ADF remuneration and civilian employment law and industrial relations^[1]

I have had the great honour and privilege to have served as Australia’s Defence Force Advocate for the past eight years with my appointment ending on Friday 10 February 2023. Throughout that time I met many outstanding men and women who serve in the Australian Defence Force. I was shown the diversity of the activities, equipment, platforms and skills used by the three services in the defence of the nation. A competitive, independent and transparent remuneration system is vital to attract and retain a motivated and talented workforce. This paper gives an insight into how that goal is achieved in submissions and hearings before the Defence Force Remuneration Tribunal.

Background

The determination of salaries and allowances for members of the Australian Defence Force (ADF) has it statutory source derived from the Defence Act 1903 (Cth) (hereinafter the Defence Act).

When reading and interpreting a statute (i.e. an Act), its long title and preamble can be used to interpret and identify its purpose^[2]. The preamble to the Defence Act reads, “An Act to provide for the Naval and Military defence and protection of the Commonwealth and of the several States.”

The preamble to an Act, as well as its own terms, sets the scene or identifies the purpose of the enactment. Often times the purpose of a statute can be used to identify how it is to be interpreted. A fundamental aspect about the Defence Act is to make laws for the proper defence of Australia. It is one of the obligations of the Commonwealth Government to protect its citizens from attack by our nation’s adversaries. Such protection can also broadly mean assisting our nation’s allies. Therefore, the statutory power to set appropriate salaries and allowances for members of the ADF needs to be interpreted consistent with the purpose of the Defence Act, that is, the defence and protection of Australia.

Members of the armed forces do not have their remuneration determined like employees in Australia. Employees have their employment regulated by normal contract law, that is express and implied terms of an agreement made between an employer and an employee and obligations standing side-by-side or imported into such contracts by orders of industrial relations commissions (such as awards or enterprise agreements), relevant statutes and regulations touching upon the provision of services by an employee to an employer.

Prior to Federation, the States had various arbitration or industrial relations statutes in place which modified common law contracts for the supply of labour. In many instances, such legislation set minimum conditions for the supply of labour. After Federation the Commonwealth Parliament, using the industrial power under subsection 51(xxxv) of the Constitution, established the Conciliation and Arbitration Commission to regulate employment conditions based upon inter-state industrial disputes.

Members of the ADF have never been ‘at law’ employees, and therefore not subject to civilian industrial relations laws, either at the common law or pursuant to statutes modifying the relationship of employers and employees. Members of the ADF serve at the pleasure of the Crown. In a recent decision of the Full Federal Court, Gaynor v Chief of the Defence Force (No 3) [2015] FCA 1370 (Gaynor) (4 December 2015), the principle that military service is not based upon a contract of employment was clearly stated based upon the authority of earlier decisions^[3]. Section 27 of the Defence Act is also quite explicit that military service is not a civil contract, “No civil contract of any kind is created with the Crown or the Commonwealth in connection with a member’s service in the Defence Force.”

Today ADF service is regulated decisively by statute, but not by any of the statutes which deal with the relations of employers and employees. It is subject to its own statutory code which has been progressively expanded^[4].

The establishment of the Defence Force Remuneration Tribunal

Prior to 1984, military remuneration was determined on an ad hoc basis by the Commonwealth Government of the day and various Commissions of Inquiry or Boards of Reference. In 1984, legislation was introduced by the then Minister for Defence, Mr Gordon Scholes, who was a member of the Hawke Labor Government.

