Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales v Industrial Relations Secretary of New South Wales

1. [1]

   THE COURT: Two industrial organisations representing many public sector employees have brought proceedings in this Court’s supervisory jurisdiction to quash decisions made by the Industrial Relations Commission of New South Wales made on 1 October 2020 and 12 November 2020, and orders reflecting those decisions made on 15 December 2020. The result of the litigation in the Commission was that there should be a 0.3% increase in salaries payable with effect from the first full pay period commencing on or after 1 July 2020. The industrial organisations had contended for an increase of 2.5%, as had occurred in previous years. The State had submitted that there should be no increase at all, due to the economic impact of COVID-19.

2. [2]

   No appeal lies from the determinations and orders of the Commission, whose decisions are final: Industrial Relations Act 1996 (NSW), s 179. However, it was common ground and accords with authority that the decisions and orders may be quashed if the plaintiffs demonstrate jurisdictional error: Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1 at [105].

3. [3]

   This Court’s role is a limited one. It is not the task of this Court to determine whether there should be a salary increase and, if so, what that increase should be. This Court’s jurisdiction is limited to resolving the parties’ submissions as to whether jurisdictional error has been established. If it has, then it is common ground that the decisions and orders should be quashed and the matters remitted to the Commission to be determined according to law.

4. [4]

   For that reason, the entire hearing of the summons was completed in a single day, although the proceedings in the Commission occupied parts or all of 13 days. For that reason, the majority of the evidence before the Commission was not reproduced in the materials provided in this Court.

5. [5]

   The plaintiffs’ summons contains five grounds. Broadly speaking, they were that the Commission had misconstrued the legislation by placing an onus upon the industrial organisations, the Commission denied the plaintiffs procedural fairness insofar as it rejected a claim for an increase based on productivity and efficiency measures, the Commission failed to have regard to a relevant consideration in the form of those productivity and efficiency measures, the Commission failed to take into account the fact that ordinarily increases greater than 2.5% may not be made and, finally, that the decision was legally unreasonable and/or irrational or illogical.

Applicable legislative regime

1. [6]

   Section 10 of the Industrial Relations Act empowers the Commission to “make an award in accordance with this Act setting fair and reasonable conditions of employment for employees”. Section 17 empowers the Commission to vary or rescind an award in certain circumstances. The applications before the Commission were applications either to make new awards or to vary existing awards, predominantly the latter, and ultimately the only orders made were orders varying existing awards. The litigation proceeded on the basis that, at least for present purposes, nothing turned on the different sources of power in ss 10 and 17.

2. [7]

   Section 146(2) requires the Commission to take into account the public interest in the exercise of its functions and, in particular, requires it to have regard to the objects of the Act and the state of the economy of New South Wales and the likely effect of its decisions on that economy. The objects are contained in s 3, and include (a) “to provide a framework for the conduct of industrial relations that is fair and just”, (b) “to promote efficiency and productivity in the economy of the State” and (e) “to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments”.

3. [8]

   Section 146C was central to much of the argument. It is expressed to have effect “despite section 10 or 146 or any other provision of this or any other Act” (s 146C(7)). Section 146C requires the Commission when making or varying any award or order to give effect to any policy on conditions of employment of public sector employees that is “declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission” and applies to the matter to which the award or order relates. The circumstances surrounding the enactment, the purpose and the validity of s 146C were considered in Public Service Association and Professional Officers’ Association Amalgamated of NSW v Director of Public Employment (2012) 250 CLR 343; [2012] HCA 58.

4. [9]

   Clause 4 of the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW) declares that it contains government policy that is required to be given effect to by the Commission. It expressly engages s 146C. Clause 6 relevantly provided:

5. [10]

   Clause 9 defined “employee-related cost savings” as savings:

6. [11]

   It followed that the Commission’s general power to make or vary an award was circumscribed, insofar as the new or varied award affected remuneration, by the “cap” of 2.5%, which could only be exceeded if there were substantial employee-related cost savings so as to satisfy cl 6. It was not suggested that the qualifications in cl 6 were ever satisfied at any material time, and so it will be convenient and in the interests of concision to employ the language of the plaintiffs and refer simply to the “cap” as if it were unqualified.

