[2013] FWCFB 5551

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FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.604—Appeal of decision

Health Services Union
(C2013/4216)

Health and welfare services

  

VICE PRESIDENT HATCHER
SENIOR DEPUTY PRESIDENT HAMBERGER
COMMISSIONER MCKENNA

SYDNEY, 21 AUGUST 2013

Appeal against decision [2013] FWC 2182 of Vice President Watson at Sydney on 15 April 2013 in matter number AM2012/133—Modern awards review 2012—Health Professionals and Support Services Award 2010.

Introduction

[1] Under item 6 of Schedule 5 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) the Fair Work Commission is required to conduct a review of all modern awards as soon as practicable after 1 January 2012. Item 6 provides:

“6 Review of all modern awards (other than modern enterprise awards and State reference public sector modern awards) after first 2 years

[2] How item 6 should be interpreted and applied in the conduct of modern award reviews was considered by a Full Bench in Modern Awards Review 2012. 1 The Full Bench said:

[3] The Full Bench also considered the scope of the review required to be conducted, and said:

[4] This appeal has arisen out of the review of the Health Professionals and Support Services Award 2010 2 (the Award) conducted by Vice President Watson. That review was conducted in response to a number of applications by employer organisations representing employers covered by the Award, namely the Australian Medical Association (AMA), the Australian Dental Association (ADA), Australian Business Industrial (ABI), the Australian Federation of Employers and Industries (AFEI), Business SA, and Dr Patrick Sim on behalf of the Chiropractors Association of Australia.

[5] In a decision issued on 15 April 2013 3 (Decision), his Honour determined that arising out of those applications a number of variations should be made to the Award. They included variations concerning the rates of pay for junior employees, the classification structure with respect to entry level roles, periods in which wages were required to be paid, and the definition of “shiftworker” for the purpose of annual leave entitlements under s.87 of the Fair Work Act 2009 (FW Act).

[6] On 6 May 2013 the Health Services Union (HSU) lodged a Notice of Appeal concerning the variations as to junior rates, payment of wages and the shiftworker definition. On 21 June 2013, the HSU lodged a proposed amended Notice of Appeal which refined the existing grounds of appeal, and added a new ground challenging in addition the variation to the classification structure.

[7] At the hearing of the appeal, the HSU was supported in its submission by United Voice. The Australian Services Union lodged a short submission supporting the HSU’s appeal, but did not appear at the hearing. The AMA, the ADA, the Private Hospital Industry Employers’ Association (PHIEA), the ABI and the AFEI appeared at the hearing to oppose the appeal. Not all the employer submissions went to all aspects of the appeal. In particular, the AMA submissions were concerned only with the junior rates and classification variations; no other party sought to defend the classification structure variations. The submissions of the ADA and the PHIEA focused upon the issue of the shiftworker definition for the purpose of annual leave entitlements.

Preliminary matters

[8] We grant the HSU leave to amend its appeal application in accordance with the proposed Notice of Appeal lodged on 21 June 2013. The grounds stated in the amended Notice of Appeal are arguable, and the grant of the amendment will not cause any significant countervailing prejudice to any respondent party.

[9] This is an appeal for which permission to appeal is required under s.604 of the FW Act. We grant permission to appeal. As earlier stated, the appellant’s appeal grounds are arguable, and, in addition, the subject matter of the appeal, concerning as it does important conditions of employment in a modern award with wide coverage, is of sufficient significance as to attract the public interest.

Junior Rates and the Classification Structure

Background

[10] Vice President Watson made two variations to the Award concerning, respectively, the method of calculation of junior rates of pay and the classification of entry level roles in Support Services roles. Because, as is discussed further below, these variations were substantially responsive to a single case mounted by the AMA and interact with each other, it is convenient to deal with them together. In this connection, a number of the provisions of the Award need to be considered.

[11] Clause 13 of the Award has at all relevant times provided:

[12] Prior to the Decision and Determination, clause 14.2 of the Award provided:

“14.2 Juniors in Support Services

[13] Schedule B of the Award contains the classification definitions, with clause B.1 containing the definitions for “Support Services employees” and clause B.2 containing the definitions for “Health Professional employees”. There are nine classifications of Support Service employees, and it is readily apparent that they embrace a large and disparate range of duties and skills. At the bottom of the classification scale, the duties are described as basic or entry-level tasks, but further up the scale are duties requiring more skill, training and responsibility. For example, Level 4 includes qualified theatre technicians, qualified dental assistants and pathology technicians, Level 7 includes supervisory personnel, and Levels 8 and 9 appear to reach into the areas of lower and middle management. The focus in the proceedings was upon the classification definitions for Levels 1, 2 and 3, which then provided as follows:

The AMA Application and its Evolution

[14] The consideration of the Award’s provisions concerning junior rates and entry level roles was initiated by an application lodged by the AMA on 8 March 2012. In that application - which was more in the nature of an outline of submissions - the AMA contended that the Award contained anomalies appropriate for consideration under item 6 of Schedule 5 of the Transitional Act. The AMA, among other matters, directed attention to the classification definitions of Support Service employees Level 1 and Level 2, and in that respect contended the following:

[15] It can be seen that at this point the “clarification” sought by the AMA concerned the progression requirements for Levels 1 and 2, and did not touch upon junior rates. Nor at this point did it seem to be the case that the AMA was opposed to progression from Level 1 to Level 2 after three months’ satisfactory service. The claimed anomalies or ambiguities concerned the calculation of three months’ service for the purpose of progression from Level 1 to Level 2, and the applicability of the Level 2 to Level 3 progression criterion to reception staff in medical practices.

