[2012] FWAFB 4033

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Ramsay Health Care Australia Pty Ltd T/A Greenslopes Private Hospital
v
The Australian Workers' Union of Employees, Queensland
(C2012/2210)

SENIOR DEPUTY PRESIDENT HARRISON
SENIOR DEPUTY PRESIDENT RICHARDS
COMMISSIONER BLAIR

SYDNEY, 29 MAY 2012

Appeal against decision [[2012] FWA 104] of Commissioner Simpson in matter number AG2011/3531, approval of enterprise agreement, National Employment Standards, construction of ss.87 and 196, additional week’s annual leave.

[1] This decision concerns an appeal under s.604 of the Fair Work Act 2009 (the Act) against the refusal by Commissioner Simpson to approve the Ramsey Health Care Australia Pty. Ltd. T/A Greenslopes Private Hospital and The Australian Workers’ Union of Employees - Queensland Enterprise Agreement 2012 - 2015 (the Agreement). The Agreement was made by the employer, Ramsey Health Care Australia Pty Ltd and its employees engaged in catering, cleaning and assisting patients with daily living tasks. 1

[2] The appeal is made by Ramsey Health Care Australia Pty Ltd (the Appellant) and it is opposed by The Australian Workers’ Union of Employees, Queensland (AWUQ) a transitionally recognised association. The AWUQ was a bargaining representative for the Agreement and, although it is referred to in the Agreement, did not file a notice stating it wanted the Agreement to cover it. It opposed approval of the Agreement in the proceedings before the Commissioner.

[3] The Appellant was represented by Mr Dwyer, a barrister and the AWUQ by Mr Herbert who is also a barrister. Each filed detailed written submissions and agreed to the appeal being dealt with on those written submissions and without the need for a hearing. 2

[4] The issue before the Commissioner was whether he was satisfied the requirements of s.196 of the Act were met. This section concerns the entitlement of certain employees to five week’s paid annual leave. We will address later, in some detail, the way in which this consideration arose. The Commissioner sought an undertaking from the Appellant that notwithstanding the terms of the Agreement a shiftworker, for National Employment Standards (NES) purposes, would be defined in the same terms as the Health Professionals and Support Services Award 2010 3 (HPSS Award) shiftworker definition for NES purposes. The Appellant declined to give that undertaking and, as a result, the Commissioner found he could not approve the Agreement and the application for its approval was dismissed.4

The key issue in the appeal

[5] The parties agree that the key issue raised by the grounds of appeal is whether the Commissioner’s construction of s.196 of the Act was wrong. That section, which is contained in Subdivision E of Part 2-4 of the Act, concerns approval requirements for enterprise agreements which contain certain provisions for shiftworkers. The particular consideration relates to a shiftworker’s entitlement to a fifth week of paid annual leave. Other than considerations relating to whether we should grant permission to appeal, the grounds of appeal do not raise discretionary considerations. We are required to decide if the Commissioner’s interpretation of s.196 was erroneous. To understand how this issue arose before the Commissioner reference needs to be made to the annual leave provisions of the HPSS Award and the Agreement.

[6] The relevant provisions of the HPSS Award are found in clause 31. They read as follows:

[7] The relevant provisions of the Agreement are in clauses 1 and 6 extracts from which read as follows:

The Appellant’s concession

[8] The Appellant conceded before the Commissioner, and before us, that a number of employees who would have an entitlement to an additional week’s annual leave by virtue of the definition of shiftworker, for NES purposes, contained in the HPSS Award would not qualify for that entitlement under the corresponding definitions in the Agreement.

The relevant provisions of the Act

[9] The objects of the Act include ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the NES, modern awards and national minimum wage orders. 5 Part 2 of the Act contains the main terms and conditions of employment of an employee. Parts 2-1 to 2-4 are the ones relevant to this decision and deal with “core” provisions, the NES, modern awards and enterprise agreements.6

[10] Several sections of the Act deal with the circumstances in which a modern award or enterprise agreement will either cover or apply to an employee and employer. In the case of a modern award, s.47 provides that it will apply to an employee or an employer when it covers them, the modern award is in operation and no other provision of the Act provides or has the effect that the award does not apply to them. A modern award covers an employee and employer if it is expressed do so however it will not cover an employee or employer if a provision of the Act provides for, or has the effect, that it does not cover the employer and employee. 7 Similar provisions apply to enterprise agreements. Section 52 provides that an enterprise agreement applies to an employee and employer if the agreement is in operation, covers the employee and employer and no other provision of the Act provides, or has the effect, that the agreement does not apply to the employer and employee. The time when an enterprise agreement is in operation is referred to in s.54. An enterprise agreement which is approved by Fair Work Australia (FWA) operates from seven days after the date it is approved or such later date as specified in the agreement. Section 53(1) provides that “An enterprise agreement covers an employee or employer if the agreement is expressed to cover (however described) the employee or the employer”. It will not cover an employee or employer if, relevantly, any other provision of the Act provide for, or have, that effect.8

[11] The Act also prescribes how the NES, modern awards and enterprise agreements will interact. Section 55 provides that a modern award or enterprise agreement must not exclude the NES or any provision of the NES. Terms that are ancillary, incidental or supplementary to the NES may be included but only to the extent "that the effect of those terms is not detrimental to an employee in any respect" when compared to the NES. The section also provides that an enterprise agreement can include terms that have the same or substantially the same effect as the NES. 9 A term of a modern award or enterprise agreement has no effect to the extent that it contravenes s.55.10 Section 57 provides that a modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to that employee.