In the Second Reading Speech amending the Defence Act, attention was given to the rationale for the establishment of an independent pay fixing authority for the ADF. The proposal for an independent body to determine salaries and allowances was said to be desirable by the Minister for Defence for these reasons:

It will supersede the existing arrangements for Defence pay fixing which were established in 1979 as a result of serious problems which had arisen in Defence Force pay fixing. At that time pay fixing was dependent on the making of regulations and this resulted in excessive delays.^[5]

It was said to be desirable for determinations of remuneration for Defence personnel to have the same force and effect as other pay fixing authorities. Mr Scholes said this about the bill:

This Bill brings into operation those proposals and will eliminate once and for all the practice which has unfortunately been inherent in pay fixing for the Defence Force, whereby references to the committee by Ministers have not been made regularly. In many cases there have been serious delays in the hearing of Defence Force salaryrelated matters, with the result that, when recommended rises have been substantial and have caused serious problems within the Defence vote. In turn, this has caused delays and has created hardship to members of the Defence Force and their families.^[6]

It was said that what was needed was similar arrangements for the fixation of wages as existed in the Public Service. That fixation was to be twofold, that is, the Minister for Defence would be able to determine financial conditions of service of members of the Defence Force under Part IIIA Division 1 of the Defence Act, and the second arm was that of wage fixation for such members of the Defence Force would be made by the Defence Force Remuneration Tribunal (DFRT), a body which would have similar power and independence to that of the then Conciliation and Arbitration Commission (a predecessor to the current Fair Work Commission). The tribunal, to be established under Part IIIA Division 2 of the Defence Act, would comprise three members, one being a Deputy President of the Conciliation and Arbitration Commission as its President, and two other persons, one who was experienced in industrial relations and the other who was a former senior member of the ADF. The tribunal would have jurisdiction to determine salaries and “salary related”^[7] allowances for the Defence Force, and would be required to review those matters at least every two years. The amendment to the Defence Act also included the establishment of the office of Defence Force Advocate (DFA). The Minister said this:

The Advocate will have the function of preparing matters for reference to the Tribunal by the Chief of the Defence Force and of preparing submissions to the Tribunal on behalf of the Defence Force. He will also represent the Defence Force in any proceedings before the Tribunal. This arrangement recognises the fact that the Defence Force has no industrial organisation.⁸

The functions of the DFRT found in section 58H relevantly set out the second limb as to how military pay matters are determined:

(2) The Tribunal shall, as provided for by this section:

(a) inquire into and determine the salaries and relevant allowance to be paid to members; and

(b) inquire into and make determinations in respect of prescribed matters that have been referred to the Tribunal.

The procedure of the Tribunal is set out in s.58K. In making a determination, the Tribunal shall have regard to these two key factors:

a. Any decision of, or principles established by, the Fair Work Commission that is or are relevant to the making of the determination; or

b. If the Fair Work Commission has not yet made any such decision or established any such principles, any decision of, or principles established by, the Australian Industrial Relations Commission that is or are relevant to the making of the determination.

In subsection 58K(8), the statute provides that the Tribunal may regulate the conduct of its proceedings as it thinks fit, and is not bound to act in a formal manner.  Moreover, the Tribunal may inform itself on any matter in such a manner as it thinks fit and is not bound by the rules of evidence.

Consequently, in order to understand how the DFRT determines salaries and allowances after proper inquiry, one must understand various concepts as to how remuneration is altered by civilian industrial tribunals. In doing so, one needs to have an understanding of industrial relations concepts such as work value, attraction and retention, relativities, nexus and flow on.

Work Value

Currently under the Fair Work Act 2009, the Fair Work Commission in exercising modern award powers is guided by s.157 and s.158. Sections 157(2) and 157(2A) of the Fair Work Act state:

(2) The FWC may make a determination varying modern award minimum wages if the FWC is satisfied that:

(a) the variation of modern award minimum wages is justified by work value reasons; and

(b) making the determination outside the system of annual wage reviews is necessary to achieve the modern awards objective.

 (2A) Work value reasons are reasons justifying the amount that employees should be paid for doing a particular kind of work, being reasons related to any of the following:

(a) the nature of the work;

(b) the level of skill or responsibility involved in doing the work; (c) the conditions under which the work is done.

In recent times within the industrial relations system of Australia, both in Federal and State industrial relations commissions, work value applications have not been common. In order to change rates of pay, parties have generally relied upon the bargaining provisions of enterprise agreements, and in the Federal area, the modern awards have set the minimum rates or base from which enterprise bargaining proceeds. Consequently, in order to look at work value reasons one needs to look at the past to understand how work value cases were conducted and what evidence was required in order to achieve a variation of rates of pay based upon work value principles.

