Compass Group (Australia) Pty Ltd & Compass Group Healthcare Hospitality Services Pty Ltd v Health Services Union
[2020] FWCFB 504
•11 MARCH 2020
| [2020] FWCFB 504 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Compass Group (Australia) Pty Ltd & Compass Group Healthcare Hospitality Services Pty Ltd
v
Health Services Union
(C2019/6061)
VICE PRESIDENT CATANZARITI |
|
Appeal against decision [2019] FWC 6186 of Commissioner Lee at Melbourne on 13 September 2019 in matter number AG2019/1253.
Introduction
[1] Compass Group (Australia) Pty Ltd and Compass Group Healthcare Hospitality Services Pty Ltd (the Appellants) have applied for permission to appeal and have appealed against a preliminary decision 1 made by Commissioner Lee on 13 September 2019 (the Decision) in relation to an application for approval of the Compass Group - Medirest (Royal Victorian Eye & Ear Hospital) Enterprise Agreement 2018 (the Agreement). The background to the appeal may be shortly stated as follows.
[2] Compass Group (Australia) Pty Ltd is a wholly owned subsidiary of Compass Group PLC which is a company registered in the United Kingdom and is the world’s leading foodservice and hospitality company. It provides services within Australia through a range of entities across business and industry including within the education, defence, mining and oil and gas, aged care and hospital sectors. Compass Group Healthcare Hospitality Services Pty Ltd is the main employing entity for the Medirest Division of Compass Group (Australia) Pty Ltd and holds contracts to provide services to a number of hospitals and aged care facilities including the Royal Victorian Eye and Ear Hospital (the RVEEH) 2.
[3] In the Decision, the Commissioner was dealing with an application for approval of the Compass Group - Medirest (Royal Victorian Eye & Ear Hospital) Enterprise Agreement 2018 (the Agreement) made under s. 185 of the Act. In doing so the Commissioner determined as a preliminary matter that the applicable Modern Award for the purposes of conducting the Better Off Overall Test (the BOOT) was the Health Professionals and Support Services Award 2010 3 (the HPSS Award), rather than the Hospitality Industry (General) Award 20104 (the HIG Award) as contended by the Appellants in proceedings before the Commissioner. The Decision of the Commissioner was subsequently stayed pending resolution of the appeal.
[4] As a result of his conclusions on award coverage, the Commissioner expressed his concerns about whether the Agreement passes the BOOT, and whether it has been genuinely agreed 5. This was not a matter which was the subject of appeal, and we express no view on these issues. However, we like the Commissioner are required to apply the Act as it is, and any adverse consequences for the prospects of approval of the Agreement which has been negotiated are the results of the application of statutory tests. We also accept that the issues raised before the Commissioner and before us on appeal regarding competing award coverage are complex and not straightforward due to the requirement to assess the ‘substantial character’ of an enterprise when determining appropriate award coverage.
The decision
[5] The Commissioner in the Decision identified the issue to be determined, that being what was the relevant modern award to be applied for the purpose of the required BOOT assessment and then set out the competing award coverage provisions of the HIG Award and the HPPS Award. The Commissioner then summarised the relevant case law to be considered and in doing so drew particular attention to the High Court decision in R v Central Board; Thiess (Repairs) Pty Ltd 6 (Thiess).
[6] The Commissioner then went on to summarise the evidence in respect of the Appellants’ business and services, relevantly stating as follows:
“[23] Ms Bondini’s evidence is that, where an enterprise agreement applies, it is underpinned by the HIG Award. There are however exceptions to this general position. The Agreement which covers employees at Thomas Embling Hospital is one, where it is said there are “historical” reasons for not applying the HIG Award. Another exception is the Newcastle Mater Hospital, where a private/public partnership is in operation. At the Newcastle Mater Hospital, CGHHS (one of the Applicants) manages the employees who perform catering, cleaning, laundry and security services. However, NSW Health employs the staff being managed. A similar public/ private partnership is in place at Long Bay Forensic Hospital.
[24] The Applicants employ approximately 10,000 employees across Australia. Approximately 2,000 of these employees are in the “Medirest” business.
[25] Other Compass group entities are:
• Compass Group Education Hospitality Services Pty Ltd;
• Compass Group B&I Hospitality Services Pty Ltd;
• Compass Group Defence Hospitality Services Pty Ltd; and
• Compass Group Remote Hospitality Services Pty Ltd.
[26] It is apparent from the evidence of Ms Bondini, that a significant part of the Applicants’ business is in the provision of food or catering services and that they provide these services in a range of diverse environments, from offshore platforms to defence establishments.
[27] However, it is also apparent that the Applicants have significant involvement in the provision of services other than food and catering, including broader support services, security and facilities management. Ms Bondini accepted that the Applicants’ business is broader than just contract food services. Ms Bondini did not know what proportion of the Applicants’ business could be attributed to support services as opposed to catering and hospitality, either in Australia or on a global basis. However, Ms Bondini maintained that catering and hospitality was the core business of the Applicants and that this knowledge was obtained from ‘on boarding, my business review meetings and inductions with general managers.’” 7 (footnotes omitted)
[7] The Commissioner then proceeded to traverse the evidence as to the type of work performed by the Appellant’s staff at the RVEEH including food services 8, cleaning services9, transportation and distribution services10 and patient support services11. The Commissioner considered and then made findings in relation to the services provided by the Appellants at the RVEEH;
“[51] At the Eye and Ear Hospital, the evidence shows that the services the Applicants already provide and will provide under the terms of the Agreement extend well beyond that of food services and catering. Ms Murray was clear that approximately 10% of the work is involved in catering services. I agree that the making and provision of the food to the hospital, almost all of which is prepared at another location is that of a catering service. Of course, there is no suggestion that employees of the Applicants who make the food and transport it to the hospital are involved in any industry other than hospitality. However, the distribution of the food is largely to patients of the hospital. It is not, with some minor exceptions, to staff of the hospital or visitors. The Applicants’ website acknowledges that patient’s meals are an integral part of a patient’s treatment.
