Application for Amendment of the Queensland Local Government Industry Award - State 2014, Re [2015] QIRC 52

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION CITATION: Re: Application for Amendment of the Queensland Local Government Industry Award - State 2014 [2015] QIRC 052 PARTIES: Queensland Services, Industrial Union of Employees (Applicant) v Local Government Association of Queensland Ltd (Respondent) CASE NO: A/2014/2 PARTIES: The Association of Professional Engineers, Scientists and Managers, Australia, Queensland Branch (Applicant) v Local Government Association of Queensland Ltd (Respondent) CASE NO: A/2014/3 PROCEEDING: Application to vary a modern award DELIVERED ON: 19 March 2015 HEARING DATE: 2 February 2015 MEMBER: Deputy President Kaufman ORDERS: 1. Each application is dismissed CATCHWORDS: safety net award - locality allowances - extra annual leave - inappropriate to import consent arrangements - equity and good conscience - discrimination between employees covered by award APPEARANCES: Mr. N. Henderson, for the Queensland Services, Industrial Union of Employees. Mr B. Watson, for The Australian Workers' Union of Employees, Queensland Ms K. Scott, for The Association of Professional -- 1 of 9 -- 2 Engineers, Scientists and Managers Mr. S. Blaney, for the Local Government Association of Queensland. Reasons for Decision [1] By its decision of 26 September 2014, a Full Bench of the Queensland Industrial Relations Commission made a modern award called the Queensland Local Government Industry Award - State 2014 (the award), which complies with the requirements of the Industrial Relations Act 1999 (the Act) in relation to modern awards and is consistent with the statutory objects of the award modernisation process, as well as the Attorney-General's Request under s 140C(1) of the Act. [2] The Full Bench decided to continue the operation of clause 13.1 of the Municipal Officers' (Aboriginal and Islander Community Councils) Award 2004 and clause 12.1 of the Queensland Local Government Officers' Award 1988 which provided for a locality allowance, as well as clause 23.1.2 of the Queensland Local Government Officer's Award 1988 and clause 20.1.2 of the Municipal Officer's (Aboriginal and Islander Community Councils) Award 2004, which provided for an additional week of leave, until the end of March 2015, in order to allow any application that might be made in relation to allowances and additional leave to be heard and determined. [3] At paragraph 152(ee) of its decision, the Full Bench stated, in relation to the issue of locality allowances: "The Full Bench sees merit in the submission of the LGAQ and it is appropriate that the basis for both the payment and the topographical boundaries which underpin the locality allowances should be comprehensively reviewed. In regard to the payment of a locality allowance, the Full Bench has indicated that it is prepared to continue the operation of Clause 13.1 of the Municipal Officers' (Aboriginal and Islander Community Councils) Award 2004 and Clause 12.1 of the Queensland Local Government Officers' Award 1998 until 31 March 2015. Such a course will enable applications to be filed in the Industrial Registry (prior to 30 November 2014) by any organisation seeking the insertion of locality allowances in this modern award. Provided that such applications are filed within that time, the Commission will hear and determine such applications by 10 March 2015. " [4] And at paragraph 47(b) of the Decision in respect of the additional week of leave: "…in relation to the QSU's proposal for an additional week of leave for salaried officers in certain divisions or districts in Queensland, the Full Bench has indicated that it will enable the QSU to make an application to the Commission prior to 30 November 2014 to have this additional week of leave for salaried officers arbitrated. We therefore continue the operation of the provisions of Clause 23.1.2 of the Queensland Local Government Officers' Award 1998 … and Clause 20.1.2 of the Municipal Officers' (Aboriginal and Islander Community Councils) Award 2004 until 31 March 2015. Should an application be filed in the Industrial Registry prior to 30 November 2014, the -- 2 of 9 -- 3 Commission will hear and determine such an application by 10 March 2015. The QSU has submitted that the additional week of leave is relied upon by employees in regional and remote areas to enable them to access leave and travel. The Full Bench has indicated that there may be some basis for the granting of the additional leave in some regional areas but that the Commission would need to hear evidence in support of such an additional leave entitlement. Whilst the QSU submits that this entitlement has existed for salaried officers since 1959, the Full Bench did indicate that the factors affecting travel within Queensland have changed markedly since 1959;" [5] On 28 November 2014, the QSU and APESMA filed applications, A/2014/2 and A/2014/3 respectively, to amend the award. These applications were allocated to me. The applications seek to insert, at clause 13 of the award, a reference to a new schedule 1 - locality allowances - and also schedule 2 an additional week's annual leave for employees of nominated councils. [6] At paragraph 57 the Full Bench noted: (cc) Locality Allowance: The LGAQ opposes a Locality Allowance provision in the modern award. There is no such provision in the Exposure Draft. The QSU and the QIEU seek the insertion of such allowances in Clause 13 of the modern award. In its submission, the LGAQ argues that locality allowances provide disparity and prejudice between the "haves" and "have nots". The LGAQ argues that allowances based on geographical location are not appropriate in a modern minimum award. The QSU argues that the inclusion of a locality allowance provision has a strong historical basis and employees in regional and remote areas of Queensland are reliant on the payment of such an allowance. The LGAQ, by contrast, submits that "[t]he historical genesis for these provisions in pre-modernisation awards is not a reason for their retention in a modern award context." The