7. [12]

   In the ordinary course, the 2014 regulation would be automatically repealed after 5 years, on 1 September 2019, in accordance with s 10(2) of the Subordinate Legislation Act 1989 (NSW). However, this was extended by a year on 30 August 2019 by the Subordinate Legislation (Postponement of Repeal) Order (No 2) 2019 (NSW), and then for a further year by the Subordinate Legislation (Postponement of Repeal) Order 2020 (NSW). Both orders were made under s 11 of the Subordinate Legislation Act. The latter was made on 5 August 2020, during the pendency of the proceedings in the Commission, but no party suggested anything turned on that.

8. [13]

   The position in relation to the 2014 Regulation may be contrasted with a different, 2020 Regulation, which was made after the litigation had commenced. On 29 May 2020, the Industrial Relations (Public Sector Conditions of Employment) Amendment (Temporary Wages Policy) Regulation 2020 (NSW) was made. Its effect was to amend the 2014 Regulation to prohibit any increase in remuneration for a 12 month period from 1 July 2020. However, there is no occasion to consider its impact upon the litigation, for that regulation was disallowed by the Legislative Council on 2 June 2020: see the notification on the NSW Legislation website for the week beginning 25 May 2020. The consequence was that the new regulation ceased to have effect, and the former regulation was restored or revived: Interpretation Act 1987 (NSW), s 41(4); Aidon v Minister for Aboriginal Affairs of New South Wales (2006) 145 LGERA 67; [2006] NSWLEC 169 at [19].

The proceedings in the Commission

1. [14]

   The plaintiffs (together with two other industrial organisations which became the eighth and ninth defendants to the amended summons, and which played no active role in this Court) commenced proceedings in the Commission in March 2020. There seem to have been some 43 applications which were heard and determined together. The details are irrelevant. It will be convenient to refer to the plaintiffs as the two industrial organisations which played an active role in this Court, and the “Employers” as the active defendants in the Commission and in this Court.

2. [15]

   On around 15 May 2020, the first plaintiff filed submissions which contended that the Commission was required to award increases of 2.5% per annum as a result of s 146C read with cl 6(1). They were joined a fortnight later by the second plaintiff. This contention was the subject of a separate, preliminary hearing on 18 June 2020. It was rejected by decision dated 22 June 2020: Application for Crown Employees (Public Sector – Salaries 2020) Award and Other Matters [2020] NSWIRComm 1044. No application has been brought to impugn or quash that determination.

3. [16]

   Thereafter, the Commission heard evidence and submissions on the balance of the applications over some 11 days in June, July and August 2020. The Commission reserved, and issued its principal decision on 1 October 2020. Aspects of the reasoning in that decision will be summarised below. For present purposes it suffices to note that the Commission concluded that employees were “entitled to maintain the real value of their earnings”: at [157]. The Commission indicated that it proposed to make awards and variations to avoid a real reduction in earnings by awarding increases of 0.3%: at [158].

4. [17]

   The Commission directed written submissions to be filed concerning the mechanics of a 0.3% increase. By a third decision, made on the papers following receipt of submissions, the Commission determined that the increase would be awarded by way of an increase to salaries and salary-related allowances in each of the awards, and that it should not include or vary a no extra claims provision in any of the awards: Application for Crown Employees (Public Sector – Salaries 2020) Award and Other Matters (No 3) [2020] NSWIRComm 1077.

5. [18]

   Ultimately, orders (which occupy some 175 pages) were made on 15 December 2020. Their details need not be summarised.

The Commission’s reasons for its second determination

1. [19]

   The parties’ grounds and submissions were directed to the reasoning in the second determination. The determination is some 172 paragraphs over 75 pages, prepared in just less than seven weeks after an 11 day hearing in proceedings involving some 43 applications and large quantities of evidence. It took the following form.

2. [20]

   Paragraphs 1-23 summarise the procedural background and the nature of the evidence adduced. Paragraphs 24-31 reproduce the applicable legal principles.