[52] While I accept that the clinicians of the hospital are responsible for determining the dietary needs of the patients, the evidence is that the Applicants’ staff are required to engage with the clinicians when there are issues with meal selections of patients. They are from time to time required to feed patients. This is not characteristic of the type of work one would normally associate with the hospitality industry. I agree with Ms Murray that there are similarities of the work of distributing the food at the hospital with that of a restaurant or an airline. However, the evidence reveals that there are also significant differences.
[53] Irrespective of the food services aspect of the work performed at the hospital, the majority of the work undertaken is in the other support services that were canvassed in the evidence earlier. Ms Bondini gave evidence that the work performed by employees at the hospital was indistinguishable from the work performed by employees across the Applicants’ business. However, this evidence was rather vague, given Ms Bondini clearly had little to no knowledge of the work performed at the Eye and Ear Hospital.
[54] Overall, Ms Murray sought to portray the type of work, other than food services work, undertaken by the Applicants’ employees as hospitality work. For example, that the cleaning work was similar to cleaning work performed at a hotel or similar hospitality environment, that the transporting of patients was akin to the type of service that might be provided in a hotel and so on. However, the evidence is that the work being performed is in many respects unique to the hospital environment. The cleaning of theatres and wards and the related need for infection control and adherence to government mandated standards can be contrasted with more general cleaning tasks in a provider of hospitality services such as a restaurant or hotel.
[55] At the Eye and Ear Hospital, the Applicants’ staff are directed as to the type of cleaning chemical to use by the clinicians. The transporting and feeding of patients is certainly unique to the hospital environment. While a hospitality worker at a hotel may occasionally assist a guest with accessing a room in a wheelchair, this is not what is occurring at the hospital. The transport of patients is part and parcel of the service provided, not an uncommon event as it is likely to be in the case of transporting guests at a hotel. I agree that the role of a Porter mirrors the typical health classification of a Hospital Orderly and bears little resemblance to the guest services attendant classification in the HIG Award. The fact that some classifications of staff at the hospital are required by the hospital to hold health care qualifications is significant. That this is so is not surprising given the involvement of the Applicants’ staff with patient feeding, assisting nurses with lifting, positioning and showering patients. Patient service attendants (PSAs) are expected in some circumstances to work in high acuity settings. Again, this is not work that could reasonably be said to be similar to that of guest services in the hospitality industry.
[56] Importantly, the evidence shows that the work undertaken by the Applicants’ staff is very much part of the fabric of the hospital’s operations. True it is that the Applicants’ staff take directions from the Applicants’ employees, as well as having their own lockers and uniform. However, they also take direction from the hospital’s clinical staff directly. They are provided training from hospital staff. Considering the business of the employers as a whole, the evidence demonstrates that the Applicants’ operations are not separate from and different in kind to the operations carried on at the hospital. In many respects, they work together with the hospital staff.” 12
[8] Having previously stated that an employer can be in more than one industry, that the Appellants were predominantly a “food service and caterer” and that it had a “discrete segment of its business that has a substantial character that is in the hospitality industry” 13 the Commissioner concluded as to what industry the Appellants were in in respect of its services to RVEEH;
“[57] Having regard to the totality of the evidence, the Applicants have a significant part of their business that is substantially the character of a business in the hospital industry. Therefore, the Applicants and their employees are not covered by the HIG Award by virtue of the operation of clause 4.1(d), which provides that the Award does not apply to employers and their employees who are in the hospital industry.” 14
[9] The Commissioner having determined that the HIG Award did not apply by reason of the carve out in clause 4.1(d) of the HIG Award proceeded to consider and determine whether the HPSS Award applied. In concluding that the HPSS Award applied the Commissioner reasoned as follows:
“[58] As set out earlier, the HPSS Award covers employers throughout Australia in the health industry and their employees in the classifications listed in clause 14 - minimum weekly wages for support services employees, to the exclusion of any other Modern Award. The health industry is defined as employers whose business and/or activity is in the delivery of health care, medical services and dental services.
[59] Health care is not defined. However, the Macquarie dictionary definition defines health care to include “medical and other services provided for the maintenance of health, prevention of disease etc.” It is apparent on the evidence already referred to, that the Applicants are in the hospital industry and that is certainly the case at the Eye and Ear Hospital. On any view, the hospital industry is in the health industry. The Eye and Ear Hospital is a public health service under the Health Services Act 1988. As to the Applicants’ employees at the hospital, it is apparent that the classifications, as they cover hospital orderly, food and domestic services assistant and other food services duties, cleaner, patient services assistant, gardener align with the support service classifications in the HPSS Award.” 15
[10] Supporting his finding that the HPPS Award applied the Commissioner had considered whether the Appellants’ ‘business and/or activity’ was in the ‘Health industry’ when he stated as follows:
“[61] As noted, the definition of health industry in the HPSS Award includes employers whose business and/or activity is in the delivery of health care or medical services.
[62] The Applicants submitted that I should find that “activity” where it is used in the HPSS Award, is a synonym of “business,” in so far as it concerns public sector entities. This submission is based on a the claim that it is not customarily apt to describe a public sector organisation pursuing not for profit activities which serve the public good, as being engaged in a “business” and that at the time the HPSS Award was formed, there was a desire of the Victorian Hospitals’ Industrial Association to ensure that the HPSS Award covered both public and private sector employers.
[63] The Applicants submit that, seen in its proper context, it is of no surprise that the word “activity” appears in the definition of health industry. This submission is speculative. The Applicants ultimately submitted that they could not, after trying as hard as they could, find the explanation for why “and/or activity” is there. However, the submission as to what it should mean is the only coherent reason that the Applicants’ representative could conceive.