LGAQ goes on to submit, "[c]ost and ease of travel and transport infrastructure has changed markedly since the inclusion of these considerations; the social relativities between the centres within these predefined districts have varied considerably since their development; and technological advancement (such as tele-health) has made significant in-roads into the remoteness and isolation of these locations/districts." Historical Basis [7] The Unions contend that both the locality allowance and the additional week's annual leave for particular localities have been included in the employment conditions for the relevant employees since at least 1959. The 1959 federal award, (Municipal Officers (Queensland) Award 1959 (93CAR492), provided for an "isolation" allowance for each employee whose "place of employment is situated, by the most practicable route' a distance of thirty-five miles or more from the nearest railway station".. However, this method altered around the late 1970's and those allowances were then fixed by reference to the allowances set by the Queensland Public Service Board.1 1 Submissions of QSU 12.1.15; See for example the Municipal Officers (Queensland) Consolidated Award 1975 Print D3115, cl 13. -- 3 of 9 -- 4 [8] In the federal Queensland Local Government Officers Award 1992, the relevant provision contained a direct reference to a Public Service Directive. This reference to a Directive was also mirrored in the same terms in the 1998 award, the (Queensland Local Government Officers Award 1998). This reference to Public Service Directive 19/99 existed throughout the historical consent arrangements made pursuant to former federal awards. The LGAQ notes that the directive, which applies only to public servants has no direct application to Queensland councils and their employees. [9] There are two main points which arise from the historical basis of these allowances and both are canvassed in the submissions of the LGAQ. There is no dispute between the parties that the locality allowance existed in the past for Queensland Councils (and will continue until at least 31 March 2015). However the LGAQ points out that all employees covered by the award are in receipt of divisional and district allowances which historically has been the vehicle by which state award employees have been compensated for any inherent disabilities associated with climatic conditions and higher living costs (to the extent they exist). The LGAQ submits that the evidentiary basis for retaining such payments should be revisited, given that changes in cost of living and other socioeconomic factors have occurred since these divisional and district allowances were introduced. [10] The LGAQ submits that the Commission has long recognized that the self-imposed regime of providing for locality allowances to public service employees is intrinsically linked to, and has the purpose of compensation for, the acknowledged discrete disability, pursuant to the Public Service Act, of employees being able to be required to transfer from their initial place of employment to any part of the state. Local Council employees do not have any such obligation and are at liberty refuse to transfer to another location. This is a fundamental difference between the employment conditions of local government and public service employees. Nature of the Application [11] The nature of the application seeks to amend the current award to provide entitlements to a class of white collar worker employed in the administrative, technical, community service, supervisory and managerial group in Indigenous councils and other than Indigenous councils. These employees were entitled to the allowance and the extra week's annual leave under the pre-modernised awards which merely incorporated Directive Number 19/99 made pursuant to the provisions of the Public Service Act 1996. [12] The applications are primarily confined to localities which fall within the area identified by the Full Bench at the hearing on 20/21 September 2014. They also extend to a separate group of localities which in the applicants' view warrants the payment of the allowance and, in some cases, the additional annual leave. The locations for which the allowance is sought are a refinement of what pertained under the pre-modernised awards. [13] The locality allowance proposed to be paid will be in accordance with a schedule setting out the relevant centres, each with a corresponding sum of the 'full rate' of -- 4 of 9 -- 5 allowance for that centre. The full rate is to be paid to those employees who have a dependent child, dependent spouse or dependent de-facto partner, with those employees without a dependent receiving half the full rate. The entitlement to the extra week's leave will be in accordance with a schedule identifying the relevant centres. [14] The basis upon which the applications were originally made was in relation to members of the QSU and APESMA working in the nominated locations. Notably the most remote councils, where the unions have no members, were excluded from the application. As the omission to include the remote councils was apparently due to a misunderstanding, on 2 February 2015, I granted leave to the unions to further amend their application to extend to an additional seven councils. [15] The statutory basis of these applications is pursuant to s 140G of the Act which provides: 140G Powers may be exercised to achieve modern awards objectives (1) The commission may, other than for the purposes of a periodic review— (a) make a determination varying a modern award; or ... (2) The commission may exercise a power under subsection (1) only if the commission is satisfied— (a) that making the determination or modern award other than for the purposes of a periodic review is necessary to achieve the modern awards objectives; … [16] Thus, I must be satisfied that the amendments are necessary to achieve the modern award objectives contained in s140D of the Act. The primary consideration is to ensure the award provides a minimum safety net of employment conditions that is fair and relevant.2 [17] Section 140D(2) provides a number of