Work value cases had been a very common method for upward adjustments to rates of pay throughout most of the 20^th century in Australian industrial relations. A very interesting article, titled “Work Value” by J.R. Kerr (later to become the Chief Justice of New South Wales and then Governor-General of Australia, Sir John Kerr) can be found in the Journal of Industrial Relations, Volume 6, Number 1, March 1964. That article provides a very good description of the development of work value cases going back even to the 1920s. Mr Kerr, refers to a case decided by the Industrial Relations Commission of New South Wales called the “1959 Margins Case”, in which the following is stated:

The difference between margins in an award occurs because the award maker has decided that there is a difference in the amounts to be awarded for skill, arduousness and other like factors proper to be taken into account in fixing a (secondary) wage.^[8]

Further, his article references another Industrial Commission of New South Wales case called the “Forestry Officers Case” which identifies work value as, “A value arrived at by considering the evidence of the nature of the work and the differences between the work of different classifications.”^[9]

Mr Kerr’s article also looks at the different types of work value cases, being as follows:

In each type of case the work is being valued. In one type it is valued by examining in detail the actual nature of the work and assessing its value on that basis. In another type of case the nature of the work is assumed to be the same as it was on the previous occasion, and it is revalued in the light of economic factors such as general economic conditions, economic conditions in the industry in question, change of value of money and increased productivity and so on.^[10]

I think with respect to matters before the DFRT, because of the existence of the ADF Workplace Remuneration Arrangement (WRA), the second type of work value case involving economic factors does not come into play in work value cases before the DFRT. What comes into play is an examination in detail of the actual nature of the work in order to assess its value, particularly when there has been a change in that work.

Work value considerations are prominent in the work of the DFRT, and such is to be found by reference to its Practice Statement issued on 23 May 2019 concerning its procedure and jurisprudence. In particular, under the heading ‘Submissions’ on page 3, the following is stated:

Submissions are to clearly justify new or changed remuneration structures having regard to work value considerations being the nature of the work, the level of skill or responsibility involved in doing the work and the conditions under which work is performed, disability, internal and external workforce relativities, and attraction and retention impacts.

In looking at work value considerations, both the DFRT and the FWC would have regard to the precedents set in other cases dealing with work value, and in particular where there has been a change to the nature of the work. So much can be found by reference to the National Wage Case of June 1986, which had a five member Full Bench of the then Australian Conciliation and Arbitration Commission, a forerunner to both the Australian Industrial Relations Commission (AIRC) and the FWC. In a very detailed decision, the Full Bench set out the principles for wage fixation and under Principle 4, Work Value Change, it reads as follows:

(a) Changes in work value may arise from changes in the nature of the work, skill and responsibility required or in the conditions under which work is performed. Changes in work by themselves may not lead to a change in wage rates. The strict test for an alteration in wage rates is that the change in the nature of work should constitute such a significant net addition to work requirements as to warrant the creation of a new classification.

These are the only circumstances in which rates may be altered on the ground of work value and the altered rates may be applied only to employees whose work has changed in accordance with this Principle.

However rather than to create a new classification it may be more convenient in the circumstances of a particular case to fix a new rate for an existing classification or to provide for an allowance which is payable in addition to the existing rate for the classification. In such cases the same strict test must be applied. 

(b) When new or changed work justifying a higher rate is performed only from time to time by persons covered by a particular classification or where it is performed only by some of the persons covered by the classification, such new or changed work should be compensated by a special allowance which is payable only when the new or changed work is performed by a particular employee and not by increasing the rate for the classification as a whole.

(c) The time from which work value changes should be measured is the last work value adjustment in the award under consideration but not in no case earlier than 1 January 1978. Care should be exercised to ensure that changes which were taken into account in any previous work value adjustments are not included in any work valuation under this principle. 