[12] We now turn to the relevant NES provisions which are contained in Part 2-2 of the Act. To again emphasise the fact that the NES form part of the minimum standards safety net, s.61 provides that this part of the Act sets minimum standards that apply to the employment of employees "which cannot be displaced, even if an enterprise agreement includes terms of a kind referred to in subsection 55(5)".

[13] The NES standards for annual leave are contained in Division 6 of Part 2-2. Section 87(1) is relevant to this appeal. It is in these terms:

Should the Agreement have been approved ?

[14] The Commissioner referred to ss.186 and 187 and identified the matters about which he needed to be satisfied. Section 186 of the Act provides that when an application for approval is made FWA must approve the agreement if the requirements set out in that section and s.187 are met. Section 186(2)(c) is particularly relevant. It is in these terms:

[15] Section 187(4) is the next relevant provision. That subsection deals with what is described as "Requirements relating to particular kinds of employees". It provides that "FWA must be satisfied as referred to in any provisions of Subdivision E of this Division that apply in relation to the agreement." Section 196, which is contained in Subdivision E, deals with one category of those particular kinds of employees, namely shiftworkers. The section is in these terms:

[16] Before the Commissioner (and before us) the parties submitted that the requirements of both s.196(1)(a) and s.196(1)(b) were established. 11 We agree with the second part of this submission namely, that the HPSS Award is the modern award for the purposes of s.196(1)(b). We have some difficulties however with the parties agreement about how the requirements of s.196(1)(a) were met. In this respect they each agreed that the enterprise agreement for the purposes of this subsection was the Ramsay Healthcare Australia Pty Ltd. T/A Greenslopes Private Hospital and The Australian Workers’ Union of Employees-Queensland Union Collective Agreement 2009-2011 (the 2009-2011 Agreement). That agreement was one approved by the Workplace Authority and is now known as a collective-agreement based transitional instrument by virtue of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the TPCA Act).

[17] We have some doubt as to whether the 2009-2011 Agreement is an “enterprise agreement” for the purposes of s.196(1)(a). It is clearly not an enterprise agreement which was made under the Act. There are numerous references throughout the TPCA Act which identify a section of the Act in which the term “enterprise agreement” is contained and provide that the section is to be read as if it included a reference to a collective agreement-based transitional instrument. 12 We give one example from Schedule 3 item 15:

[18] We were not referred to any comparable provision in the TPCA Act or the regulations which may allow a collective agreement-based transitional instrument to be read as if it were a reference to an enterprise agreement for s.196 purposes. Our preliminary view is that the 2009-2011 Agreement could not be an enterprise agreement for the purposes of s.196(1)(a).

[19] On our reading of the Act, the Agreement would have been an enterprise agreement for s.196(1)(a) purposes. In this respect we refer first to the definition of “enterprise agreement” contained in s.12 of the Act. That provides, relevantly, that it means a single-enterprise agreement and "single-enterprise agreement" means “an enterprise agreement made as referred to in subsection 172(2)". It is to be noted that all that is here required is that the enterprise agreement is one that has been made. Clearly it having been presented for approval the Agreement had been made. Next, the consideration is whether an employee is covered by it. In this respect we have noted above that s.53 of the Act provides that an enterprise agreement covers an employee or employer if the agreement is expressed to cover the employee or the employer. Unarguably the Agreement was so expressed. On this construction the requirements of s.196(1)(a) would appear to have been made out.

[20] The construction of s.196(1)(a) of the Act we have referred to above is consistent with that taken by Commissioner Hampton in a decision in which he dealt with an application to approve the Adventist Aged Care Support and Administration Staff Enterprise Agreement 2011 13(Adventist Aged Agreement). The AWUQ and Commissioner Simpson adopted this decision as establishing the correct approach to take to the construction of s.196(1)(a). Commissioner Hampton there considered arguments of United Voice and the AWUQ in opposition to the approval of the Adventist Aged Agreement. In his decision, the Commissioner noted the “employer’s concession that some employees who would otherwise be entitled to five week’s leave under the NES (and the award) would not have that benefit” under the Adventist Aged Agreement.14 On our reading of his decision he identified the Adventist Aged Agreement as being the enterprise agreement referred to in s.196(1)(a). This was in circumstances where there appears to have been a collective agreement-based transitional instrument, or at least an instrument he described as a preserved collective agreement.15 We do not read Commissioner Hampton’s decision as support for the 2009-2011 Agreement being considered an enterprise agreement for the purposes of s.196(1)(a). We do, however, read it as support for here finding the Agreement being so.

[21] The parties have not had an opportunity to address us on the matters we have discussed in paragraphs 16 - 20. We have decided this issue is of sufficient importance that they should be given an opportunity to do so if they wish. We return to this later in this decision.

