Appeal against a decision of the Public Service Arbitrator given on 14 February 2012 in matter no. PSACR 26 of 2008

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2012 WAIRC 00362

DELIVERED : Friday, 15 June 2012

FILE NO. : FBA 1 OF 2012

Appellant

AND

Health Services Union of Western Australia (Union of Workers)

Respondent

ON APPEAL FROM:

Jurisdiction : Public Service Arbitrator

Coram : Commissioner J L Harrison

Citation : [2012] WAIRC 00082; (2012) 92 WAIG 251

File No : PSACR 26 of 2008

Catchwords : Industrial Law (WA) - Jurisdiction of Public Service Arbitrator - Claim for additional remuneration above award - Whether prior applications for registration of industrial agreements and an order to vary an award settled the industrial matter before Arbitrator considered - Whether the terms of the order were retrospective considered - Scope of s 80E(1) and s 80E(2) of the Industrial Relations Act 1979 (WA) considered - Found the industrial matter the subject of the appeal had not been settled - Appeal upheld - No power to vary the salary paid to the position in question - Order varied to bring within the power of Arbitrator to award an over‑award payment.

Legislation : Industrial Relations Act 1979 (WA) s 7, s 26(1)(a), s 34, s 35, s 36, s 37(1), s 39, s 39(1), s 39(3), s 39(4), s 41(1), s 41(4), s 44, s 44(9), s 44(13), s 49, s 80E, s 80E(1), s 80E(2), s 80E(2)(a), s 80E(5), s 80G(1), s 83;

Conciliation and Arbitration Act 1904 (Cth) s 28(1), s 28(2), s 48(4).

Result : Appeal upheld and order varied

Representation:

Counsel:

Appellant : Mr R J Andretich

Respondent : Mr D H Schapper

Solicitors:

Appellant : State Solicitor's Office

Respondent : Derek Schapper

Case(s) referred to in reasons:

BHP Billiton Iron Ore Pty Ltd v Construction, Forestry, Mining & Energy Union of Workers [2006] WASCA 49; (2006) 86 WAIG 1193

Corlett Bros Pty Ltd v Transport Workers Union of Australia, Industrial Union of Workers, Western Australian Branch (1975) 55 WAIG 644

Director General Department of Justice v Civil Service Association of Western Australia Inc [2005] WASCA 244; (2005) 149 IR 160

Director General of Health as the delegate of the Minister of Health v Health Services Union of Western Australia (Union of Workers) [2011] WAIRC 00332; (2011) 91 WAIG 865

Hospital Salaried Officers Association of Western Australia (Union of Workers) v Hon Minister for Health [2006] WAIRC 03473

McCorry v Como Investments Pty Ltd (1989) 69 WAIG 1000

Pooley v Commissioner of Police [2009] WASCA 67

R v Blakeley; Ex parte Australian Theatrical & Amusement Employees Association (1949) 80 CLR 82

Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia (1987) 163 CLR 656

Registrar v Metals and Engineering Workers' Union of Western Australia (1993) 74 WAIG 1487

Reid v Secretary, Department of Family and Community Services [2001] FCA 794; (2001) 109 FCR 477

Robe River Iron Associates v Association of Draughting, Supervisory and Technical Employees of Western Australia (1987) 68 WAIG 11

State Wage Case (1992) 72 WAIG 191

The Federated Gas Employees' Industrial Union v The Metropolitan Gas Co Ltd (1919) 27 CLR 72

The Honourable Minister for Education, Employment and Training v The Australian Liquor, Hospitality and Miscellaneous Workers Union, Miscellaneous Workers Division, Western Australian Branch (1994) 75 WAIG 14

The Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434

The Waterside Workers' Federation of Australia v The Commonwealth Steamship Owners' Association (1920) 28 CLR 209

Reasons for Decision

SMITH AP:

The appeal

1          This is an appeal to the Full Bench pursuant to s 49 of the Industrial Relations Act 1979 (WA) (the Act) against the decision of the Public Service Arbitrator given on 14 February 2012 in PSACR 26 of 2008:  [2012] WAIRC 00082.

2          The decision appealed against is an order requiring the appellant to pay Mr Edward Scull, one of the respondent's members, an increase in salary.  On 23 December 2002, Mr Scull was appointed to the position of the Head of Department, Medical Engineering and Physics at Royal Perth Hospital.  At the time of appointment it was agreed he would be paid an annual salary that was above the rates prescribed in the Hospital Salaried Officers Award 1968 (No 39 of 1968) (HSO Award) and the Hospital Salaried Officers Metropolitan Health Services Enterprise Agreement 2001 (2001 Agreement).  It was also agreed that Mr Scull's salary would be maintained by any percentage increases payable in rates applied to the HSO Award and the 2001 Agreement and any subsequent industrial agreement.  A dispute later arose about the quantum of salary paid to Mr Scull after a work value review increased the salary of positions that reported to his position.

3          This is the second appeal which has come before the Full Bench in PSACR 26 of 2008.  When the matter was first heard by Public Service Arbitrator Harrison (Arbitrator) the matter proceeded as a claim for increased remuneration in contract.  In the first appeal, the Full Bench set aside the order awarding an increase in salary to Mr Scull and found that it was not open to the Arbitrator to find it was a term of Mr Scull's contract that the status of the position held by him as at the date of entering into the contract for the position would be maintained:  Director General of Health as the delegate of the Minister of Health v Health Services Union of Western Australia (Union of Workers) [2011] WAIRC 00332; (2011) 91 WAIG 865 (Scull [No 1]).  It also found that it was not a term of contract that the relativity of Mr Scull's salary to those positions that reported to him would be maintained.  On 23 May 2011, the Full Bench suspended the order and remitted the matter to the Public Service Arbitrator at first instance for further hearing and determination.  The matter was remitted on the basis that the matter before the Arbitrator was not restricted to whether Mr Scull's contract of employment required an increase in salary as a result of the reclassification of his position and positions that reported to him, but also included whether the respondent acted in a manner that was not fair, just or reasonable, by refusing to award an increase to the salary of the position after it implemented the Health Professional Work Value Review (HPR):  Scull [No 1].

4          The first order was made on 17 January 2011 by the Arbitrator in substantially the same terms as the order the subject of this appeal.  After the first appeal was upheld a second order and declaration was made by the Arbitrator on 14 February 2012 (which will be hereinafter referred to in these reasons as an order).  The second order (which is a decision for the purposes of s 49 of the Act) is the subject of this appeal and is as follows:

1. DECLARES THAT Mr Edward Scull was treated unfairly, unjustly and unreasonably when the respondent refused to increase his salary after the work value of the position of Head of Department, Medical Engineering and Physics (position number 103229) at Royal Perth Hospital and senior positions reporting to this position increased.

2. ORDERS THAT the salary of the position of Head of Department, Medical Engineering and Physics (position number 103229) at Royal Perth Hospital held by Mr Edward Scull be increased to reflect the relativity of this position to other senior positions within the Department of Medical Engineering and Physics at the level it was when Mr Scull commenced employment in the position.

3. ORDERS THAT the salary levels contained in Column 3 of the table in the Internal Memorandum to the Chief Executive South Metropolitan Area Health Service from Mr Gregory dated 2 September 2009 be applied to the position of Head of the Department, Medical Engineering and Physics at Royal Perth Hospital held by Mr Scull.

5          I found in Scull [No 1], and Beech CC agreed, that the terms of Mr Scull's contract in respect of salary increases were as follows [78]:

(a) The position was not covered by the [HSO] Award or any relevant industrial agreement.

(b) Any percentage increases that applied to the [HSO] Award, the 2001 industrial agreement and any subsequent agreement would be applied to the salary paid to Mr Scull.

(c) If senior positions that report to the position held by Mr Scull were reclassified or were to receive additional remuneration which resulted in significant work value for the position held by Mr Scull, Mr Scull could renegotiate his contract.

(d) Any review of senior positions in the Department which were positions that reported to Mr Scull would include a review of his position.

6          Whilst it was a matter of common ground in Scull [No 1] that the terms and conditions of Mr Scull's employment were provided for in a common law contract of employment, when the matter was remitted to the Arbitrator, the claim proceeded on the basis that the provisions of the HSO Award and the 2001 Agreement and subsequent industrial agreements applied to the position held by Mr Scull by operation of law and that it was only the remuneration to be paid to Mr Scull that was fixed in a common law contract of employment.

7          At all material times, the following facts were not in dispute:

(a) Mr Scull was appointed to the position in question on 2 October 2002 at a commencing annual salary of $126,622 plus $1892 (professional expenses allowance).

