Health Services Union NSW v Health Secretary

[2017] NSWSC 1661

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Health Services Union NSW v Health Secretary [2017] NSWSC 1661
Hearing dates:	7 September 2017
Date of orders:	30 November 2017
Decision date:	30 November 2017
Jurisdiction:	Common Law
Before:	Schmidt J
Decision:	Union is entitled to declaratory relief.  The parties are directed to confer as to the terms in which that relief should be granted, to reflect the conclusions reached. The proposed orders should be filed within 7 days.
Catchwords:	INDUSTRIAL LAW – declaratory relief – Clause 17 of the Health Employees’ Conditions of Employment (State) Award – long service leave – whether employees are entitled to have past periods of continuous casual service taken into account when calculating accrued long service leave under Clause 17 – clause ambiguous – referral to the Industrial Relations Commission – how construction of the Award must be approached – no evidence led about agreement which Clause 17 of Conditions Award encapsulates – Jones v Dunkel inferences – statutory framework – history of award regulation of casual employees – casual employees with requisite continuous service acquire rights under the Long Service Leave Act – prior continuous casual service of full time and part time employees to whom Clause 17 applies must be taken into account when entitlements under Clause 17 are calculated – Clause 17 does not apply to casual employees – Union entitled to declaratory relief – parties to confer – proposed orders should be filed
Legislation Cited:	Government Sector Employment Regulation 2014 (NSW) Health Services Act 1997 (NSW) Industrial Relations Act 1996 (NSW) Industrial Relations Amendment (Industrial Court) Act 2016 (NSW) Long Service Leave Act 1955 (NSW) Statute Law (Miscellaneous Provisions) Act 1992 (NSW) Transferred Officers’ Extended Leave Act 1961 (NSW)
Cases Cited:	Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; [2005] HCA 10 Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24 George A Bond & Co Ltd (In liq) v McKenzie [1929] AR (NSW) 498 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Kennedy v Board of Fire Commissioners [1967] AR (NSW) 455 Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 Richens v Tresilian & Dun (1993) 32 NSWLR 301 Ryde-Eastwood Leagues Club Limited v Taylor (1994) 56 IR 385; [1994] NSWIRComm 112 State of New South Wales v Stockwell [2017] NSWCA 30
Category:	Principal judgment
Parties:	Health Secretary Union of New South Wales (Plaintiff) Health Secretary (Defendant)
Representation:	Counsel: M Gibian (Plaintiff) A Britt (Defendant)   Solicitors: Maurice Blackburn Lawyers (Plaintiff) Director, Industrial Relations and Workplace Change, NSW Ministry of Health (Defendant)
File Number(s):	2016/333777
Publication restriction:	None

Judgment

1. By application filed on 8 November 2016, the Health Services Union sought declaratory relief under s 154 of the Industrial Relations Act1996 (NSW), in relation to clause 17 of the Health Employees’ Conditions of Employment (State) Award. Section 154 empowered the Industrial Court to make binding declarations of right relating to a matter in which the Industrial Relations Commission had jurisdiction. The section was repealed by the Industrial Relations Amendment (Industrial Court) Act2016 (NSW). There is no issue that the power to grant such declaratory relief was thereby granted to this Court: Industrial Relations Act, s 355C.

2. Even though it is common ground between the parties that clause 17 of the Conditions Award is ambiguous, as it clearly is, they have been unable to resolve disagreements which have arisen as to the long service leave entitlements of a number of long serving employees, to whom the Conditions Award applies. There is also a dispute about whether the clause applies to casual employees.

3. The parties agreed a statement of facts, which referred to aspects of the employment history of various employees who have had a past period of continuous casual service, which in some cases had persisted over a period of many years. They are now all permanent employees.

4. The parties did not agree as to what long service leave entitlements these employees each had under clause 17. The declarations which the Union originally sought were:

“That an employee covered by the Health Employees’ Conditions of Employment (State) Award who transfers from casual employment to full-time or permanent part-time employment without a break in continuous service is entitled to have the period of casual employment taken into account for the purpose of calculating his or her long service leave entitlements under clause 17 of that Award.

In the alternative, that an employee covered by the Health Employees’ Conditions of Employment (State) Award who transfers from casual employment to permanent employment without a break in continuous service is entitled to have the period of casual employment and permanent employment taken into account for the purpose of calculating his or her long service leave entitlement under the Long Service Leave Act 1955 (NSW) to the extent that the provisions of that Act are more favourable to the employment that[sic] the provisions of the Award.”

5. In submissions finally advanced for the Union, only the first declaration was pressed, although it was finally accepted that it required amendment.