(d) Where a significant net alteration to work value has been established in accordance with this Principle, an assessment will have to be made as to how that alteration should be measured in money terms. Such assessment should be normally based on the previous work requirements, the wage previously fixed for the work and the nature and extent of the change in work. However, where appropriate, comparisons may also be made with other wages and work requirements within the award or to wage increases for changed work requirements in the same classification in other awards provided the same changes have occurred. 

(e) The expression ‘the conditions under which work is performed’ relates to the environment in which the work is done. 

(f) The Commission should guard against contrived classifications and over classification of jobs.

(g) Where through technological or other change the impact of work value change on the workforce is widespread or general, the matter should be dealt with in the National Wage Cases.^[11]

The Tribunal in the reasons for decision of a very important case, Matter 2 of 2003, Remuneration Reform Project, authoritatively stated its view about the place of the concept of work value in its deliberations. At page 12 of the decision, the following is stated… 

Work value

Firstly, both the ADF and the Commonwealth submitted that determination of salary for each officer group is to be based on work value. But it was apparent throughout proceedings that there are different understandings of work value and that the parties risk reliance on work value beyond its ability to assist. If the principal parties wish to rely on work value, further work is required to ensure understanding of what it is, and what it is not.

We understand work value in terms of the AIRC’s [then] current Wage Review Principle 6. It is a relative concept, where the value of work is to be determined by comparison to other work on the basis of its nature, skill and responsibility required or the conditions under which the particular work is normally performed. The work environment is dynamic, rather than static. So change in work value cannot be established by evaluating change in that work only: it is to be compared to the change in other work. Hence, the establishment of benchmark categories or jobs is a necessary condition for establishing and maintaining relativities.

Further, it is significant change that affects differences in value. Consequently, given the emphasis of the parties on work value, the Tribunal has been concerned that the new salary structure should have significant gaps between pay grades, such that the Tribunal is not asked to continue such fine differentiation as is evident in the numerous current levels of disability allowances. Also, the Commonwealth helpfully referred to an AIRC decision which discusses some of the factors in assessing work value change (Print K4004).^[[12]]

Similarly, pay grade placement would be the prime means of recognizing differences in work value. Many arguments now advanced for change in allowances would be more properly directed to pay grade placement. For example, disability allowances have a role to play primarily where conditions of work are irregular. The proposition that either a regular or a long term element of work value is not reflected in pay grade placement could not be sustained. The application of work value implies that pay grade placement must represent the long term market value of the work.

The important aspect about that is the extent of the change and the date from when the change might be measured. Often times there are arguments as to when that should take place. Principle 4 (as stated above in paragraph 22 in the National Wage case of 1986) suggests it should take place since the last time the particular classification or groups of classification has been assessed on work value principles.

For example, in the recent DFRT Matter 21 of 2020 (Air Force Officer Aviation Pay Structure Report Back), it was agreed by the parties that the date from which any work value changes are to be measured for the various Air Force roles or jobs remunerated under the Officer Aviation Pay Structure would be 2009. That is, one will need to know what was the nature of

the responsibilities, skills, qualifications and scope work performed in 2009 compared to when the cohort is being assessed for an increase to salary based upon changes to work value. Records ought to be kept of changes, even incremental ones, in order to justify any increases in the future based upon work value argument. Such changes must be supported by evidence such as by records kept and /or by persons who by dint of their position would know.

I shall deal with the matter of evidence later, however, I would advise Air Force if it wants to guarantee a successful outcome in any future work value case to obtain an affidavit of a person who would have direct knowledge of all aspects of the duties, skill and conditions of Officers Aviation work in 2009, so that person’s evidence is kept on record. With that evidence of the datum or starting point one can confidently make a comparison to the relevant and significant changes to the work at the time of the hearing of the case. That person with knowledge of the position in 2009 should be asked to compile a sworn record of the scope of work of the various Officer Aviation competency streams. Such a record is easier to compile now than what could accurately be done in five or ten years’ time should Air Force wish to bring a work value case for any of those competency streams. Such a written sworn record from an expert could be tendered in such proceedings either as evidence of that person and/or as a business record.