[64] The HWU submits that the ordinary meaning of the word “activity” should be used. The task of construction of a Modern Award or enterprise agreement, like that of a statute or contract begins with the ordinary meaning of the relevant words, and I see no reason to depart from that approach.
[65] Activity means “the state of action; doing.” It is apparent from the evidence canvassed above, that the Applicants are involved in the activity of delivering health care services at the Eye and Ear Hospital.
[66] In the event that I am wrong to have determined that the Applicants’ business is in the delivery of health care, then they most certainly would be involved in the “activity” of the delivery of health care and therefore, the HPSS Award would cover them.” (footnotes omitted)
[11] The Commissioner then considered in the alternative to his finding that the HIG Award did not apply and that the HPSS Award did apply, that both awards may apply. He concluded that a review of the relevant classifications in each of those awards led him to conclude that the HPSS Award classifications were more appropriate. 16
[12] Having concluded that the HPSS Award was the relevant modern award for the purposes of conducting the BOOT assessment the Commissioner then stated that he had a concern as to whether the Agreement passed the BOOT and advised that the matter would be listed for mention and if necessary programming to deal with those outstanding concerns. 17
Grounds of appeal and submissions
[13] The Appellants’ five grounds of appeal are as follows:
(1) In concluding that the Appellants’ employees are not covered by the HIG Award the Commissioner erred in failing to address or apply the proper construction of employers in the industry of ‘hospitals’ in sub-clause 4.1(d) of the HIG Award and in doing so:
(i) Failed to construe properly the exclusion of sub-clause 4.1(d) as being confined to that part of the Appellants’ business which had a substantial character falling within the industry of ‘hospitals’; and
(ii) By failing to find that on the criterion, the Appellants were not in the industry of ‘hospitals’, either in the context of their overall business or in the context of scope clause 2 of the Agreement.
(2) The Commissioner made material errors of fact and took into account irrelevant considerations:
(i) By conflating activities of the corporate entities other than the Appellants with the Appellants;
(ii) Mistaking and mischaracterising the evidence about the extent of catering and food services provided by the Appellant at the Victorian Eye and Ear Hospital;
(iii) By regarding the public/private partnerships at Long Bay Hospital and Newcastle Mater Hospital as evidencing that the Appellants were engaged in the hospital industry;
(iv) Mistaking the evidence about the cleaning services, in finding that the cleaning services were unique to hospitals and could be contrasted with cleaning services provided by hospitality services.
(3) In reaching his primary conclusion that the HPSS Award applies to the Appellant and its employees the Commissioner erred:
(i) By failing to address the correct issue of whether the scope of the Agreement captured business and/or activities of the Appellant that could be characterised as delivery of health care and/or medical services, such that the Appellants were in the ‘health industry’;
(ii) By addressing the wrong issue by equating the HIG Award concept of an employer in the hospitality industry with ‘in the health industry’ for the purposes of sub-clause 3.1 of the HPSS Award.
(4) The Commissioner erred in reaching the alternative conclusion that the Appellants are involved in the ‘activity’ of delivering health care services at the Victorian Eye and Ear Hospital.
(5) On the assumption that both the HIG Award and HPSS Award covered the Appellants, the Commissioner erred in concluding that that the HPSS Award was the most appropriate award:
(i) By adopting a ‘block’ approach and failing to apply the test to each classification under the respective awards;
(ii) In failing to identify that the most appropriate award classification for each of the Agreement classifications was to be found in the HIG Award; and
(iii) In the alternative, failed to draw a distinction between ‘patient support’ classifications (HPSS Award) and the lower classifications in the Agreement (HIG Award).
Permission to appeal
[14] An appeal under s 604 of the Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker. 18 There is no right to appeal and an appeal may only be made with the permission of the Commission. Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is in the public interest to do so. Permission to appeal may otherwise be granted on discretionary grounds.
[15] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 19 The public interest is not satisfied simply by the identification of error, or a preference for a different result.20 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...” 21
[16] Other than the special case in s 604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if leave is refused. 22
[17] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 23 However, as earlier stated, the fact that the Member at first instance made an error is not necessarily a sufficient basis for granting permission to appeal.
[18] We consider that permission to appeal should be granted, because the appeal raises issues of general application regarding the assessment of the ‘substantial character’ of an enterprise when determining appropriate award coverage.
Consideration
[19] The matter to be determined by the Commissioner was that of what is the relevant award or awards for the purpose of conducting the BOOT assessment of the Agreement. The Appellants contended before the Commissioner that the HIG Award was the applicable instrument whereas the Health Services Union Victoria No. 1 Branch (of the Health Services Union of Australia) trading as the Health Workers Union (the HWU) contended that the HPSS Award was the appropriate modern award. Central to the resolution of the issue before the Commissioner and now before us on appeal is what industry or industries the Appellants are engaged in.
[20] It is well established, and we agree, that resolution of the question of the industry in which an enterprise of an employer is engaged is a question of fact. 24 Answering that question requires the “substantial character”25 of the enterprise in which the employer and employees are engaged to be assessed and determined. It is not the case however that an enterprise can only have one character or only be in one industry.26 While unnecessary to decide whether one character is predominant in circumstances where an enterprise has more than one character, the character must be substantial before it can be concluded that the enterprise is in a particular industry. The Full Bench in Dyno Nobel27 summarised the relevant law as follows:
“[51] Drawing the High Court authorities together, we think the position is as follows:
(a) An eligibility rule, or part of an eligibility rule, that simply refers to persons employed or engaged “in or in connection with” a specified industry or industries is properly characterised a conventional industry rule and the discremen of eligibility under such a rule is the industry of the employer, that is, whether the trade or business of the employer is in or in connection with the specified industry or industries.