6. The making of such a declaration was opposed by the Secretary as not accurately reflecting either the correct construction of clause 17, or the provisions of the Long Service Leave Act 1955 (NSW), which the Secretary contends regulates the long service leave entitlements of some employees, including some casuals. Further, the declaration was both ambiguous and uncertain, even if the construction for which the Union contends is held to be correct.

7. It was common ground that only casual employees who have the requisite “continuous service” with an employer can acquire an entitlement to long service leave, either under s 4 of the Long Service Leave Act, or under clause 17 of the Conditions Award, if it applies to them.

8. This consensus reflects that service of casual employees is not necessarily continuous: Ryde-Eastwood Leagues Club Limited v Taylor (1994) 56 IR 385 at 401 – 402; [1994] NSWIRComm 112. There it was observed as to the two different classes of employees who may have casual employment:

“It is apparent that two classes of employee colloquially described as "casual" can readily be identified in the organisation of industrial relationships. The first class refers to those employees who are truly casual in the sense that there is no continuing relationship between the employer and the employee. The second class is where there is a continuing relationship which amounts to an ongoing or continuing contract of employment; …. Whilst the cross-over point between the above described classes may be difficult to ascertain, it being a matter of fact in each case, we are confidently of the view that the relationship particular to this case fell clearly within the class of an ongoing contractual relationship.”

9. The declaratory relief pressed for the Union was not finally reformulated. For reasons which I will explain, I am satisfied that declaratory relief should be granted, however it may be necessary to hear the parties about its precise terms.

Referral to the Industrial Relations Commission

10. Whatever the outcome of these proceedings, as the parties accepted, the complicated and ambiguous terms in which clause 17 of the Award is couched, are unsatisfactory. The clause ought to be drafted in terms by which both the Secretary and the employees to whom the Conditions Award applies, can clearly understand their respective rights and obligations, without the need for applications such as this to be pursued.

11. The Conditions Award was originally made by consent, but no evidence was led by either party as to the agreement which they had reached, which clause 17 of the Award was intended to encapsulate.

12. The Award has since been reviewed by the Commission under s 19 of the Industrial Relations Act, which required the Award to be reviewed before September 2001 and subsequently, at least once every three years.

13. During the cases which the parties advanced at the hearing, it became apparent that the aims of s 19 of the Industrial Relations Act have not yet been achieved in the case of clause 17. Award reviews are intended to identify and address problems of the kind which there plainly exist.

14. The ambiguous terms in which the clause is couched give rise to both unnecessary technicality and problems with the ease of understanding which the employees to whom the award applies, are intended to have, about the provisions which regulate their employment: s 19(3)(f). That situation is also contrary to the objects of the Act: s 19(3)(g). Those objects include facilitating appropriate regulation of employment through awards and encouraging and facilitating co-operative workplace reform and equitable, innovative and productive workplace relations: ss 3(e), (3)(h).

15. In the result, I will direct the Registrar to refer this judgment to the Chief Commissioner of the Industrial Relations Commission of New South Wales, so that the Commission may consider what steps, if any, should be taken to address the problems which presently exist with clause 17.

The parties’ cases

16. The Union’s case was that the construction of clause 17 of the Conditions Award being applied by the Secretary was wrong. First, in refusing to recognise full-time or permanent part-time employees’ prior continuous casual service, when calculating their entitlement to long service leave under clause 17. Secondly, in construing the clause as not applying to casual employees who have the necessary continuous service.

17. On the Secretary’s case, clause 17 does not apply to casual employees at all. Further, any period of prior continuous casual service, by either full-time or permanent part-time employees to whom the clause does apply, is irrelevant to the calculation of their long service leave entitlements. That was argued to reflect the correct construction of clause 17, even though the Secretary acknowledged that the result, in some cases, is that such an employee does not have entitlements as generous as those which he or she would have, if the Long Service Leave Act regulated their long service leave entitlements.

18. On the Secretary’s case, this was an outcome contemplated by s 5(1) of the Long Service Leave Act: Kennedy v Board of Fire Commissioners [1967] AR (NSW) 455. Section 5(1) provides:

“5    Exemptions

(1) Section 4 shall not apply to any worker who is employed by an employer as a member of a class of workers for whom provisions entitling the worker (whether immediately or upon the fulfilment of certain conditions) to leave in the nature of long service leave are made:

(a) by an award or agreement, whether made before or after the commencement of this Act, and such provisions are more favourable to the worker than those of section 4, or

(b) by or under any Act, other than this Act or the Industrial Relations Act 1996.

Where the worker ceases to be a member of a class of workers as aforesaid and at the same time ceases to be in the employment of the worker’s employer the service of the worker as a member of such class shall not be service for the purposes of section 4.”