(b) In application P 18 of 2003, on 13 January 2006 Public Sector Arbitrator, Scott C, issued reasons for decision to amend the HSO Award to reflect increases in the work value of health professions in what are commonly referred to as 'specified callings':  [2006] WAIRC 03473.  The order amending the HSO Award was made on 19 December 2005:  [2005] WAIRC 03346, and took effect on and from 6 August 2003.  These work value variations to the HSO Award increased the classifications of positions across health professionals who are employed by the respondent, including the senior positions that report to Mr Scull.

(c) On 24 November 2005, Mr Scull made an application to have the salary adjustment awarded in the HPR applied to the position he held.

(d) On 12 May 2009, Mr Scull was informed that the position he held had been regarded as a level 11 HSU at the time of his appointment in 2002 and that the classification level based on work value increases applied by the HPR was level 12 HSU.

(e) Whilst the position held by Mr Scull was reclassified to a level 12 on the basis of a work value assessment, Mr Scull's request for a salary adjustment was rejected on 5 October 2009 on grounds that Mr Scull's rate of pay was significantly higher than the work value of the position, or put another way, higher than the salary payable to a level 12 position under the HSO Award and industrial agreements.

8          When the matter was remitted back to the Arbitrator for further hearing following the delivery by the Full Bench of its decision in Scull [No 1], the respondent called evidence from Dr Phillip Montgomery.  In 2002, Dr Montgomery was the Deputy Director of Clinical Services at Royal Perth Hospital and in this position he was responsible for the selection and appointment of senior staff at the hospital.  Prior to Mr Scull being appointed to the position in question, the position was held by Dr Richard Fox, a Medical Practitioner.  At the time the selection process commenced it was intended that the position would continue as a clinical position.  However, Mr Scull is not a medical practitioner.

9          In her reasons for decision, the Arbitrator made the following observations and findings about the evidence of Dr Montgomery [9] - [12]:

(a) Dr Montgomery was a member of the selection panel for the position in question and during discussions Dr Montgomery had with Mr Scull about salary, Dr Montgomery told Mr Scull that the status of the position, including its salary, would be maintained at the previous level.

(b) Prior to his appointment, Mr Scull was offered a contract with terms commensurate with Dr Fox's remuneration package.

(c) Dr Montgomery gave an undertaking to Mr Scull to maintain the status of the position which related not just to the remuneration of the position but to its clinical status which could include the quantum of the salary paid.

(d) Dr Montgomery expressed opinions in his evidence that:

(i) maintaining the relativity of positions which report to Mr Scull was important to maintaining the status of a position;

(ii) the position held by Mr Scull was not equivalent to the position of Head of Department Medical Technology and Physics at Sir Charles Gairdner Hospital as Mr Scull's position had more responsibilities;

(iii) Mr Scull was offered a market rate for his skills and experience and the quantum was designed to retain a quality person in the position.

(e) The issue of relativities of salaries within Mr Scull's department only came about at the time of the HPR.  This issue was first raised with Dr Montgomery by Mr Scull in 2005.

(f) Dr Montgomery informed Mr Scull in a memorandum dated 10 July 2006 that if he could demonstrate a significant increase in the work value of the position he could renegotiate his contract.

10       After hearing from the parties and considering the evidence given by Dr Montgomery, the Arbitrator made the following findings:

(a) In taking into account the terms of s 26(1)(a) of the Act and the duty on the Arbitrator to consider the relief being sought on the basis of equity and good conscience, and after carefully considering the facts relevant to these proceedings, Mr Scull as the occupant of the position should be paid the increased salary the applicant was seeking on his behalf.

(b) It was unfair that the increased work value of the position which resulted in the position being reclassified, was not being recompensed by the respondent and was being absorbed into the existing salary of the position.

(c) Even though Mr Scull was in receipt of a salary which is significantly in excess of a level 12 position under the HSO Award, it was unjust that the salary of the position was not increased to reflect work value changes to the position, as it denied Mr Scull a salary increase which was open to other employees when changes to the work value of their positions took place.

(d) The respondent's refusal to increase Mr Scull's salary in light of work value changes to his position and senior positions reporting to Mr Scull was unfair because part of Mr Scull's contract of employment was to the effect that if positions that reported to his position were reclassified, and this resulted in the value of the work of his position increasing, he could renegotiate the level of remuneration of his position.

(e) In reaching the conclusion that it was unfair that Mr Scull's salary should absorb a salary increase related to work value changes, it was noted that the respondent agreed to pay Mr Scull the market rate for the position when he commenced in the position which was higher than the relevant award rate at the time.  Not increasing the salary of his position to reflect work value changes undermined the integrity of the rate of pay.

(f) Dr Montgomery confirmed that duties required of the position held by Mr Scull were more complex than a similar level 12 position at Sir Charles Gairdner Hospital and that is why Mr Scull was and has been paid a higher salary than the position at Sir Charles Gairdner Hospital.

(g) The status of the position of Mr Scull relative to other senior positions which report to it had diminished as a result of the respondent's refusal to pay Mr Scull the salary increase he was seeking and the respondent's actions in this regard were unfair and contrary to undertakings given to Mr Scull when he commenced in the position.

(h) There is a relationship between the level of the salary paid to the position of Mr Scull when compared to the salary of positions which report to it and that any diminution of this differential negatively impacted on the status of the position of Mr Scull.

(i) Dr Montgomery confirmed that when Mr Scull was offered the position, he assured him that the status of the position would be retained and that the remuneration of a position and the seniority of a position with respect to positions which report to it were relevant to the status of a position.

11       Of importance to the resolution of this appeal, the appellant does not challenge the Arbitrator's decision on any grounds which go to the exercise of the Arbitrator's discretion but raises two issues of jurisdiction which were raised before the Arbitrator.

Grounds of appeal and orders sought

12       The grounds of appeal which are pressed in this appeal are as follows:

1. The Public Service Arbitrator erred in law in determining she had jurisdiction to further consider the claim, on the basis of fairness and equity, and to make an order increasing Mr Scull's remuneration, when:

(a) The Full Bench determined in FBA 2 of 2011 that Mr Scull's contract contained no term requiring his remuneration to be maintained relative to that of his immediate subordinates.

(b) It was not otherwise established that Mr Scull was contractually entitled to an increase in remuneration as a result of the outcome of the Health Professions Work Value Review.

(c) An Award and an Industrial Agreement applied to Mr Scull's position which settled the industrial matter of what remuneration it could attract so that in exercising her arbitral jurisdiction the Public Service Arbitrator was limited by the salary scales contained in those instruments in determining what was a fair remuneration for the position Mr Scull occupied.

(d) Mr Scull was and is being paid more than was available by way of remuneration under the Award and Industrial Agreement for his position.

2. The Public Service Arbitrator further erred in law in making an order which has a retrospective operation earlier than the date on which application PSACR 26 of 2008 was filed when the effect of sections 44(13) and section 39, of the Industrial Relations Act, is to prohibit an earlier operation of an order.

13       Although the grounds of appeal contain a ground 3, when counsel for the appellant, Mr Andretich, appeared at the appeal he informed the Full Bench that the ground was not pressed.

14       The appellant seeks orders that the appeal be allowed, the decision of the Arbitrator be quashed and application PSACR 26 of 2008 be dismissed.

The appellant's submissions

15       When the matter was remitted to the Arbitrator and heard by her on 5 October 2011, the appellant submitted that the Arbitrator had no jurisdiction to make the order sought for the reasons outlined in ground 1 of the appeal, nor any power to make an order that operated prior to the filing of the application on the grounds set out in ground 2 of this appeal.

(a) Ground 1

16       The appellant points out that ground 1 was always in issue in the proceedings, but was not dealt with in the first hearing before the Arbitrator, as the matter initially proceeded before the Arbitrator on the basis that the claim was limited to a claim based upon the terms of Mr Scull's contract of employment.  However, the issues raised in ground 1 of this appeal were, at all material times, set out in the memorandum of matters referred for hearing( AB 92).

17       The central point the appellant makes in ground 1 of the appeal is that whilst Mr Scull had been paid in excess of the remuneration provided for in the HSO Award and the industrial agreements, outside a claim based in contract there is no scope for a claim for remuneration in excess of the rates prescribed in an award and/or industrial agreements to determine what remuneration should be paid to employees.  This is because the rates of pay which are set out in those industrial instruments had settled the industrial matter before the Arbitrator.

