Australian Nursing Federation

[2011] FWA 2430

[2011] FWA 2430

FAIR WORK AUSTRALIA

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 10 Sch. 3—Variation of transitional instrument

Australian Nursing Federation
(AG2010/23994)

Health and welfare services
COMMISSIONER GOOLEY	MELBOURNE, 21 APRIL 2011

[1] The Australian Nursing Federation (ANF) made an application pursuant to Item 10 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (the Transitional Act) to vary the Healthe Care (Vic Hospitals) and ANF and HSU Nurses Collective Agreement 2008 (the Agreement). 1 The Agreement was approved by the Workplace Authority on 27 October 2008.

[2] Healthe Care Australia Pty Ltd (Healthe Care) is bound by the Agreement and opposed the application.

[3] The matter was heard on 11 March 2011. Mr Denis O’Callaghan appeared for the ANF and Mr Rohan Millar of counsel appeared with permission for Healthe Care.

[4] Mr Barry Megennis an Industrial Officer for the ANF and Ms Karen Sawyer an Industrial Relations Organiser gave evidence for the ANF. Mr Steven Atkins the Group Chief Executive Officer gave evidence for Healthe Care. Ms Sawyer was not required for cross-examination.

[5] The ANF submitted that Appendix 1 of the Agreement, which sets out wage rates for the classifications in the Agreement, contained two errors. The ANF submitted that the pay rate for an employee classified Grade 3B (ANUM) year 2 is prescribed in column 1 as $1235.90 and should be $1253.90. The ANF submitted that consequently the rates in the remaining columns are incorrect as the percentage increase has been applied to the incorrect base figure.

[6] The ANF submitted that a further drafting error existed in the rates of pay for an employee classified as grade 4A where the rates are unchanged for each year of the Agreement. The ANF submitted that these employees were entitled to the wage increases provided for in the Agreement.

The Jurisdiction of Fair Work Australia

[7] The parties agreed that the Transitional Act empowered Fair Work Australia to vary an agreement to remove ambiguity or uncertainty. The parties agreed that Fair Work Australia must first determine if there is ambiguity or uncertainty. The parties agreed on the tests to be applied by Fair Work Australia when deciding if ambiguity or uncertainty exists. The parties further agreed that if ambiguity or uncertainty is determined to exist then Fair Work Australia must determine what the mutual intentions of the parties were when they made the Agreement and that Fair Work Australia has a discretionary power to vary the Agreement to remove the ambiguity or uncertainty.

The evidence of the ANF

[8] Mr Megennis gave evidence 2 that he was involved in the negotiations for the Agreement from August 2007.3 Mr Brian Cook from the Services Industry Advisory Group represented Healthe Care in the negotiations.4 It was Mr Megennis’ evidence that during negotiations for the Agreement discussions took place about pay parity with nurses employed in Victorian public sector hospitals.5

[9] In July 2008 a draft agreement 6 was presented to the ANF by Mr Cook. It should be noted that this document is headed “without prejudice” and Healthe Care objected to the admission of “without prejudice” documents. I determined to allow the “without prejudice” documents to be admitted. I do not consider that the expression “without prejudice” is used in negotiations for an enterprise agreement in the same manner it is used in the settlement of legal disputes. Counsel for Healthe Care did not dispute this conclusion.7

[10] That draft agreement did not have a grade 4B rate and the rates for the ANUM started at $1204.20.

[11] Mr Megennis sent an email to Mr Cook on 6 August 2008 in which he outlined a number of issues with the proposed agreement. Mr Megennis wrote:

“ANUM wages rates

The proposed wages do not match against public sector parity. On account of ANF’s understanding that all Grade wages are to match public sector, I ask that these rates be adjusted accordingly.

Grade 4A’s

ANF has been advised that HealthECare employs a number of nurses at Grade 4A. I note that the proposed agreement has inadvertently omitted these classifications from the draft agreement. I ask that you insert these rates in accordance with public sector parity. 8“

[12] Mr Cook responded to that email on 8 August 2008 9 as follows:

“Healthe Care is stating that from the 1st of March 2008 (first pay period on or after) that their nurses will be paid the same as public sector health nurses.

