Article originally published in Police New Magazine March 2024 Edition - Click here to read original print

New IR changes shift the goal posts

Recent changes in NSW Industrial Relations legislation mean the Award effecting Police will be conducted differently Delegates to Conference since 2011 with the election of the former Coalition Government have passed motions to remove the 2.5% wages cap placed on public sector workers including police officers.

During the 2023 State Election, this was a key priority for the PANSW with the Labor Government giving a commitment to workers in NSW to ‘scrap the cap’.

Members will have seen the first aspect of this in July 2023 with a 4.04% pay increase being applied to your salary and salary related allowances despite the Crown Employees (Police Officers 2021) Award being within its 3 year no further claims period. The PANSW pressed the NSW Government to apply this increase, the same as they had to other workers whose Awards had expired.

Towards the end of 2023, members may have seen some media around significant legislative reform to the industrial relations landscape in New South Wales, including the abolition of the public sector wages cap and the recreation of the Industrial Court of New South Wales. It will be useful for members to have some greater understanding of the industrial relations reforms introduced last year as they will likely have a significant impact on the impending bargaining for a new Award setting terms and conditions of employment for police officers in New South Wales.

Background to reforms

The Industrial Relations Commission of New South Wales (the NSW IRC) is the Tribunal in New South Wales established to create instruments that set fair and reasonable conditions of employment for public sector workers and settle industrial disputes. The NSW IRC is the Tribunal that creates the instrument that sets the terms and conditions of employment for police officers in New South Wales: namely, the Crown Employees (Police Officers) Award. 

It is currently the oldest body established to regulate the field of workplace relations and industrial disputation any anywhere in the world.

The next oldest such institutions are the Fair Work Commission (created the year after the NSW Commission), and then the National Labour Relations Board of the United States formed in 1935.

For the vast bulk of its existence, the NSW IRC was formally constituted as both a judicial body that enforced existing rights (known as the Industrial Relations Commission in Court Session, and later the Industrial Court), and an arbitral body that could create new rights in the form of Awards or enterprise agreements and the like, known as the Industrial Relations Commission.

The head of jurisdiction (the President), and the senior members of the Commission (the Vice-President and the Deputy Presidents), were appointed as both judges of the Industrial Court (judicial offices with the status of Supreme Court judges) and Presidential members of the Commission. Following the election of the conservatives in 2011, the government embarked upon a suite of sweeping changes to the regulation of industrial relations in New South Wales.

First, the government enacted the Industrial Relations Amendment (Public Sector Conditions of Employment) Act 2011 and the Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 that, amongst other things, imposed a legislated wages cap on the Commission, handcuffing its ability to set fair and reasonable conditions of employment for police and other public servants.

Second, over the objections of the Association, the government enacted the Police Amendment (Death and Disability) Act 2011 to kill off the Crown Employees (Death and Disability) Award 2005, and in its stead require the Commissioner of Police or relevant Minister to take out insurance policies providing for certain types of death and disability benefits.

It is those changes that gave life to the current Police Blue Ribbon Insurance products with Aware Super. It is also those changes that have given rise to a range of problems for police in the superannuation space, including the significant problems associated with concessional cap.

Over the ensuing years, a range of further changes were made to the jurisdiction of the Industrial Court, and ultimately in 2016, the Industrial Court was abolished and its powers transferred away from a specialist body with knowledge of workplaces and workplace law, to the general courts (the District Court and Supreme Court).

Over the period between 2011 and 2022, members would appreciate the significant limitations the public sector wages cap imposed on the ability of unions, including the Association, to pursue wage increases over and above the wages cap of 2.5%. There were also very significant practical consequences that arose in trying to have Courts of general jurisdiction, who generally had little experience of workplace law (excepting select members of the Supreme Court), enforce industrial relations legislation and workplace rights.

Shortly after its election in early 2023, the current Labor government confirmed it would honour one of its significant election promises in that it would bring an end to the public sector wages cap and restore the jurisdiction of the Industrial Relations Commission.

To that end, the government appointed two eminent industrial relations jurists, former President of the Industrial Relations Commission the Hon. Roger Boland, and Anna Booth, a former Senior Deputy President of the Fair Work Commission (and now Fair Work Ombudsman), to an Industrial Relations Taskforce with terms of reference designed to enable it to make recommendations fundamentally reshaping the industrial relations landscape in New South Wales.

The Association, other unions, and Departments met with the Taskforce (over 40 consulting meetings), and put submissions to the Taskforce designed to significantly reshape the industrial relations landscape in New South Wales.