18       The appellant points out the Arbitrator identified the industrial matter before her was a dispute over the amount of Mr Scull's salary:  [57] of the Arbitrator's reasons for decision.  At paragraph [58] of her reasons, the Arbitrator rejected the submission that the application for increased remuneration had to be considered within the confines of the HSO Award and associated industrial agreements.  The appellant says it would appear that this was on the ground that she found that the jurisdiction conferred by the provisions of the Act is at large when a matter of fairness is raised by, or on behalf of, a government officer in relation to an 'industrial' matter.  This approach is said to be incorrect as s 26(1)(a) of the Act 'does not confer a general jurisdiction to do whatever is thought to be in accordance with equity, good conscience and the substantial merits of a case':  Robe River Iron Associates v Association of Draughting, Supervisory and Technical Employees of Western Australia (1987) 68 WAIG 11, 20, 22 (Pepler) (Rowland J).

19       The appellant also points out that the outcome of the HPR of positions contained within the description of 'specified callings', in the HSO Award, resulted generally in those positions immediately subordinate to Mr Scull's, being increased by one level of classification.  This was pursuant to a process contained in an order made by Scott C in P 18 of 2003 which records the settlement achieved by the parties to implement the work value increases in Hospital Salaried Officers Association of Western Australia (Union of Workers) v Hon Minister for Health [2006] WAIRC 03473 (AB 256).  This reclassification was made operative not by way of amendment to the provisions of the HSO Award, but by the outcome of 'desktop assessments' of all positions classified above level 7.  Where work value increase justified it, a position was reclassified one level upwards.  Mr Scull's position was not within the scope of the HPR as his position was anomalous in that he was paid above the remuneration available under the HSO Award and industrial agreements for his position, but it was otherwise within the description of a 'specified calling' for the purposes of the HSO Award:  evidence of J Ross, the project manager of HPR (AB 333).  Nevertheless, an independent external review of the classification of Mr Scull's position was undertaken, and, as a result, the position was found to have been appropriately classified at level 11 at the time of Mr Scull's appointment, but there had been an increase in work value for the medical physics profession which supported an increase in Mr Scull's position and classification to a level 12.  The consultant who conducted the review of the position held by Mr Scull concluded (AB 319):

This classification is further supported by the alignment of the position with the 'Health Professionals Descriptors' for Level 12 and with increases in staffing levels.  Comparison with other positions currently classified Level 12 also supports a Level 12 classification for the review position.

20       The appellant says that in the public sector there is inevitably a hierarchical pay structure contained in the relevant awards and industrial agreements which applies to positions, except for the most senior positions in respect of which remuneration is determined by the Salaries and Allowances Tribunal.  Remuneration outside the limits of the relevant awards and industrial agreements is generally not permitted and is determined on the basis of work value.  In this respect, the remuneration paid to Mr Scull is anomalous.  Classification is the process by which a level is allocated to a position according to the relative worth of the work associated with a position compared to like positions.  From the level of classification flows the amount of remuneration associated with the position and is payable to the incumbent.  That is, what is fair remuneration for the work associated with the position?  Like positions having the same work value have the same level of classification and the incumbents of positions having the same level of classification, as a matter of fairness, are paid the same.

21       The appellant argues that it is not the case that Mr Scull was treated differently and unfairly in connection with the outcome of the HPR.  In particular, the appellant says the HPR did not entail the maintenance of relativities to other classifications or positions.  According to the work value of his position, Mr Scull was, and is, being remunerated far above the classification his position was given as a result of the HPR.  There was no evidence that the classification was incorrect, nor any assertion that it was.  The evidence of Mr Ross was that where the incumbent of a position was being paid in excess of the remuneration that would follow reclassification as a result of the HPR he or she would be placed upon salary maintenance until classification remuneration overtook the remuneration otherwise payable to the incumbent.

22       While the parties at first instance proceeded on the basis that Mr Scull's employment was 'award free', it was only 'award free' in the sense that his remuneration was not set within the confines of the levels of the HSO Award and industrial agreements.  Otherwise, the position was covered by the HSO Award and within the 'specified callings' clause, and the associated industrial agreements.

23       An award by s 37(1) of the Act extends to and binds all employees employed in any calling mentioned in the industry or the industries to which the award applies and to all employers employing those employees.  An award, subject to variation, remains in force until cancelled, suspended or replaced, except where it is expressly stated it is to cease to operate on a specified date:  s 39(4) of the Act.

24       An industrial agreement may be made between an organisation or association of employees and any employer or organisation or association of employers under s 41(1) of the Act in respect of an industrial matter or for the prevention or resolution of disputes, disagreements, or questions relating thereto.  The 2001 Agreement and the successive industrial agreements have settled the industrial matter limits of what remuneration employees like Mr Scull may be entitled to.  If a government officer whose employment is subject to an award or industrial agreement is dissatisfied with his or her remuneration, apart from contract, the only  remedy he or she has is to make an application to the Arbitrator under s 80E(2) of the Act seeking to review the classification of the office he or she occupies.

25       Importantly, the appellant argues that the industrial matter settled by the order made by Scott C in P 18 of 2003 was to settle increases in work value by way of a variation to the HSO Award.  The appellant, in particular, argues that for the capacity for the employer to pay more beyond the terms of the HSO Award and industrial agreements there has to be an agreement made in contract between the employer and employee, and, in the absence of such an agreement, the limits which are to be paid are in the HSO Award and industrial agreements.  The Full Bench decision in Scull [No 1] puts it beyond doubt that there was no contract between the appellant and Mr Scull which enabled him to be paid more as a result of the work value review.

26       The effect of awards and industrial agreements made under the Act is to settle the 'industrial matters' with which they deal in relation to the employees and the employers to whom they apply:  The Federated Gas Employees' Industrial Union v The Metropolitan Gas Co Ltd (1919) 27 CLR 72, 79, 83, 84; The Waterside Workers' Federation of Australia v The Commonwealth Steamship Owners' Association (1920) 28 CLR 209, 255 (Starke J).  Consequently, the appellant argues it is not open to an employee who is dissatisfied with the conditions of employment available under an award or an industrial agreement to seek from the Commission special conditions that are outside the limits of the award or agreement that only apply to him or her.  They say there would be no point in making awards or industrial agreements if this avenue was to be available to individual employees.  Such orders if made are in effect an award which applies to one person.  Such over-award payments can only be made by way of contract.

27       Where an award or industrial agreement applies to a person's employment, there is no jurisdiction in the Commission as a matter of fairness and equity to consider at large what remuneration should be paid to an employee.  That can only be determined under, and in accordance with, s 80E(2) of the Act (in the case of a government officer) and within the confines of the salary levels contained in industrial instruments.

28       Unless Mr Scull's claim to be paid more is within the remuneration structure imposed by the instruments which applied to his employment, there is no jurisdiction to entertain his claim, except insofar as it is based upon contract.  It is relevant that the HPR outcomes involved only movements within the HSO Award and industrial agreement salary structures when increased work value was found to justify increased remuneration.

29       It is immaterial that the HSO Award and industrial agreements prescribe that the rates are expressed as minimum rates as jurisdiction to pay more can only be in contract above those rates that are prescribed.

(b) Ground 2

30       If an order can be made to vary Mr Scull's remuneration, the appellant submits that it can only be given limited retrospectivity as in the absence of some clear statement to the contrary, an Act will be assumed not to have retrospective operation.  Similarly, in the absence of some clear statement to the contrary, an Act will be assumed not to confer upon a court or tribunal the power to make orders that have retrospective operation:  BHP Billiton Iron Ore Pty Ltd v Construction, Forestry, Mining & Energy Union of Workers [2006] WASCA 49; (2006) 86 WAIG 1193 [83] (Le Miere J).

31       The Industrial Appeal Court in BHP Billiton found that the effect of s 44(13) of the Act, together with s 39 of the Act, only permits retrospective operation to be given to an order no earlier than the date of the application in respect to which the order was made.  Section 26(1)(a) of the Act does not provide an independent source of power to grant retrospective relief:  Robe River Iron Associates v Association of Draughting, Supervisory and Technical Employees of Western Australia (19, 20, 22).

32       The issues referred for determination in this matter came out of a s 44 conference.  Section 44(9) of the Act permits the Commission to determine those issues and make binding orders.  Section 44(13) provides that s 39 applies, with such modifications as are necessary, to enable the Commission to make an order under s 44.  By s 39(1), an award can only have a prospective operation.  Such effect is in accord with the nature of arbitral proceedings which create new rights as opposed to providing for the enforcement of past or existing rights.  By operation of s 39(3), the Commission may only give a retrospective operation to its awards by consent or if there are special circumstances making it fair to do so.  In any event, in the absence of consent retrospective effect cannot be given prior to the date upon which the application to make the award was lodged in the Commission.  The date of the application in this matter was 23 September 2008, and the appellant does not consent to any retrospective operation.  The decision refusing Mr Scull an increase in his remuneration as a result of the review was made on 5 October 2009.  Consequently, an order could not be made to operate earlier than that date.