3. [21]

   Paragraphs 32-46, under the heading “A presumptive increase?”, were said to give rise to jurisdictional error as identified in the first ground of the summons. Under that heading, the Commission addressed the plaintiffs’ submissions that “[a]ny assessment of what constitutes fair and reasonable conditions of employment in a particular year must commence with the presumption that public sector employees receive a 2.5% increase each year”. The Commission noted the similarity between this submission and the submission rejected in its first decision, and noted how the submission had been put in various ways, some of which were reiterated in this Court. It was said that a failure to afford a 2.5% increase would “constitute a permanent cut to the remuneration of nurses, health workers and public service employees which cannot be corrected or made good in future years” and, alternatively, that the onus rested on employers to make out the “need for restraint”. The Commission rejected the submission, holding that the onus to make out the case rested with the applicants, as had been identified in many earlier decisions.

4. [22]

   The Commission noted that it had rejected the plaintiffs’ preliminary submission that a 2.5% increase was mandated, and addressed the fallback submission that the starting point was that there should be a 2.5% increase, with the onus on the employers to justify any different approach. This submission turned on the constraint upon the power to make awards which were fair and reasonable which was effected by s 146C and cl 6 of the 2014 regulation. It necessarily assumed that a similar constraint would apply into the future. The Commission reproduced a summary of the submissions to this effect and rejected it at [36]:

5. [23]

   The Commission also rejected submissions that the failure to afford a 2.5% increase would constitute a permanent cut to government employees which could not be corrected or made good in future years, saying that that proposition assumed the premise that a 2.5% increase was an entitlement. The Commission maintained that the onus to make out a case rested with the applicants: at [44].

6. [24]

   At [47]-[75], occupying some 20 pages of the decision, the Commission addressed the application of the Wage Fixing Principles. It held that those principles applied (at [47]-[51]), and addressed the productivity and efficiency principle at [53]-[60]. This aspect of the reasoning gave rise to grounds two and three. Most of this section was occupied by the recitation of the plaintiffs’ submissions concerning their evidence in support of improved productivity over the relevant period. Some details of this will be given when dealing with ground 2 below. A great deal of attention was given in this Court to the dispositive paragraphs of this aspect of the reasoning, [58]-[60], and it is convenient to reproduce them in their entirety:

7. [25]

   The Commission then addressed the “special case” principle, at [61]-[75], in a way that was not the subject of any detailed submissions, and which therefore need not be summarised.

8. [26]

   Under the heading “Overview of economic considerations” the Commission reproduced aspects of the economic evidence relied upon by the Employers, directed to the disruption to the Australian and NSW economy due to the COVID-19 pandemic, which included estimation of a $20.3 billion reduction in revenue from State taxes and GST over the five years to 2023-24, a rise in NSW unemployment rate of 0.5% from May to June 2020 and uncontroversial statements that the pandemic led to “the most severe contraction in global and domestic economic activity in decades” and represented “the largest … shock to the global economy in many decades”.

9. [27]

   Under the heading “Maintenance of real wages”, at [89]-[112], the Commission concluded that there would be a reduction in employees’ real wages of approximately 0.3% if no increase was awarded for the 2020/2021 year.

10. [28]

    Under the heading “Section 146 considerations”, the Commission addressed the public interest, including the objects of the Act and the state of the economy of NSW and the likely effect of any decision on that economy, as required by s 146. The Commission summarised the Employers’ submission that savings from a wage “pause” over four years would permit some $3 billion to be placed into a new “Infrastructure and Job Acceleration Fund” which would accelerate, over a shorter timeframe, a series of “smaller, shovel-ready projects touching every corner of the State”. The Commission was sceptical of this aspect of the case, noting at [117] that it was not possible to verify the claimed future savings and that it had been provided with “virtually no details as to the ‘shovel-ready projects’ to which the Employers referred”: at [118]. The Commission then addressed an issue which was the subject of competing evidence as to whether the economic impact of an increase in salaries would be greater than the economic impact of investment in infrastructure. There was evidence, although it was disputed, that a stronger economic stimulus was provided by government investment rather than expenditure on public sector wages. The Commission reproduced the conclusion from a report from Treasury which was in evidence annexed to an affidavit of Mr Michael Pratt AM, Secretary of NSW Treasury, who was cross-examined, which concluded:

11. [29]

    The Commission’s ultimate conclusion was an acceptance of the Employers’ contentions, notwithstanding the absence of details in relation to the “shovel-ready projects”: at [128]. The Commission rejected the Employers’ submission that an increase to salaries or salary-related allowances would necessarily have an impact on the State’s credit rating (at [133]), and said that it did not place “any great weight” on the fiscal target contained in the Fiscal Responsibility Act 2012 (NSW) to the effect that annual growth in general government expenses should be less than long-term average general government revenue growth. Of some significance to the grounds alleging jurisdictional error was the acceptance by the Commission that it would be possible to fund the salary increase by debt and the conclusion at [136]:

12. [30]

    At [137]-[147], the Commission addressed the effective date of its determination, in a manner that does not require summary in these reasons. Then, at [148]-[156], the Commission summarised its conclusions, as follows:

13. [31]

    At [157]-[163], the Commission determined that employees were entitled to maintain the real value of their earnings, with the result that awards and variations would be made involving increases of 0.3%. The Commission explained its reasons for that conclusion as follows:

14. [32]

    The remainder of the reasons concern matters of detail that need not be summarised.

Grounds two and three: procedural fairness

1. [33]

   Grounds two and three are inter-related and were addressed collectively in the plaintiffs’ submissions. They turned on the reasoning at paragraphs [58]-[60] which have been reproduced above. It is commonly appropriate to resolve claims of a denial of procedural fairness first (see Nadinic v Drinkwater (2017) 94 NSWLR 518; [2017] NSWCA 114 at [100]) and it is convenient to consider at the outset the plaintiffs’ claim that the Commission determined the applications in a way which was procedurally unfair.

2. [34]

   The plaintiffs maintained that the Commission had rejected one strand of their submissions on the basis that it required them to adduce financial analysis of the measures which had been undertaken to improve productivity and efficiency. They claimed that this had not been part of the Employers’ case, and had not been foreshadowed by the Commission, such that deciding this aspect of the proceedings on that basis was procedurally unfair. Alternatively, the plaintiffs submitted that it amounted to a failure properly to apply s 10 of the Act.

3. [35]

   In writing, the point was advanced thus:

4. [36]

   In order to address these grounds, it is necessary to return to the detail of the written and oral submissions before the Commission.

5. [37]

   In closing submissions before the Commission, the plaintiffs had relied on more than 50 improvements in productivity and efficiency. The first five were as follows.

6. [38]

   It is not necessary to reproduce the remainder (which occupy more than eight single-spaced pages); those five give their flavour. These points were put forward with a view to engaging paragraph 8.3 of the Wage Fixing Principles. As relevantly formulated, in the State Wage Case 2019 [2019] NSWIRComm 1065, being orders made pursuant to s 51 of the Industrial Relations Act, that principle is:

7. [39]

   In paragraphs 152 and 153 of their written closing submissions, the Employers said that it was “not sufficient to merely point to the types of usual changes that are expected to ensure Government money is spent as efficiently as possible. The fact that some parts of the public sector have been reorganised does not mean that the work of employees has a higher value” and that “[t]he evidence does not rise any higher than identifying that in some particular agencies there have been changes intended to achieve increased efficiency”, which “falls well short of the across-the-board evidence necessary to justify an increase to all employees”.

8. [40]

   The Employers supplied written submissions on 12 August 2020, on the same day as closing addresses. Understandably, when Mr Gibian made his address, he advised that he had not been able closely to study the Employers’ written response.

9. [41]

   Later that day, Mr Taylor for the Employers spoke to the written submissions, and addressed by way of elaboration what had been put in writing concerning the examples marshalled by the plaintiffs as follows:

10. [42]

    The plaintiffs addressed in reply, including on this point:

11. [43]

    Counsel’s second point was that some of the changes reflected the response to bushfires and the COVID-19 pandemic, and denied that they could be characterised as “the usual changes expected of government”.