19. In question in Kennedy was whether an industrial agreement which provided long service leave benefits was valid, given that in individual cases, a worker could be worse off under the agreement, than under the Long Service Leave Act. The Industrial Commission in Court Session observed at 459, that agreements which deal with long service leave must be compared to the provisions of s 4 of the Long Service Leave Act, as at the time that the agreement is made and that the comparison must be made:

“… without advance knowledge of how particular individuals may fare ultimately in their employment, it must be based on an estimate of what is likely to be best for the majority of individuals involved — in other words, on the principle of the greatest good for the greatest number. The only way to do this is to examine each set of provisions as a whole, weighing the various pros and cons and arriving at a final balance on an overall basis. This means that the workers have to be considered as a group over the whole range of their possible employment. This may involve speculation often on imprecise material but, in the end, the answer must be ‘Yes’ or ‘No’.”

20. Neither party suggested that Kennedy had been wrongly decided. Nor did the Union contend that clause 17 of the Award was invalid, even if the Secretary’s construction was correct.

21. That reflects, no doubt, that for those to whom the clause does apply, who have not had any prior casual employment, the long service leave benefits which they receive under that clause are considerably more generous than those provided by s 4 of the Long Service Leave Act.

How the construction of the Award must be approached

22. The Union’s case was that where ambiguity exists in an award, as it does in the case of clause 17, it should be resolved in favour of affording employees a more generous entitlement, rather than depriving them of a benefit which is reasonably open on the words used in the award.

23. As discussed in State of New South Wales v Stockwell [2017] NSWCA 30 at [68], in construing an award attention must be paid to the language used, “understood in the light of its industrial context and purpose and its operation as a whole as well as the legislative background against which it was made and in which it was to operate”: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; [2005] HCA 10.

24. Further, as observed long ago by Street J in George A Bond & Co Ltd (In liq) v McKenzie [1929] AR (NSW) 498 at 503 – 504:

“… speaking generally, awards are to be interpreted as any other enactment is interpreted. They lay down the law affecting employers and employees in their relations as such, and they have to be obeyed to the same extent as any other statutory enactment. But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result ... from an agreement between the parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore, in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award.”

25. In resolving what is in issue, it is thus necessary to consider the relevant award history and legislative context in which the parties agreed to clause 17.

No evidence led about the agreement which clause 17 of the Conditions Award encapsulates – Jones v Dunkel inferences

26. It was common ground that clause 17 was inserted into a predecessor to the Conditions Award by consent. Neither party led evidence about what the award parties then agreed, either about the employees to whom the clause was to apply, or how the service of such employees was to be calculated.

27. That there was no such evidence led, supports the conclusions I have reached about both of the matters lying in issue between the parties.

28. Such an agreement could have been evidenced in writing; it could have been addressed at the hearing of the award application, either by evidence or the parties’ submissions; or it could have been dealt with in the Commission’s decision when the award was made. Oral evidence could also have been called from those involved in the negotiations which led to the making of the agreement.

29. That no such evidence was led by either party gives rise to obvious inferences: Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8. The principles there established are concerned with a party's unexplained failure to lead evidence which it would naturally lead, or which it might reasonably be expected to lead.

30. In such a case the three relevant considerations are first, that the evidence would be expected to be called by one party, rather than the other; secondly, that this evidence would elucidate a particular matter; and thirdly, that the absence is unexplained: RHG Mortgage Limited v Rosario Ianni [2015] NSWCA 56 at [75] - [96]. When those conditions are satisfied, the inference that the evidence would not have helped the party's case, may be drawn.

31. In this case it I am satisfied, as I will explain further, that it must be inferred on one hand, that there is no evidence supporting the existence of an agreement that prior continuous casual service would not be taken into account, when the service of an employee to whom clause 17 applies, is calculated, which was to be encapsulated in the clause. On the other, that there is no evidence supporting the existence an agreement, to be encapsulated in the clause, that the more beneficial long service leave entitlements there provided, would apply to any casual employees, to whom no reference is made in the clause.

The statutory framework

32. The meaning of clause 17 of the Conditions Award must be approached within the statutory framework within which the award was made.

The Health Services Act 1997 (NSW)

33. The starting point is the Health Services Act 1997 (NSW), which provides in s 116 for the employment of staff by the Government of New South Wales, to enable specified functions to be exercised by bodies and offices there identified. Section 115(1) provides that the NSW Health Service “consists of those persons who are employed under this Part by the Government of New South Wales in the service of the Crown”. They are not employed in the Public Service of New South Wales: s 115(2).

34. Section 116(2) provides that “[t]he employment of staff in the NSW Health Service, including the exercise of employer functions in relation to that staff, is subject to the requirements of this or any other Act relating to that staff.”