The respondent's submissions

(a) Ground 1

33       The respondent says the starting point is to ask whether the claim made on behalf of Mr Scull for an increase in remuneration was an industrial matter.  If the answer to that question is yes, then it is clear the Arbitrator had power to deal with that matter unless something in the Act took the claim outside of that matter.

34       The respondent points out that pursuant to s 7 of the Act an 'industrial matter' is defined as 'any matter affecting or relating or pertaining to the … remuneration of employees'.  They say the claim made in respect of Mr Scull was clearly such a matter.  They also contend the jurisdiction of the Arbitrator to deal with this matter is provided for in s 80E(1) of the Act and is effectively the same as that of the Commission; that is, the Arbitrator has jurisdiction to enquire into and deal with any industrial matter relating to a government officer.

35       As the claim for additional remuneration for factors personal to Mr Scull is clearly an industrial matter, the question raised by ground 1 of the appeal is whether the provisions of the HSO Award or the industrial agreements excluded the jurisdiction to deal with the industrial matter.

36       The respondent argues the authorities relied upon by the appellant are of great antiquity and relate to the entirely different legislative scheme.  In any event, as noted in Scull [No 1] [83], the claim is not as to remuneration for the office held by Mr Scull, but Mr Scull's remuneration in that office.  The difference is not merely semantic.  Notwithstanding remuneration assigned to the office in the HSO Award and industrial agreements, the appellant paid Mr Scull 'over‑award'.  The dispute was not based on the unfairness to refuse to increase the salary of Mr Scull as a consequence of the HPR but was what fairness required the over-award payment should be in the particular circumstances relevant to Mr Scull.  Those circumstances were that he had been given an assurance (albeit of non-contractual force) that the status of his position, including the actual remuneration, would be maintained.

37       The HSO Award and the award that succeeded it, the WA Health – HSU Award 2006 (HSU Award) and industrial agreements expressly provide for minimum rates of pay and leave open the issue whether more should be paid to an employee.  It is clear when the evidence is reviewed that Mr Scull's circumstances justified an order being made that he be entitled to the remuneration that was claimed on his behalf.  To say that a claim of that type is prohibited by an award and industrial agreements that set salary levels and classifications for a wide variety of positions that are pitched as a minimum leaves open the remuneration of individual employees if the circumstances warrant it.

38       The appellant, having chosen to pay Mr Scull the over-award payment, made a decision that it would not increase his over-award remuneration.  Yet Mr Scull was assured the status of his position would remain unchanged.  The issue was, was it unfair for the employer not to stand by its word?  The order was an exercise of a discretionary decision by the Arbitrator.  There is no attack made on the exercise of discretion in this appeal.  This was not a case of Mr Scull simply saying I want to be paid more without providing good reason why he should be paid more.

(b) Ground 2

39       The order at first instance was not an award, it was an order.  Therefore, the injunction against retrospectivity does not apply.  In any event, the order is not retrospective in its operation:  Corlett Bros Pty Ltd v Transport Workers Union of Australia, Industrial Union of Workers, Western Australian Branch (1975) 55 WAIG 644 and Pooley v Commissioner of Police [2009] WASCA 67.

40       The terms of the order do not, on their face, specify any operative date.  The memorandum referred to in order 3 of the order is a document containing a list of various salaries claimed by reference to dates relevantly commencing on 3 August 2003.  The order, in effect, provides that the amounts appearing in column 4 of the internal memorandum be paid.  The obligation to pay those amounts only arises as at the date the order was made.  Whilst the amounts payable are calculated by reference to past periods, the order does not create any retrospective obligation to have paid those sums at those past times, nor render the failure to pay those sums at a time past in any sense unlawful.  To use the language of s 39(4) of the Act, the order appealed from does not have 'effect from a date earlier than' the date it was made.  It does not matter that, in calculating the sum to be paid, reference is had to amounts paid at earlier dates.

41       Alternatively, the respondent makes a submission that, pursuant to the jurisdiction conferred on the Arbitrator under s 80E(5) of the Act, the Arbitrator is able to review and rectify past acts, as a Public Service Arbitrator is able to 'nullify' and 'modify' acts of an employer.  This enables a Public Service Arbitrator to retrospectively review or modify and right past wrongs as this provision empowers a Public Service Arbitrator to sit in the place of an employer.

Conclusions

(a) Ground 1 – Jurisdiction to make the order

42       A central point to the appellant's argument that the Arbitrator had no power to make the order, is the contention that the Arbitrator relied upon the legislative command in s 26(1)(a) of the Act as a source of power to make the order.

43       Section 26(1)(a) provides that in the exercise of its jurisdiction under this Act the Commission '[S]hall act according to equity, good conscience, and the substantial merits of the case without regard to technicalities or legal forms'.  As the appellant correctly points out, Rowland J in Pepler made it clear that this provision is not a source of jurisdiction to give power to the Commission which otherwise would not exist (22).  In Pepler, the Industrial Appeal Court set aside an order made by the Commission awarding compensation to Mr Pepler who had been found to have been unfairly dismissed as there was no express power in the Act to award compensation.  At the heart of the reasons for decision of each of the members of the Industrial Appeal Court was a finding that the Commission did not have any power at large to make orders for compensation following a finding that a dismissal was unfair, but could only direct the reinstatement or re-employment of a dismissed employee and make orders for compensation that were incidental to an order for re-employment or reinstatement, such as an order requiring payment of wages from the date of dismissal to the date of re-employment or reinstatement:  Pepler (16 – 17) (Kennedy J), (22) (Rowland J).  As Rowland J explained (22):

[O]nce the finding is made that the employee shall not be reinstated, then it seems to me that, even if the matter started off being an industrial dispute in the sense that it was a matter affecting or relating to the rights of employer and employee, the matter is no longer an 'industrial matter' as defined because the termination of that employment has been confirmed by the Commissioner's finding that he be not re-employed.

…

In my view, there is simply no nexus between an employer and a Union, concerned for an employee wrongly dismissed who is not reinstated, whatever the reason for the failure to direct re-employment, so as to say that an industrial matter still exists to found an order for the payment of anything, call it what one likes, to such an ex-employee where there is nothing else involved in the dispute.  There is simply no live 'industrial matter' to condition the making of such an order.  There is no express power in the Act to justify such an order.  Nor can I find any power by necessary implication.

44       The facts in this matter are different and can be distinguished from the factual and legislative provisions of the Act that were considered in Pepler.  Leaving aside the question whether the industrial matter had been settled in earlier matters dealt with by other Public Service Arbitrators, as the respondent points out, there was, at all material times, a live 'industrial matter' within the meaning of s 7 and s 80E(1) of the Act which was capable of enlivening a power to make an order for payment of salary pursuant to s 80E(5).  Under s 80E(1), the Arbitrator has jurisdiction to deal with any matter affecting or relating to or pertaining to the remuneration of Mr Scull as such a matter is an industrial matter relating to a government officer.  The Arbitrator is empowered to review, nullify, modify or vary an act of an employer that is an act within the jurisdiction of the Arbitrator:  s 80E(5).  Whilst the powers of the Arbitrator are very wide, s 80E(5) does not confer an independent power to review a decision of an employer, but only a power to review, and, if necessary, to differ from, the decision of an employer where it is necessary to do so as part of the process of dealing with an industrial matter:  Director General Department of Justice v Civil Service Association of Western Australia Inc [2005] WASCA 244; (2005) 149 IR 160 [28], [33] (Wheeler and Le Miere JJ).

45       In Pepler, the power of the Commission to make orders following a finding of unfair dismissal of an employee was restricted to re-employment and reinstatement and any incidental orders that were necessary to make such orders effective.  In this matter, the power of the Arbitrator to make orders pursuant to the jurisdiction conferred by s 80E was not limited in the same way for two reasons.  Firstly, the relationship of employer and employee between Mr Scull and the appellant remains on foot and thus an industrial matter was on foot in respect of the appropriate rate of remuneration payable to Mr Scull.  Secondly, but of lesser importance in this appeal, the power of the Arbitrator to make an order to deal with the industrial matter in s 80E(5) of the Act is broader than the powers that were available to the Commission in 1987 when Pepler was decided, following a finding that dismissal was unfair.