As a matter of good practice, all Services should keep account of even incremental changes to employment categories, specialist/professional workforces. Incremental changes may not be enough to produce a relevant and/or significant wage increase alone; however, when a few (or several) changes are added together that could constitute a significant addition to work which would be able to be claimed for a higher pay placement. The keeping of such a record of changes in all aspects of ADF trades and professions and conditions under which such work is performed is desirable and important. It should become a matter of usual process.

Evidence

The desirability and importance of keeping good records brings me to the topic of evidence. As noted above, the DFRT is not bound by the rules of evidence (s.58K(8)(b)), that is, the manner in which evidence of a fact is admitted into civil proceedings, and more particularly, the strict manner found in criminal proceedings. However, in its hearings the DFRT does not ignore, but is guided by, the rules of evidence in order to provide fairness and to abide by its statutory function to inquire into remuneration and alter (or not alter) rates based upon a sure foundation.

The rules of evidence have developed over hundreds of years in the English common law system adopted in Australia, as made by judges and by statute in order to provide a fair hearing to parties and a just result based on cogent factual material, not speculation or suspicion.

The rules of evidence may be defined as those rules which determine the reception of information tendered in proof of the material facts upon which the outcome of a claim depends.

The procedure in a hearing before the DFRT is that the submissions are developed, written and supplied to the Commonwealth and filed with the DFRT prior to the hearing taking place. The submissions setting out what the ADF wants by way of a change to remuneration of an employment category or group must be based on evidence able to be proved if disputed.

Human testimony is the principal form of evidence at common law. Observational witnesses report experiences directly to the court, in an affidavit and/or in response to questions put by the parties calling them, and are subject to cross-examination by other parties to the proceedings.^[13]

Documents, including photographs and videos, may be admitted as evidence. At common law, such material may be presented as evidence following authentication by a witness but cannot be admitted as evidence of assertions of fact contained within them unless by consent of the other party or an exception to the hearsay rule applies.^[14]

For example documents could be admitted into evidence as a ‘business record’, that is records kept in the ordinary course of business. I have previously referred to a potential future work value claim for Air Force Officer Aviation roles/jobs. If it was Air Force’s practice to keep records of the training of and skill required for these roles/jobs in 2009, such documents could be tendered into evidence as ‘business records’ without necessarily requiring a witness with direct knowledge of this evidence to be called and cross-examined.

The concern of the rules of evidence is proof of disputed material facts. Material facts are those upon which a successful legal claim directly depends. The reality is that most facts in proceedings before the DFRT are admitted by the consent of the Commonwealth without the need to prove that material fact strictly. However, in the preparation of a submission one will not necessarily know which facts may be in dispute. I might add that the ADF, through its special position of advantage in such litigation, is under a duty only to rely upon material facts which are able to be proved.

In a case recently decided by the DFRT, Matter 17 of 2020 (Tri-Service Medical Officers), the Commonwealth queried the proposed quanta of the proposed remuneration increases and alleged ‘a lack of analytical data’ in the ADF’s submission for the proposed remuneration increases, but it did not seek to provide any evidence in support of a lesser amount. As a consequence, the Commonwealth’s argument was rejected.^[15]

“Real evidence” may be admitted as evidence. Real evidence is that information observed and experienced directly by the court.¹⁷ Most common examples before the DFRT include inspections, geographical views, and physical objects. Where it is impossible or inconvenient to bring an object or a process to the court, the court may go to see the object, in which case it is undertaking a “view” or an inspection. If no more than this occurs, then, at common law, the court is not receiving evidence. The purpose of a view is, according to consistent High Court authority, for “enabling the tribunal to understand the questions that are being raised, to follow the evidence and to apply it, but not to put the result of the view in place of evidence.”^[16]

Often in proceedings before the DFRT, notes of what has been seen on an inspection are taken and with the consent of the Commonwealth tendered as an exhibit. 

