establish a program and agenda by reference to which further hearings may be planned.

Pursuant to section 107(10), therefore, we direct that:

(i) Frawley C report upon the claims and submissions of the parties as to the proper outcome of arbitration of a final award, noting the matters raised in the Commission's provisional view expressed in paragraph 3 of the Statement of 1 September 1995;

(ii) for the purposes of that report, Frawley C will sit on 19 October 1995 at 10.00 a.m. in Melbourne for the purpose of programming and issuing directions;

(iii) the availability of the interim increase and of the process for further determination by arbitration of outstanding issues may be conditioned upon there being no industrial action with respect to these matters; and

(iv) Frawley C shall have recourse at his discretion to the Full Bench for further directions or reference if required.

BY THE COMMISSION:

JUSTICE P. R. MUNRO

Appearances:

K. Bell, of counsel, for the Australian Education Union.

C. Jessup QC with G. Giudice and N. Green, of counsel, for the State of Victoria and the Minister for Education (Victoria).

T. Pallas for the Australian Council of Trade Unions, intervening.

K. Heaney for the Minister for Industrial Relations (Commonwealth), intervening.

K. Fenton for the Victorian Affiliated Teachers Federation, intervening.

S Craven for the Victorian Principals' Federation, intervening.

Hearing details:

1995.

Melbourne:

August 10-11;

September 1;

October 9.

Printed by Authority by the Commonwealth Government Printer

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Attachment A

REPORT TO FULL BENCH

Following the statement issued by the Full Bench on 1 September, 1995 the parties have met on several occasions, including in conciliation conferences which I have chaired. Those conciliation proceedings took place on 21 September, 1995 and 2, 3 and 6 October, 1995.

I was required to report to the Full Bench by 5 October, 1995 as to whether or not there is any likelihood of any relevant agreement by the parties on terms of settlement.

I was requested by the Directorate of School Employment (DSE) to delay that report until there could be reference to Government of the matters covered in discussions between the parties including a wage increase as part of an overall package.

On 6 October, 1995 the parties reported again to me.

I have to report that the parties have not reached an agreement.

The Australian Education Union (the union) have requested that I report their position in the following terms:

· the Government has displayed a complete absence of good faith and the union negotiators are angry and outraged at the Government's actions;

· there is no prospect of agreement; and

· the Australian Industrial Relations Commission (the Commission) is requested to determine the union's application urgently.

The DSE representatives, on behalf of the Government:

· seek a further three weeks to enable consultation to take place with employees about the proposed changes;

· wish to have discussions with the AEU at the end of that period; and

· does not consider that the prospect of an agreement is closed off.

Attached is a copy of a news release issued by the Minister for Education on 6 October, 1995 and a copy of a document "Proposed PRP Package", described as `the Government offer' which the DSE has been directed by Cabinet to send to all teachers over the weekend.

Note: This News Release is contained in the published version of this decision or may be inspected on file C No. 32548 of 1995.

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