[16] On 21 September 2012, the AMA lodged an amended application which specified precisely the variations which it sought with respect, among other matters, to junior rates and the classification definitions. The variations sought were as follows:

[17] This amended application sought the capacity to retain employees performing “basic duties on an ongoing basis” in Level 1 indefinitely, to insert an overriding requirement in Level 2 that employees have between three months’ and one year’s experience except for office assistants or receptionists employed on an ongoing basis, and to allow junior employees to be employed in Level 2 and be paid the appropriate percentage of the Level 2 rate.

[18] The AMA lodged a written submission together with its amended application. That submission described what was sought in the application, and stated:

[19] In relation to the variation it sought to clause 14.2 of the Award, the AMA said:

The hearing

[20] The hearing of the various applications before Vice President Watson occurred on 26 and 28 November 2012. After appearances were taken at the commencement of the hearing, Mr Izzo, who appeared for ABI, tendered a draft determination which he said represented an agreed position between all the employer groups except the PHIEA. He also indicated that the draft determination had been discussed with the HSU “last Friday” (presumably 23 November 2012). The document was marked as Exhibit I1. Exhibit I1 contained the following proposed variation concerning junior rates:

[21] Exhibit I1 did not contain any proposed variations to the classification definitions for Support Services employees in Schedule B.

[22] The transcript does not record any objection at that point on the part of the HSU to the employers proceeding on the basis of Exhibit I1; indeed there was no response at all from the HSU. The Vice President then proceeded to hear the evidence. The first witness, called by the AMA, was Ms Olya Valaire, who was the AMA’s industrial advisor and solicitor. In her statement of evidence 4, she gave the following evidence relevant to junior rates and the classification definitions for Support Services employees:

[23] Ms Valaire was not cross-examined by the HSU in relation to her evidence set out above. No further evidence was called by any party (including the HSU) relevant to the issues of junior rates or the classification definitions for Support Service employees. After the completion of the evidence, the proceedings moved into submissions. Mr Izzo indicated that he would address in relation to Exhibit I1 on behalf of all the employer organisations which supported it, and then individual employer organisations would make submissions on “some residual issues”. 5 Again, the transcript does not record any objection to this course on the part of the HSU.

[24] In his submissions concerning the proposed variation to clause 14.2, Mr Izzo made the following submission 6:

[25] The transcript then records the following exchange between Vice President Watson and Mr Izzo 7:

[26] There was also a further exchange about the form of the proposed variation 8:

[27] Counsel for the AMA subsequently spoke to the written submissions to which we have earlier referred. With respect to junior rates, the AMA characterised item 3 of its amended application as its “fall-back position”, thus confirming its support in the first instance for the proposed variation to clause 14.2 in Ex I1. The AMA submitted that there were “three different views” as to the interpretation of the Award provisions concerning junior employees, stating 9:

[28] Shortly after the re-commencement of the hearing on 28 November 2012, the AMA also advised Vice President Watson later in its submission, in respect of the “Notional Agreements Preserving State Awards” (NAPSAs) which applied to support staff prior to the Award coming into effect, that “none of the NAPSAs provide that the percentage to be paid to a junior is to be restricted to level 1, which we find in the current modern award” 10. In respect to the AMA’s proposed change to the classification structure, the AMA submitted11:

[29] Before the HSU made its submissions, Mr Izzo for ABI made a further short submission advising Vice President Watson of some inquiries that had been made as to the genesis of the junior rates provision in the Award. He advised that the original exposure draft developed in the award modernisation process had not contained a junior rates provision and that in relation to the hearing leading to the making of the Award, there had been no substantive discussion of the junior rates issue. He also tendered a table 12 which summarised the nature of the junior rates provisions in 73 pre-modern awards which were superseded by the Award.

[30] It was not until after all the employer groups appearing in the proceedings had been heard that the HSU first raised any concern about the course that the proceedings had taken. That concern was expressed in general terms as follows 13:

[31] The HSU did not make any application for it to be permitted to call any further evidence. It essentially complained that in the light of the way the matter had developed, it was not in a position to make its closing submissions that day. 14 In response to that complaint, Vice President Watson offered the HSU an opportunity either to have the matter set down on a later date in order for it to make its closing submissions orally or to file further written submissions. After the HSU indicated that either course would be appropriate, the HSU was permitted to lodge its submissions in writing by the end of the following week, with the employer groups given a right to lodge submissions in reply seven days after that.

[32] The HSU duly lodged its written submissions on 7 December 2012. With respect to junior rates, the submissions made the complaints that “the draft determination did not reflect the terms of any application before the FWA in these proceedings” and that the proposed changes “have been raised after the parties had an opportunity to call evidence in relation to the issue”. On that basis, it was submitted that the tribunal should “decline to consider the proposal”. In the alternative, the HSU made submissions as to why the ABI proposal should be rejected, but indicated it did not oppose item 3 of the AMA’s amended application (which the AMA had identified as its “fall-back position”).

The Decision

[33] In the Decision, Vice President Watson determined to grant the variation to clause 14.2 proposed in Exhibit I1, and the AMA’s proposed variations to the classification structure. As to the first matter, his Honour’s reasoning was as follows:

[34] In respect of the change to the classification structure, Vice President Watson said:

Submissions

[35] The grounds upon which the HSU (supported by UV) challenged the junior rates variation were as follows:

[36] In relation to the variations to the classification structure, the HSU contended that Vice President Watson erred in the following respects:

[37] The AMA, ABI and the AFEI all submitted that no error had been demonstrated with respect to the junior rates variation. However, the basis upon which those parties defended the decision to make this variation differed somewhat. The AMA submitted that clauses 13 and 14.2 and clause B.1.1 of Schedule B of the Award could not logically operate together, but gave rise to the three alternative interpretations which it had identified in its submissions at first instance. This ambiguity had, on the evidence of Ms Valaire, led to a result whereby employers in medical practices were reluctant to employ junior employees because they believed they may not be able to employ them on junior rates for more than three months. It was, the AMA submitted, open on that evidence for Vice President Watson to conclude in his conduct of the review that there was an anomaly and a technical problem which required remedy, and also that the Award was not meeting the Modern Awards Objective in s.134 of the FW Act. The AFEI made a submission similar to that of the AMA. ABI submitted, however, that the existing junior rates provisions were not ambiguous at all, and that Vice President Watson had done no more than to vary the Award to confirm what was already the clear meaning of the Award - that is, that junior employees were to be paid at the appropriate percentage of the Level 1 rate.