The Taskforce report was prepared, presented to, and has now been considered by government. Whilst the report has not itself been made public, we understand there were four key themes for reform outlined in the Taskforce report:

  • IRC structure and functions, including the abolition of the public sector wages cap
  • A new Bargaining framework, to improve relations between unions and government, and provide for an ‘interest based’ bargaining system.
  • Modernisation of Industrial Relations Act
  • Miscellaneous changes specific to particular groups (for example, a relatively minor amendment in Local Government giving certain senior staff access to the IR System, health, police etc). 

In late 2023, the government set about implementing very significant industrial relations reform, consistent with the central Taskforce Recommendations.

As promised, in September 2023, the government allowed the Industrial Relations (Public Sector Conditions of Employment) Regulation to lapse and not be renewed. That means that regulation, and importantly the wages cap that it created, is now gone.

Further to its commitment to restore the Industrial Relations Commission (and in pursuit of some of the recommendations made by the IR Taskforce), in December 2023 the legislature passed the Industrial Relations Amendment Act 2023 (the Amending Act).

The Association was heavily involved in numerous consultations with government and Unions NSW around terms of the Bill that ultimately became the Amending Act.

A number of significant reforms were introduced by the Amending Act, but amongst them the 3 big ticket items are:

  • It repealed s 146C of the Industrial Relations Act 1996. That section was what empowered the making of the Industrial Relations (Public Sector Conditions of Employment) Regulation, and the wages cap it imposed.
  • The creation of a new Chapter 2A to the Industrial Relations Act 1996, entitled “Mutual Gains Bargaining”, to provide for a new cooperative negotiation model for governments and unions to negotiate wage and conditions claims for public servants (including police); and
  • The recreation of the Industrial Relations Commission in Court Session, to be known as the Industrial Court. There are a significant number of amendments to other statutes recognising the recreation of the Industrial Court and the conferral of jurisdiction on the Industrial Court away from the existing repository (either the Supreme Court or the District Court).

Repeal of s 146C of the IR Act

Whilst the Industrial Relations (Public Sector Conditions of Employment) Regulation was allowed to lapse in late 2023, and as such the wages cap ceased to exist, repealing s 146C means no future government can again impose such a cap - or at least not without further legislative change.
Formal legislative wages caps are now effectively dead.

Mutual Gains Bargaining

Mutual Gains Bargaining is a new cooperative negotiation model for the government and the unions which represent the State’s public sector and local government workforce. It will be supported by the Treasury’s productivity unit to link pay rises to innovation and productivity in the delivery of essential public services.

Under the Act Mutual Gains Bargaining:

  • Is to be a collaborative approach to bargaining;
  • Parties to the bargaining are to identify and communicate their key needs to reach an agreement that maximises common interests and reconciles conflicted interests between them;
  • The negotiations must be consensus-seeking, with the parties working together to solve problems; and
  • The bargaining aims to create, maintain or strengthen good relationships between government and unions.

This new bargaining framework commenced on 15 December 2023.

This is a significant legislative reform that will likely have significant influence on the current bargaining round for a new Award to replace the Crown Employees (Police Officers) Award, which reaches its nominal expiry on 30 June 2024.

Recreated Industrial Court and Senior members of the Commission

The Amending Act also recreates the Industrial Court of New South Wales as a judicial arm of the Industrial Relations Commission, and returns the suite of jurisdiction that was disbursed to the general Courts to a judicial body made up of specialist judges (of Supreme Court status) who will enforce industrial relations rights and hear work health safety prosecutions.

The Amending Act also recreated the offices of the President, Vice-President and Deputy President, and provided for the judges of the Industrial Court to be duly appointed as the most senior members of the Industrial Relations Commission.

That the judges will also hold the senior offices of President, Vice President and Deputy President of the Commission is of very real significance to the Association and its members for a number of reasons, including that any arbitrated wages and conditions claims (which need to be heard by a Full Bench of the Commission), will likely be heard and determined by a Commission constituted by these new senior appointments. These new senior members will likely hear all appeals and as such likely help steer the development of the jurisprudence of the Commission in a manner that is fairer and more reasonable than in recent years.

Additionally, the review jurisdiction for challenging Orders under Part 9 of the Police Act imposing reviewable action (s 173 Orders) or removing an officer for loss of confidence (s 181D Orders) will be heard by the new Presidential members of the Commission.

The government is currently in the practical process of recreating the Industrial Court (finding premises, staff and appointing judges). The parts of the Amending Act creating the Court and transferring jurisdiction will likely be proclaimed and made operative in the first quarter of this year.

Further Reforms

The government’s agenda on Industrial Relations, giving effect to the recommendations of the IR Taskforce, has yet to be fully implemented. Further consultation regarding the government’s further response to the Taskforce report began in late December 2023, shortly prior to Christmas. We anticipate the consultations will kick off again in early 2024, in which the PANSW will be involved in representing the interests of police officers.