Compass Group Healthcare Hospitality Services Pty Ltd v Health Services Union

[2019] FWC 7030

[2019] FWC 7030

FAIR WORK COMMISSION

REASONS FOR 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)

DEPUTY PRESIDENT MASSON MELBOURNE, 14 OCTOBER 2019

Appeal against decision [2019] FWC 6186 of Commissioner Lee at Melbourne on 13 September 2019 in matter number AG2019/1253 – stay application

Introduction

[1] This decision concerns an application for a stay order by Compass Group (Australia) Pty Ltd; Compass Group Healthcare Hospitality Services Pty Ltd (the Appellants). The stay order is sought pursuant to s 606 of the Fair Work Act 2009 (the Act) in relation to an appeal lodged against a decision of Commissioner Lee in Compass Group (Australia) Pty Ltd T/A ESS; Compass Group Healthcare Hospitality Services Pty Ltd T/A Medirest (Australia) Pty Ltd 1 (the Decision).

[2] 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) pursuant to s. 185 of the Act, and determined pursuant to s. 193 of the Act 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 2 (the HPSS Award), rather than the Hospitality Industry (General) Award 20103 (the HIG Award) as contended by the Appellants in proceedings before the Commissioner.

[3] Section 606(1) of the Act provides as follows:

Staying decisions that are appealed or reviewed

(1) If, under section 604 or 605, the FWC hears an appeal from, or conducts a review of, a decision, the FWC may (except as provided by subsection (3)) order that the operation of the whole or part of the decision be stayed, on any terms and conditions that the FWC considers appropriate, until a decision in relation to the appeal or review is made or the FWC makes a further order.

[4] The Appellants seek a stay of the Decision of Commissioner Lee. The practical effect of a stay would be to suspend the proceedings before Commissioner Lee, and his consideration of the application for approval of the Agreement until the appeal in this matter is determined.

[5] A hearing was conducted before me on the 11 October 2019, at which the Appellants were represented by Mr A Lambert of Herbert Smith Freehills by permission of the Commission granted pursuant to s. 596 of the Act, and by Mr Scott Crawford for the Health Services Union (HSU).

[6] The HSU advised the Commission at the outset of the hearing that it did not contest the stay order being sought. Although the stay is not contested, it remains for the Commission to decide whether to exercise its discretion to grant a stay under s.606. The application must be decided.

Grounds of appeal

[7] The Appellants raise five grounds of appeal that may be summarised 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).

Consideration

[8] It is well established that, in deciding whether to exercise its discretion to grant a stay order, the Commission must first be satisfied that the appellant has an arguable case with some reasonable prospects of success, both in respect of permission to appeal and the substantive merits of the appeal.⁴ In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed.⁵

[9] Having reviewed the grounds in the notice of appeal and the materials filed, I am satisfied that there is an arguable case for permission to appeal and that the Appellant has some reasonable prospects of success with respect to the merits of the appeal.

[10] In relation to the balance of convenience the Commissioner determined by way of a threshold issue the question of the relevant Modern Award for the purposes of the BOOT assessment. That decision is likely to be fundamental to the outcome of the Commissioner’s assessment of the BOOT and whether the Agreement was ‘genuinely agreed’ as required by s. 188 of the Act.

[11] Were a stay not granted and assuming the Appeal were successful, the Appellants would be potentially required to deal with BOOT and ‘genuinely agreed’ inquiries from the Commission which may require the provision of unnecessary responses and undertakings. In these circumstances I am persuaded that the balance of convenience favours the granting of the stay sought.

[12] As regards the terms of the stay order sought, the Appellants sought to stay both the Decision of the Commissioner and also the subsequent directions issued by the Commissioner on 1 October 2019, in relation to the filing of responses by the Appellants to the BOOT issues and other concerns held by the Commissioner. I considered the Appellants’ submission but decline to grant the breadth of the stay sought and confine the scope of the order to the Decision of the Commissioner. I do so as I believe it to be unnecessary to stay the directions of the Commissioner. The utility of those directions fall away in light of the stay of the Decision.

Conclusion

[13] I am satisfied that there is an arguable case with some reasonable prospects of success in respect of both permission to appeal and the substantive merits of the appeal. I am further satisfied that the balance of convenience weighs in favour of granting a stay.

[14] Taking all of these matters into account, I am satisfied that I should make an order staying the operation of the Decision of Commissioner Lee in PR712040, pending the determination of the appeal.

[15] The Application for a stay is granted. An order giving effect to my decision was issued separately in PR713227.

DEPUTY PRESIDENT

Appearances:

A. Lambert representing the Appellants.

S. Crawford representing the HSU.

Hearing details:

2019
Melbourne
11 October

Printed by authority of the Commonwealth Government Printer

<PR713226>

 1   [2019] FWC 6186

 2   MA000027

 3   MA000009

4 Kellow-Falkiner Motors Pty Ltd v Edghill Print S2639, 24 January 2000 at [5]; applied in Bank of Sydney Ltd v Repici[2015] FWC 5511 et al.

5 Ibid. See also Coal and Allied Operations Pty Limited v Crawford and Others (2001) 109 IR 409 at [13].