[38] The classification structure variation was defended only by the AMA. It submitted that in varying the classification structure as he did, Vice President Watson was removing an anomaly and technical problem that arose as part of the award modernisation process and which was demonstrated by Ms Valaire’s evidence that employers were finding it confusing as to how long employees could remain on Levels 1 and 2 of the Award if the employees were undertaking only very basic tasks such as scanning or filing.

Consideration - junior rates variation

[39] We have not been persuaded by the HSU’s submissions that it was denied procedural fairness with respect to the junior rates variation. The position which emerged in Exhibit I1 certainly emerged late in the piece, and after the time for the filing of evidence by the HSU had passed. However, as was explained by Mr Izzo at the commencement of the hearing, it emerged as a result of discussions between the various employer groups. Given that there was a diverse range of employer interests appearing in the proceedings agitating a diverse range of issues, there cannot be any criticism of the fact that there was an attempt to achieve a joint position between them in order to simplify the matters required to be determined. Award matters in this Commission do not proceed on the basis of strict pleadings, and it is often the case that parties adapt their positions during the course of award proceedings in order to narrow their differences, to meet difficulties or objections identified by other parties, or even to respond to matters raised from the bench. This type of pragmatic flexibility is to be encouraged rather than criticised.

[40] It is always the case, of course, that if any party modifies its position in this way, the other parties must be given a fair opportunity to respond to that modified position. How that fair opportunity is to be provided will depend on the particular circumstances of the case. Here, as earlier outlined, the HSU made no protest against the hearing going forward on the basis that all employer groups except for the PHIEA were seeking the award variations in Exhibit I1. When the time came for the HSU to make its closing submissions, it requested more time to consider its position in respect of the variations proposed in Exhibit I1 and the matters advanced in support of them. Vice President Watson accommodated this request by allowing the HSU to put its submissions in writing at a later time. The HSU’s subsequent written submissions articulated clearly its position on the proposed variations in Exhibit I1. It is plain from his Honour’s decision that he took those submissions into account.

[41] The HSU’s main complaint now appears to be that it did not have the opportunity to adduce evidence in respect of the proposed junior rates variation in Exhibit I1. However, the HSU never requested any such opportunity before his Honour. There is no reason to think that, had the HSU requested an opportunity to lead further evidence, his Honour would not have accommodated that request in some way. The Commission is required by s.577 of the FW Act to perform its functions and exercise its powers in a manner which is fair and just, and is quick and informal and avoids unnecessary technicalities; the Commission will therefore always be prepared to consider an adjustment to its procedures in order to ensure that a party receives a fair hearing. In Sullivan v Department of Transport 17, Deane J observed that procedural fairness requires only that a party be given “a reasonable opportunity to present his case” and not that the tribunal must ensure “that a party takes the best advantage of the opportunity to which he is entitled”. We consider that the fact that the HSU did not adduce any evidence concerning the proposed junior rates variation in Exhibit I1 was a result of it not taking advantage of the ample opportunity it had to apply to do so, not because it was denied that opportunity by his Honour.

[42] We do consider however, that the HSU’s substantive challenge to the junior rates variation has merit. In the light of the AMA’s submissions concerning the differing available interpretations of the junior rates provision and the evidence of Ms Valaire concerning employer confusion on the issue, Vice President Watson was entitled to conclude that there was ambiguity in the Award concerning junior rates. However, in the context of a review conducted under item 6 of Schedule 5 of the Transitional Act, the issue could not then be resolved simply by picking what was perceived to be the correct interpretation of the ambiguous provisions and then varying the Award to confirm that interpretation. As the Modern Awards Review 2012 decision confirmed 18, subitem 6(4) of Schedule 5 requires that the Commission, in making any award variation relating to minimum wages as a result of the conduct of the two-yearly review, take into account the modern awards objective in s.134(1) of the FW Act and the minimum wages objective in s.284(1) of the FW Act. The effect of that requirement is that regard must be had to a range of merit considerations, including most relevantly “providing a comprehensive range of fair minimum wages to junior employees” (s.284(1)(e)). The variation made by his Honour, concerning as it did the provision in the Award specifying rates of pay for juniors, was clearly a variation which “related[d] to modern award minimum rates” and therefore required consideration of s.134(1) and s.284(1).

[43] The Decision gives no indication that the objectives specified in s.134(1) and s.284(1) were taken into account, and the outcome positively indicates that they were not. As earlier stated, the classification structure in the Award for Support Services employees encompasses a broad spectrum of duties and skills, ranging from basic entry-level tasks at the bottom end to tasks requiring a significant degree of skill, training and responsibility at the top end. Since under the variation made by Vice President Watson, juniors may be engaged “at any classification level in this award” (presumably meaning, from the heading to clause 14.2, any Support Services classification), the effect of the variation is that juniors are paid the relevant percentage of the entry-level Level 1 rate regardless of the duties which they perform. The result of the variation is that any two junior employees of the same age will be paid the same wage rate even if one is performing duties requiring a degree of training, skill and responsibility and the other is only performing basic entry-level tasks. The result is also that a junior employee who is required by his or her employer to perform work functions graded at a higher classification level will not receive any additional remuneration for doing so, whereas an adult employee would. There is clearly a serious issue as to whether this system of junior rates provides a “comprehensive range of fair minimum wages to junior employees”, and in the absence of any rationale for such a system in the Decision, we must conclude that the minimum wages objective was not taken into account in making the variation contrary to the requirement in subitem 6(4). That constitutes appealable error.