factors to be taken into consideration in making that assessment: … (a) relative living standards and the needs of low-paid employees; (b) the need to promote social inclusion through increased workforce participation; (c) the need to promote flexible modern work practices and the efficient and productive performance of work; (d) the need to ensure equal remuneration for male and female employees for work of equal or comparable value; (e) the need to provide penalty rates for employees who— (i) work overtime; or (ii) work unsocial, irregular or unpredictable hours; or (iii) work on weekends or public holidays; or (iv) perform shift work; 2 Industrial Relations Act 1999, s 140D(1). -- 5 of 9 -- 6 (f) the likely impact of the exercise of the chapter 5A powers on business, including on productivity, employment costs and the regulatory burden; (g) the need to ensure the modern award system— (i) is simple and easy to understand; and (ii) is certain, stable and sustainable; and (iii) avoids unnecessary overlap of modern awards; (h) the financial position considerations, including the likely impact of the exercise of the chapter 5A powers on those considerations; (i) the likely impact of the exercise of the chapter 5A powers on— (i) employment growth and inflation; and (ii) the sustainability, performance and competitiveness of the Queensland economy. …. Submissions Unions' Submissions [18] The unions filed thirty-three affidavits in support of their applications.3 These were admitted without objection, and none of the deponents was cross-examined. In summary, these affidavits depose to the need for residents of regional localities to travel significant distances to access services. Many of the deponents do not have easy access to medical facilities and schools and incur expenses travelling to access medical appointments. Some of the material highlighted costs in visiting family or friends. The locality allowance is said to be utilized to cover these expenses and many expressed their reliance on the additional leave to travel the distance to access necessary services. Many deponents noted the 'increased' price of food and petrol in their area. [19] The QSU also relied on the affidavit of Jennifer Thomas, which included a 2013 report from the Queensland Government Statistician's Office indexing retail prices in Queensland regional centres as well the relevant economic profiles for local government areas. [20] It is the QSU's submission that if the variation to the award is not made, the existing entitlements of relevant employees will be lost and this would adversely affect the living standards and needs of low-paid employees; a factor to which I am obliged to have regard by s 140D(2)(a) of the Act. The QSU submits that the factors affecting living standards in remote areas include climatic conditions, isolation, limited access to some services and higher costs for some goods and services. [21] It also submits that the variations promote productivity and employment growth, as locality based entitlements encourage attraction and retention of employees in the affected areas, against the overall flow of the Queensland population to metropolitan areas, a matter to which regard must be had pursuant to s 140D(2)(i). It submits that the removal of such entitlements may act as a disincentive to employment in the areas in question and, therefore, those entitlements advance the objective of social inclusion and workforce participation, a matter to which regard must be had pursuant to s140D(2)(b). No evidence to support this submission was adduced. 3 Exhibits QSU1 - QSU29; APESMA1 - APEMSA3; Affidavit of Max Gehring sworn 30 January 2015. -- 6 of 9 -- 7 [22] The QSU also argues that the variations sought do not impact negatively on any of the other modern award objectives. The QSU submits there is 'no impact' on employment costs or the regulatory burden, but rather the variations would maintain certainty and stability. This is not entirely correct, as some councils, which have not been required to pay the locality allowance will now be so required. Further, in some instances, the quantum of the allowance will increase. LGAQ's Submissions [23] The LGAQ submits that any statistical data the Unions seek to rely upon, including financial information contained in affidavit material, which is not from an authoritative source should be disregarded. [24] The LGAQ contests the data provided by the applicants, submitting that it falls short of demonstrating that the higher cost of living in regional areas is higher than in urban areas. The LGAQ provided a comprehensive breakdown of the data which the applicants seek to rely upon and points out disparities between the assertions made by QSU in reliance on those data and what the data actually convey. For example, QSU relies on a Price Index Survey, in part, to show that there are additional costs and hardships in the areas the subject of the applications. The LGAQ correctly points out that the Price Index Survey does not cover significant areas of the state to which the applications relate. Further, the Price Index Survey does not demonstrate that the asserted differences in the cost of living are particularly excessive. For example, in the column 'All items less housing', all the locations being compared, with the exception of one, are within 5 per cent of the cost of Brisbane. In relation to the cost of food and non-alcoholic beverages only two of the locations being compared experienced average costs higher than 15 per cent of those of Brisbane. The LGAQ also submits that the formula used to calculate housing costs is weighted almost exclusively towards rental costs. It submits that it is problematic to place much weight on such figures as a significant number of local government employees no doubt live in their own homes rather than rent. In any event, rents and house values, with the exception of some in areas affected by the recent mining boom, are considerably lower than those in the Brisbane area. Further, since the time of the figures relied on by the unions, house prices and rents in the mining boom areas have significantly fallen