35. Section 116A empowers the Health Secretary to fix the salary, wages and conditions of employment of staff so employed, to the extent they are not fixed by or under any other law. By s 116H the Secretary is taken to be the employer for the purpose of proceedings before a competent tribunal having jurisdiction to deal with “industrial matters”, as defined in the Industrial Relations Act.

The Industrial Relations Act 1996 (NSW)

36. Various awards have been made by the Commission under s 10 of the Industrial Relations Act, to apply to those employed in the NSW Health Service. That section empowers the Commission to make awards which set "fair and reasonable conditions of employment for employees”.

37. Contrary to the case advanced for the Health Secretary, s 10 does not empower the Commission to make awards which prohibit employment in the Health Service, on terms agreed between the Health Secretary and an individual.

38. It is long settled that employment is a relationship of contract under which the right to receive wages for work performed springs: Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 73. As discussed by Latham CJ in Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 at 423:

“When any person is employed to do work to which an award applies, the parties are bound by a contract. Their legal relations are in part determined by the contract between them and in part by the award. The award governs their relations as to all matters with which it deals. This result is produced by secs. 83 and 176. Sec. 83 provides that an award is to be a common rule and that it shall be binding on all employers and workers engaged in the industry to which it applies. Sec. 176 (1) avoids contracts so far as they purport to annul or vary the terms of an award, and sec. 176 (2) provides that every worker shall be entitled to be paid by an employer in accordance with any relevant award, notwithstanding any contract to the contrary. Thus, the award controls the relations of the parties as to all matters to which it applies.

But an award never deals with all the matters which affect the relations of any particular employer and any particular employee. The creation of the relation of employer and employee depends upon an agreement between them and not upon any award. Thus, the existence of the obligations under an award in relation to a particular employer and employee always depends on the existence of a contract between them. So, also, there are terms of their relationship which do not depend upon any award. For example, the employee must always obey the lawful orders of his employer, but awards do not commonly include a term to that effect.”

39. The Industrial Relations Act still contains such provisions in ss 12 and 406. The latter provides:

“406    Awards and other industrial instruments provide minimum entitlements

(1)    The conditions of employment set by an industrial instrument are the minimum entitlements of employees.

(2)    The provisions of a contract of employment or other contract do not have effect to the extent that they provide an employee with a benefit that is less favourable to the employee than the benefit to which the employee is entitled under an industrial instrument.”

40. In its terms, s 10 of the Industrial Relations Act does not empower the Commission to make an award which prevents the Health Secretary and an individual from entering into a contract of employment on terms different to those provided by an award. The section is not concerned with what is offered before employment is accepted, or with the terms on which the contracting parties agree.

41. It is only once a contract of employment comes into existence, that it can attract the provisions of a legislative scheme such as the Long Service Leave Act, or an award made by the Commission under s 10. Those provisions then apply to the employment which the parties have agreed will come into operation. In the result, once the parties have entered into an employment contract, they will be bound by the minimum terms of such legislation, or of an award which applies to the employment, unless the contractual terms which they have agreed to are more generous. In that event, the parties remain bound by their contract.

42. The Industrial Relations Act thus contemplates that employers who wish to attract individuals to accept, or continue employment, are entitled to offer as an inducement conditions or rates of pay which are more generous than the minimum provisions imposed by an applicable award or legislative scheme. Conversely, employees are entitled to offer or accept employment on such terms.

43. It is only once the contract comes into existence, that the question of whether what the parties have agreed is more generous than the minimum conditions of a legislative or award provision, can arise for determination.

The Long Service Leave Act 1955 (NSW)

44. What was agreed in clause 17 of the Conditions Award must be approached in light of the provision made in the Long Service Leave Act, as the parties contended, given the limitation on the Commission’s award making powers imposed by s 6. Thereby the Commission may not “insert any provisions relating to long service leave unless those provisions are more favourable to workers than the provisions of s 4”: Long Service Leave Act, s 6.

45. Section 4 provides for specified periods of long service leave on ordinary pay, for a worker’s continuous service with an employer, “whether on a permanent, casual, part-time or any other basis, under one or more contracts of employment”: s 4(11). “Worker” is defined in s 3 to mean a:

“person employed, whether on salary or wages or piecework rates, or as a member of a buttygang, and the fact that a person is working under a contract for labour only, or substantially for labour only, or as lessee of any tools or other implements of production, or as an outworker, or is working as a salesman, canvasser, collector, commercial traveller, insurance agent, or in any other capacity in which the person is paid wholly or partly by commission shall not in itself prevent such person being held to be a worker but does not include a person who is a worker within the meaning of the Long Service Leave (Metalliferous Mining Industry) Act 1963.”