[44] We would add that we doubt, in any event, that the variation to the Award made by Vice President Watson did not alter the meaning of the previous provisions, as his Honour concluded. Having regard to the matters we have adverted to in the previous paragraph, we do not think it likely that the Award Modernisation Full Bench which made the Award intended that junior rates operate in the way we have described. This tends to be confirmed by an analysis of the table which ABI tendered at first instance 19 identifying the junior rates provisions in 72 pre-modern awards which were superseded by the Award. Of those 72 awards, 30 either did not provide for or did not specify any junior rates. Another 18 provided that juniors were to be paid an identified percentage of the appropriate adult rate or of the first-year increment of the appropriate adult rate. The remainder of the awards had a disparate range of junior rates provisions. Many of them required juniors to be paid an identified percentage of a particular adult rate, but this was usually on the basis that juniors could only be employed in particular classifications or job junctions. Only one award, the Private Hospitals Employees’ Award - State 2003 (an award of the Queensland Industrial Relations Commission), clearly provided that juniors were to be paid the identified percentage of the lowest adult rate in the award without any restriction on the classification or role in which juniors could be employed. However, even in that award there were a number of critical differences: there were only three adult classifications, the percentage for juniors was higher than in the Award here, and adult rates were payable at age 19. No award in the ABI’s table contained junior rates provisions on all fours with that which Vice President Watson considered already existed in the Award.

[45] In the Award Modernisation Decision of 19 December 2008 20, the Award Modernisation Full Bench made the first 17 modern awards applying to a number of identified “priority” industries and occupations. In that decision, the Full Bench made a number of statements concerning the general approach it would take to particular issues that had arisen in the course of the award modernisation process to that point. About junior rates the Full Bench said (underlining added):

[46] The Award was not one of the awards made in the priority stage. However, if the Full Bench had in making any subsequent modern award intended to depart from the principle it stated that junior rates would be expressed as a percentage of the relevant adult rate, then we think it likely that in the decision in which the Award was made, some reasons would have been stated for this approach. However, in that decision 21, there was no consideration of junior rates in the Award.

[47] Having regard to that history, we consider that it is more likely that one of the alternative interpretations of the existing provisions in the Award advanced by the AMA accorded with the Full Bench’s intention - namely that, junior employees were only to be employed in and paid at the Level 1 Support Services classification. We do not consider, however, that it is necessary for us to make a final determination about this issue because, as earlier stated, the employer applications to vary the junior rates provisions should not have been determined simply on the basis of a determination as to what the existing provisions meant.

[48] For the reasons stated we will therefore quash the variation to clause 14.2 of the Award.

Consideration - classification structure variations

[49] In respect of the variations to the classification structure made by Vice President Watson, it is clear from the outset that there is a fundamental problem in that they have changed the effect of the Support Services classification structure at Levels 2 and 3 in a way which was clearly not intended by his Honour or by the moving party for the variations, the AMA. His Honour’s rationale for the variations was to allow employees “who may be required to perform very basic duties on an ongoing basis” to remain indefinitely at either Level 1 or Level 2. However, at Level 2, the variations have achieved substantially the opposite.

[50] Previously, the only temporal restriction contained in Level 2 was that, in respect of the indicative role of “General clerk/Typist”, the employee had to have “between 3 months and 1 years service”, with a General clerk/Typist at “second and subsequent years of service” graded at Level 3. All other indicative roles for Level 2 could stay in Level 2 indefinitely if there was no change in duties and responsibilities. This position has been turned on its head by the variations. The addition of the words “An employee with between three months and less than one year’s work experience in the industry and/or an office assistant or receptionist who is performing level 2 duties on an ongoing basis” to Level 2 means that, except for the office assistant or receptionist, there is now an overriding requirement that any employee in Level 2 have no more than one year’s industry service. That would appear to require, for example, a “non-trade gardener” to be moved up to Level 3 after a year of industry experience, even though “non-trade gardener” is not identified as an indicative role in Level 3 or any other classification. The same unintended automatic progression would apply to drivers of less than 3 tonne vehicles, housekeepers, unqualified maintenance/handypersons, diet cooks, instrument technicians, and personal care workers, grade 1.

[51] Additionally the variations add to, rather than resolve, confusion and anomalies:

[52] We consider that for these reasons alone, the variations to the classification structure were erroneously made, in that their drafting caused unintended effects and/or added new anomalies and ambiguities, and must therefore be quashed. We also consider that, as the HSU submitted, his Honour erred in determining that there was any confusion or anomaly concerning how employees performing entry-level type duties were to be classified which required clarification. The previous Level 1 definition made it clear that no person could remain in that classification for any longer than three months; after that, any employee had to be moved up to Level 2. The previous Level 2 definition made it equally clear that any employee performing duties at that level could remain in that classification indefinitely, except for the General clerk/Typist who had to be moved to Level 3 after one year’s industry service. There was no ambiguity in the text of the Award which required any resolution.