46       The Arbitrator found that Mr Scull was treated unfairly and unreasonably when the appellant refused to increase Mr Scull's salary after the work value of his position increased, the Arbitrator made this finding after having regard to the duty imposed on her by s 26(1)(a) of the Act:  Arbitrator's reasons [59], (AB 20).  This finding was not in error.  When her reasons are analysed it can be seen that the Arbitrator did not rely upon this provision as a head of power to the order sought to be impugned, but she properly had regard to s 26(1)(a) as circumscribing the exercise of her power.  At [57] of her reasons for decision she found that the issue before her related to an industrial matter as it concerned a dispute about the amount of Mr Scull's salary.  Having found that matter was an industrial matter and thus within jurisdiction, the Arbitrator was bound to deal with the matter by applying the statutory command in s 26(1)(a) of the Act and was authorised under s 80E(5) to consider whether to exercise her discretion to review, nullify or modify the decision of the appellant to refuse to increase the salary of Mr Scull following the work value assessment of the position held by him.

47       For these reasons, I am not persuaded by the first argument put on behalf of the appellant in respect of ground 1 of the grounds of appeal.

48       The second argument the appellant puts forth goes to the heart of ground 1.  The appellant argues that in the absence of a term of contract that entitles Mr Scull to maintain relativity of the quantum of his salary with the salary of positions that report to his position, the salary rates in the industrial instruments determined his remuneration.  If this argument was accepted, the respondent's application for orders would have been dismissed by the Arbitrator as Mr Scull is and has, at all material times, been paid in excess of the amounts prescribed in the HSO Award and industrial agreements.

49       The basis of this argument is the contention that the Arbitrator had no jurisdiction to make the order awarding increases in salary to Mr Scull as there was no 'industrial matter' before her as the rates of pay payable to the position held by Mr Scull had been settled by orders made by Scott C in P 18 of 2003 and by the making of the rates of pay in the relevant industrial instruments.

50       In The Federated Gas Employees' Industrial Union v The Metropolitan Gas Co Ltd the Commonwealth Court of Conciliation and Arbitration had determined an industrial dispute by making an award.  The original claim was for the fixation of minimum wages for engine-drivers of 13s 2d per shift or day of eight hours.  The rate awarded was for 12s 6d per shift or day.  Pursuant to s 28(1) of the Conciliation and Arbitration Act 1904 (Cth) the Court of Conciliation and Arbitration was required to fix the term of the award for a period not exceeding five years.  During the term of the award the union brought a new claim for a minimum rate for engine-drivers of 15s 6d per day or shift of eight hours.  The employers objected on grounds that a higher rate could not be claimed before the expiry of the existing award.  The matter proceeded before the High Court as a stated case for an opinion of the Full Court on, among others, a question whether Higgins J when sitting in the Court of Conciliation and Arbitration was justified in finding that there was an industrial dispute existing within the meaning of the Conciliation and Arbitration Act on the subject of the claims.  The majority of the Full Court of the High Court found the answer to the question was no.  The reason why they so found turned on the interpretation of s 28(1) and s 28(2) of the Conciliation and Arbitration Act.  Section 28(1) and s 28(2) provided:

(1) The award shall be framed in such a manner as to best express the decision of the Court and to avoid unnecessary technicality, and shall subject to any variation ordered by the Court continue in force for a period to be specified in the award, not exceeding five years from the date of the award.

(2) After the expiration of the period so specified, the award shall, unless the Court otherwise orders, continue in force until a new award has been made.

51       Justice Barton found the meaning of the term 'continue in force' to clearly imply that the award on the dispute shall operate finally in settlement of it until the prescribed term expires, and even afterwards until the making of a new award, even though the court had power to make an order preventing its continuance (79).  He then held that [80]:

[I]f the subject matter of the new claim is any part of the subject matter of the original award, it cannot be treated as a new industrial dispute under which the President would be authorized to disturb the existing award …

What, then, is the position as regards subject matter?  The original claim was for a fixation of minimum wages both as to engine-drivers and other classes of employees.  Although the rate then demanded was less than is now demanded, the present claim is, notwithstanding, one for a minimum wage.  The minimum wage for the prescribed period of the award was fixed by the original award, and it cannot in my view be said that the mere fact that the present demand is a higher one while the subject matter remains the same constitutes a new dispute so as to entitle the Court to make a new award.

No doubt, it is true that a new dispute may arise where new subject matter arises, but as regards the original subject matter or matters I think it is the plain policy of the Act that, when the Court has once made an award prescribing a period of currency, that award is, unless itself varied or reopened under sec. 38 (o), to remain undisturbed during the period. Cases of hardship may and no doubt will arise, as they will in the case of every general rule, but their probability does not entitle the Court to frustrate the intention of Parliament.

52       Similar observations were made by Isaacs and Rich JJ (83 – 85).  There was, however, power to vary the award on the application of a party, but as Higgins J who was, with Power J, in dissent pointed out, any variation could not exceed the ambit of the dispute which was 13s 2d (90).  The members of the majority of the High Court all found that s 28(1) and s 28(2) of the Conciliation and Arbitration Act did not affect the powers of the Court of Conciliation and Arbitration to deal with a new and different dispute that was not within the ambit of the original log of claims.

53       In The Waterside Workers' Federation of Australia v The Commonwealth Steamship Owners' Association the majority of the High Court followed the reasoning of the majority in The Federated Gas Employees' Industrial Union v The Metropolitan Gas Co Ltd and found the Court of Conciliation and Arbitration had no power by a new award to fix the minimum rate of wages payable to operate retrospectively before the making of the new award.

54       The observations and findings made by the majority of the High Court in The Federated Gas Employees' Industrial Union v The Metropolitan Gas Co Ltd has not been reviewed in recent times.  This is perhaps because, at least by sometime prior to 1949 the Conciliation and Arbitration Act was amended to provide in s 48(4) that the fact that an award is in force does not prevent another award being made in settlement of a further dispute, whether or not the subject matter of the further dispute is the same in whole or in part as the subject matter of the dispute determined by the first award:  see the discussion in R v Blakeley; Ex parte Australian Theatrical & Amusement Employees Association (1949) 80 CLR 82.  Whilst the decision of the majority in The Federated Gas Employees' Industrial Union v The Metropolitan Gas Co Ltd can be said to be authoritative in the 21st century, when regard is had to the subject of the industrial matter in this case and the subject of the industrial matter in the case before Scott C in P 18 of 2003 and the terms of the relevant industrial agreements it can be seen that the industrial matter before the Arbitrator in this matter is not the same.

55       In The Federated Gas Employees' Industrial Union v The Metropolitan Gas Co Ltd the subject matter of the industrial dispute was the same in both applications.  In both applications the union sought an award to be made to increase minimum rates of pay payable to engine-drivers.

56       In this matter, the industrial matter before the Arbitrator was substantially encapsulated in paragraph 1 of the memorandum for hearing and determination as follows:

The applicant claims that the respondent has acted in a manner which is not fair, just and or reasonable by refusing to award an increase in remuneration for the position of Head of the Department of Medical Engineering and Physics at Royal Perth Hospital (Post number: 103229) ('the position') occupied by Mr Edward Scull consequent upon the respondent implementing outcomes of the Health Professions Work Value Review ('the HPR') to the position, pursuant to the provisions of the Hospital Salaried Officers Metropolitan Health Services Enterprise Agreement 2001 (PSAAG 1 of 2002) ('the Agreement').

57       In P 18 of 2003 the parties to this appeal sought to amend the HSO Award to provide for a new salary structure to reflect significant increases in work value of health professionals in specified callings.  As a result of an agreement between the parties, among other matters, the following matters were settled [2005] WAIRC 03346:

(a) classification level descriptors for levels 4/6 through to 12; and

(b) the assessment of health professional positions currently classified level 7 and above for reclassification in the new salary structure.

58       P 18 of 2003 was a matter that was preserved as a matter the respondent could pursue during the life of the 2001 industrial agreement.  Clause 6(1) of the 2001 industrial agreement provided that for the life of the agreement the respondent could make no further claims on the appellant, except for a number of matters set out in cl 6(2) which included:

(a) individual or collective reclassification claims, including claims for new classification structures; and

(b) the rates of pay for specified callings, including the classification structure for such callings.