46. A “casual” contract of employment is not defined in this Act. It thus takes its ordinary meaning.

47. Section 8 requires employers to keep a long service leave record, in a form approved by the Minister. It appears, however, that since this provision was inserted into the Act in 1992 by the Statute Law (Miscellaneous Provisions) Act 1992 (NSW), no Minister has ever approved such a form, inconsistently with the Parliamentary intention that employers maintain such records, upon risk of penalty. The predecessor to s 8 required that:

“Every employer shall keep or cause to be kept a long service leave record in or to the effect of the form and containing the particulars prescribed for a period of at least 6 years after the last entry therein.”

48. Sections 10, 10A and 10B of the Act still, however, impose penalties for failures to comply with requirements of the Act, including s 8. That incentive seems, however, to have been frustrated, in the case of the obligation to keep long service leave records, as the result of Ministerial inaction.

49. In this case, the nature of the records which the Secretary maintains, because of the view taken of the proper construction of clause 17 of the Award, has also been a matter of disagreement between the parties. From the parties’ submissions, it became apparent that resolution of what was in dispute, would have been assisted if there had been an approved form of long service leave record, which the Secretary was obliged to keep.

50. This omission would be one which the current Minister could usefully address. In this case, it has become apparent that the failure to approve a form of long service leave record, as s 8 contemplates, has led to a situation where both employees and the Secretary potentially face real evidentiary difficulties, if a disputed claim for long service leave has to be determined by a court.

51. That, no doubt, explains the paucity of the facts which the parties were able to agree in this case.

52. Entitlement to long service leave arises in the circumstances specified in s 4(2)(a):

“(a)    Subject to paragraph (a2) and subsection (13) the amount of long service leave to which a worker shall be so entitled shall:

(i)    in the case of a worker who has completed at least 10 years service with an employer be:

(A)    in respect of 10 years’ service so completed, 2 months, and

(B)    in respect of each 5 years’ service with the employer completed since the worker last became entitled to long service leave, 1 month, and

(C)    on the termination of the worker’s services after the completion of 15 years’ service, in respect of the number of years’ service with the employer completed since the worker last became entitled to an amount of long service leave, a proportionate amount on the basis of 2 months for 10 years’ service, and

(ii)    in the case of a worker who has completed at least 10 years service but less than 15 years with an employer and whose services with the employer are terminated or cease for any reason, be a proportionate amount on the basis of 3 months for 15 years service, and

(iii)    in the case of a worker who has completed with an employer at least five years service, and whose services are terminated by the employer for any reason other than the worker’s serious and wilful misconduct, or by the worker on account of illness, incapacity or domestic or other pressing necessity, or by reason of the death of the worker, be a proportionate amount on the basis of 2 months for 10 years service.”

53. Service is deemed to be continuous despite breaks, in circumstances which include those specified in s 4(11)(a1), namely:

“(a1)    the service of a worker with an employer shall be deemed to be continuous notwithstanding that the service has been broken by reason only of an interruption or determination thereof:

(i)    caused by the absence of the worker under the terms of the worker’s employment,

(ii)    caused by the absence of the worker on account of illness or injury,

(iii)    made by the employer with the intention of avoiding any obligation imposed on the employer by this Act or by any obligation in relation to sick leave imposed on the employer by a State industrial instrument,

(iv)    arising directly or indirectly from an industrial dispute,

(v)    made by the employer by reason of slackness of trade,

(vi)    arising from the absence of the worker for any cause by leave of the employer, or

(vii)    caused by the employer for any reason other than those referred to in subparagraphs (iii)–(v) where the worker returns to the service of, or is re-employed by, the employer within 2 months of the date on which the service was interrupted or determined,

but the period during which the service is so interrupted or determined shall not in the circumstances referred to in subparagraphs (iii)–(vii), by reason only of this paragraph, be taken into account in calculating the period of service.”

54. Section 4(11)(c) also makes provision for continuity of service in the case of transmission of a “business, undertaking or establishment or any part thereof”, where the employee becomes a worker in the employ of the transmittee. The Act also makes provision for continuity of service in cases where an employee transfers from the service of a corporate employer, to the service of a related corporation: s 4(11)(c) - (f). “Corporation” is defined in s 4(13) to mean “any body corporate formed or incorporated in or outside New South Wales” and “holding company and subsidiary” are defined “to have the same meanings as they have in the Corporations Act 2001 of the Commonwealth”.

55. Whether, in a particular case, a casual employee’s service has the necessary continuity, thus depends not only on the terms of the employee’s contract or contracts of employment, but also on whether, at the time that an entitlement to long service leave arises under the Long Service Leave Act, the employee has the requisite continuous service.