ANUM Wage Rates

Please note that the ANUM rates in the attached document do match public sector nurses.

Grade 4A’s

I understand there are two Grade 4A’s and rates have been included in the agreement for this level.”

[13] A revised draft Agreement 10 dated 8 August 2008 provided by Mr Cook. It included a Grade 4A classification and rate but did not provide for that rate to be increased as provided for in the Agreement and the starting rate for the grade 2 ANUM was changed to $1235.90.

[14] It was his evidence that at the time the pay rate for the grade 2 ANUM in the public sector was $1253.90. Further it was his evidence that the rates of pay for the Grade 4A nurses in the public sector were increased by 3.25% each year. 11 It was Mr Megennis’ evidence that he did not pick up these errors at the time.

[15] It was not disputed that the Agreement, which was signed by the parties, provided to the employees and voted on, and approved by the Workplace Authority, contained the errors identified by the ANF.

[16] Ms Sawyer gave evidence that the ANF sent an email on 21 July 2010 to Ms Grace Collier who represented Healthe Care raising these concerns. Ms Collier advised on the same day that the company was not aware of this and said “it appears to be a typo error.” 12 Ms Collier asked that the issue be raised formally.13

[17] On 27 July 2010 the ANF then sent Ms Collier a letter outlining their concerns. 14

[18] Ms Judith Knight the Director of Clinical Services replied on 23 August 2010 and said that the matters raised were an anomaly and they would arrange for the appropriate pay increments to be paid. 15

[19] Ms Sawyer gave further evidence 16 that on 23 September 2010, Ms Sandra Gray, National Payroll Manager for Healthe Care, wrote to Mr Colgan and advised that the incorrect rates had been included in an ANF Newsflash. The ANF corrected the newsflash but the rates set out in the corrected newsflash were the rates that the ANF contended should have been included in the Agreement.17 No issue was raised by Healthe Care about the revised newsflash.

[20] Ms Sawyer also exhibited pay slips from registered nurses classified as ANUM year 2. 18 These payslips show that on 20 October 2010 the rate of pay was increased to the rate claimed by the ANF to be the correct rate and the rates in the weeks before and after were the rates set out in the Agreement.

The evidence of Healthe Care

[21] Mr Atkins’ evidence was that Healthe Care was not aware of the alleged errors until the ANF advised them in July 2010. Further he gave evidence that it was “never [his] understanding or instruction that [they] were to simply agreeing to adopt public sector pay rates and other conditions.” 19 It was his evidence that Healthe Care had paid the rates set out in the Agreement in good faith and “any variation in the rates payable will cause substantial unbudgeted liability for the Respondent.”20

[22] Subsequently, Mr Millar advised the Tribunal that Healthe Care would voluntarily consent to an order correcting the rate for the grade 4A classification. 21 Healthe Care acknowledged that there was an “apparent ambiguity there between the rates that are set out and the percentage increases that are contained in the agreement. Objection [was] however maintained to the variation sought on the other item.”22

[23] It was also accepted that the variation to the grade 4A rate should be retrospective. 23 Mr Millar advised that the increases had in fact been paid.24

The submissions of the ANF

[24] Given the concessions of Healthe Care, the ANF was only required to make oral submissions about the ambiguity in the wage rates for the grade 2 ANUM. The ANF submitted that there was ambiguity because the parties agreed to one set of rates and the agreement does not reflect what was agreed. 25 The ANF submitted that the ambiguity or uncertainty is “also evident when considered in the whole context of the pay scales.”26 The scales show that the difference between year 1 and year 2 for the ANUM is less than that for grade 3A, 3B and 4A. The ANF submitted that the increases are internally inconsistent and ambiguous. It was submitted that this gives rise to ambiguity or uncertainty and when coupled with the admitted ambiguity or uncertainty in the Grade 4A rate “enlivens the jurisdiction and would then cause the Tribunal to be able to look behind that and see well what were these rates meant to be and that’s a matter of looking at the context in which they were negotiated and the mutual intention of the parties.”27

[25] It was submitted that the changes in the amount paid to grade 2 ANUMs in October 2010 showed that Healthe Care acknowledged the error. 28

[26] It was submitted that there was a mutual intention that the rates in the Agreement were to be the same as those in the public sector. It is clear, given the concession by Healthe Care about the grade 4A rates, that all the other rates in the Agreement match the public sector rates.