[53] It is apparent that the variations to the classification structure sought by the AMA were not to truly resolve an ambiguity, but to achieve a substantive change to the structure by way of re-classifying clerical employees performing basic duties at a lower grade. This is illustrated in the Vice President’s summation of the AMA’s case as follows 22 (underlining added):

[54] The AMA’s submission to his Honour that the words in the Level 2 classification definition “General clerk/Typist (between 3 months and less than 1 years service)” make it unclear how long such an employee is to be classified at Level 2 was untenable. The very words quoted make it perfectly clear. The underlined words in the above passage demonstrate that the AMA understood that the effect of the quoted words in the Level 2 classification definition was to require General clerks/Typists to be moved to Level 3 after one year’s industry service, and that it wanted a substantive change to this. This is confirmed by the following part of the AMA’s oral submission at first instance (which we have quoted at greater length above):

[55] The AMA is of course quite entitled to apply for substantive variations to the Award’s classification structure if it considers that particular roles or job functions are not appropriately graded in that structure. If supported by appropriate evidence going to the work value of the roles or job functions in question relative to that of other positions in the classification structure, such an application might well be granted. It is open to the AMA to take that course in the upcoming four-yearly review of modern awards to be conducted next year. However, it constituted error to grant the AMA’s application on the basis of alleged anomalies and confusion which did not in truth exist. We will therefore quash the variation to the classification definitions in clauses B.1.1 and B.1.2 of Schedule B of the Award.

Re-determination of the applications concerning junior rates and the classification structure

[56] Having found error, the applications to vary the Award provisions concerning junior rates and the classification structure must be determined again under item 6 of Schedule 5 of the Transitional Act. Because of the passage of time, we will ourselves determine these applications rather than remit them for further hearing. We will determine the applications based upon the evidence currently before the Commission (noting that no party suggested that there should be any re-opening of the evidence at this point).

[57] Towards the end of the hearing of the appeal, we invited the parties to identify in writing what, if any, variations to the Award we should make in the event that we found error with respect to the junior rates and classification structure variations. We also directed the parties to confer in respect of this in the hope that a consensus position could be reached. This proved to be in vain. The positions of the parties which responded to our invitation may be summarised as follows:

[58] We emphasise that in advancing the above alternative positions, no party resiled from its primary position. In particular, the AMA, the ABI and the AFEI did not resile from their submissions that there was no appealable error with respect to the junior rates and/or classification structure variations.

[59] With respect to junior rates, we accept the submission made by the AMA that the Award provisions concerning junior rates are ambiguously drafted and capable of multiple interpretations. While the evidence in this regard was short and not well-developed, we accept the evidence of Ms Valaire that this ambiguity has caused confusion amongst employers in medical practices, including a perception that junior employees may not be engaged for longer than three months. We consider that the ambiguous drafting of the junior rates provisions constitutes an anomaly and a technical problem arising from the award modernisation process which is preventing the Award from operating effectively in this area. We also consider that, to the extent that the junior rates provisions are being read as preventing the engagement of junior employees for longer than three months, the Award is not achieving the modern awards objective in s.134 in that it is not encouraging increased workforce participation, it restricts the efficient and productive performance of work, and it adversely affects employment growth and costs.

[60] The Award should be varied to remedy this. Given the AMA has identified what we accept is a difficulty with the junior rates provisions, we cannot accept its position (or that of ABI) that nothing should be done about it. We consider that any variation, in order to meet the modern awards objective in s.134 and the minimum wages objective in s.284, and having regard in particular to s.284(1)(e), should be consistent with the following principles:

[61] Only the alternative position advanced by the AFEI is consistent with these principles. The Award will be varied to give effect to that position.

[62] Consistent with our earlier reasons, we do not consider that the classification structure is failing to achieve the modern awards objective or is not operating effectively. The AMA has not demonstrated that there is any anomaly or technical problem in the classification structure arising out of the award modernisation process which requires rectification. The principal problem raised in the AMA’s evidence, namely concerns about the capacity to employ juniors, will be rectified by the variation we make to clause 14.2. Accordingly, we dismiss the AMA’s application to vary the classification structure.

Payment of wages

[63] In the Award as it stood at the time of the hearing before Vice President Watson, clause 20 provided as follows:

[64] ABI’s Exhibit I1 proposed a variation to this provision to allow for wages to be paid monthly upon giving the affected employees one month’s notice. The PHIEA proposed an alternative variation, on the basis that it supported the change for health professionals but recognised that “support service employees working in lower paid positions may have difficulty budgeting if paid on a month to month basis”. 23

[65] Vice President Watson determined to vary clause 20.1 to provide:

[66] The reasoning in the Decision for this variation was as follows:

[67] The HSU, supported by UV, contended that there was no proper basis for such a variation to be made because there was no finding that, in respect of payment of wages, the Award was not achieving the modern awards objective or was not operating effectively without anomalies or technical problems arising from the award modernisation process as required by item 6(2) of Schedule 5 of the Transitional Act, and further because there was no evidence to support the factual conclusions stated by his Honour.

[68] The only respondent in the appeal which made submissions in respect of the payment of wages issue was ABI. It submitted that no evidence was required to support the variation, and referred to the following passage in the Full Bench decision in Australian Manufacturing Workers’ Union v Australian Business Industrial 24 to support its approach in this regard:

[69] ABI further submitted that his Honour was also entitled to make the conclusions of fact that he did on the basis of “judicial notice” of those matters.

[70] We consider that his Honour’s decision to vary clause 20.1 was attended by error in two respects. Firstly, the Decision does not disclose that any consideration was given to either of the matters required to be considered in item 6(2) of Schedule 5 of the Transitional Act. Contrary to the HSU’s submission, item 6(2) does not require positive findings about the matters identified in the item for a variation to a modern award to be made, but there is a statutory duty to consider them. The decision in Australian Manufacturing Workers’ Union v Australian Business Industrial relied upon by ABI and quoted above confirms that this is the case. The failure to consider these matters as required by the statute was a constructive failure to exercise jurisdiction causing the decision-making process to miscarry.

