[2014] FWCFB 4470
FAIR WORK COMMISSION

DECISION


Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Sch. 6, Item 4 - Application to make a modern award to replace an enterprise instrument.

Together Queensland, Industrial Union of Employees
(EM2013/108)

DISTRICT HEALTH SERVICES EMPLOYEES’ AWARD - STATE 2003

Health and welfare services

VICE PRESIDENT WATSON
DEPUTY PRESIDENT SMITH
COMMISSIONER LEE

MELBOURNE, 23 JULY 2014

Application by Together Queensland, Industrial Union of Employees (1092_TRQ) - Whether the District Health Services Employees’ Award - State 2003 is capable of being the subject of an application - Factors to be considered when making a modern enterprise award - Dispute about continuation of public hospital terms and conditions in an award safety net - no case made out for the continuation of an enterprise award - Workplace Relations Amendment (Work Choices) Act 2005 - Fair Work (Transitional Provisions and Consequential Amendments Act 2009, Schedule 6 Item 4, Schedule 6 Item 2(2A), Schedule 6 Sub-Item 4(5), Schedule 6 Item 6, Schedule 6 Item 9(3), Schedule 3 Item 31.

Introduction

[1] Together Queensland, Industrial Union of Employees (Together Queensland) has made an application to make a modern enterprise award to replace the District Health Services Employees’ Award - State 2003 (the DHS Award). The application is made under Item 4 of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments Act 2009 (the Transitional Act).

[2] The Workplace Relations Amendment (Work Choices) Act 2005 created numerous new federal instruments as Pre-Reform Awards (from Federal Awards) and Notional Agreements Preserving State Awards (NAPSAs) (from State Awards). A NAPSA was created from the Queensland DHS Award applicable to national system employers bound by the Queensland Award. The only national system employer expressly bound by the DHS Award is the Mater Misericordiae Health Services Brisbane Limited (Mater) with respect to its public hospital activities. In 2010 a Full Bench of Fair Work Australia accepted that the resultant NAPSA was an enterprise instrument and removed it from the list of pre-reform awards and NAPSAs terminated following the award modernisation process. 1

[3] The scope clause of the DHS Award is as follows:

[4] In view of this wording the question arises as to whether the DHS Award is an enterprise instrument capable of being the subject of an application under Item 4. We accept that the various public sector District Health Services bound by the award by virtue of clause 1.5.1 are not national system employers and the NAPSA does not apply to them.

[5] However the application of the award to contractors and subcontractors in public health facilities may mean that the NAPSA is not an award based transitional instrument that covers employees only in a single enterprise for the purposes of Item 2(2A) of Schedule 6 to the Transitional Act. This aspect of the wording was not addressed by the Full Bench in its 2010 decision.

[6] We raised this issue with the parties in the proceedings. Mater submitted that while the DHS Award is technically an enterprise award for the purposes of the definition outlined in the Award Modernisation Case 2010, this does not automatically make it an enterprise modern award and does not mean that Together Queensland’s application that it become a modern enterprise award should be accepted.

[7] Together Queensland relies on the concession made by Mater that the DHS Award is an enterprise award.

[8] Neither party addressed the significance of the DHS Award applying to contractors and sub-contractors in addition to Mater. Given the conclusion we have reached in relation to this application it is unnecessary for us to express a final view on the matter. However it appears that the status of the DHS as an enterprise instrument is questionable and the application may therefore not be valid.

The Legislative Task

[9] The role of the Commission in an application to make a modern enterprise award is governed by sub-item 4(5) of Schedule 6 to the Transitional Act which provides:

[10] It is also necessary to consider the modern enterprise awards objective: Item 6 of Schedule 6 of the Transitional Act. This is a legislative requirement for the Commission to recognise that, in addition to modern awards objectives generally, modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises.

[11] Despite our doubts about the validity of the application we turn to consider these factors in relation to the circumstances of this case on the assumption that the DHS Award is an enterprise instrument. In doing so we note that there are no other matters prescribed by the regulations. The specified factors are required to be considered as matters of significance in the determination of whether a modern award should be made.