[27] It was further submitted that an inference should be drawn from the failure to call Mr Cook who was the chief negotiator for the Agreement. It was submitted that an inference should be drawn that his evidence would not have assisted Healthe Care on the issue in dispute, namely was it the mutual intention of the parties that the rates match the public sector rates.

The submissions of Healthe Care

[28] In its written submission, Healthe Care said that submissions by the ANF that there were typographical errors “is not accepted by the Respondent: at all times the Respondent relied in good faith on the correctness of the rates contained in the Agreement, as agreed and executed by all parties and approved by the Workplace Authority.” 29

[29] Healthe Care submitted that there was no ambiguity or uncertainty as the meaning of the Agreement is plain and no alternative interpretation is available on the face of the Agreement. 30

[30] While this submission was obviously modified by their concession in relation to classification 4A, the essence of Healthe Care’s submissions was that, even if the rate for the grade 2 ANUM classification was a mistake, Fair Work Australia has no power to correct a mistake. 31

[31] Healthe Care submitted that no regard should be had to the evidence about the representations of Mr Cook to the ANF about wage parity with the public sector nurses “because the agreement was not concluded until such time as it was presented to the parties for signature and the employees for approval and then you get the Workplace Authority.” 32

[32] Further it was submitted that no regard should be had to the change in the rate made on 20 October 2010 because the employer quickly reverted to the Agreement rate. 33

[33] It was also submitted that no inference should be drawn from the failure to call Mr Cook as it was Mr Atkins’ evidence that he was not aware that Mr Cook had put forward a proposal based on wages parity with public sector nurses. 34 It was conceded however that if ambiguity or uncertainty was found that the evidence of Mr Cook’s representations would be relevant.

Conclusion

Grade 4A

[34] I find that there is ambiguity or uncertainty in relation to the rate of pay for the grade 4A classification.

[35] Clause 13 of the Agreement provides as follows:

“(a) Wages shall be in accordance with Appendix A of this Agreement and shall be increased on the following:

(i) the first pay period to commence on or after 1 March 2008.

(ii) the first pay period to commence on or after 1 January 2009.

(iii) the first pay period to commence on or after 1 January 2010.

(iv) the first pay period to commence on or after 1 January 2011.

(c) The wage rates specified in Appendix 1 shall constitute the all purpose rate of pay in respect of the employee covered by this Agreement.

(d) The wage increases provided in Appendix 1 shall be absorbed into any payment made to the Employee beyond the minimum rates contained within this Agreement.

(e) Any further wage increase shall be at the discretion of the Employer, unless the rate of pay falls below the Australian Pay and Classification Scale (APCS), in such circumstances the rate of pay shall default to the minimum rate prescribed in accordance with the APCS.

(f) The loadings for casual employees as per Clause 19 of this Agreement shall be calculated and paid in accordance with Appendix 1 of this Agreement.”

[36] Appendix 1 sets out the wage rate schedule and it provides in the heading as follows:

FPPOA	FPPOA	FPPOA	FPPOA
1/03/2008	1/03/2009	1/01/2010	1/01/2011
3.25%	3.25%	3.25%

[37] For the Grade 4A classification in Appendix 1, no increase is provided in the wage rates for 2009, 2010 or 2011.

[38] I find that there is ambiguity in the Agreement about the increase to be paid to grade 4A classification. I find that it was the mutual intention of the parties that rate of pay for the grade 4A classification be increased by the percentage set out in the Agreement from the same date as the other classifications and the Agreement will be varied with that effect from 27 October 2008. An order to that effect will be issued with this decision.