[71] Secondly, we consider that Vice President Watson erred by basing his decision on findings of fact made without the support of any relevant evidentiary material. In support of its proposed variation, ABI adduced no evidence in the proper sense. The only material of a remotely evidentiary nature was a reference in ABI’s written submissions to an Australian Bureau of Statistics study Australian Social Trends December 2011 Catalogue No. 4102.0 which was said to demonstrate that in 2009-2010 about 70 per cent of households had at least one credit card. The document itself was not provided. Beyond that, ABI did no more than make a series of factual assertions in its written and oral submissions; for example it asserted that for many businesses a change to monthly pay “could mean a significant cost saving” in relation to “the cost of the labour of payroll staff”, and would (because of widespread access to credit cards) be “less likely to cause undue hardship and inconvenience to employees than in previous times”. These propositions appear to us to be far from self-evident, and were in any event expressed in a contingent way.

[72] It is open for this Commission, being a tribunal not bound by the rules of evidence 25 and capable of informing itself in such manner as it considers appropriate26, to accept and act upon factual assertions made by parties which are agreed or not put in contest.27 We consider that the HSU, in stating in its closing written submissions that ABI’s application was not supported by any evidence led as to the matters in item 6(2) of Schedule 5 of the Transitional Act but by “mere assertions”, put the ABI’s factual contentions in issue, or at least did not admit them. In those circumstances, we do not consider that his Honour was entitled to determine the matter upon those factual assertions. That his Honour did so by is apparent from that part of the Decision concerning the payment of wages issue which we have earlier set out.

[73] The decision in Australian Manufacturing Workers’ Union v Australian Business Industrial does not assist ABI’s defence of the payment of wages variation. In that case, there had been a variation made at first instance to the payment of wages clause in the Graphic Arts, Printing and Publishing Award 2010 to allow for weekly or fortnightly payment of wages as determined by the employer, or monthly payment by agreement with the individual employee, in circumstances where that award had previously only allowed wages to be paid weekly. The variation was affirmed on appeal. However, in that case, the justification for the variation was not dependent upon any finding of fact, but rather upon a conclusion that the requirement for wages to be paid weekly was anomalous having regard to the equivalent provisions allowing fortnightly pay in the kindred Manufacturing and Associated Industries Award 2010 as well as in most other modern awards and needed to be changed to ensure that the modern awards objective was met. That was not a conclusion which required evidence. Here, the variation was not applied for or granted on any such basis; indeed, the existing payment of wages clause in the Award here was virtually the same in effect as that in the Manufacturing and Associated Industries Award 2010, and the variation to allow monthly pay at the employer’s unilateral election puts this Award at odds with the majority of modern awards without any apparent justification.

[74] The reference in paragraph [9] of Australian Manufacturing Workers’ Union v Australian Business Industrial (quoted above) to “administrative efficiencies arising from the reduction in pay periods, payment practices that operate generally in the community, and the impact of a change on particular employees” is not to be read as a series of a priori conclusions to be applied to any application concerning award payment of wages provisions. It identifies the matters which are likely to be relevant to any such application, but what the conclusions would be about those matters would depend upon the evidence presented in relation to such an application.

[75] ABI’s submission that his Honour’s findings of fact could be justified on the basis that they constituted “judicial notice” of those facts is rejected. There is no indication in the decision that that was the basis upon which his Honour made those findings. In any event, in order to be able to take judicial notice of a fact, a number of strict requirements apply. The fact must be so generally known as to give rise to the reasonable presumption that all ordinary persons are aware of it, so that a court or tribunal member’s personal knowledge of particular facts is excluded. Further, the court or tribunal member must be fully satisfied as to the fact, and must be cautious to see that no reasonable doubt exists. 28 None of the alleged facts the subject of the findings made here meets either requirement in our view.

[76] We will therefore set aside the variation to clause 20.1. No party submitted that we should ourselves re-determine the application to vary that provision or that we should remit it. In any event, we would not ourselves grant any variation to the provision, in the absence of any evidence and any cogent reason why the provision determined upon by the award modernisation Full Bench needs to be changed. There is nothing before us to suggest that clause 20.1 is not meeting the modern awards objective or that it is not operating effectively without anomalies or technical problems arising from the Part XA award modernisation process.

Annual leave entitlements for shiftworkers

[77] Section 87(1) of the FW Act provides:

[78] The effect of s.87(1)(b)(i) is that any employee defined or described in a modern award as a “shiftworker” for the purposes of the National Employment Standards (NES) is entitled to five rather than four weeks of paid annual leave.

[79] In the Award as it was when first made on 3 April 2009, clause 31.1 dealt with the issue of this additional annual leave entitlement in the following terms:

[80] This clause was expressed in a curious way. Read literally, it appeared to confer a double entitlement. Clause 31.1 conferred an additional week’s leave, on top of the NES standard, for a shiftworker or for an employee working the requisite number of weekends. Clause 31.2, for the purpose of the NES entitlement of an additional week’s leave, then defined a shiftworker as an employee regularly rostered to work ordinary hours outside of the Award’s span of ordinary hours. That definition was consistent with the definition of “shiftworker” to be found in clause 3.1 of the Award: “shiftworker is an employee who is regularly rostered to work their ordinary hours outside the ordinary hours of work of a day worker as defined . . .”. The apparent result was that a shiftworker would be entitled to six weeks of annual leave.

[81] This anomaly was soon picked up by the Victorian Hospitals Industrial Association (VHIA), which made an application to vary clause 31.1 under s.160 of the FW Act on the basis that the existing provision was ambiguous or uncertain or constituted an error requiring correction. The VHIA’s application, which was supported by the PHIEA and the ADA, was to vary clause 31.1 to read as follows:

[82] The VHIA’s proposed variation had its own curiosities. In particular, in seeking to eliminate the apparent double entitlement to an additional week of leave by confining the provision’s operation to the definition of “shiftworker” for the purpose of the NES, it did not retain the existing definition of “shiftworker” for that purpose appearing in the original clause 31.1(b). Instead, it picked up the criterion for the extraneous additional week’s leave found in the original clause 31.1(a), and in doing so omitted any requirement for the employee to actually be a shiftworker as defined in clause 3.1 in order to qualify for the extra entitlement.