(b) Whether or not the trade or business of an employer is in or in connection with a particular industry is a question of fact.
(c) The answer to that question of fact is determined by the “substantial character” of the trade or business of the employer and all of its employees and requires a consideration of the business of the employer as a whole.
(d) The business of an employer can be ‘in or in connection with’ more than one industry. This outcome can arise in different ways:
(i) The business of the single employer is a single integrated enterprise but nevertheless operates substantially in or in connection with two or more industries simultaneously. This may be because:
• There is an overlap between industries and the business operates in the area of overlap (in such a case the same business can be described in different ways placing the business in either industry so that it has a ‘substantial character’ that places it in each industry); and/or
• The nature of the single integrated business is such that the business itself overlaps two or more distinct industries in such a way that it has a ‘substantial character’ within each of those industries.
(ii) The overall business of the single employer is properly seen as being constituted by two or more distinct businesses or enterprises each of which has a different “substantial character”.
(e) The mere supply of goods or services to a business in a particular industry is not, of itself, sufficient to render the business of the supplier one that is ‘in connection with’ the industry of the business supplied, even if those goods are essential to the operation of that business.
(f) Where a conventional industry rule applies in relation to a distinct business or enterprise of an employer, all of the employees in that business or enterprise are eligible for membership of the union.” 28 (Footnotes omitted)
[21] More recently a Full Bench of the Commission, in dealing with whether the scope of an agreement extended to work covered by particular awards in Construction, Forestry, Maritime, Mining and Energy Union and others v Specialist people Pty Ltd (Specialist People) 29, relevantly stated as follows:
“…It is not enough to identify the industry of the employer and the Award that applies to it at that time it makes the agreement. The scope of work that may be undertaken under the agreement is a central part of the analysis.” 30
[22] Having identified the relevant case law and principles to be applied we now turn to the grounds of appeal.
First Appeal Ground
[23] The Appellants submit that the Commissioner’s conclusion that the Appellants’ employees are not covered by the HIG Award was reached by misconstruing subclause 4.1(d) of the HIG Award and contention that on its proper construction the effect of the carve-out in subclause 4.1(d) is confined to businesses operating hospitals as opposed to providing services to hospitals. The Appellants submit that they are engaged in the latter, that of providing services to businesses in the health sector.
[24] Relevantly, the HIG Award contains the following coverage provisions:
“4. Coverage
4.1 This industry award covers employers throughout Australia in the hospitality industry and their employees in the classifications within Schedule D—Classification Definitions to the exclusion of any other modern award. The award does not cover employers in the following industries:
(d) hospitals;
………………
4.2 For the purpose of clause 4.1, hospitality industry includes hotels; motor inns and motels; boarding establishments; condominiums and establishments of a like nature; health or recreational farms; private hotels, guest houses, serviced apartments; caravan parks; ski lodges; holiday flats or units, ranches or farms; hostels, or any other type of residential or tourist accommodation; wine saloons, wine bars or taverns; liquor booths; resorts; caterers (emphasis added); restaurants operated in or in connection with premises owned or operated by employers otherwise covered by this award; casinos; and function areas and convention or like facilities operating in association with the aforementioned.”
[25] In support of its submission the Appellants advanced the following arguments.
[26] Firstly, the HIG Award covers a service-based industry and the scope clause of that award (and other provisions) recognise that the industry coverage of the award is designed to include not just employers who provide services at establishments such as hotels and motels but also to employers who provide services to other industries.
[27] Secondly, the HIG Award is a ‘broad church’ covering employers who provide the services in a range of ways as evidenced by the breadth of the scope clause and classification streams. The Appellants refer to the history of the making of the HIG Award where the Full Bench decided to make a single award rather than a suite of modern awards to deal with a broad range of hospitality industry sectors. To construe the carve-outs beyond the premises listed in sub-clause 4.1 of the HIG Award would, according to the Appellants, result in the kind of fragmented coverage that the Full Bench sought to avoid by making the one award to cover the hospitality industry.
[28] Thirdly, in complying with the Award Modernisation request and s. 576A of the then Workplace Relations Act 1996 (Cth) (the WR Act), the tribunal was required (amongst other things) to make the awards “simple to understand and easy to apply” which would “result in a certain, stable and sustainable modern award system”. Confining the subclause 4.1(d) carve out to the industry of operation of hospitals is, according to the Appellant simple, easy to understand and apply, and certain whereas the construction reached by the Commissioner would not meet this modern award requirement.
[29] Fourthly, expanding the effect of the carve-out in subclause 4.1(d) of the HIG Award beyond the industry of operating hospitals would risk excluding employees from coverage under the HIG Award in circumstances where the HPSS Award may not have corresponding coverage. Significantly, the definition of the ‘industry’ of ‘hospitals’ under the HIG Award, and the definition of the ‘health industry’ under clause 3 of the HPSS Award do not align.
[30] Fifthly, the Appellants contend that their construction is consistent with the long-standing distinction drawn by the High Court in Poon Bros 31 between operating in an industry and providing services to an industry.
[31] A key contention of the Appellants in their first ground of appeal is that in order for the carve-out in clause 4.1(d) of the HIG Award to have effect in respect of the Appellants’ enterprise it would be necessary for the Appellants to be operating a hospital rather than providing a service to it. We disagree with the Appellants’ contended construction for the following reasons.
[32] The plain meaning of the words in clause 4.1(d) does not in our view support the construction advanced by the Appellants. The words of the clause simply refer to employers in the hospital industry. While the Appellants strive for a narrower meaning and a construction that confines the effect of the carve-out to operators of hospitals, we are not persuaded that the history of the making of the HIG Award supports that contention. We were not taken to any material that clarified the meaning of the term “hospital industry” in the context of the clause 4.1(d). Nor is the term defined within the HIG Award.