The opinions of experts may be received to assist in material of fact outside the experience of the tribunal. Typically in proceedings or during inspections before the DFRT, subject matter experts are called to give evidence about the work of an employment category, trade or profession and the ADF capability they support. As the world becomes increasingly complex and specialised, there is a corresponding increase in the fields of specialisation in regard to which the judge or jury have insufficient training or experience to draw inferences without assistance. For example, in Matter 14 of 2015 (Submarine Capability Assurance Payment), in order to prove the vital strategic importance of the Navy’s Submarine Arm to

Australia’s defence , the ADF called as an expert witness, Mr. Peter Jennings, the Executive Director of the Australian Strategic Policy Institute. In calling him, the ADF had also had to provide evidence of his expertise and qualifications to give testimony on such a topic.

These are some of the issues relevant for proceedings before the DFRT in relation to evidence which are useful guides in preparing the submissions today and what evidence may be necessary to call from a witness or whether once the COVID pandemic has receded what cases would assist the DFRT with an inspection.

In dealing with the quality and reliability of the evidence, the ADF has, in its pre-eminent role in formulating applications for increases to military remuneration, a profound responsibility to be completely transparent in its dealings with the Commonwealth and with the DFRT. This absolute need for transparency is because of the superior position in terms of evidentiary materials and subject matter expertise that the ADF enjoys compared to the information and advice available to the Commonwealth Advocate and the DFRT. Both of the latter entities are heavily reliant upon the accuracy and integrity of factual matters supporting changes to employment category/trade/profession remuneration provided by the ADF.

In the preparation of submissions one also needs to take notice as to evidence and arguments presented in previous related cases. This is to guard against potential “double counting” and inconsistency of approach. I have regard to a statement of the DFRT; a relevant aspect of that statement is the following paragraph:

Questions of how the capability to perform a role is assessed and how the competencies required in the role are to be achieved are issues that, in the main, are within the discretion of the ADF. The Tribunal expects to be informed of proposed training changes only where its reasons for decision specify that requirement or changes are of such magnitude that the DFRT’s reasons for issuing a determination are compromised [my underlining]. In such circumstances the DFRT expects the ADF to exercise some judgement on whether or not a matter should be referred back for the further consideration of the DFRT. ^[17]

Such transparency is manifestly important. The ADF must act with the utmost good faith in its dealings with both the Commonwealth, and more particularly the DFRT, concerning matters of material significance which may affect the placement of an employment category,/trade/profession and skill grade into a particular pay grade or competency level. Both the Commonwealth and the DFRT must have trust and confidence in the integrity of the ADF evidence, processes and submissions.

I also have regard to the Charter of the Employment Category and Remuneration Review Committee (ECRRC). That Charter sets out how matters concerning salaries and allowances are brought forward by the Services and whether or not matters need to be considered by the DFRT. Paragraph 1 of the Charter sets out that the ECRRC is the principal advisory committee to the Australian Defence Force (ADF) on all salary and salary related allowances that fall under the jurisdiction of the Defence Force Remuneration Tribunal (DFRT) in accordance with s.58H of the Defence Act 1903 (the Act).

How would one answer the question of “how much evidence is enough?” Too little and it won’t get across the line, but one must also be cognizant of not providing too much, and “keeping your powder dry” for another day. That question is a matter resolved by the exercise of judgment by an experienced person.

Attraction and Retention

Other issues in matters before the DFRT beyond work value are ones dealing with increases in remuneration based on ‘attraction and retention’ factors in order to maintain a capability, particularly after its members have reached the end of their Initial Minimum Period of Service (IMPS) or have completed their Return of Service Obligation (ROSO). Recent good examples of matters which primarily focused on the ‘attraction and retention’ factors include Matters 5 of 2016 (Air Force Officer Aviation Pay Structure), 6 of 2018 (ADF Rotary Wing Aviation Officers) and Matter 17 of 2020 (Tri-Service Medical Officers). In each of these cases, either the proposed increases in remuneration and/or changes in human resource strategy and structure were used to retain members beyond IMPS/ROSO on account of the significant pull factors of comparable civilian positions’ total salary packages. Evidence of civilian rates was given to identify the challenge faced by the ADF in retaining such members. Other evidence was given of the significant savings available to the ADF by being able to retain such members, at a crucial time of mastery in their careers, for some additional years beyond the expiry of their IMPS/ROSO.