[83] In a decision issued on 12 May 2010 29, Vice President Watson granted the VHIA’s application. His Honour’s reasoning was as follows:

[15] The Award annual leave clause should define the basis of the additional week’s leave for the purposes of NES by defining the term “shiftworker” for this purpose in a similar way to which the qualification for the additional week was expressed in previous awards. This will usually be a class of shiftworkers only - not all shiftworkers for other purposes of the Award.

[84] His Honour’s conclusion in paragraph [14] of this decision above that the original clause was ambiguous, did not reflect previous entitlements and constituted an error was undoubtedly correct. Further, the proposition stated in paragraph 15 that the Award clause should define “shiftworker” in a similar way to previous awards was unexceptional. However, for reasons which we will come to, the conclusion in paragraph 16 that the VHIA’s proposed new clause reflected the previous award qualifications for the extra week of leave was problematic.

[85] It is apparent that the 12 May 2013 decision did not settle employer concerns about clause 31.3(b) of the Award. It is equally apparent that those concerns were elevated as a result of the Full Bench decision in Ramsay Health Care Australia Pty Ltd t/as Greenslopes Private Hospital v Australian Workers’ Union of Employees, Queensland 30 which made it clear that, by reason of s.196 of the FW Act, an enterprise agreement which did not contain a definition of “shiftworker” for the purpose of the NES which applied to at least the same employees as the equivalent definition in an otherwise applicable modern award was incapable of approval.

[86] In the 2012 Review for this Award conducted by his Honour, the issue of clause 31.1 was initially agitated only by the ADA in its application for variation. The ADA’s proposed variation was as follows:

[87] Subsequently, the other employer groups jointly advanced by way of Exhibit I1 an alternate variation to clause 31.1(b) so that it read:

[88] At the hearing before Vice President Watson, the ADA called extensive evidence from a number of witnesses which demonstrated that the cost of the additional week’s annual leave for persons employed to work ordinary hours on Saturdays was inhibiting dental practices from opening on Saturdays, despite there being a public demand for them to do so. No other party called any evidence in relation to the matter.

[89] Vice President Watson determined to grant the variation to clause 31.1(b) proposed in Exhibit I1. His Honour’s reasoning in the Decision in this matter was as follows:

[90] The HSU submitted that his Honour erred in varying the Award in this way because:

[91] The HSU’s first submission requires some further analysis as to the origins of clause 31.1(b). The starting point to this analysis must be that clause 31.1(b), even in the form that it was as a result of the 12 May 2010 variation, was unusual. The historical basis for an entitlement to an extra week’s annual leave was usually to compensate seven-day shiftworkers for having to regularly work on Sundays and public holidays. There was considerable debate in various decisions of industrial tribunals over the course of the last century as to what constituted seven-day shift work (sometimes alternatively characterised as “continuous shift work”) either generally or for the purpose of particular occupations and industries. 31 The minimum position seems to have been that a seven-day shiftworker had to have been a shiftworker who regularly worked Sundays and public holidays32, with “regularly” defined in the most generous case as being 35 shifts per year.33

[92] In order to qualify for the extra week’s leave under the clause in the Award here as it stood after the 12 May 2010 variation, the employee did not have to be a shiftworker at all, and did not have to have worked any Sundays or public holidays at all (if ten or more Saturdays had otherwise been worked). This was clearly a marked departure from the historic standard. That does not mean in itself that the previous provision was industrially unjustifiable. It was recognised in the award modernisation process that there was a wide variety of provisions in pre-existing instruments concerning annual leave, including as to the definition of a shiftworker for that purpose, such that the development of such a standard provision was not possible. 34 However, one would expect to find some historic rationale for the departure from the standard.

[93] An analysis prepared by the AFEI in its written submissions at first instance demonstrated that, overwhelmingly, the various instruments covering health professionals and support staff in each State which the Award replaced did not have annual leave provisions equivalent to that in clause 31.1 of the Award as it was prior to the variation the subject of the appeal. The HSU identified two predecessor instruments in Victoria, the Health and Allied Services - Public Sector - Victoria Consolidated Award 1998 35 and the Health and Allied Services - Private Sector - Victoria Consolidated Award 199836 as the source, and therefore justification, of the Award provision as it previously was. However, we consider that the annual leave provisions in those awards had a different effect. Each of these awards had a provision in the following terms:

[94] The critical feature of this provision was that the employee had to be a “shift worker” in order for the provision to have any application. “Shift worker” was not given a specific definition in the awards. The HSU submitted that a “shift worker” for the purpose of the provision was merely a person who met the provision’s criteria concerning the number of weekends worked per year. We do not accept that submission, since it would mean that the expression “shift worker” in the clause would not only have had no work to do but was used to signify employees who were in fact not shiftworkers at all. We consider that the correct interpretation of the provision is that it only applied to persons who performed shift work under the shift work clauses in the awards, and that a shiftworker who met the criteria for working weekends was deemed to be a seven-day shiftworker entitled to the additional week’s leave (as the heading to the provision suggests). The shift work clause in the awards provided:

[95] That provision effectively referred to afternoon, night and early morning shiftworkers, so that only employees who worked shifts of that type and who worked on the requisite number of weekends qualified for the extra week’s leave. That is quite a different thing to clause 31.1 as it stood as a result of the 12 May 2010 variation, which allowed day workers to qualify.