[33] As is evident from reading clause 4.1 of the HIG Award, the award applies to employers in the “hospitality industry” which is defined at clause 4.2 and relevantly includes “caterers”. It is not apparent to us what utility or purpose the carve-out of the “hospital” industry could have at clause 4.1(d) if the carve out’s effect was confined to only those enterprises that were “operating” hospitals as it is difficult to see how such enterprises could fall within the definition of an employer in the “hospitality industry” as defined at clause 4.2. Simply put, a construction that confined the effect of the clause 4.1(d) carve-out to operators of hospitals would appear to have no utility as an operator of a hospital could not on any sensible view be within the hospitality industry such that the carve-out clause was relevant or necessary.
[34] We accept the submission of the Appellants that the HIG Award is a “broad church” and that it is intended to cover both employers providing services in hotels and motels for example and may also cover employers providing services to other industries. Contrary however to the submissions of the Appellants we do not accept that expanding the effect of the carve out at clause 4.1(d) beyond the premises listed in clause 4.1 would create the kind of fragmented award coverage it is submitted the Full Bench sought to avoid in making the HIG Award. If the clause 4.1(d) carve-out in the circumstances of the present case were confined to operators of hospitals it may still result in fragmented coverage, the vice the Appellants contend their construction of clause 4.1(d) would avoid. That is so because if the Appellants are correct in their construction, all that would mean is that the HIG Award is not excluded. It does not guarantee the avoidance of potentially overlapping award coverage which may create the confusion and uncertainty the Appellants contend would be avoided by their construction.
[35] As regards the Appellants contention that expanding the effect of the carve-out in subclause 4.1(d) of the HIG Award beyond the industry of operating hospitals would risk excluding employees form award coverage, the risk raised by the Appellants appears to be more theoretical than real in the present case. It appears to us based on the relevant Agreement classifications and a review of the HPSS Award classifications that the exclusion of the HIG Award’s coverage by reason of the clause 4.1(d) carve out would be unlikely to leave employees at risk of falling outside the coverage of both awards.
[36] Taking the Appellants’ argument to its logical conclusion it would not matter what actual services were being provided by it to the RVEEH as the carve-out clause could never operate to exclude the HIG Award so long as the Appellants were not operating a hospital. The clause 4.1(d) carve-out must have work to do in our view.
[37] The above supports a construction that the hospital industry referred to at clause 4.1(d) is not confined only to those employers that operate hospitals and includes enterprises that are operating in the hospital industry. We consequently do not accept the Appellants’ argument that the effect of the carve-out at clause 4.1(d) of the HIG Award is confined to enterprises that operate hospitals. It follows that the Commissioner was not in error by failing to apply the narrow construction of the carve-out clause 4.1(d) contended by the Appellants.
[38] Turning now to the Commissioner’s assessment of the substantial character of the Appellants’ enterprise, it is contended by the Appellant that the Commissioner failed to construe the exclusion in subclause 4.1(d) as being confined to that part of the Appellants’ business which had a substantial character falling within the hospital industry. Further, it is contended the Commissioner erred by failing to find on that criteria that the Appellants were not in the industry of hospitals, either in the context of their overall business or in the context of the scope clause 2 of the Agreement.
[39] The Appellants submit that the Commissioner’s construction was inconsistent with the long-standing distinction drawn in Thiess Repairs 32 and Poon Bros33 between operating within an industry and providing services to an industry. Accepting that the hospital industry, as we have found above, may include employers other than just operators of hospitals, it was necessary for the Commissioner to determine whether the enterprise in which the Appellants were engaged at the RVEEH had a substantial character of being in the hospital industry, in order to reach a conclusion that the carve-out at clause 4.1(d) applied.
[40] We accept that Thiess Repairs 34 and Poon Bros35 are authority for the proposition that the fact that an employer provides services to an industry does not mean they are necessarily held to be an employer within that particular industry. However, Thiess Repairs36 and Poon Bros37 do not stand as authority for the proposition that a service provider to an industry can never be in that industry. If that were the case, then a requirement to undertake an assessment of the substantial character of an enterprise providing services to or in a particular industry would not arise.
[41] Contrary to the Appellants’ submissions we are satisfied that the Commissioner approached the task of determining the substantial character of the enterprise in an orthodox manner. He did so by assessing the nature of the Appellants’ business, both at a corporate level and at the enterprise level as defined within the Application and Coverage clause 2 of the Agreement, that being the provision of “hospitality and related services” to the RVEEH by employees within the relevant classifications of the Agreement. He also considered the evidence in relation to the performance of work by the Appellants’ staff at the RVEEH, as was identified as necessary in Specialist People. 38
[42] As regards the Commissioner’s finding that a significant part of the Appellants’ broader business is in the provision of food or catering services, nothing turns on that finding in our view. Firstly, such a finding is self-evident and not inconsistent with the authorities to which we have referred to above in that a business may operate in more than one industry. Nor is it decisive in our view that the broader business of the Appellants or a significant part of it was unarguably in the hospitality industry. The key focus of the enquiry by the Commissioner was correctly on the enterprise defined by the scope of the Agreement.
[43] As to the Commissioner’s finding that the Appellants’ enterprise was in the hospital industry, we discern no error. He correctly stated that an employer can be in more than one industry 39 and it is apparent on a fair reading of the Decision that his analysis of the substantial character of the enterprise was focussed on the scope of the work being undertaken at the RVEEH by the Appellants’ enterprise. His findings were supported by reference to the relevant evidence which revealed that the work undertaken by the Appellants’ staff was “not separate and different in kind to the operations carried on at the hospital. In many respects, they work together with the hospital staff.”40
[44] We note in particular the following evidence relating to the services provided by the Appellants at the RVEEH; the small volume of food catering which is for the most part focussed on patients and does not include operating the kiosk or snack bar, cleaning duties including inpatient wards and operating theatres, the application of the Victorian Hospital Cleaning Standard to certain cleaning, the transport of patients and medical equipment, patient support services and the requirement of staff engaged at Levels 4 or 5 of the classification structure under the Agreement to hold a Certificate III in health care or equivalent.