59       The 2001 industrial agreement was replaced by the Health Services Union – Department of Health – Health Service Salaried Officers State Industrial Agreement 2004 (2004 industrial agreement).  The 2004 industrial agreement contained a similar clause to cl 6(1) of the 2001 industrial agreement.  Clause 6 of the 2004 industrial agreement provided that during the life of the agreement the respondent could make no further claims, except for individual or collective reclassification claims, including claims for new classification structures.  The 2004 industrial agreement was replaced by the Health Services Union – WA Health State Industrial Agreement 2006 (2006 industrial agreement).  Clause 7 of that agreement in substance contained the same provision as cl 6 of the 2004 industrial agreement.  The 2006 industrial agreement was replaced by the Health Services Union – WA Health State Industrial Agreement 2008 (2008 industrial agreement) which in turn was replaced by the WA Health – Health Services Union – PACTS – Industrial Agreement 2011 (2011 industrial agreement).  Both the 2008 industrial agreement and the 2011 industrial agreement contain a cl 7 that limited extra claims during the term of the agreements, but preserved the right to pursue reclassification matters before the Arbitrator.

60       Importantly, the 2001 industrial agreement and all the subsequent industrial agreements provide minimum rates of pay.  For example, cl 42(1)(a) of the 2001 industrial agreement provided:

This clause replaces Schedule A - Minimum Salaries of the Hospital Salaried Officers' Award 1968 No. 39 of 1968.

(1) (a) Subject to the provision of Clause 9. - Salaries of the Award and to the provisions of this clause, the minimum annual salaries for employees bound by this Agreement are set in this clause and shall apply from the 19th of July 2001 until the expiry of this Agreement.

(See also cl 13(1) of the 2004 industrial agreement, cl 18(1) of the 2006 industrial agreement, cl 17.1 of the 2008 industrial agreement and cl 17.1 of the 2011 industrial agreement).

61       These provisions replaced the rates of pay prescribed in the HSO Award and the HSU Award which cancelled and replaced the HSO Award in 2006.  It is also notable that cl 9(1) of the HSO Award and cl 8 of the HSU Award also provide for minimum rates of salary.

62       The appellant says there is no general jurisdiction to deal with the terms and conditions of Mr Scull's employment outside of the industrial instruments that otherwise apply to him as an employee.  In the absence of any contractual agreement between the appellant and Mr Scull the industrial instruments settle what is to be paid to Mr Scull.  This is said to be the effect of s 41(4) of the Act which provides that an industrial agreement extends to and binds all employees who are employed in any calling mentioned in the industrial agreement in the industry or industries to which the industrial agreement applies.  Consequently, it is argued that, in effect, there are two relevant industrial matters that have been settled by the parties.  The first is the work value claim which clearly defines the principles to be applied to all reclassifications and second is the remuneration applicable to all positions, including the remuneration applicable to the position held by Mr Scull.

63       The appellant's counsel, in my opinion, correctly identifies that there are two material industrial matters that have been settled by the Arbitrator.  The first is the work value review.  It appears that there is no dispute with the fact that the position held by Mr Scull has been properly reviewed and reclassified to level 12 pursuant to the terms of the settlement of that review.  The second settled industrial matter is the settlement of minimum rates of remuneration paid to each level of classification of positions held by employees covered by the industrial instruments, including the position held by Mr Scull.  Although I have referred to this as one industrial matter, in fact on each occasion the parties entered into each successive industrial agreement, there was a settlement of the industrial matter that pertained to, among other matters, minimum rates of remuneration for the period each industrial agreement remained in force.

64       At the hearing of the appeal the appellant also adopted an argument that the discretion conferred by s 80E(1) to review remuneration is limited to the rates provided for in awards and industrial instruments.

65       Whilst I agree that there is no scope for the respondent on behalf of Mr Scull to make a claim for remuneration that is covered by the terms of each of the awards and industrial agreements, an analysis of what is covered and thus excluded from the jurisdiction of the Arbitrator must start from the undisputed fact that the settlement for rates of remuneration was in each case the setting of minimum rates of salary for each level of classification in the industrial instruments.

66       Turning to the industrial matter before the Arbitrator in this matter, it is clear that the matter was not what the minimum rate of salary should be paid for the level of classification held by Mr Scull, but the rate of remuneration that Mr Scull himself should be paid as a result of the outcomes of the HPR.  Part of that dispute was the respondent's claim that the relativity of Mr Scull's actual remuneration in excess of the minimum rates of salary prescribed for the position held by him would be maintained against the salaries of other positions that were increased as a result of the HPR.  This was not a claim on behalf of an employee whose terms and conditions of employment were specified as only the minimum rate of remuneration in the industrial instruments.

67       The industrial matter before the Arbitrator was different to the industrial matters that were settled by the reaching of the industrial instruments and the work value application in P 18 of 2003.

68       It is not the case that employees employed as government officers can only be paid more than the minimum rates specified in industrial instruments where it is a term of their contract of employment that requires such a payment to be made.  The fact that in general, government usually only pays minimum rates and no more to government officers is a matter that is open to government as a matter within its prerogative.  But that does not mean that such a policy operates to deprive a Public Service Arbitrator of his or her jurisdiction to make an order awarding a higher rate of remuneration where in the circumstances of a particular case payment of a higher rate of remuneration is warranted.

69       In The Honourable Minister for Education, Employment and Training v The Australian Liquor, Hospitality and Miscellaneous Workers Union, Miscellaneous Workers Division, Western Australian Branch (1994) 75 WAIG 14 it was argued that because the respondent to a number of awards did not pay more than the rates specified in the awards and treated the awards as a maximum, the awards were paid rates awards.  In that matter the awards did not state whether the rates were to be paid as minimum rates.  Rejecting the argument put by the employer, Beech C observed (21):

[S]omething more than the parties' attitudes is required.  There may well be many minimum rates awards where the rates prescribed are also, in practice, the actual or maximum rates that are paid.  And that may well be due to a policy position on the part of an employer respondent to the award that nothing more than the minimum will be paid.  But the refusal of an employer bound by a minimum rates award to pay more than the award does not thereby convert the award to a paid rates award.

70       Whilst the appellant in this appeal does not contend the rates specified in the industrial instruments are paid rates, it is contended more can only be paid as contractual benefits.  However, that is not the case.  Minimum rates in industrial instruments prescribe rates of pay as legal minima and employees are at liberty to pursue over-award payments:  State Wage Case (1992) 72 WAIG 191, 204.  Although in the normal course of a negotiated outcome for over-award payments, such payments may become payable in a way that creates a contractual entitlement, that does not mean that the jurisdiction of the Arbitrator is to be limited to claims for contractual benefits.  Section 80E(1) of the Act when read with s 80E(5) and s 80G(1) is not so limited.  An exercise of arbitral power is the creation of new rights and obligations:  The Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434, 463 (Isaacs and Rich JJ) and Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia (1987) 163 CLR 656, 666.  In this matter, it is clear the Arbitrator exercised arbitral power in making the order sought to be impugned by the appellant.

71       Where an order is sought for increased remuneration, the creation of new rights and obligations is not restricted to a review of acts of an employer that solely go to a denial of existing contractual benefits and obligations.  Such a reading of s 80E would necessarily create a restricted power of arbitration and thus necessarily limit the power of a Public Service Arbitrator to enquire into and deal with an industrial matter.

72       In any event, the respondent entered into a contract with Mr Scull to pay him rates of remuneration that were and are above award.  It was also a condition of the contract of employment that if senior positions that report to the position held by Mr Scull were reclassified, or were to receive additional remuneration which resulted in significant work value for the position held by Mr Scull, he could renegotiate his contract.  What this industrial matter is about is Mr Scull had a right to renegotiate his remuneration and the heart of the dispute was what should be the quantum of his over-award payment in light of the assurance given to Mr Scull that was not binding in contract, that the status of his position, including his remuneration, would be maintained.  The question before the Arbitrator, as Mr Schapper put it on behalf of the respondent, was whether it was unfair of the appellant not to give effect to an assurance given on his behalf when giving effect to the outcomes of the HPR.  That was not a matter that can be characterised as part of the industrial matter before the Arbitrator when the 2001 industrial agreement and the successive industrial agreements were made, or part of the industrial matter in P 18 of 2003.

73       The Arbitrator had the jurisdiction to hear and determine the industrial matter before her and to review the appellant's decision not to increase Mr Scull's over-award remuneration.  As part of that review, the Arbitrator could exercise her discretion to vary the decision of the appellant.  The respondent properly concedes that there would have to be a sound basis why a person whose terms and conditions are covered by an award or industrial agreement could properly persuade the Arbitrator to increase their remuneration.  However, leaving aside the argument that the rates in the industrial instruments limited the Arbitrator's exercise of discretion, whether the Arbitrator erred in the exercise of her discretion is not a matter that is before the Full Bench in this appeal.