The circumstances that led to the making of the enterprise instrument rather than an instrument of more general application: Item 4(5) (a)

[12] As indicated above the DHS Award was not made as an enterprise award. It originated as an industry award covering the public health system in Queensland. As a result of the legislative reforms and the movement of national system employers into the Federal system the federal instrument created out of that process only expressly covered one private sector employer. That history shows that the making of the enterprise instrument was not the result of an intentional act to create an enterprise instrument rather than an instrument of more general application. No discernible rationale for making an enterprise instrument can be drawn from this history. If there was such a rationale, it could be evaluated to determine whether it remained relevant and persuasive. In the light of the history no such evaluation can be made. This consideration does not support the continuation of an enterprise award.

Whether there is a modern award that would, but for the enterprise instrument, cover the persons who are covered by the instrument: Item 4(5) (b)

[13] The Health Professionals and Support Services Award 2010 (the Health Professionals Award) is the modern award that would apply to all Mater employees (other than those in classifications that are generally award free) if the DHS Award is not replaced by a modern enterprise award. The Health Professionals Award applies to all other national system employers providing similar services to the Mater apart from those public sector organisations still regulated within state systems. This factor does not provide a justification for an enterprise award to continue.

The content of the Health Professionals Award: Item 4(5) (c)

[14] We note the terms of the Health Professionals Award and that it has recently been reviewed during the 2012 Award Review process. Together Queensland submits that if the DHS Award is discontinued the applicable enterprise agreement would prescribe the rate of pay but there would be no industrial instrument to describe the classification level, movement within the classification level or movement between classification levels because the DHS Award was an integral part of the employment framework.

[15] Together Queensland also contends that in moving to the Health Professionals Award as the underpinning award, Mater public hospital operations would be departing from the safety net covering the public hospital system in Queensland and this would thereby create an anomaly.

[16] Mater made a commitment in the proceedings to maintain the benefits of the DHS Award until the current enterprise agreement is replaced or terminated. It submits that the benefits in the enterprise agreement are well in excess of those in the DHS Award and the Health Professionals Award.

[17] The difference between the parties on this matter relates more to a dispute about which is the appropriate industry award base rather than an argument about the desirability of an ongoing enterprise award as such. Together Queensland submits that as it runs a public hospital, its award base should be the same as the remainder of the public hospital sector. The retention of an enterprise award that contains public sector conditions is a vehicle to achieve that. Mater submits that it runs public and private hospitals and interests of simplicity and fairness make it more appropriate that it operates on a single award safety net with any differences in actual terms being reflected in agreements. This factor does not provide a justification for an enterprise award to continue.

The terms and conditions of employment applying in the industry: Item 4(5) (d)

[18] The initial task is to identify the relevant industry for the purposes of this consideration. Mater submits that the industry is other private hospitals. Together Queensland suggests that it is the Queensland public health sector. Another alternative is the entirety of the hospital sector. We are of the view that the broader hospital industry is the appropriate benchmark. The Health Professionals Award applies to a large proportion of that industry. Other groups of employees employed in Mater hospitals, such as nurses and medical officers are covered by industry wide awards. Mater submits that public hospital employees covered by the DHS award work side by side with employees covered by modern industry wide awards. It submits that the application of different safety nets affects its competitive position as well as the complexity of its industrial regulation.

[19] We are not satisfied that there are any significant differences between Mater and the types of hospitals covered by the Health Professionals Award that might provide justification for continuing an enterprise award approach.

The extent to which the DHS Award provides enterprise-specific terms and conditions of employment: Item 4(5) (e)

[20] The origins of the DHS Award and a consideration of its content demonstrate that its terms are manifestly not of an enterprise specific nature. It would be more accurate to describe them as those that reflect an alternative industry award. There is nothing in this factor which supports the continuation of an enterprise award.

The likely impact on the persons covered by the DHS Award, and the persons covered by the Health Professionals Award, of a decision to make, or not make, the modern enterprise award: Item 4(5) (f)

[21] Together Queensland submits that the DHS Award contains entitlements that apply in addition to those in the Health Practitioners (Mater Misericordiae Public Hospitals Brisbane) Enterprise Agreement and that the termination of the DHS Award will remove those entitlements. It makes that submission on the basis of the wording of the enterprise agreement which provides in clause 10 that the agreement is to be read in conjunction with the award. It appears to us that Together Queensland may have overlooked the terms of item 31 of Schedule 3 to the Transitional Act. This provides that an award based transitional instrument ceases to apply to the employee and the employer if an enterprise agreement under the Fair Work Act applies to the employee. The termination of the DHS Award would therefore have no additional impact on the employer or the employees.

[22] Together Queensland also submits that if the DHS Award is terminated, there will be a range of other awards that apply to Mater public hospitals. As the employees will be covered by the enterprise agreement this will only have relevance at the time the agreement is renegotiated. That situation currently applies to Mater private hospitals. It appears to present no difficulty for Mater or the employees concerned.

[23] As there is an enterprise agreement currently applying to the affected employees and Mater has given an undertaking regarding any applicable award entitlements while this agreement is in place it is unlikely that employees of Mater will be adversely affected by the failure to make a modern enterprise award. Mater submits that as the award base of its competitors is less than the DHS Award it will be disadvantaged by its continuation. Indeed it also submits that the DHS applies only to a part of its overall operations and it is undesirable that different safety nets apply to different parts of its operation. We do not consider that this factor supports the continuation of an enterprise award.

The views of the persons covered by the enterprise instrument: Item 4(5) (g)

[24] The unions covered by the DHS Award support its replacement by a modern enterprise award. Mater opposes that course. There is no evidence of the views of employees on the matter.

The Modern Enterprise Awards Objective

[25] The prospect of modern enterprise awards providing terms and conditions tailored to reflect employment arrangements that have been developed in relation to relevant enterprises is a consideration that should be taken into account. The industry origin of the award is a circumstance that minimises the significance of this consideration in this case.

Should a modern enterprise award be made?

[26] To the extent that the above factors bear on the question they do not provide strong support for making a modern enterprise award. While we acknowledge that a modern enterprise award can provide for terms that reflect enterprise employment arrangements, we consider that overall fairness and equity considerations, the availability and utilisation of enterprise bargaining, the scope of Mater’s operations beyond its public hospital function and the desirability of simplicity and consistency in the award safety net mean that a continuation of enterprise awards is not necessary or of great utility.

[27] Underpinning the parties’ submissions in this matter is a dispute as to the ongoing application of public hospital terms and conditions by way of award coverage. The positions of the parties cannot be easily reconciled. Together Queensland wants to continue the public hospitals safety net that the existing award - originally made as an industry award - provides. Mater submits that as it operates in both the public and private hospital sector it should have one award safety net, and the Health Professional Award is appropriate in that regard.

[28] The concerns and objectives of Together Queensland may be valid. But in our view they are best pursued in the terms of agreements applying to Mater operations and/or in the terms of the industry award that applies very broadly to public and private hospitals throughout Australia.

[29] Having regard to the above considerations and all of the circumstances of this matter we are not persuaded that a case has been made out to make a modern enterprise award to cover the Mater public hospital.

Conclusions

[30] As we are not persuaded that a modern enterprise award should be made we dismiss the application. Pursuant to item 9(3) of Schedule 6 to the Transitional Act the DHS Award terminates as at the date of this decision.

VICE PRESIDENT

Appearances:

K. McKay and D. Goldman, for Together Queensland, Industrial Union of Employees.

B. Watson for the Australian Workers Union.

D. Peverill for United Voice.

J. Urquhart, K. Sweet and K. Bell, for Mater Misericordiae Health Services Brisbane Limited.

Hearing details:

2014.

Melbourne - Video Conference Link to Brisbane.

26 June.

Final written submissions:

Mater Misericordiae Health Services Brisbane Limited on 4 July 2014.

Together Queensland, Industrial Union of Employees on 7 July 2014 and 18 July 2014.

 1   [2010] FWAFB 9916 at [57].

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