Relativities, nexus and flow on

Finally I deal with the issue of salary relativities. That means the connection one employment category, trade or profession may have with another.

Firstly there are external market relativities that should be considered. A direct comparison between an ADF trade/profession and the civilian equivalent cannot be heavily relied upon, because the ADF trade/profession will always have an inherent military component which is not applicable to the civilian/private sector. That being said, a comparison between the two can be informative and provide context which generally can be used to demonstrate ballpark rates of salary and degree of market forces acting on an ADF workforce. The ADF is usually in the position of trying to reduce the remunerative disparity between the ADF and external market, not directly compete with that external market.

There are also relativities between similar trades/professions in each of the Services that are considered and negotiated. Inter-Service trade/profession competition is unhealthy for the ADF as a whole, and Services will purposely avoid creating situations or environments where competition and poaching between themselves flourishes. Sometimes this means other value factors informing a pay placement need to be compromised so as to maintain interService harmony.

Internal Service relativities will also influence a final pay placement, and are generally informed by a Service’s capability priorities. Generally, the categories/trades associated with those priorities may receive a remuneration premium compared to other categories/trades. Again, sometimes this means that other value factors informing a pay placement need to be compromised so as to maintain the internal Service relativities and priorities.

The last relativity concept is that of nexus and flow on. A movement in rates with respect to one category may have a flow on effect to another category if there has been an established connection between the two. This is referred to as a ‘nexus’. By way of example, the ADF have established a nexus between the trainee rates of salary and the rate of salary for GORPS Pay Grade 3/GOPS pay Grade 2, such that the trainee rates of salary are a discounted percentage of the determined GORPS PG3/GOPS PG2 rates. When an increase is applied to the PG2/PG3, that increase will automatically flow on to the relevant trainee rates of salary, purely as a consequence of the established nexus between those two salary structures.

In Matter 6 of 2018 the evidence showed that there existed an equivalence in pay placements between Rotary Wing Pilots (RWPs) and Aviation Warfare Officers (AvWOs) for a very long time within Navy^[18], perhaps many decades. This is also a ‘nexus’.

Cogent evidence and convincing reasons were needed to successfully argue to change the ‘nexus’ or pay equalities that existed between RWPs and AvWOs. What was required was more than what is stated in the ADF’s submission at paragraph 9.15:

Maintaining ADF pilot relativities across the three services (fixed wing and rotary wing) and at the same time recognising the similar level of training and contribution and capability that AvWOs have provided alongside their pilot counterparts.

In order to change the settled order of relativity between Navy pilots and AvWOs, the ADF, as the applicant, bore the onus of proof to provide cogent evidence and convincing reasons why the relevant pay nexus should be broken. By way of analogy, dealing with an ancient industrial principle, well before the establishment of the AIRC, and from what was then the pre-eminent Industrial Relations Commission of NSW, Justice Beeby, considered an application for the reduction of award wages on economic grounds. In Re Steel Works Employees (BHP Company Ltd) Award 1923 AR (NSW) 14 at page 23, Justice Beeby said, “The deliberate lowering of established wage standards has never been authorised by this Court without strong reason being shown [my emphasis].”

That ancient authority from New South Wales is useful to consider by way of analogy; however, it also applies to any arbitral tribunal where an application is made to alter the settled order of pay placements.

One other complication which that case revealed was that after the submissions had been drafted which supported the application that RWPs should receive more money than the AvWOs when it came to interviewing the witnesses, both from the RWP and AvWO ranks, no one could be found who supported the change. One really can’t pursue a case which is not supported by those whom it affects.

From time to time, in dealing with an ADF submission for an increase, the Commonwealth has asserted a movement in the rates in one workforce or category could lead to a flow on to another. However, such an argument (to be successful) must be based upon the proof of an established connection (a nexus) between the two categories, that is, if one moves the other moves as a matter of course. Submissions in relation to potential flow on should not merely be based on speculation or fear, but rather based on an established connection.

Jeffrey Phillips, SC

Defence Force Advocate