and are now closer to pre-boom values. [25] The LGAQ has also compared the proposed allowance rates for each Council against the allowance paid under Directive 19/99. Based on that, if the application were accepted, it would likely increase the quantum paid in 34 councils and decrease the amount paid in six. In 20 councils, the locality allowance would be increased by more than $520 per employee annually. [26] The submissions also note that the applications would extend the obligation to pay the locality allowance where it has never previously existed in at least three councils, possibly five. One Indigenous council indicated it would simply reduce staff due to its inability to fund increased wages. [27] APESMA supports the position of the QSU. -- 7 of 9 -- 8 [28] For reasons that follow, I have decided to dismiss the applications. In the circumstances it is not necessary to deal with the submissions of the parties in detail. I add that I am nevertheless persuaded by the submissions of the LGAQ. The evidence relied on by the unions falls far short of a persuasive case. The Limited Scope of the Applications [29] I noted at the commencement of the hearing that I had some concerns about the nature of the applications. Although an attempt has been made by the unions to provide an evidentiary basis for the granting of the applications, there is no doubt that the motivation behind them is an attempt to retain the locality allowances and the additional week's leave that existed in the pre-modernised awards. [30] Section 320(3) of the Act provides that the commission is to be governed in its decisions by equity, good conscience and the substantial merits of the case having regard to the interests of the persons immediately concerned and the community as a whole. [31] Section 273 provides that the commission's functions include establishing and maintaining a system of non-discriminatory awards that, together with the Queensland Employment Standards, provide for a fair minimum safety net of enforceable conditions of employment for employees. [32] These applications cover only a proportion of the employees covered by the award. They extend only to administrative, technical, community service, supervisory and managerial employees in Indigenous and non-Indigenous councils. There are an additional 11 groups of employees covered by the award in respect of whom these applications are not made. There is no evidence as to the numbers of employees in the respective groups. Given the nature of the groups to which the application does extend, it is reasonable to assume that those groups comprise a significant proportion of the employees of the councils concerned. [33] Disadvantages associating with living in the areas for which the location allowance and the extra week's leave is provided are not related to the work performed, its nature, complexity or difficulty. [34] As a matter of logic, it must be the case that any disadvantages due to the geographic location in which persons perform work are shared by all in the location to a greater or lesser extent; perhaps depending on whether the work is performed indoors or outdoors. Yet these applications cover only a proportion of the employees in the locations for which special consideration is sought. [35] Pursuant to s 140BA of the Act part of the principal object of modernising awards is so that they, together with the Queensland Employment Standards, provide for a fair minimum safety net of enforceable conditions of employment for employees. In my view, to provide for a location allowance and/or a in additional week's leave for only some of the employees covered by the award who find themselves in the particular location, whilst not providing the same for other employees in the same location cannot be said to be fair. -- 8 of 9 -- 9 [36] Further, it would be contrary to equity and good conscience to award benefits to only some employees in the situation where they cannot be differentiated from other employees who must, as a matter of logic, suffer from the same disability. Nor would an award so providing comply with the s 273 imperative of establishing and maintaining a system of non-discriminatory awards that, together with the Queensland Employment Standards, provide for a fair minimum safety net of enforceable conditions of employment for employees. It is apparent that, if the applications were to be granted, the award would discriminate as between employees covered by it [37] It is not appropriate in the making of a modern safety net award to import the consent arrangements agreed to by some unions with the employers in respect of a portion of the workforce. In reality this is what is being sought to be done here. [38] There is considerable force in the LGAQ's submission that there is no place in this modern award for what was, in reality, a consent arrangement to import certain public service conditions into local government awards. Such matters are properly the subject of enterprise bargaining or individual contracts. Unlike the situation in the public service where employees may be required to transfer to any location within the state, local government employees must be recruited. If incentives are required to attract and retain them, no doubt enterprise agreements and individual contracts will be tailored accordingly. [39] By parity of reasons the same considerations must apply to the provision of an additional week's leave. [40] The applications must be dismissed. [41] However, as, no doubt, some current employees, to a greater or lesser extent, will have arranged their finances and affairs relying on the allowance and the extra leave they have been receiving, I am inclined to consider a mechanism to allow them to retain these provisions for a period of time. [42] The unions are directed to file and serve any submissions they are minded to make on this issue, including the mechanism by which any "red-circling" might be achieved, by 4.00pm on 2 April 2015. The LGAQ is to file and serve any submissions in reply by 4.00pm on 16 April 2015. [43] The matter will be listed for further hearing on 1 May 2015. -- 9 of 9 --