74       The appellant also puts forward an argument that apart from a claim for contractual benefits any claim by an employee for an increase in remuneration can only be dealt with by the Arbitrator as a review of a reclassification pursuant to s 80E(2) of the Act.

75       Section 80E(1) and s 80E(2) provide:

(1) Subject to Division 3 of Part II and subsections (6) and (7), an Arbitrator has exclusive jurisdiction to enquire into and deal with any industrial matter relating to a government officer, a group of government officers or government officers generally.

(2) Without limiting the generality of subsection (1) the jurisdiction conferred by that subsection includes jurisdiction to deal with — 

(a) a claim in respect of the salary, range of salary or title allocated to the office occupied by a government officer and, where a range of salary was allocated to the office occupied by him, in respect of the particular salary within that range of salary allocated to him; and

(b) a claim in respect of a decision of an employer to downgrade any office that is vacant.

76       This argument was indirectly raised by counsel for the appellant in Scull [No 1].  In response to that submission, I observed [83]:

Section 80E(2) of the Act makes it clear the jurisdiction under s 80E(2)(a) of the Act includes jurisdiction to deal with a claim in respect of the salary or range of salary allocated to an office occupied by a government officer.  However, it is apparent that s 80E(2)(a) of the Act is not concerned with the salary that attaches to the person who holds an office but to the office.  Section 80E(1)(a) of the Act contains a distinction between what may be colloquially described as a job (an office) and the person who holds that job (an officer).  This distinction is found not only in s 80E(1)(a) of the Act but in other provisions of the Act and the Public Sector Management Act 1984 (WA):  (see, for example, s 80I(1)(b) and s 80I(1)(c) of the Act).  The documents that contain Mr Scull's terms of contract of employment attach to him personally and do not attach to the office held by him.  For this reason I am of the opinion that it is doubtful that s 80E(2)(a) of the Act has any application to the industrial matter raised in this appeal.

77       This matter is not a dispute about the salary that is allocated to the level 12 office held by Mr Scull.  It is about the quantum of remuneration he should receive in excess of the amount of salary allocated to the office.  A review of the salary allocated to an office within the meaning of s 80E(2)(a) entails a review of the duties and work value of the position and any skills and experience of the incumbent are not relevant matters in a determination of the proper salary allocated to an office.  The only basis for consideration of these factors is where a claim is made by an officer that he or she should be paid at a particular point within the range of salary allocated to an office.  For example, if an office is allocated a range of salary that has three points, the incumbent may on appointment seek to be paid at a level higher than the first salary point.  Such a claim could be heard and determined by the Arbitrator under s 80E(2)(a) of the Act.  The claim the subject of this appeal is not such a claim.

78       Although the industrial matter before the Arbitrator in this appeal was a dispute about the quantum of an over-award payment payable to Mr Scull personally, paragraphs 2 and 3 of the order operate to increase the salary of the position held by Mr Scull rather than the over-award payments paid to Mr Scull.  Whilst the Arbitrator considered matters that were relevant to the work value of the position in that she found the duties required of the position were more complex than a similar level 12 position at Sir Charles Gardiner Hospital, the Arbitrator made the findings that were personal to the circumstances of Mr Scull's claim:  Arbitrator's reasons [62] – [63], AB 20 – 21.  Yet paragraphs 2 and 3 do not reflect these findings.  As the appellant points out, the Arbitrator has no power to vary the salary of the position itself.  That is an industrial matter that has been settled by the making and variation of the HSO Award, the making of the HSU Award and the relevant industrial agreements.

79       For this reason, I would uphold ground 1 of the appeal as I am of the opinion that the Arbitrator had no jurisdiction to make an order requiring the appellant to increase the salary of the position.  However, I am of the opinion that she had jurisdiction to require the appellant to increase the remuneration paid to Mr Scull as his remuneration included payments in excess of the minimum rates prescribed in the industrial instruments.  Consequently, I am not of the opinion that the decision should be quashed as paragraphs 2 and 3 of the order are capable of amendment to bring them within power, as proposed at the conclusion of these reasons.

(b) Ground 2 – Is the order retrospective

80       The appellant argues that the order creates an obligation to retrospectively pay a greater remuneration to Mr Scull as the order varies salary rates from 3 August 2003.

81       In considering whether the order is on its terms retrospective, it is of assistance to review the meaning of retrospectivity of legislation.  In construction of legislation a distinction is drawn between legislation that has a prior effect on past events, which in law is not regarded as giving retrospective operation to a legislative provision.  In Reid v Secretary, Department of Family and Community Services [2001] FCA 794; (2001) 109 FCR 477, Reid claimed a disability support pension in January 1998.  When assessing his pension application lump sums of compensation paid from 1995 to 1998 under the Workers Rehabilitation and Compensation Act 1986 (SA) were taken into account.  Reid sought a review of that decision on grounds that when he met the qualifications for a disability support pension in 1990, the legislative provisions that provided for an entitlement to a disability support pension did not assess lump sum payments.  After he became eligible to apply for a pension, legislative amendments became operative on 1 January 1994 which required assessment of lump sum compensation payments.  Branson and Mansfield JJ held that Reid did not have a right to receive payment of a disability pension until he made a claim for the pension in 1998 and that his claim for a pension had to be assessed at the time Reid applied.  When coming to this opinion, their Honours found their construction of the legislative provisions was not retrospective [21].  In making this finding, they relevantly had regard to observations in two authorities.  These were as they observed [21]:

As Jordan CJ said in Coleman v Shell Co of Australia Ltd (1943) 45 SR (NSW) 27 at 31:

'[A]s regards any matter or transaction, if events have occurred prior to the passing of the Act which have brought into existence particular rights or liabilities in respect of that matter or transaction, it would be giving a retrospective operation to the Act to treat it as intended to alter those rights or liabilities, but it would not be giving it a retrospective operation to treat it as governing the future operation of the matter or transaction as regards the creation of further particular rights or liabilities.'

To a similar effect, the Victorian Full Supreme Court in Robertson v City of Nunawading [1973] VR 819 at 824 said of the principle that legislation is presumed not to operate retrospectively:

'[The] principle is not concerned with the case where the enactment under consideration merely takes account of antecedent facts and circumstances as a basis for what it prescribes for the future, and it does no more than that.'

82       In this matter, the Arbitrator was called upon to review and vary the act of the appellant on 5 October 2009 (which was carried out by a delegate) refusing to pay Mr Scull a salary adjustment.  Section 80E(5) of the Act expressly empowers the Arbitrator to review and vary this decision.  This provision by its very nature enabled the Arbitrator to look back in time and to make an order that granted the amounts sought in the appellant's claim.  That does not mean that the order made by the Arbitrator was retrospective.

83       Paragraph 2 of the order requires that the salary of Mr Scull be increased.  It does not specify an operative date as to when that increase is to be paid.  Paragraph 3 of the order requires that the salary levels in a table contained in a memorandum dated 2 September 2009 be applied.  The table contains the following calculations (AB 240):

84       Although the table contains dates from which amounts are calculated, the incorporation of the table into the order does not require that the amounts specified as salary claimed be payable from those dates.  There was no obligation to pay the amounts specified until the order (which by definition is a decision) was perfected.  To be perfected, a decision is required to be first produced to the parties as minutes and then signed, sealed and deposited in the office of the Registrar pursuant to the procedures set out in s 34, s 35 and s 36 of the Act:  Registrar v Metals and Engineering Workers' Union of Western Australia (1993) 74 WAIG 1487.  Once an order is perfected by the procedure provided for in those provisions, an order has effect according to its terms.  As paragraphs 2 and 3 of the order simply requires an increase in salary to be applied as calculated in the table and no date is specified for that payment to be made, it is apparent that the obligation to pay came into operation on the date the order was signed, sealed and deposited in the office of the Registrar.

85       In this matter no rights and obligations were affected by the order made by the Arbitrator prior to the date of the order as the obligation to pay did not arise until the order was made.  Once the order came into effect, it did not do so retrospectively as the order does not operate earlier than the date on which it was perfected.  To operate retrospectively (if valid to do so) the order would have to specify a date (earlier than the date the order was perfected) from which the terms of the order were to take effect from.  Once the order was perfected it affects the rights and obligations of the appellant and Mr Scull which have present and future consequences to past events.  This is expressly contemplated by s 80E(5) of the Act.

86       In this matter the order simply requires that payment be made to Mr Scull as calculated in paragraph 3 of the order.