12. [44]

    It was clear that the parties were at issue as to the sufficiency of the list of instances of productivity and efficiency changes to satisfy paragraph 8.3 of the Wage Fixing Principles. The Employers contended that the “substantial” cost savings or productivity or efficiency improvements were not established by a list of instances. It thus fell to the Commission to resolve the parties’ competing submissions. It is no part of this Court’s role to express a view as to the correctness or otherwise of the Commission’s determination. The only issue which arises on these grounds is whether the Commission’s process was procedurally fair, or otherwise disclosed jurisdictional error.

13. [45]

    The parties’ submissions raise a threshold issue as to the construction of the reasons. The Employers maintained, and the plaintiffs denied, that the first sentence of [59] which is extracted at [24] above (“We accept the Employers’ submissions”) stood alone, and all that followed was supplementary. According to the Employers, it followed that there was no “practical injustice” in the course taken by the Commission, and any breach was immaterial. There is force in the plaintiffs’ submission that, fairly read, the sentences which follow the opening sentence of [59] are the reasons which justify the conclusion. That is a natural way of reading [59] and [60] as a whole.

14. [46]

    Further, in litigation as significant as the present, it would be undesirable for the Commission merely to adopt one side’s submissions, rather than to explain in its own words why it had acceded to or rejected the application. That would give rise to the concern identified by the Full Court of the Federal Court in LVR (WA) Pty Ltd v Administrative Appeals Tribunal (2012) 203 FCR 166; [2012] FCAFC 90 at [5] and by this Court in Goodwin v Commissioner of Police [2012] NSWCA 379 at [23] that the Commission had failed to bring its own mind to bear on the issues before it and thus that it had constructively failed to exercise its jurisdiction.

15. [47]

    But the fact that the first sentence of [59] does not stand apart from what follows does not mean that this ground is established. The exchange of written and oral submissions reproduced above makes it plain that the Employers regarded the evidence adduced by the plaintiffs as insufficient, and were urging the Commission so to find. The position was as described during the hearing:

16. [48]

    The position was that the plaintiffs were given an opportunity to be heard in response to the Employers’ submissions. They exercised that opportunity. The Commission accepted the Employers’ submissions that the list of examples was insufficient to engage paragraph 8.3 of the Wage Fixing Principles, and explained why that was so. The absence of any financial analysis was a reason for the conclusion that the plaintiffs had not demonstrated the substantial savings or improvements required by the relevant Wage Fixing Principles. The reasons did not hold that financial analysis was inevitably required in order to engage that principle. There was nothing procedurally unfair about what occurred.

17. [49]

    Insofar as it was put, in support of ground three, that the reasoning amounted to a misconstruction of the Act, by requiring a demonstrable and quantifiable benefit before an increase was made within the 2.5% cap, once again the ground is not made out. It is true that the reasons use the word “offset” and in part resemble the language of cl 6(1)(b) of the 2014 Regulation. But the reasons must always be read in the context of the submissions they are resolving. The language which the Commission used was apt to describe what it regarded as the submission’s essential deficiency, which was that the plaintiffs had merely assembled a long list of instances of enhanced efficiency and productivity across the entirety of the public sector without providing any detail as to their breadth, and without quantifying the benefit, and without providing any great assistance on whether any trend could be derived across the board.

18. [50]

    It was necessary in order for paragraph 8.3 of the Wage Fixing Principles to be engaged for the costs savings and/or productivity or efficiency improvements to be characterised as “substantial”. Whether or not that was so was a matter for the Commission. It fell to be addressed by reference to the fact that the plaintiffs sought an across-the-board remuneration increase. The inherent difficulty with pointing to a range of discrete instances of efficiency and productivity savings, which did not apply across-the-board, and which were unaccompanied by any analysis which enabled their cumulative effect to be assessed in order to justify an across-the-board remuneration increase, is obvious. One way of addressing that difficulty is, as the Commission indicated, to quantify the effect of the discrete instances. There may be other ways of doing so. But there was nothing contrary to the statute in the Commission acceding to the Employers’ submission that the instances amassed by the plaintiffs were not sufficient to engage paragraph 8.3 of the Wage Fixing Principles so as to justify an across-the-board increase.

19. [51]

    These grounds are not made out.