[22] Despite our not making a final ruling about the matters referred to in the preceding paragraph we have reached a view about the Commissioner’s application of s.196(2). We do so as we are of the opinion there was an enterprise agreement in terms of s.196(1)(a) although at this stage though we have not yet made a final decision whether that agreement was the 2009-2011 Agreement or the Agreement.

[23] Having made the findings that the circumstances in s.196(1) existed then s.196(2) required the Commissioner to be satisfied that the Agreement "defines or describes the employee as a shiftworker for the purposes of the National Employment Standards". We agree with the Commissioner that s.196 is to be read in a way in which the employee who is referred to in ss.196(1)(a) and (b) and in s.196(2) is the same employee. It is to that employee’s entitlements under the modern award and to that employee’s entitlements under the Agreement to which the section directs attention. It is the status of that employee as a shiftworker, for the purposes of the NES, which is to be maintained in the Agreement.

[24] The Appellant submits that when the Commissioner concluded that the requirements of ss.196(1)(a) and (b) existed then the only other requirement was that the Agreement contained a provision which defined or described the employee as a shiftworker for NES purposes. The terms of that definition, and its practical impact upon relevant employees, were not considerations required by the section. All that is required is a definition. This construction of the section would mean that a definition would be acceptable which would result in few employees qualifying for five weeks paid annual leave despite the fact a larger number of employees would qualify for the extra leave under the definition in the HPSS Award.

[25] In the context of the other provisions of the Act we have referred to earlier we are not persuaded the Appellant’s interpretation of s.196(2) is correct. It leads to a result that is manifestly unfair to the relevant employees. It is also inconsistent with the notes in ss.87 and 196 which cross-reference each other. They alert the reader to the need to consider the requirements of each section and their presence can only make sense if the construction we prefer is adopted. Our construction of the section is also consistent with those sections of the Act which ensure the minimum safety net of terms and conditions for all employees is maintained. That safety net would be undermined if we were to adopt the construction contended for by the Appellant. Furthermore our construction is one which would best achieve the objects of the Act. 16

[26] In the event it was thought that the ordinary meaning of the words of s.196 was not clear then this is a proper case, in our opinion, for us to have resort to extrinsic material and we now turn to this consideration. If we require confirmation that the construction we have adopted is correct (given the context of the provision and the objects of the Act) or the section is ambiguous then, consistent with s.15AB of the Acts Interpretation Act 1901, the explanatory memorandum may be considered to assist in ascertaining the meaning of the section. The relevant extracts of that explanatory memorandum are as follows:

[27] The observations in the explanatory memorandum are consistent with the construction placed upon s.196(2) by the Commissioner and by us.

[28] Before we turn to how the parties will be given an opportunity to address us further as we have indicated in paragraph 21 there are two matters we wish to refer to. The first is to note that the grounds of appeal did not raise the better off overall test. Accordingly, we have not considered whether the Agreement would have passed that test. The second is that we should not be taken to have decided that the relevant definitions in a modern award and an enterprise agreement must be in identical terms. We can imagine an enterprise agreement that may contain a definition which is not exactly the same as that of the relevant modern award and there may be a good reason for the difference. It may, in fact, be such as to give an entitlement to an employee for an additional week of paid annual leave which that employee would not have under the relevant modern award definition. It has not been necessary for us to rule upon this consideration.

Conclusion

[29] We have decided that the issue raised by the grounds of appeal is such that it is in the public interest that we should grant permission to appeal. It is appropriate we do so as it is the first time a Full Bench has considered the manner in which s.196 should be applied by a member of FWA when considering whether to approve an enterprise agreement.

[30] As is apparent from these reasons we have decided the parties should be given an opportunity to make further submissions about whether the 2009-2011 Agreement and/or the Agreement may constitute an enterprise agreement for the purposes of s.196(1)(a) of the Act. In this respect, the parties should assist us with references to any relevant provisions of the Act, the TPCA Act and the regulations. Consideration should also be given to the relevance, if any, of Schedule 3, Part 5, items 23 to 27 of the TPCA Act. The parties will be contacted to make arrangements for the issuing of any directions or for the listing of a short hearing.

SENIOR DEPUTY PRESIDENT

Written submissions filed on:

17 February 2012;
9 March 2012; and
15 March 2012

 1   Employer’s Form F17, answer to question 1.5

 2   s.607

 3   MA000027

 4   [2012] FWA 104

 5   s.3(b)

 6   s.43

 7   ss.47 and 48

 8   s.53(4)

 9   s.55(4) and (5)

 10   S.56

 11   Appellants submission para 18, AWEQ submission para 5

 12   Other examples are in Schedule 3, items 16, 24, 36, Schedule 3A items 22,23, Schedule 12 item 3

 13   [2011] FWA 5103

 14   Ibid para 14

 15   Ibid para 24 and, although not expressly stated in the decision it is also apparent from the discussion about whether the modern award applied or covered the employees he observed that it must covers as there existed a preserved collective agreement.

 16   s.15AA Acts Interpretation Act 1901

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