87       For these reasons, I am not satisfied that ground 2 of the grounds of appeal has been made out.

Conclusion

88       For the reasons expressed in respect of ground 1 of the appeal, I am of the opinion an order should be made to uphold the appeal and to vary paragraphs 2 and 3 of the order made by the Arbitrator as follows:

2. ORDERS THAT the salary of over-award payments made to Mr Edward Scull who holds the position of Head of Department, Medical Engineering and Physics (position number 103229) at Royal Perth Hospital held by Mr Edward Scull be increased to reflect the relativity of this the position to other senior positions within the Department of Medical Engineering and Physics at the level it was when Mr Scull commenced employment in the position.

3. ORDERS THAT the salary levels contained in Column 3 of the table in the Internal Memorandum to the Chief Executive South Metropolitan Area Health Service from Mr Gregory dated 2 September 2009 be applied to the position of Head of the Department, Medical Engineering and Physics at Royal Perth Hospital held by paid to Mr Scull.

BEECH CC:

89       I have had the advantage of reading in draft form the reasons for decision of Her Honour the Acting President.  I agree with those reasons and the order to issue, and have nothing to add.

KENNER C:

90      This is the second appeal to the Full Bench from a decision of the Public Service Arbitrator about a dispute between the Director-General and the Union concerning the applicable salary to be paid to Mr Scull.  Mr Scull occupies the position of Head of Department, Medical Engineering and Physics, at Royal Perth Hospital. The background to Mr Scull's appointment, the dispute concerning his level of salary, and surrounding circumstances, are set out in some detail in the first Full Bench decision and are unnecessary to repeat: Director General of Health as the delegate of the Minister of Health v Health Services Union of Western Australia (Union of Workers) (2011) 91 WAIG 865.  In the first Full Bench decision, it was held that the learned Arbitrator had erred in concluding that it was a term of Mr Scull's contract of employment with Royal Perth Hospital, that the status of his position relative to others required an increase in his salary.  The decision of the learned Arbitrator was suspended and the matter remitted for further hearing and determination.  Further reasons for decision, and declaration and orders in Mr Scull's favour, were delivered on 8 February 2012: (2012) WAIRC 00059, (2012) 92 WAIG 240; (2012) WAIRC 00082, (2012) 92 WAIG 251.

91      Arising from those proceedings, the learned Arbitrator, in the exercise of her discretion, and having regard to s 26(1)(a) of the Act, concluded that the Director-General's refusal to increase Mr Scull's salary, in the context of work value changes to his position and work value changes to positions reporting to him, was unfair.  This was so notwithstanding the fact that at all material times, Mr Scull has enjoyed a substantial over-award payment, which the Director-General maintains has adequately rewarded Mr Scull for his efforts.

92      This appeal raises two issues.  In short, the central thrust of the first ground of appeal asserts, in effect, that because Mr Scull's employment has been and is covered by the terms of the relevant award and successive industrial agreements binding the parties, then the salaries and conditions specified in those industrial instruments constitute a settlement of the industrial matters between the parties.  It follows, on the Director-General's submission, that the dispute as to salaries and terms and conditions having been resolved by the making of the relevant industrial instruments, it was not open to the learned Arbitrator, as a matter of jurisdiction, under s 80E(1) of the Act, to interfere.  The only way, according to the Director-General's submission, that the Arbitrator could have dealt with the matter was if it could be established that Mr Scull had a contractual entitlement to a higher salary.  Given the first Full Bench found that this was not the case, Mr Scull's remuneration could not be revisited by the Union on application to the Arbitrator.

93      Secondly, ground 2 of the grounds of appeal contends that the order made by the learned Arbitrator purported to operate retrospectively, contrary to the terms of the Act.

94      The proceedings before the learned Arbitrator were not brought under s 80E(2) of the Act, in relation to a claim concerning the salary, range of salary or title allocated to an office occupied by a government officer.  The matter originally came before the Arbitrator in a s 44 conference, which was unsuccessful in resolving the issues in dispute.  The matter was referred under s 44(9) of the Act as a dispute, in part, in relation to the harshness and unfairness of the Director-General in not increasing Mr Scull's salary, in light of developments to which I have briefly referred above.

95      Importantly for present purposes, the Director-General makes no challenge against the learned Arbitrator's exercise of discretion.  The challenge on appeal relates solely to the jurisdiction of the Arbitrator to make an order in relation to the salary to be paid to Mr Scull.  It is not controversial that the salary paid to Mr Scull is in excess of that prescribed by the relevant industrial instruments.  That is, Mr Scull is, and always has been, in receipt of an over-award payment.

96      The jurisdiction and powers of an Arbitrator under s 80E(1) of the Act are wide.  When read with the power under s 80E(5) to grant a remedy, the jurisdiction of an Arbitrator extends to enquiring into and dealing with any industrial matter relating to a government officer, and reviewing, nullifying, modifying or varying any act, matter or thing done by an employer.  The definition of industrial matter in s 7 of the Act is also wide, and expressly incorporates a matter "affecting or relating or pertaining to…(a) the wages, salaries, allowances, or other remuneration of employees or the prices to be paid in respect of their employment;". 

97      The matter referred back to the learned Arbitrator for further determination from the first Full Bench concerned a claim in relation to the fairness or otherwise of the Director-General's decision to not increase Mr Scull's over-award payment, in light of work value changes to his position, and to other positions which were found by the learned Arbitrator to impact upon the status of his position.  That finding was consistent with evidence to which the learned Arbitrator referred, in particular that of Dr Montgomery. This was to the effect that Mr Scull was given assurances that the status of his position would be maintained, which in part involved the remuneration and seniority attaching to his job.

98      Given that the salary paid to Mr Scull was not that prescribed by the relevant award and industrial agreements, which were minimum obligations, and given that the claim to increase Mr Scull's over-award payment was plainly an industrial matter, I am not persuaded that the learned Arbitrator made any jurisdictional error in exercising her discretion to decide the matter in Mr Scull's favour.   It is to be accepted, as conceded by the Union, that there would need to be cogent reasons for the Arbitrator to review an employer's decision in the present circumstances. Such a claim is not open merely for the asking.  In this particular case, however, there were cogent reasons, supported by the evidence, for the orders made by the Arbitrator. 

99      Moving to consider the particular form of the orders, as noted in the reasons of Smith AP, it would appear that the orders made by the learned Arbitrator, despite her reasons for decision, seem to have the effect of increasing the salary of the office held by Mr Scull, rather than his over-award salary.   The distinction between the salary attaching to Mr Scull's office and that paid to him personally was recognised by the learned Arbitrator at par 57 of her reasons.  It thus seems that the form of orders made reflects a drafting error.  I agree that the orders should be varied to make it clear that it is only the over-award salary that is being increased, and not the salary attaching to the office occupied by Mr Scull.

100   In relation to ground 2 that being that the order of the learned Arbitrator had retrospective effect, I am not persuaded that this was so.  I can state my reasons for so concluding relatively shortly.  The declaration and orders made do not in their terms, refer to any particular operative date. Thus, the order can only operate from its date, which is specified as 14 February 2012.  This is of course, subject to any later date that the order was perfected and deposited in the office of the Registrar in accordance with the requirements of ss 34, 35 and 36 of the Act: Registrar v Metal and Engineering Workers Union of Western Australia and Ors (1993) 74 WAIG 1487; McCorry v Como Investments Pty Ltd (1989) 69 WAIG 1000. The argument put by the Director-General was to the effect that because the various historical salary levels in the table referred to in order 3 operated on dates prior to the order, what the learned Arbitrator did was to retrospectively apply them to Mr Scull now. 

101   The distinction between legislation or as in this case, an order that is truly retrospective or which applies past circumstances to present and future events, is not always easy to draw: See generally Pearce and Geddes Statutory Interpretation in Australia Fourth Edition at pars 10.3-10.4.  In this particular case, however, the order is not retrospective.  What is does is provide that the salaries set out in column 3 of the table are to apply to Mr Scull from the date of the order.  Put another way, if the employer failed to comply with the order in whole or part, by paying a lesser salary, Mr Scull could commence a claim to enforce the order under s 83 of the Act.  However, in my view, he could only claim payment of any amount from the date of the order, that being 14 February 2012.  That is the date on which the obligation to pay arises.  It is only if it could be said that the obligation to pay arises from an earlier date that the order could be said to operate retrospectively.  The effect of the learned Arbitrator's order is to impose present and future obligations on the Director-General based on past events.  This ground of appeal is not made out.