Grounds one and four

1. [52]

   These two grounds were addressed together orally, with the principal focus being on the former, which was summarised thus in the plaintiffs’ written submissions:

2. [53]

   There is no doubt that the Commission placed an onus on the plaintiffs to justify a remuneration increase. The essence of this ground was that under the constraint imposed by s 146C and the 2014 Regulation, it could not be presumed that the existing awards were fair and reasonable, with the consequence that imposing an onus was an impermissible departure from the obligation to set fair and reasonable conditions of employment. It was said:

3. [54]

   Alternatively, it was put that imposing an onus was an impermissible fetter on the statutory test in ss 10 and 17:

4. [55]

   Thirdly, the plaintiffs advanced an elaborate submission:

5. [56]

   Each of the ways in which this ground was advanced is addressed in turn.

6. [57]

   There is, as the Employers submit, some artificiality in the first way in which this ground is advanced. In response to the first point, the Employers submitted, and the plaintiffs did not dispute, that the plaintiffs had made no attempt to establish that the consensual 2.5% increases which had occurred in previous years had left employees being under-remunerated. Had this been established, the position might be different. But that left the plaintiffs in the position that they were asking the Commission to make new awards, or vary existing awards, so as to yield a higher remuneration across-the-board. There was no challenge to the rejection of the plaintiffs’ submission in the Commission’s first decision that there was an entitlement to an increase. It followed that the onus rested with the party moving to alter the status quo to make out a case for doing so.

7. [58]

   In response to the second way in which this ground was advanced, it is inconsistent with the Commission’s reasons and it is inconsistent with what the Commission ordered.

8. [59]

   The Commission expressly proceeded on the basis that its task was to determine just and reasonable rates for the period during which the award was in operation. It said so in terms at [31(9)], and returned to the point at [89]:

9. [60]

   Further, the outcome of the case, namely, a 0.3% rise in order to prevent the erosion of remuneration by inflation, is inconsistent with the submission that the Commission failed to apply ss 10 and 17 in approaching its function.

10. [61]

    The Employers complained that the third way of advancing this ground went beyond what was pleaded in the summons. That complaint is not without force, but it is better to address the submission on its merits. The plaintiffs’ submission is not made out. It ultimately amounts to a submission that there was jurisdictional error in the Commission, having expressly taken into account the matters raised in the evidence, accepting the evidence that restraint was called for in the particular financial year, and granting a remuneration increase which was sufficient to maintain the real value of that remuneration. That does not amount to jurisdictional error.

11. [62]

    Ground 4 of the summons was addressed very concisely in oral submissions:

12. [63]

    The gravamen of the point was that the Commission failed to appreciate that because the “cap” was largely insusceptible of being exceeded, there was the continuing possibility that the remuneration would not be fair and reasonable. The point was made rhetorically by stating that the failure to grant an increase in 2020 would have the effect of denying an increase not only in 2020 but in all subsequent years, that being the practical consequence of an inability to “catch up”.

13. [64]

    But this was considered by the Commission, expressly. It recorded the plaintiffs’ submission at [33]:

14. [65]

    The Commission also recorded Dr Charlton’s evidence at [121]:

15. [66]

    Finally, when summarising the effect of its decision, the Commission stated at [161]:

16. [67]

    The submission that the Commission failed to have regard to the operation of s 146C read with the 2014 Regulation cannot be sustained. All the passages reproduced above demonstrate that the Commission had regard to this.

17. [68]

    These grounds are not made out.

Ground five: illogicality or unreasonableness

1. [69]

   This ground fastens upon the Commission’s conclusion at [155] that notwithstanding the absence of detail in the evidence adduced by the Employers, it nonetheless called for “restraint” in the particular circumstances of the current financial year. This was part of the Commission’s reasoning on the mandatory relevant consideration of s 146(2). The plaintiffs said that this aspect of the Commission’s decision was illogical or unreasonable, and for that reason the Commission’s conclusion evinced jurisdictional error.