[96] It cannot be said therefore that either clause 31.1 as it was originally made by the Award Modernisation Full Bench, or as subsequently varied by Vice President Watson on 12 May 2010, reflected the leave entitlements found in the various pre-modern awards. The form of the original clause was, as Vice President Watson found in his 12 May 2010 decision, an error. It is difficult to discern what occurred in the award modernisation process, but there may have been unintended drafting consequences in an attempt to adapt the leave provisions from the Health and Allied Services - Public Sector - Victoria Consolidated Award 1998 and the Health and Allied Services - Private Sector - Victoria Consolidated Award 1998. The 12 May 2010 variation which was intended to rectify this likewise did not have the same effect as the equivalent provisions in the two identified predecessor awards.

[97] Having regard to the historical context we have described, the HSU’s first submission must be rejected. The principle stated in the Modern Awards Review 2012 decision was that a variation to a modern award provision as part of the 2-year review should not be made absent “cogent reasons for doing so”. The demonstration of a “significant change of circumstances which warrants a different outcome” was identified in the Modern Awards Review 2012 decision as merely an example of what might constitute “cogent reasons”. We consider that where, as here, the modern award provision has been demonstrated to have been made in error, that would equally constitute “cogent reasons” for a variation. The position is a fortiori where the evidence demonstrates that the erroneous provision has been having unintended and detrimental consequences upon the capacity of employers to meet public demand for their services.

[98] The HSU’s submission that the evidence did not demonstrate an anomaly or technicality, or a failure to achieve the modern awards objective must also be rejected. Vice President Watson’s finding of fact in paragraph [15] of the Decision, which we have earlier set out, was not challenged by the HSU in the appeal. That finding, we consider, clearly made available the conclusion that clause 31.1 of the Award as it previously was did not meet the modern awards objective in s.134(1) having regard in particular to “the need to promote flexible modern work practices and the efficient and productive performance of work” (s.134(1)(d)) and “the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden” (s.134(a)(f)).

[99] We also reject the HSU’s third submission that the actual variation granted by Vice President Watson was not adapted to remedying the problem identified in the evidence concerning the dental industry. We do so for two reasons. Firstly, the variation to clause 31.1 was made by his Honour not only on the basis of the evidence adduced by the ADA, but also on the basis that clause 31.1 departed from common standards concerning the entitlement to an extra week’s leave in circumstances where nothing that occurred in the award modernisation process identified a rationale for such a departure. This provided an independent justification for a variation which applied to all employers and employees under the Award. Secondly, neither the HSU nor any other party submitted, even in the alternative, that any variation to clause 31.1 should be confined to the dental industry. Accordingly, we think that his Honour was entitled in those circumstances to determine the issue on an all or nothing basis.

[100] This aspect of the HSU’s appeal is therefore dismissed.

Conclusion and orders

[101] We determine and order as follows:

VICE PRESIDENT

Appearances:

L. Doust of counsel on behalf of the Health Services Union (HSU).

W. Ash on behalf of United Voice.

F. Hancock of counsel on behalf of the Australian Medical Association (AMA).

G. Boyce of counsel on behalf of the Australian Dental Association (ADA).

L. Izzo on behalf of Australian Business Industrial (ABI) and Business SA.

S. Forster on behalf of the Australian Federation of Employers and Industries (AFEI).

L. Hepworth on behalf of the Private Hospital Industry Employers’ Association (PHIEA).

Hearing details:

2013.

Sydney:

25, 26 July.

 1   [2012] FWAFB 5600.

 2   MA000027.

 3   [2013] FWC 2182.

 4   Exhibit H1.

 5   PN686.

 6   PNs 690-692.

 7   PNs 695-696.

 8   PNs 702-705.

 9   PN834.

 10   Transcript PN5.

 11   PNs 36-38.

 12   Exhibit I6.

 13   PN320.

 14   PN 322.

 15   HSU written submissions paragraph 23.

 16   HSU amended appeal notice ground (i).

 17   (1978) 20 ALR 323 at 343.

 18   [2012] FWAFB 5600 at [63].

 19   Exhibit I6.

 20   [2008] AIRCFB 1000.

 21   [2009] AIRCFB 345.

 22   [2013] FWC 2182 at [62].

 23   [2013] FWC 2182 at [20].

 24   [2013] FWCFB 580.

 25   Fair Work Act, s.591.

 26   Fair Work Act, s.590(1).

 27   R v The Commonwealth Conciliation and Arbitration Commission and Others; Ex Parte The Melbourne and Metropolitan Tramways Board (1965) 113 CLR 228 at 243 per Barwick CJ and 252 per Menzies J; MM Cables (a division of Metal Manufactures Limited) v Zammit [1999] AIRC 553 at [19]-[24].

 28   Holland v Jones (1917) 23 CLR 149 at 153 per Isaacs J.

 29   Health Professionals and Support Services Award 2010 [2010] FWA 3724.

 30   [2012] FWAFB 4033.

 31   See the discussion in Re Theatrical Employees (Sydney Convention and Exhibition Centre) Award 1989 Print M7325, 1 December 1995, recently cited in Transpacific Industrial Solutions - South Australia (Olympic Dam) - Enterprise Agreement 2011 [2012] FWAA 1436 at [40].

 32   Ibid.

 33   Re Nurses' (ANF - Western Australian Public Sector) Consolidated Award 1990 Print L3678, 2 June 1994.

 34   Award Modernisation Decision [2008] AIRCFB 1000.

 35   AP783945.

 36   AP783872CRV.

 37   Clause 33 in the Health and Allied Services - Private Sector - Victoria Consolidated Award 1998.

 38   Clause 31 in the Health and Allied Services - Private Sector - Victoria Consolidated Award 1998.

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