ANUMs

[39] I do not accept the evidence of Mr Atkins that the parties did not intend that the rates of pay for all employees to be the same as those applying to public sector nurses. Mr Atkins admitted that he appointed Mr Cook to represent him in the negotiations and it is clear from the evidence that Mr Cook, who provided the draft Agreements, advised the ANF that the rates in the draft forwarded by him in August 2008 were the same as those paid to public sector nurses. This was in fact not correct. This is not to suggest there was intent to mislead the ANF, it was obviously an inadvertent error.

[40] I am willing to infer from the failure of Healthe Care to call Mr Cook that his evidence would not have assisted Healthe Care’s submissions that it was not their intention to grant parity with public sector nurses.

[41] Further Mr Atkins evidence that Healthe Care had paid the wage rates in the Agreement and that to increase the rates would cause a substantial unbudgeted liability is not consistent with the submissions put by Mr Millar about classification 4A. Healthe Care conceded that the rates in the Agreement were incorrect and that the employees had already received the increases provided for in the Agreement.

[42] Given the concession by Healthe Care about the Grade 4A rates, the evidence established that all the other rates in the Agreement are identical to public sector nurses rates and no credible evidence was provided to counter the evidence of the ANF that it was the mutual intention of the parties that the rates would be the same as the public sector rates.

[43] I therefore find that the base rate provided for grade 2 ANUMs in the Agreement was incorrect due to a typographical error. As a result of that error the percentage increases have been applied to an incorrect base rate.

[44] However, the first step that Fair Work Australia is required to determine is whether there is ambiguity or uncertainty. Fair Work Australia has no general power to vary agreements to correct mistakes or errors. Fair Work Australia can only vary an agreement if there is ambiguity or uncertainty. There is nothing else in the Agreement which points to how the rate for the grade 2 ANUM was derived. For example the Agreement makes no reference to parity with public sector rates. As such, there is a figure set out in the Agreement which is, on its face, clear and unambiguous. I am therefore unable to vary the Agreement as sought by the ANF.

[45] It is unfortunate that this error occurred. It is further unfortunate that given the error originated in the draft prepared by Healthe Care’s representative that it has not been corrected. When another omission in the Agreement was brought to Healthe Care’s attention in 2009 Healthe Care advised the ANF that “as a gesture of good faith and in recognition of the positive working relationship [it] has with the ANF” it would provide undertakings to pay the leave loading.” 35

[46] I would urge Healthe Care to do similarly now and provide the grade 2 ANUMs with the wage rates it was intended by all that they receive under the Agreement.

COMMISSIONER

Appearances:

D O’Callaghan for the Australian Nursing Federation.

R Millar of Counsel for Healthe Care.

Hearing details:

2011.
Melbourne.
March 11.

 1   Agreement Number 085485388

 2   Exhibit ANF 1

 3   Ibid at [2]

 4   Ibid at [4]

 5   Ibid at [5]

 6   Ibid at BM4

 7   Transcript PN 435

 8   Exhibit ANF 1 at BM3

 9   Ibid at BM5

 10   Ibid at BM 6

 11   Ibid at BM7

 12   Exhibit ANF 4 at Schedule A .1

 13   Ibid

 14   Ibid at Schedule A .2

 15   Ibid at Schedule A, 3

 16   ANF 5

 17   Ibid at Schedule B 1,2, and 3

 18   Ibid at Schedule B, 4

 19   Exhibit HC1 at [7]

 20   Ibid at [8]

 21   Transcript PN 374

 22   Ibid

 23   Ibid PN 376

 24   Ibid PN 366

 25   Exhibit ANF 3 at [8]

 26   Ibid at [9]

 27   Transcript PN 411

 28   Ibid PN 412

 29   Exhibit HC 2 at [3]

 30   Ibid at [7]

 31   Transcript PN 441

 32   Ibid at PN 442

 33   Ibid at PN 446

 34   Ibid PN 457

 35   Exhibit ANF 2 at BM 12

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