2. [70]

   The plaintiffs relied on ARG15 v Minister for Immigration and Border Protection (2016) 250 FCR 109; [2016] FCAFC 174 at [47] for the proposition that illogicality or irrationality in the sense stated in Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; 77 ALJR 1165 at [34] and [37] and Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32; 78 ALJR 992 at [38] applied not merely to the ultimate decision, “but also extends to fact finding which leads to the end result”. The proposition of law may be controversial. It may also be more nuanced than the plaintiffs submitted. Irrationality or illogicality in relation to a step in the reasoning which is a necessary component of the ultimate conclusion is quite distinct from irrationality or illogicality in one aspect of a determination which involves evaluation of a wide range of discrete elements. As Basten JA observed in D’Amore v Independent Commission Against Corruption [2013] NSWCA 187; 303 ALR 242 at [229], a more limited approach is supported in some cases by the statement by Glass JA in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156-7:

3. [71]

   The Commission did not make a judicial decision, but it is far from clear, in point of principle, that in this respect (as opposed to review for error of law) judicial and administrative tribunals should be treated differently.

4. [72]

   But those matters may, for present purposes, be put to one side, because the submission can be addressed on its merits. The substance of the plaintiffs’ challenge was that it had been common ground that a wage freeze would of itself have a negative impact on consumer spending and therefore on the economy. The debate before the Commission was whether the Employers’ proposal to accelerate expenditure on capital projects using the funds saved would outweigh the negative impact on consumer spending from not granting a 2.5% increase.

5. [73]

   In their written submissions, the plaintiffs contended that the Employers’ position required acceptance of at least four propositions:

   1. (1)

      the proposed infrastructure expenditure was incremental in that it was not proposed to be undertaken in any event;

   2. (2)

      the infrastructure projects would be undertaken in a relevant timeframe to provide an economic stimulus;

   3. (3)

      infrastructure expenditure would have a higher stimulatory effect; and

   4. (4)

      the government could not do both.

6. [74]

   The plaintiffs complained that the Commission did not address propositions (1), (2) or (4), nor did it make findings which could logically lead to a conclusion that restraint was warranted before increasing public sector salaries.

7. [75]

   There is, with respect, nothing irrational or illogical in the Commission’s undertaking an evaluative process which considered the differential impact on the economy of a salary increase or infrastructure expenditure. The contrary submission, that it was possible for the government to do both, ignores the consequences of doing so. While the cost of funding debt is historically low, there is nonetheless a cost, which at some time will be required to be met through higher taxes, cuts to services, sale of assets, or other reductions in future spending compared with the position which would have obtained had the borrowing not occurred. But even if that be wrong, on no view was it irrational or illogical for the Commission to evaluate the relative benefits to the economy of wage increase or infrastructure expenditure.

8. [76]

   In relation to the economic impact of infrastructure spending, the point resolved to which form of expenditure would have a higher “fiscal multiplier”. Based on a NSW Treasury report, the Employers submitted that:

9. [77]

   That opinion was tested in cross-examination. The Commission’s acceptance of that point at [128] was neither illogical nor irrational.

10. [78]

    Further, the Commission did not accept the Employers’ submissions in their entirety. Rather than a freeze, an increase of 0.3%, backdated to 1 July 2020, was ordered. That was based in turn upon a rejection of important aspects of the Employers’ case (including the difficulties in verifying the infrastructure projects, the insufficiency of evidence establishing that a wage increase would have an impact on the State’s credit rating or would result in a breach of the Fiscal Responsibility Act). That was the context in which the Commission determined a level of “restraint” would be exercised, but not such as to preclude an increase which would match inflation. There is nothing irrational or illogical in the Commission taking that course.

11. [79]

    This ground is not made out.

Orders

1. [80]

   For those reasons, none of the grounds of jurisdictional error has been established. The amended summons dated 16 March 2021 should be dismissed. Both sides proceeded on the basis that costs should follow the event, in relation to the active parties to the litigation in this Court. The submissions refer to an agreement or understanding involving the eighth and (it would appear) ninth defendants, who supported the plaintiffs but played no active role in this Court, as to costs. This Court’s order is not intended to undercut that position. If the position is other than we have inferred, any party may apply within the period specified by UCPR r 36.16.

2. [81]

   This Court’s order will be: