AMA (Victoria) Ltd and Australian Salaried Medical Officers Federation v The Royal Women's Hospital

[2021] FWCFB 6044

[2021] FWCFB 6044

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

AMA (Victoria) Ltd and
Australian Salaried Medical Officers Federation
v
The Royal Women's Hospital
(C2021/4894)

VICE PRESIDENT HATCHER
DEPUTY PRESIDENT ANDERSON
COMMISSIONER HAMPTON SYDNEY, 10 NOVEMBER 2021

Appeal against decision [2021] FWC 4696 of Deputy President Young at Melbourne on 2 August 2021 in matter number C2019/4760.

Introduction

[1] AMA (Victoria) Ltd and the Australian Salaried Medical Officers Federation (appellants) have appealed against a decision of Deputy President Young issued on 2 August 2021 1 (decision) concerning an application made by the appellants (application) for the Commission to deal with a dispute in accordance with the dispute resolution procedure in the AMA Victoria – Victorian Public Health Sector – Medical Specialists Enterprise Agreement 2018 – 20212(Agreement) under s 739 of the Fair Work Act 2009 (FW Act). The Agreement is a single-enterprise agreement made pursuant to a single interest employer authorisation which covers doctors employed by 37 health services in Victoria (identified by name in Schedule A to the Agreement), one of which is The Royal Women’s Hospital (RWH). The application, as filed, identified 8 different issues in dispute with all 37 health services. The aspect of the application dealt with in the decision concerned the first issue identified as being in dispute, namely the long service leave entitlements of a doctor (Dr AS) who works on a fractional (part-time) basis for the RWH and also for another health service covered by the Agreement, Alfred Health. The parties, by agreement, formulated the following question to be determined by the Commission in order to resolve this issue in dispute:

“Fractional Doctor ‘A’ has been employed continuously as a Specialist by Employer ‘X’ for twelve years and remains in the employment of Employer ‘X’.

Five years ago, Fractional Doctor ‘A’ commenced employment as a Specialist with Employer ‘Y’ and remains in the employment of Employer ‘Y’.

Fractional Doctor ‘A’ has had contemporaneous, ongoing employment as a Specialist with both Employer ‘X’ and Employer ‘Y’ since their commencement with Employer ‘Y’.

In respect of Fractional Doctor ‘A’ in the scenario above (or a Fractional Doctor in an equivalent scenario), does Fractional Doctor ‘A’ have an entitlement to access a long service leave benefit described in clause 55.1 of the Agreement from:

(a) both Employer ‘X’ and Employer ‘Y’; or,

(b) only Employer ‘X’?”

[2] The appellants’ position at first instance was that “(a)” was the correct answer, whereas the RWH (supported by the Victorian Department of Health, which intervened in the proceedings) contended that “(b)” was the correct answer.

[3] The matter proceeded before the Deputy President on the basis of written submissions only, and there was no hearing of the matter.

[4] In her decision, the Deputy President proceeded on the basis that the dispute resolution procedure in the Agreement (clause 11) conferred upon the Commission (by clause 11.7(a)) a discretion as to whether to arbitrate any dispute when requested to do so pursuant to the procedure and that, accordingly, there was a threshold question as to whether it was appropriate that the dispute be arbitrated. The Deputy President determined this threshold question by declining to arbitrate the dispute on the basis that the issue of long service leave for doctors employed on a fractional basis by more than one health service was intended to be resolved by negotiation pursuant to clause 63 of the Agreement and that there was no common understanding about the construction of clause 55 in relation to this issue. 3 However, the Deputy President went on in any event to express her opinion as to the matter in dispute and, in doing so, answered “(b)” to the question posed for determination.4

[5] The appellants contend in their appeal that the Deputy President erred in declining to arbitrate the issue in dispute. Their notice of appeal contains five grounds of appeal which, in summary, raise the following contentions:

(1) The Deputy President denied the appellants procedural fairness by failing to give them an opportunity to address the threshold jurisdictional question identified by her.

(2) The Deputy President erred in determining that s 739 and clause 11.7(a) of the Agreement did not require the Commission to arbitrate the dispute and that clause 11.7(a) only provided that the Commission may be requested to arbitrate the dispute.

(3) The Deputy President erred in determining the meaning and application of clause 11.7(a).

(4) The Deputy President erred in concluding that clause 63.1 of the Agreement operated to “park” the matter in dispute until a later date.

(5) The Deputy President erred in concluding that the issues of long service leave and concurrent employment were to be determined and progressed under clause 63.2 of the Agreement.

[6] There is no dispute that permission is required for the appeal.

Relevant provisions of the Agreement

[7] The dispute resolution procedure in the Agreement is contained in clause 11. Relevantly, clause 11.1(b)(i) provides that the dispute resolution procedure applies to any dispute arising in relation to the Agreement. Clause 11.2 sets out the obligations upon the parties to the dispute that is the subject of the procedure, and clause 11.2(a) provides:

(a) The parties to the dispute and their representatives must genuinely attempt to resolve the dispute through the processes set out in this clause and must cooperate to ensure that these processes are carried out expeditiously.

[8] Clauses 11.4(a) and (b), in summary, require parties to expeditiously attempt to resolve the dispute at the workplace in the first instance. Clause 11.4(c) provides:

(c) If a dispute cannot be resolved at the workplace it may be referred by a party to the dispute or representative to the FWC for conciliation and, if the matter in dispute remains unresolved, arbitration.

[9] Clauses 11.6 and 11.7 relevantly provide for conciliation and arbitration of a dispute by the Commission in the following terms:

11.6 Conciliation

(a) Where a dispute is referred for conciliation, the FWC member will do everything the member deems right and proper to assist the parties to settle the dispute.

(b) Conciliation before the FWC is complete when:

(i) the parties to the dispute agree that it is settled; or

(ii) the FWC member conducting the conciliation, either on their own motion or after an application by a party, is satisfied there is no likelihood that further conciliation will result in settlement within a reasonable period; or

(iii) the parties to the dispute inform the FWC member there is no likelihood the dispute will be settled and the member does not have substantial reason to refuse to regard conciliation as complete.

11.7 Arbitration

(a) If, when conciliation is complete, the dispute is not settled, either party may request the FWC proceed to determine the dispute by arbitration.

(b) The FWC member that conciliated the dispute will not arbitrate the dispute if a party objects to the member doing so.

. . .

(d) Subject to subclause 11.7(e) below, a decision of the FWC is binding upon the persons covered by this Agreement.

(e) An appeal lies to a Full Bench of the FWC, with the leave of the Full Bench, against a determination of a single member of the FWC made pursuant to this clause.

[10] Clause 11.8 provides that, subject to any agreement between the parties in relation to a dispute and the provisions of clause 11, the Commission will in dealing with a dispute through conciliation or arbitration conduct the matter in accordance with ss 577 and 578 and Subdivision B of Division 3 of Part 5-1 of the FW Act.

[11] Clause 55 of the Agreement is concerned with long service leave. Clause 55.1 establishes the entitlement to long service leave of doctors covered by the Agreement in the following terms:

55.1 Entitlement

(a) A Doctor is entitled to Long Service Leave with pay for Continuous Service with Institutions and Statutory Bodies, in accordance with the provisions of this clause as follows:

(i) Six (calendar) months of long service leave after 15 years of Continuous Service then two months of long service leave after each additional five years of Continuous Service.

(ii) A Doctor may take pro rata long service leave after 10 years of Continuous Service where the Health Service agrees. The Health Service will not unreasonably withhold agreement.

[12] The term “Continuous Service”, used in clause 55.1 above and elsewhere in clause 55, is defined in clause 55.8 as follows:

55.8 Continuous Service includes entitlements pursuant to previous Victorian Industrial Awards or Agreements

(a) Continuous Service includes continuous service with Institutions and Statutory Bodies within the meaning of any industrial instrument in operation in Victoria that covered the Doctor prior to the date upon which this Agreement covers the Doctor, subject to the allowable period of absence at subclause 55.9. This includes service recognised by an industrial instrument where the Doctor was employed as part of an accredited Specialist training program by an employer not covered by that agreement. (See subclause 68.7(f) of the AMA Victoria – Victorian Public Health Sector - Doctors in Training Enterprise Agreement 2018-2021, where relevant.) The requirements of subclause 55.13 apply.

[13] The terms “Institution” and “Statutory Body”, which are used in clause 55.1, are defined in paragraphs (s) and (bb) of clause 3.1 as follows:

(s) Institution means any hospital, health service (whether or not listed in Schedule A) or benevolent home, community health centre, Society or Association registered pursuant to the Health Services Act.

(bb) Statutory Body means the Department of Health and Human Services (Victoria) and, formerly, the Department of Health (Victoria) and the Department of Human Services (Victoria).

[14] Clauses 55.2, 55.3, 55.4 and 55.5 deal, respectively, with pro-rata entitlement to long service leave on termination of employment, payment for when long service leave is taken, the taking of leave, and calculating service for entitlement to leave. In respect of payment for long service leave, clause 55.3(a) distinguishes between a “Full-time Doctor” and a “Fractional Doctor” as follows:

(a) The Doctor is entitled to be paid the following for Long Service Leave:

(i) for a Full-time Doctor, the remuneration for a Doctor’s normal weekly hours of work calculated, at the Doctor’s ordinary time rate of pay, at the time the leave is taken or (if the Doctor dies before the completion of leave so taken) as at the time of death;

(ii) for a Fractional Doctor, the remuneration calculated on the average of their ordinary hours of work applying over the two years of employment immediately preceding the taking of leave.

[15] Clause 3.1(m) defines a “Full-time Doctor” to be a doctor engaged on a full-time basis in accordance with clause 16.2(a), and clause 3.1(l) defines a “Fractional Doctor” to be a doctor engaged on a fractional basis in accordance with clause 16.3. Clause 16.2(a) provides that a “Full-time Doctor” is one engaged to work 38 hours per week, or an average of 38 hours, plus reasonable additional hours. In relation to a “Fractional Doctor”, clause 16.3(a) provides:

(a) A Fractional Doctor is one who is engaged by a Health Service to work 35 hours per week or less, for the treatment of Health Service patients and other agreed duties/commitments.

[16] Clause 55.6 is concerned with periods which are counted as continuous service for the purpose of the long service leave entitlement and, for relevant purposes, clause 55.6(a) provides:

55.6 Counted as Service:

In calculating Continuous Service, the following is counted as part of the period of service:

(a) service for which long service leave or payment in lieu has not been received in one or more Institutions including Statutory Bodies directly associated with such Institutions for the period required by subclause 55.1(a) of this Agreement;

. . .

[17] Clause 55.7 is concerned with periods which do not count as service but do not break continuity of service, and includes in this category:

(c) any period of time from employment between engagements with a Statutory Body, any Institution and any other provider that is less than the Doctor’s allowable period of absence from employment pursuant to subclause 55.9 below;…

[18] Clause 55.9 deals with allowable breaks in service, and limits this to the greater of 5 weeks in addition to the total period of paid annual leave and/or personal leave that the doctor receives on termination or is paid in lieu, or such longer absences for the purpose of parental leave under the NES. Clause 55.10 provides for the transfer of long service leave entitlements as follows:

55.10 Transfer of Entitlement

(a) Provided in the case of a Doctor who accrues entitlement pursuant to subclause 55.1(a) of this Agreement and who intends to be re-employed by another Institution or Statutory Body:

(i) such a Doctor may in writing request payment in respect of such leave to be deferred until after the expiry of the Doctor’s allowable period of absence from employment provided in subclause 55.9 of this Agreement;

(ii) except where the Doctor gives notice in writing that the Doctor has been employed by another Institution or Statutory Body, payment will be made in respect of such leave at the expiry of the Doctor’s allowable period of absence from employment; and

(iii) where a Doctor gives notice in writing that the Doctor has been employed by another Institution or Statutory Body, the Health Service is no longer required to make payment to the Doctor in respect of such leave.

[19] Clauses 55.11 and 55.13 deal respectively with the payment of accrued long service leave entitlements on the doctor’s death and the responsibility upon doctors to prove sufficient service to access the long service leave entitlement. Clause 55.12 provides:

55.12 Health Service Must Keep Records

(a) The Health Service must keep a record of long service leave for each Doctor. This record must show details of service, leave taken and payments made.

[20] Clause 63 is entitled “Service Delivery Partnership Plan”. Clause 63.1 relevantly provides:

63.1 The parties are committed to contributing to improve the productivity and efficiency of the Victorian public health by:

. . .

(i) collaboration between the parties over the life of the Agreement to better accommodate long service leave arrangements for Doctors employed by two or more Health Services concurrently;

. . .

[21] Clause 63.2 provides:

63.2 To facilitate the achievement of the above initiatives the parties agree to establish a Service Delivery Partnership Plan Working Group (SDPPWG) within six months of the Agreement being approved by the FWC. The role of the SDPPWG will be to discuss, implement and monitor progress towards achieving the initiatives outlined in this clause.

[22] Clause 63.5 provides that a dispute over the implementation of clause 63 will be dealt with by conciliation in accordance with clause 11.

The decision

[23] As earlier indicated, the Deputy President first considered what she described as the threshold question of whether she should arbitrate the matter before her. The Deputy President noted that clause 11.7(a) referred to a “request” to the Commission for arbitration rather than any requirement that the Commission do so or a referral to the Commission for arbitration following the conclusion of conciliation. The Deputy President therefore concluded that clause 11.7(a) did not require the Commission to arbitrate but rather provided that it may be requested to do so, while accepting that in the ordinary course the Commission would proceed to arbitrate following such a request. However, the Deputy President did not consider it “appropriate” that she arbitrate the dispute, and she declined to do so, because:

•  clause 63 is an express recognition that the issue of long service leave entitlements for doctors with multiple fractional appointments was effectively “parked” by the parties and is to be addressed by the Service Delivery Partnership Plan Working Group (Working Group) for which clause 63.2 provides;

•  it was not in contest that multiple fractional appointments are common and the subject matter of the dispute is not novel;

•  clause 55 does not expressly recognise or refer to the concurrent employment of a fractional doctor by two or more employers;

•  clause 55 does not expressly consider the impact of concurrent service on the taking of long service leave nor does it have the detailed machinery provisions to deal with the issues arising with concurrent employment;

•  it was uncontested that, given the way in which long service leave was dealt with in the negotiations for the Agreement, there is not and never has been any common understanding as to the meaning of clause 55 and, accordingly, the Commission was being asked by the appellants to find that an entitlement exists in clause 55 when there was no mutual intention to create such an entitlement;

•  in light of these matters, the parties intended that matters to do with long service leave and concurrent employment were to be determined and progress through the Working Group and no agreed position as to these matters had been reached between the parties;

•  clause 63 is not directed purely to administrative matters or solely to means to improve productivity and efficiency and is to be read more expansively; and

•  in those circumstances, the Commission should not arbitrate when not required to do so on a matter about which the parties have not reached a common understanding and which they have agreed will be dealt with through the Working Group.

[24] The Deputy President then said:

“[30] Although I have declined to arbitrate Item 1 of the Compendium Dispute, should it assist the parties, I set out below my opinion as to the matter in dispute. Further, should I be wrong and I am required to arbitrate the dispute pursuant to clause 11 of the Agreement, I would have determined the matter in accordance with my opinion below.

[31] In my opinion, the answer to the Question is ‘(b)’. Fractional doctor ‘A’ is only entitled to take long service under clause 55 of the Agreement from Employer ‘X’.” (footnote omitted)

[25] In her reasons for this conclusion, the Deputy President said that clause 55 was clear and unambiguous, and rejected the construction of clause 55 contended for by the appellants, because:

•  clause 55 does not at any point expressly recognise that or refer to the concurrent employment of a doctor by two or more employers;

•  clause 55 does not expressly deal with the taking of long service leave in concurrent employment nor does it have machinery provisions to deal with the issues arising with concurrent employment;

•  the entitlement to long service leave in clause 55.1 is in respect of “Continuous Service with Institutions and Statutory Bodies”, and the definition of “Continuous Service” in clause 55.8 does not render it synonymous or interchangeable with concurrent service;

•  continuous service is an established concept in industrial law with a well-established ordinary meaning, and nothing in clause 55 suggests that the ordinary meaning should not be applied;

•  as to the taking of long service leave, clause 55.1(a)(ii) allows the taking of pro rata leave after 10 years “where the Health Service agrees”, so that the entitlement is expressed in respect of a single employer and not concurrent employers;

•  clause 55.6(a) provides for service with other employers to be included in the calculation of continuous service and, in referring to “service for which long service leave or payment in lieu has not been received in one or more Institutions”, the use of the past tense indicates that the relevant service is past service and not ongoing concurrent service;

•  clause 55.10 provides machinery for dealing with continuous service of transferring employees, which is to be contrasted to the absence of such machinery provisions dealing with concurrent employment;

•  the form of the certificate provided for in Schedule D to prove the requisite continuous service is consistent with and lends support for a construction that service with each employer is separate and distinct; and

•  concurrent employment is expressly referenced in clause 63.1(i) in the context of long service leave but not so in clause 55.

[26] The Deputy President rejected the appellants’ submission that clause 55 does not require service with one employer to be terminated before it can be considered as part of continuous service with another employer, on the basis that clause 55.10 deals with the circumstances in which service with one employer is transferred to another and is specific to termination of employment. The Deputy President also rejected the contention that, because the Agreement is a single-enterprise agreement made pursuant to a single interest employer authorisation, service with one employer is to be counted as continuous service with any other employer in the single enterprise. The Deputy President said that the effect of a single interest employer authorisation is to allow two or more individual employers to bargain together and it does not have the effect of treating the individual employers the subject of the authorisation as a single employer for other purposes, nor does it alter the parties to the employment relationship. The Deputy President did not regard provisions in other Victorian public sector health agreements dealing with concurrent employment and long service leave as permissible aids to the construction of clause 55 of the Agreement, nor did the Deputy President accept that the principles applicable to the concept of beneficial legislation to be of relevance. In this latter respect, the Deputy President said:

“Further, whilst I accept the submission that the purpose of long service leave is to provide an employee with an extended period of leave after long service, I find nothing inconsistent with that purpose with an interpretation of clause 55 which requires a fractional doctor to have completed the requisite period of “long service” with the Employer from whom that entitlement is sought to be accessed. The concept of long service leave is generally confined to service with a single employer, including a successor employer. I also reject the submission that this conclusion “undermines the overall purpose of long service leave.” I accept that there is some complexity in accessing long service leave in circumstances of concurrent employment, however I reject the submission that this would require a fractional doctor to remain working with one Employer during a period that the doctor was taking paid long service leave with another Employer. There are clearly other alternatives and I find nothing in the Agreement which would preclude a fractional doctor from accessing another form of leave (such as annual leave) from another Employer for all or part of the period of their long service leave.” 5 (footnotes omitted)

Appeal submissions

[27] The appellants submitted in relation to their first ground of appeal that it made its written submissions on the basis that the jurisdiction of the Commission under clause 11 to arbitrate the matter was not in question and that, in their submissions in response, neither the RWH nor the Department of Health raised the jurisdictional issue upon which the Deputy President determined the matter. It was submitted that if, after receiving the parties’ submissions, the Deputy President had a question, concern or issue as to the jurisdiction of the Commission under clause 11, the Deputy President was obliged to bring this to the attention of the parties and give them an opportunity to make submissions about it. By failing to do so, it was submitted, there was a failure to accord the appellants procedural fairness.

[28] In relation to the second and third appeal grounds, the appellants submitted that the Deputy President erred in interpreting clause 11.7(a) of the Agreement by looking at the provision in isolation, and by focusing only on the word “request” and assuming that it meant “to ask for”. It was submitted that “request” can also have the meaning of “require”, as in s 576C of the Workplace Relations Act 1996. Consideration of the context provided by clause 11.4(c), which creates a right for a party to refer a matter in dispute to arbitration, suggests that this latter meaning of “request” is to be preferred, but this context was not considered in the decision.

[29] As to the fourth and fifth appeal grounds, the appellants submitted that the Deputy President erred in her interpretation of clause 63 and its interaction with clause 55. It was submitted that the logical conclusion from the Deputy President’s approach to clause 63 is that every fractional doctor employed by more than one health service under the Agreement has no entitlement under clause 55 because the issue of that entitlement has been “parked” and further, that Fractional Doctor A, the subject of the question posed for determination by the parties, ceased to have an entitlement to long service leave when they were employed by Health Service Y in addition to Health Service X. This involved such a “high level of absurdity” in relation to the consequences which flow, it was submitted, that the decision could not be left to stand.

[30] The appellants submitted that permission to appeal should be granted because its contentions of error raise matters of such significance that it is in the public interest that permission to appeal be granted. The relief sought by the appellants is that the decision be quashed and the matter referred to a member of the Commission other than the Deputy President for redetermination.

[31] In its submissions, the RWH recounted the history of how the matter came before the Deputy President and noted that, in its written submissions at first instance, it had submitted that, before turning to the agreed question, a “threshold question” should be addressed “about whether the Commission should proceed to address the posed question”. In this connection, it submitted that clause 55 did not a contain a developed scheme for the portability of long service leave entitlements and that this issue was to be addressed by the Working Group pursuant to clause 63.1(i). It was also noted that the appellants responded to this in their submissions in reply. Hence, it was submitted in relation to the first appeal ground, there was no denial of procedural fairness, and the appellants’ submissions mischaracterised the Deputy President’s acceptance of the submission in this regard as jurisdictional in nature when it was nothing of the sort.

[32] In relation to the second appeal ground, the RWH submitted that the Deputy President was correct to determine that clause 11 of the Agreement did not require the Deputy President to arbitrate. The Commission’s powers were sourced in s 739(1) of the FW Act, which provides that s 739 applies if a dispute resolution term “requires or allows” the Commission to arbitrate: here, it was submitted, clause 11.7(a) allowed but did not require the Commission to arbitrate. The RWH submitted that the Deputy President had a discretion as to whether to arbitrate, and whether the Deputy President erred in the exercise of that discretion required the test in House v The King to be met. As to the third appeal ground, it was submitted that none of the ordinary meanings of “request” bear the connotation of “require”, and there is no compulsion to accede to a request.

[33] In relation to the fourth and fifth appeal grounds, it was submitted that, given there was no mutual intention as to what the arrangements would be for the long service leave entitlements of employees with concurrent fractional entitlements, a finding that the issue was “parked” by referral to the Working Group seems uncontroversial, and it would put the Commission in an untenable position to determine what the entitlements of concurrent fractional employees should be when the only agreed position was to refer the matter to the Working Group.

[34] The RWH submitted that permission to appeal should be refused because the decision was not jurisdictional in nature and because the appeal lacked utility because the Deputy President did, in fact, provide the parties which a detailed and considered opinion on the way the Agreement is to be construed, and there would be no point returning the matter for an arbitral determination of the interpretation issue “as this would only serve to confirm what is already known”. Alternatively, it was submitted, the appeal should be dismissed.

[35] The Department of Health was permitted to be heard in relation to the appeal, and it made submissions which essentially reiterated the main points of the submissions of the RWH.

[36] At the hearing of the appeal, we invited the parties to make submissions as to whether, if the appeal was upheld on any of the grounds advanced by the appellants, we should re-determine the matter ourselves by affirming the opinion as to the proper construction of clause 55 stated by the Deputy President in the decision. The parties filed further written submissions in response to this invitation.

[37] The appellants submitted that there were two fundamental errors in the Deputy President’s opinion. The first concerned the Deputy President’s conclusion that the use of the past tense in clause 55.6(a) was intended to refer to past service, not ongoing concurrent service. The appellants submitted that this conclusion is untenable because it is obvious that service for long service leave purposes will always be past service, whether the doctor is employed concurrently or not. The second error concerned the Deputy President’s conclusion that clause 55 requires employment with another employer to be terminated before it can be considered as part of continuous service with a current employer. The appellants submitted that the Deputy President erroneously used clause 55.10, which can only operate after a long service leave entitlement has come into existence, to then determine when the entitlement comes into existence, and the plain language of clause 55.6(a) does not require that service with one health service be terminated before it can be considered as part of continuous service with a current employing health service. The appellants also submitted that the Deputy President erred by focusing on the subjective intent of the parties in the absence of any agreed common fact and by relying upon clause 55.1(a)(ii) to conclude that the entitlement to long service leave is expressed in respect of a single employer, when the specific matter dealt with by clause 55.1(a)(iii) is not the creation of the entitlement but the taking of the entitlement. The appellants conceded that there is an obvious contrast between the machinery provisions in clause 55.10 and the lack of machinery provisions dealing with concurrent employment, but submitted that the Deputy President erred in treating this as determinative of a lack of an entitlement to long service leave for doctors concurrently employed by two or more health services. Accordingly, it was submitted, the errors identified in the Deputy President’s opinion render it so unsound that the Full Bench should decline to adopt it as its own decision and, if permission to appeal were granted and the appeal upheld, the matter should be referred for determination to another member of the Commission other than the Deputy President.

[38] In its further submissions, the RWH rejected the appellants’ contentions of fundamental error on the part of the Deputy President. In relation to the first contention of error, the RWH submitted that clause 55 provides an entitlement to long service leave specific to each employer, periods of concurrent service are to be treated as separate and distinct periods of service, and clause 55 does not expressly recognise or refer to concurrent employment of a doctor by two or more employers. Had the contrary been the case, it was submitted, the clause would have said so and detailed machinery provisions would have been included. Clause 55.6(a) is directed towards the exclusion of service where a crystallising event has already occurred, and the Deputy President was correct to take this into account. In relation to the second contention of error, the RWH submitted that the Deputy President was correct to draw upon clause 55.10 in support of her view that service must have been terminated before it can be regarded as part of continuous service with another employer, since the wording of the clause provides support for the view that clause 55.6(a) only includes prior completed service and not ongoing concurrent service, and the concession made by the appellants that clause 55.10 is specific to termination of employment further supported this view. In relation to the other errors contended by the appellants, the RWH noted their concession that continuous service is not concurrent service and submitted that the appellants had not answered the proposition that clause 55 (by contrast to clause 63.1(i)) does not deal with or refer to concurrent service. The RWH otherwise rejected the further contentions of error advanced by the appellants and submitted that if, contrary to its primary submission, the appeal was upheld, the Full Bench should deal with the long service leave issue by adopting the opinion provided by the Deputy President in the decision.

Consideration

[39] In declining to arbitrate the issue concerning the entitlement to long service leave for fractional doctors employed by more than one health service covered by the Agreement, the Deputy President proceeded on the basis that the dispute resolution procedure in the Agreement entitled her to form a judgment about whether it was “appropriate” to arbitrate 6 - in other words, that it conferred a discretion as to whether to arbitrate. It may be accepted that an agreement, to the extent that it empowers the Commission to arbitrate a dispute pursuant to the dispute resolution procedure at all, may confer upon the Commission a discretion as to whether to arbitrate rather than a requirement to arbitrate. In requiring that enterprise agreements must include a term about settling disputes, s 186(6) of the FW Act refers (in paragraph (a)) to a procedure that “requires or allows” the Commission (or another independent person) to settle disputes. This language is repeated in s 739(1), which provides that s 739, which empowers the Commission to deal with disputes in accordance with dispute resolution terms in (for relevant purposes) enterprise agreements, applies where the term “requires or allows” the Commission to deal with a dispute. Whether in a particular case such a discretion exists depends upon the proper construction of the dispute settlement term in the agreement in question.

[40] In this case, the Deputy President considered that such a discretion existed because clause 11.7(a) provides that, if a dispute is not settled by conciliation, either party may “request” the Commission to arbitrate. There is some doubt, we consider, as to whether “request” signifies the conferral of a discretion rather than simply making it clear that arbitration does not require the consent of both parties. We note in this connection that clause 11.4(c) provides that, where a dispute cannot be resolved at the workplace, it may be “referred” by party or their representative to the Commission for conciliation and, if necessary, arbitration. This infers a right to have an unresolved dispute arbitrated. However, it is unnecessary for us to determine this question to finality because we consider that if the Deputy President had a discretion to arbitrate, she erred in the exercise of that discretion.

[41] The Deputy President’s decision not to arbitrate was dependent on her conclusion that “there was no mutual intention” or “common understanding” for clause 55 to create an entitlement to long service leave for concurrently employed fractional doctors and that clause 63.1(i) was to be construed as providing for the mechanism by which this issue was to be resolved. This conclusion is vitiated by a fundamental error of principle. The Deputy President appears to have proceeded on the basis that because the parties said they had never agreed as to how clause 55 would work with respect to concurrently-employed fractional doctors, that meant that there was no discernible mutual intention as to the meaning of clause 55 and it was therefore incapable of proper construction. However, the common intention of the parties to an agreement is to be discerned from the terms in which they have expressed their agreement, not from their subjective statements about their intentions. In relation to commercial contracts, the High Court said in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd: 7

“It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean.”

[42] This principle was applied to the construction of enterprise agreements made under the FW Act in AMWU v Berri Pty Limited, 8 in which the Full Bench said:

“The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.”

[43] In this case, clause 55.1 confers upon doctors covered by the Agreement an entitlement to long service leave in clear terms. There is no available construction of the clause under which it can be read as not conferring an entitlement upon concurrently-employed fractional doctors. The question which the parties posed for determination assumed that Fractional Doctor A had such an entitlement, with the dispute being about the nature of that entitlement. That was a dispute capable of being determined by the normal methods of construction of legal instruments. This includes resolving ambiguity (if any) that may exist between clause 55.1 and clauses 55.6 or 55.10. We note that, when it came to expressing an opinion about the construction of clause 55 with respect to concurrently-employed fractional doctors, the Deputy President had no difficulty in coming to a clear conclusion about this. In short, there was no good reason why the parties’ question could not be the subject of arbitration, and the parties’ subjective statements as to their intention in respect of clause 55 did not afford such a reason.

[44] Clauses 63.1(i) and 63.2 do not provide any alternative mechanism for the resolution of the dispute. They constitute merely a facilitative mechanism to, relevantly, “better accommodate” the long service leave arrangements for concurrently-employed fractional doctors and are not concerned with determining the meaning and operation of the long service leave entitlement already provided for in clause 55.1 of the Agreement. It may also be noted that the Agreement took effect on 7 August 2018, its nominal expiry date is 31 December 2021, and there was no evidence before the Deputy President that the Working Group has resolved any issue pursuant to clause 63.1(i). The dispute before the Deputy President the subject of the appellants’ application did not concern the implementation of clause 63, so any limitation upon the dispute resolution procedure imposed by clause 63.5 was not applicable.

[45] For these reasons, we grant permission to appeal with respect to the fourth and fifth appeal grounds, and we uphold the appeal on those grounds. This renders it unnecessary to grant permission to appeal in order to consider the other appeal grounds. In addition, we consider that the first appeal ground, which contends that the appellants were denied procedural fairness, is completely without merit, and that constitutes a further reason not to grant permission to appeal in relation to that ground.

[46] We consider that the appropriate course is for us to proceed to determine, by arbitration, the parties’ question concerning the long service leave entitlement of Fractional Doctor A. By inviting further submissions about whether the opinion stated by the Deputy President should be adopted by us as the determination of the parties’ question, we had intended that the parties address the correctness or otherwise of the Deputy President’s answer. However, in their submissions the appellants merely addressed, and criticised, the reasons which the Deputy President gave for her opinion without advancing any positive case as to why “(a)” would be the correct answer, and in its submissions in reply the RWH responded in kind. As a result, those submissions have not been of significant assistance to us in determining what the correct answer to the question is.

[47] We therefore direct that the parties (including, if it wishes, the Department of Health) file further written submissions addressing directly the question which they have posed for determination. Those submissions should clearly identify the merits of the case for the answer for which they contend. In addition, the submissions should address the following questions:

(1) Does the possible answer “(a)” to the question operate on the assumption that Fractional Doctor A has 12 years’ continuous service or 17 years’ continuous service?

(2) In posing the possible answer “(a)”, what is to be understood by the use of the word “both” in “(a)”. Is it to be understood to mean that Fractional Doctor A has an entitlement against each of Employer X and Employer Y, or only against one of Employer X or Employer Y?

(3) If “(b)” is the correct answer, does Fractional Doctor A’s accrual of five years’ service with Employer Y remain or is it extinguished by clause 55.6(a) once long service leave with Employer X is taken?

(4) If the answer to (2) is that the accrual with Employer Y remains, does that accrual count as part of continuous service with Employer X or any employer covered by the Agreement which employs Fractional Doctor A in the future?

[48] We also invite the parties to make submissions about the historical industrial context in which clause 55 of the Agreement was developed, including in relation to corresponding provisions in previous enterprise agreements and in the current and previous awards.

[49] We will also conduct a further hearing in the matter on a date to be advised.

Conclusion

[50] We order and direct as follows:

(1) Permission to appeal is granted with respect to appeal grounds 4 and 5. Permission to appeal is otherwise refused.

(2) The appeal is upheld with respect to appeal grounds 4 and 5.

(3) The parties are directed to file further submissions in accordance with paragraph [47] above within 14 days of the date of this decision.

VICE PRESIDENT

Appearances:

J Ryan on behalf of AMA (Victoria) Ltd and the Australian Salaried Medical Officers Federation.
R Millar of Counsel on behalf of The Royal Women’s Hospital.
S Silvapulle on behalf of the Victorian Department of Health.

Hearing details:

2021.
Sydney and Adelaide (via video-link):
21 October.

Printed by authority of the Commonwealth Government Printer

<PR735617>

 1   [2021] FWC 4696

 2   AE429332

 3   [2021] FWC 4696 at [24]-[29]

 4   Ibid at [30]-[31]

 5   Ibid at [39]

 6   Ibid at [25]

 7 [2004] HCA 52, 219 CLR 165 at [40]

 8   [2017] FWCFB 3005, 268 IR 285 at [114]