[45] At this point we would highlight a distinction between the services provided by the Appellants to the RVEEH to that considered by the High Court in Poon Bros 41on which authority the Appellants seek to rely. The circumstances of that case were that the contractor in question was providing a range of camp and township services at Newman in the Pilbara region of Western Australia in support of the Mt Newman Mining Co Pty Ltd. At issue was whether in providing those services the contractor was operating in or in connection with the industry of metalliferous mining. The camp and township services, while unarguably important to the remote mining operation, were found to be identifiably different, distinct and not done as an integral part of the mining operation. In the present case the Commissioner found, and we agree, that the Appellants’ enterprise at the RVEEH was not separate and distinct and was integral to the provision of health services within the RVEEH.
[46] We see no conflict between the conclusion reached by the Commissioner and the principles outlined in Thiess Repairs 42 and Poon Bros43. In truth it is difficult for us to see how a contrary conclusion could have been reached by the Commissioner as to the substantial character of the enterprise having regard to the evidence as to the nature of the services provided and the work performed by the Appellants’ staff at the RVEEH. That is not to say a service provider in the hospital industry such as the Appellants must inevitably be considered to be in the hospital industry. Such a conclusion must turn on a careful analysis of the scope of work undertaken in the particular circumstances of each case. That is what is required when assessing the substantial character of the relevant enterprise.
[47] It follows from the above that we discern no error as contended by the Appellants by grounds 1(a) and 1(b) of the notice of appeal. Appeal grounds 1(a) and 1(b) are rejected.
Second Appeal ground
[48] The Appellants contend by their second ground of appeal that in assessing the substantial character of the Appellants’ business the Commissioner took into account four matters that were variously factually wrong, or else irrelevant and that these errors infected his evaluation of the substantial character of the Appellants business.
[49] We turn firstly to the Appellants’ contention that the Commissioner conflated and confused the activities of other Compass group entities in finding that the Appellants have significant involvement in providing services beyond those in food and catering. The Appellants’ point to the Commissioner’s findings that the Appellants “have significant involvement in providing services beyond those in food and catering” 44 relying on evidence of Ms Melanie Bondini where she states;
“10. Hospitality and catering is our core business. Throughout the Group, there are only two exceptions;
(a) Omega Security Services Pty Ltd which operates in the security industry; and
(b) DeltaFM (Australia) Pty Ltd which is a facilities management company.” 45
[50] The evidence of Ms Bondini on which the Commissioner relied was, according to the Appellants, evidence directed to the global Compass Group and not in relation to the Appellants business and did not provide a sound basis for the finding that the Appellants “have significant involvement in providing services beyond those in food and catering”.
[51] It is not apparent to us that the relevant evidence given by Ms Bondini was in fact directed to the global Compass Group. We note that in giving evidence Ms Bondini variously stated that the Compass group has provided contract food and support services to its clients in Australia for over 40 years 46, that the number of sites operated by the Compass Group in Australia was 50047 and that at the time of making her statement the Compass Group employed 10,000 employees across Australia and 2000 in the Medirest business48. She then went on to refer to the Compass Group’s competitors49 before describing hospitality and catering as the core business of Compass50. It is also the case that when pressed under cross-examination on information relating to both the global Compass Group and its Australian operations Ms Bondini was forced to concede a lack of detailed knowledge.51
[52] A reasonable interpretation of Ms Bondini’s evidence on which the Commissioner relied is that she was referring to Compass Group (Australia) Pty Ltd’s operations. We reach this view based on Ms Bondini’s evident lack of knowledge of the global Compass Group and her role as the National HR and Risk Manager employed by Compass Group Management Services Pty Ltd which is a wholly owned subsidiary of Compass Group (Australia) Pty.
[53] We are consequently not persuaded that the Commissioner erred in his findings. If it was in error the error was not significant as the conclusion ultimately reached by the Commissioner regarding the substantial character of the enterprise was not in relation to the broader Compass Group but was in relation to that part of its business providing services to the RVEEH.
[54] The Appellants further submit that the Commissioner mistook the evidence of Ms Murray concerning the extent of catering and food services provided by the Appellants at RVEEH and did not deal with the broader component of the Appellants off site workforce involved in the catering business that provided services to the RVEEH. It was the business of the Appellants, not merely that part which falls within the scope of the Agreement which falls for examination of the substantial character according to the Appellants.
[55] This submission is rejected. The Commissioner was clearly alive to the fact that the preparation of food and meals by the Appellants’ staff at an off-site location was clearly hospitality work and acknowledged that there was no suggestion that such off-site staff were in any industry other than hospitality. 52 He did not however equate that set of facts with a conclusion that the Appellants fell within the hospitality industry in respect of the enterprise conducted at the RVEEH. As we have previously observed and consistent with the authorities, to which we have referred to above, an employer may be in more than one industry and it was necessary for the Commissioner to examine and determine the substantial character of the particular enterprise providing services to the RVEEH.
[56] As to the suggestion that it is the broader business of the Appellants that falls for examination, such an examination may be instructive but ultimately may not be determinative. Were it determinative, than as we have previously observed, it would matter little what actual services were were being delivered by the Appellants to the RVEEH as on the Appellants’ construction the enterprise would be in the hospitality industry by reason of the broader business’ substantive character. In our view the focus of the examination of the substantive character of the enterprise must include that part of the business that is providing services to the RVEEH. The Commissioner undertook the analysis in this manner, and we discern no error in his approach.
[57] The Appellants also contend that the evidence that Compass Group Healthcare Hospitality Services Pty Ltd was a party to public/private sector partnerships in the health industry provided no safe basis to conclude that either Appellant was in the hospital industry. While the Commissioner acknowledged the Appellants’ involvement in public/private partnerships 53 we are not persuaded that such a finding of fact, which was unchallenged, infected the Commissioner’s conclusion regarding the services provided at the RVEEH. The reasoning of the Commissioner at [51]-[56] of the Decision is clearly focussed on the services provided by the Appellants at the RVEEH and the conclusion reached by him at [57] of the Decision as to the substantial character of the business is founded on that reasoning and is focused on the RVEEH. We discern no error in the Commissioner’s reasoning or conclusion.
[58] Finally, the Appellants submit that the Commissioner’s conclusion that the cleaning work performed “is in many respects unique to the hospital environment” was not supported by the evidence. The Appellants point to the evidence of Ms Murray which was to the effect that the difference between cleaning tasks in a hospital and cleaning in a different setting was in the detail and the level of training required. 54
[59] Ms Murray was cross-examined at some length in relation to cleaning within a hospital setting. During that cross-examination she made various admissions including that; cleaning in a hospital is to a higher standard, 55 there is an obligation to comply with the Victorian Hospital Cleaning Standards,56 specific training in health care settings is required with support of the infection control manager of the hospital57 and Category A type cleaning under the Victorian Hospital Cleaning Standards is unique to healthcare.58 It is clear on our review of the evidence before the Commissioner that the finding made was open to him and we discern no error.
[60] It follows from the above that we discern no error as contended by the Appellants by ground 2 of the notice of appeal. Appeal ground 2 is rejected.
Third Appeal Ground
[61] The Appellants contend that in order to reach a conclusion that the HPSS Award was the applicable instrument for BOOT purposes the Commissioner was required to determine three questions, which he failed to do. Those questions were:
(i) Whether the Appellant’s business and/or activities had a substantial character of the “delivery of health care and/or medical services” as defined in clause 3 of the HPSS Award;
(ii) Whether the relevant employees fell within the classifications in clauses 14 & 15 of the HPSS Award; and
(iii) If so, whether any of the relevant employees covered by the HPSS Award fell within the coverage of the Agreement.
[62] The Appellant contends that the Commissioner made no attempt to assess whether the Appellants conducted a business and/or activity with the substantial character of the “delivery of health care and/or medical services”. That failure according to the Appellants led the Commissioner to erroneously address the second question and overlook the third question entirely.
[63] The clauses of the HPSS Award that are relevant to coverage include the following:
“4. Coverage
4.1 This industry and occupational award covers:
(a) employers throughout Australia in the health industry and their employees in the classifications listed in clauses 14—Minimum weekly wages for Support Services employees and 15—Minimum weekly wages for Health Professional employees to the exclusion of any other modern award.”
[64] The definition of “health industry” is described at clause 3 of the HPSS Award as:
“health industry means employers whose business and/or activity is in the delivery of health care, medical services and dental services.”
[65] We agree with the Appellant that as a first step the Commissioner was required to determine whether the Appellants business and/or activities had the substantial character of the “delivery of health care, medical services and dental services.” The Commissioner in approaching that task relied on the evidence to which he had previously referred, and it was unnecessary for him to repeat that evidence. He also relied on the finding that he had made that the Appellants were in the hospital industry, a finding with which we agree.
[66] While the Appellants appear to take issue with a lack of forensic analysis as to whether the Appellants’ business had the substantial character of the “delivery of health care, medical services and dental services” it is in our view self-evident that an employer engaged in the hospital industry is also engaged in the health industry. The Commissioner clearly engaged with the required consideration at [58]-[59] of the Decision. This is not in our view a case of overlapping industries that required careful comparison. One (the hospital industry) is subsumed in the other (the health industry) or any reasonable assessment.
[67] The suggestion that an enterprise that disclosed a substantial character of being in the hospital industry may not disclose a substantial character of being in the health industry is not accepted. The Commissioner reached the conclusion that the Appellants business was in the health industry in large measure by reason of the conclusion he had earlier reached as to the substantial character of the Appellants’ business being in the hospital industry. If there were error in the approach taken by the Commissioner to reach the conclusion that the Appellants’ business had a substantial character of being in the health industry, the error is not significant or material in our view given the conclusion he ultimately reached, with which we agree.
[68] Turning now to the submission that the second question the Commissioner was required to ask was whether the relevant employees fell within the classifications in clauses 14 & 15 of the HPSS Award. We also agree that it was necessary for the Commissioner to turn his mind to the work performed by the Appellants’ employees and whether that work fell with the classifications within the HPSS Award.
[69] It is only clause 14 of the HPSS Award that may be relevant as clause 15 deals with Health Professional classifications which are clearly not contemplated by the classifications within the Agreement. Clause 14 of the HPSS Award provides the relevant Support Services employee stream classification levels and rates of pay but little is gained by reviewing that sub-clause without reference to Schedule B1 of the HPSS Award which has the classification definitions for Support Services employees.
[70] We do not agree with the Appellant that the Commissioner approached the task of assessing the classifications in the HPSS Award from the wrong point. That submission is made on the basis that the Commissioner did not confine his inquiry to those employees employed in that part of the business that had a substantial character of “delivery of health care, medical services and dental services.” The Commissioner approached the task focused on those employees of the Appellant at the RVEEH within the scope of the Agreement, the very cohort of employees that he had considered the duties of in arriving at his determination as to the substantial character of the Appellants business at the RVEEH.
[71] As to the findings made by the Commissioner that the classifications in the Agreement “align with the support service classifications in the HPSS Award” the Commissioner may be criticised for the shorthand manner in which he dealt with the classification issue. However, that can be put in perspective by his forgoing analysis in the Decision of the duties of the Appellants’ employees at the RVEEH and his inclusion of the Agreement classification structure at Appendix A of the Decision. Further analysis of the classifications is provided by the Commissioner when subsequently dealing with a comparison of the HIG Award and HPSS Award classification at [68] of the Decision.
[72] Fairly read, the Commissioner’s review of the work undertaken by the Appellant’s staff underpinned his conclusion that the Agreement classifications aligned with the classifications in the HPSS Award. Having reviewed the HPSS Award Support Services employee classifications the Full Bench is not persuaded that the Commissioner’s finding was in error. For example, the HPSS Award provides for the following classifications:
• B.1.1 Support Services employee Level 1 - Cleaner, hospital orderly and food and domestic services attendant.
• B.1.2 Support Services employee Level 2 – Storeperson.
• B.1.3 Support Services employee Level 3 – Driver and Personal care worker Grade 2.
• B.1.4 Support Services employee Level 4 –Personal care worker grade 3. At this level a Certificate III may be required.
• B1.5 Support Services employee Level 5 – Personal care worker grade 4.
• B.1.7 Support Services employee Level 7 – Food services supervisor.
[73] Any reasonable comparison of the classifications within the Agreement and the HPSS Award would lead to a conclusion that there is strong alignment between the classifications. On that basis we find no error in the Commissioner’s conclusion. Ground 3 of the appeal is rejected.
Fourth Appeal ground
[74] By the fourth ground of appeal the Appellant contends that the Commissioner erred in reaching the alternative conclusion that the Appellants are involved in the ‘activity’ of delivering health care services at the Victorian Eye and Ear Hospital. The Appellants contend that the word ‘activity’ in the definition of ‘health industry’ in clause 3.1 of the HPSS Award is intended to capture the operations of public sector employers and not a lower threshold of private sector operation. The Appellant further submits that any ‘activity’ of the Appellants in the delivery of health and/or medical services was merely ancillary and an insubstantial function of its hospitality business.
[75] We note that the Commissioner dealt with the meaning of ‘activity’ as it appears in the clause 3.1 definition of ‘health industry’ in the alternative to his finding that the Appellant’s business or a part of it was in the health industry. As we have found no error in the Commissioner’s primary conclusion it is unnecessary for us to deal with his alternative conclusion.
Fifth Appeal Ground
[76] Consideration of the fifth appeal ground is not required given our disposition of appeal grounds 1, 2 & 3.
Conclusion
[77] Because we have rejected the appeal grounds for the foregoing reasons, the appeal must be dismissed.
Orders
[78] We order as follows:
(1) Permission to appeal is granted.
(2) The appeal is dismissed.
VICE PRESIDENT
Appearances:
R Dalton and A Pollock of counsel and A Lambert for the Appellant.
M Champion of counsel and S Crawford for the Respondent.
Hearing details:
2019.
28 November.
Sydney.
Final written submissions:
Appellant’s written submissions dated 1 November 2019.
Respondent’s written submissions dated 18 November 2019.
Printed by authority of the Commonwealth Government Printer
<PR716319>
1 [2019] FWC 6186.
2 Appeal Book [96] – [97].
3 MA000027.
4 MA000009.
5 Decision [71].
6 (1948) 77 CLR 123.
7 Decision [23]-[28].
8 Ibid [34]-[35].
9 Ibid [36]-[38].
10 Ibid [39]-[41].
11 Ibid [42]-[44].
12 Ibid [51]-[56].
13 Ibid [50].
14 Ibid [57].
15 Ibid [58]-[59].
16 Ibid [68].
17 Ibid [70]- [71].
18 Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
19 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398, [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] – [46].
20 GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343, [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663, [28].
21 [2010] FWAFB 5343, 197 IR 266, [24] – [27].
22 See also CFMEU v AIRC (1998) 89 FCR 200; Wan v AIRC (2001) 116 FCR 481.
23 Wan v AIRC (2001) 116 FCR 481, [30].
24 Re Federated Liquor and Allied Industries Employees Union of Australia; ex parte Australian Workers’ Union (1976) 51 ALJR 266, 268 (Poon Bros).
25 R v Central reference Board; Thiess (Repairs) Pty Ltd (1948) 77 CLR 123 (Thiess Repairs).
26 R v Drake Brockman; Ex parte National Oil Pty Ltd (1943) 68 CLR 51, 57; Dyno Nobel Asia Pacific Limited v Construction, Forestry, Mining and Energy Union, (Dyno Nobel) PR956868 [51].
27 PR956868.
28 PR956868.
29 [2019] FWCFB 6307.
30 Ibid [34].
31 Ex parte Australian Workers’ Union (1976) 51 ALJR 266.
32 (1948) 77 CLR 123.
33 Ex parte Australian Workers’ Union (1976) 51 ALJR 266.
34 (1948) 77 CLR 123.
35 Ex parte Australian Workers’ Union (1976) 51 ALJR 266.
36 (1948) 77 CLR 123.
37 Ibid.
38 [2019] FWCFB 6307.
39 Decision [50].
40 Decision [56].
41 Ex parte Australian Workers’ Union (1976) 51 ALJR 266.
42 (1948) 77 CLR 123.
43 Ibid.
44 Decision [48].
45 Appeal Book pg 96 [10].
46 Ibid [6].
47 Ibid [7].
48 Ibid [8].
49 Ibid [9].
50 Ibid [10].
51 Transcript of hearing on 31 July 2019, PN263-PN282.
52 Decision [51].
53 Decision [49].
54 Transcript of hearing on 31 July 2019 at PN 414.
55 Ibid PN412.
56 Ibid PN420.
57 Ibid PN437.
58 Ibid PN450.
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