56. While s 7 of the Long Service Leave Act provides that its provisions have effect “notwithstanding any stipulation to the contrary whether made before or after the commencement of this Act” and precludes parties from contracting out of the Act’s provisions, s 5 “Exemptions” specifies circumstances in which exemptions apply including, relevantly, where an award contains provisions more favourable to the worker than those provided by s 4.

The history of award regulation of casual employees

57. It was common ground that casuals have been employed in the Health Service for many years. The agreed facts identify that in one case, casual employment commenced as long ago as 1978, at a time when such employment was not regulated by award.

58. On the Secretary’s case, casual employment in this industry was only first regulated by an award made by Hungerford J in 2000: the Health Industry Status of Employment Interim (State) Award.

The 1998 Conditions Award

59. The first Conditions Award appears to have been made in March 1998. Clause 17 “Long Service Leave” of that Award was concerned with continuous service in one or more hospitals: cl 17(ii)(a). That clause provided that such service did not include any period of part-time service, except as provided in subclause (vi), which dealt with the situation of full-time employees who had previously worked part-time, for a period equivalent to two full days’ duty per week.

60. This clause made no reference to casual employees, or prior casual employment. Nor did the award otherwise deal with casuals.

61. It follows that the 1998 Conditions Award did not preclude casuals from accruing rights to long service leave, if they achieved the requisite continuous service on which the entitlement to long service leave depends: s 4(11) Long Service Leave Act. The 1998 Award did not apply to casuals and so no exemption can have arisen in respect of their long service leave entitlements, under s 5 of the Long Service Leave Act.

The 2000 Interim Status Award

62. The 2000 Interim Status Award applied to “officers in the classifications falling within the jurisdiction of the Public Health Employees (State) Conciliation Committee”: cl 9 “Area Incidence and Duration”. It did not define the word “officer”, nor did it deal with long service leave. It did define the term “casual employee” in cl 1.3 to mean:

“… a person who may be engaged on an hourly basis, for a period which does not extend beyond one week, to provide services related to the unexpected absence of temporary, permanent or exempt employees. This provision may also encompass short-term employment associated with unanticipated peak demands.”

63. The 2000 Interim Award provided for payment of such casual employees, at the same rate hourly as full-time employees, with a 10% loading and a minimum payment of 2 hours per shift: cl 4.1 “Loadings”. It also dealt in clause 2 “Principles”, with the expectations of employees who are engaged in meaningful work on a continuing basis to permanency of employment, in terms which it is not necessary here to repeat. Given the narrow definition of the term “casual employee”, however, it is apparent that clause 4 of this award did not apply to all casual employees, but only those who fell within the defined term.

64. The agreed facts did not deal with the question of whether any of the employees there dealt with, fell within the definition of “casual employee” first adopted in the 2000 Interim Status Award.

65. Mr Millionis, for example however, does not appear to have fallen within the definition. He worked as a casual between August 2007 and February 2012, when he accepted an offer of permanent full-time employment. That during this period he was employed either “for a period which does not extend beyond one week, to provide services related to the unexpected absence of temporary, permanent or exempt employees”, or to “encompass short-term employment associated with unanticipated peak demands” is not apparent on what was agreed.

66. Mr Millionis’ continuous casual service over that period of time thus does not appear to fall within this definition.

67. In other cases, Ms Carey for example, the employee’s continuous casual service predated any award regulation of casual employment, she having worked as a casual from August 1978 to September 1990. That service appears to have resulted in the accrual of entitlements under s 4 of the Long Service Leave Act, before she became a permanent employee in 1990.

The 2008 Status Award

68. The current Health Employees’ Status of Employment (State) Award took effect from November 2008: cl 8.1 “Area, Incidence and Duration”. It applies to persons employed in classifications contained in the Awards identified in Schedule A, where reference is made to the Conditions Award: cl 8.2 and Schedule A, 12. It defines “employee” in clause 1.2 to mean:

“a person who is engaged on either a full-time, part-time, temporary, exempt or casual basis under a contract of employment in the NSW Health Service under s 115(1) of the Health Services Act 1997.”

69. A “casual employee” is still, however, defined in clause 1.3 of the 2008 Status Award, as it was in the 2000 Award. Provision for a 10% loading and minimum 2 hour start for casuals is also still there provided: cl 3.1.

70. It follows that any casual employee who is presently employed for purposes other than “unexpected absence of temporary, permanent or exempt employees” or for “short-term employment associated with unanticipated peak demands” does not fall within the definition of “casual employee”. Their contracts of employment could, of course, provide that the award provisions which apply to casual employees is to apply to them. There was, however, no evidence about this.

71. The 2008 Status Award also does not deal with long service leave. In cl 2 “Principles” of the Status Award, it is now provided that:

“2.1   Employees who are engaged in meaningful work on a continuing basis are entitled to an expectation of permanency of employment subject to the provisions of this award.

2.2   It is the responsibility of the employer to ensure that all employees, upon engagement and at all appropriate times, are correctly classified as exempt, casual, temporary, or permanent according to the above definitions.

2.3    Where a person changes from casual to either temporary or permanent, the employment status of the person is deemed to have changed automatically.

2.4   During the period of continuing employment the status of an employee cannot be changed from permanent to temporary or casual or from temporary to casual, without the prior written consent of the employee.

2.5    All permanent employees are required as part of their contract of employment, to use their best endeavours to provide four weeks notice of their intention to terminate their employment contract.

2.6    Any position which would involve the employment of an exempt, temporary or permanent employee, upon falling vacant, will, where such a position continues to be required in its current form by the Health Service, be advertised within the Health Service and/or external to the Health Service.  Positions should be filled under the merit principle of selection.

2.7    A person who, by definition, is a temporary employee for a period of less than 13 weeks may be re-engaged by the same Health Service under more than one employment contract provided the aggregate period of the contracts, where consecutive, does not exceed 13 weeks.

2.8     Where the employee is retained beyond a continuous period of 13 weeks in the same position the employee is deemed to be permanent, subject to the outcome of any appeal. The application of this sub clause shall not be applied in a manner which is inconsistent with legislation or Government recruitment and employment policy, as varied from time to time. This subclause does not apply to an exempt employee as defined.”

72. The effect of clause 2 appears to include that those casuals who fall within the definition of “casual employee”, who “are engaged in meaningful work on a continuing basis are entitled to an expectation of permanency of employment”, in accordance with the terms of the clause.

73. In the case of inconsistency between the Status Award and the Awards specified in “Schedule A”, which includes the Conditions Award, the Status Award is to prevail: cl 5.2. Neither party contended, however, that there was any inconsistency between the 2008 Status Award and the Conditions Award.

The Conditions Award

74. The current Conditions Award was made to take effect on 1 July 2016. It replaced the 2015 Conditions Award and applies to persons employed in the NSW Health Service in classifications contained in a number of other identified awards: cl 49 “Area, Incidence and Duration”. The 2008 Status Award is not there referred to, nor is the term “casual employee” there defined. There was also an earlier 2006 Conditions and a 2008 Conditions Award, to which it is not presently necessary to refer.

75. It follows that if a person is employed in a classification in one of the award specified in clause 49, including on any casual basis, the Conditions award will apply to him or her. That is because neither the word “employee”, nor the term “casual employee” are defined in this Award and so must both take their ordinary meaning, that encompassing the two types of casual employees identified in Ryde-Eastwood Leagues Club Limited.

76. Clause 6 of the Conditions Award deals expressly with permanent part-time and part-time employees, making provision for matters such as their working hours, rosters and various benefits. There is no comparable clause dealing generally with casual employment.

77. There is, however, limited reference to casuals in the Conditions Award. In clause 28, “Family and Community Services Leave and Personal Carers’ Leave”, for example, it is expressly provided that casual employees as defined in the Status Award, are to be entitled to such leave: cl 28(iii). There is no such provision made, however, in clause 17, in respect of long service leave.

74. Some award conditions, for example clause 41A “Lactation Breaks” do not on their face exclude casuals, that clause applying as it does to “employees who are lactating mothers”: cl 41A(i).

75. Other clauses, including clause 189 “Payment and Particulars of Salary”, clause 20 “Termination of Employees”, clause 21 “Accommodation and Amenities”, clause 23 “Uniform and Protective Clothing, clause 26 “Dispute resolution”, clause 27 “Anti-Discrimination”, clause 44 “Salary sacrifice”, clause 45 “Salary packaging”, clause 46 “Reasonable Hours”, clause 47 “Induction and Orientation”, also all apply to “employees”, without drawing any distinction between full-time, part-time or casual employees.

76. Some clauses, however, expressly apply only to full-time employees, for example, clause 42 “Study leave”. Others refer only to full-time or permanent part-time employees: cl 41 “Maternity Adoption and Parental Leave” and cl 18 “Sick leave”. Others apply to those employed under identified awards: clause 39 “Removal Expenses”.

Casual employees with requisite continuous service acquire rights under the Long Service Leave Act

81. Contrary to the case advanced for the Secretary, none of the Award provisions I have discussed prohibit the Secretary entering into an employment contract which provides for conditions of casual employment more generous than those provided by these awards: Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 421; [1995] HCA 24.

82. In the result, it cannot be inferred that since the adoption of the definition of casual employee in the Status Award in 2000, all casuals employed in the Health Service have been employed under contracts which have never extended beyond one week, as the Secretary contended. To the contrary, clause 2 “Principles” itself contemplated that there could be continuous service, even of such employees.

83. Nor can it be inferred that no casual presently employed in the Health Service, has had continuous service of the kind discussed in Ryde-Eastwood Leagues Club Limited. If a casual has had continuous service which falls within the definition in s 4 of the Long Service Leave Act, unless clause 17 of the Conditions Award applies to that employee, he or she will thereby acquire an entitlement to long service leave. Such an employee will then be entitled to take long service leave in accordance with the provisions made in that Act, or to have the leave paid out, when the employment terminates: s 4.

84. Some of the identified employees were employed as casuals over the course of many years, with some having commenced their employment many years before 2000. There is no evidence upon which it may be concluded that after the making of the 2000 Interim Status Award, any contracts of employment which permitted such continuous casual employment came to an end, as they could have, either upon the giving by either party of the requisite notice, or by agreement.

85. If such an agreement was entered, however, in order to ensure that the employee did not achieve rights under the Long Service Leave Act, it would be contrary to s 7(2), which provides that such a contract or agreement shall not “operate to annul or vary or exclude any of the provisions of this Act”.

86. That any such continuous casual service was brought to an end by the making of any of the awards to which I earlier referred, also cannot be accepted. The Industrial Relations Commission has no power to make an award purporting to have that effect.

87. Further, if an award did purport to bring ongoing continuous casual employment to an end, or to prevent such employment coming into existence, in order to preclude the employee from attaining benefits under the Long Service Leave Act, it could not be valid. That is because such an award could not be one which sets “fair and reasonable conditions of employment” and would be contrary to s 6 of the Long Service Leave Act, by which the Commission may only make an award that is “more favourable to workers than the provisions of section 4”.

88. Whether or not a particular employee who has had a period of casual service, has attained the requisite period of continuous service, is a matter of fact which must be determined in each case. The answer will depend on the terms of each individual’s contract or contracts of employment; his or her work history; and whether it is the Long Service Leave Act, or the Conditions Award, which regulates the employee’s entitlement to long service leave.

The application of clause 17 of the Conditions Award to casual employees

The provisions of the clause

89. Given the complexity and ambiguity of clause 17, it must be set out in full, in order to understand the conclusions I have reached. It provides:

17.    Long Service Leave

(i)   (a)   Each employee shall be entitled to two months long service leave on full pay after ten years of service; thereafter additional long service shall accrue on the basis of five months long service leave on full pay for each ten years service.

Employees with at least seven years service and less than 10 years service are entitled, proportionate to his or her length of service, to proceed on a proportionate period of long service leave on the basis of two months' long service leave for ten years' service on full pay.

(b)   Where the services of an employee with at least five years service and less than seven years service are terminated by the employer for any reason other than the employee's serious and wilful misconduct, or by the employee on account of illness, incapacity or domestic or other pressing necessity, he/she shall be entitled to be paid a proportionate amount for long service leave on the basis of two months' long service leave for ten years' service.

Where the services of an employee with at least seven years and less than 10 years service are terminated by the employer or by the employee, he/she shall be entitled to be paid a proportionate amount for long service leave on the basis of two months' long service leave for ten years' service. Where the services of an employee with at least 10 years service are terminated by the employer or by the employee, he/she shall be entitled to be paid on the basis of two months' long service leave for ten years' service and thereafter on the basis of five months long service leave for each ten years service.

(ii)    For the purposes of subclause (i) of this clause:

(a)    Service shall mean continuous service with the employer. For the purpose of this paragraph, continuous service will be determined in accordance with the provisions of Section 17 of the NSW Health Policy Directive PD2014_029 Leave Matters for the NSW Health Service, as amended from time to time.

(b) Broken periods of service with the employer in one or more hospitals shall count as service.

(c)    Service shall not include –

(1)    any period of leave without pay, except in the case of employees who have completed at least ten years service (any period of absence without pay being excluded there from), in which case service shall include any period of leave without pay, not exceeding six months, taken after the 1 January 1973;

(2)    any period of part-time service, except as provided for in subclause (ix) of this clause.

(iii)    An employee with an entitlement to long service leave may elect to access such entitlement:

(a)    on full pay;

(b)    on half pay; or

(c)    on double pay.

(iv)    When an employee takes long service leave, the leave entitlement will be deducted on the following basis:

(a)    a period of leave on full pay - the number of days so taken;

(b)    a period of leave on half pay - half the number of days so taken; or

(c)    a period of leave on double pay - twice the number of days so taken.

(v)    When taking long service leave and an employee would otherwise have had a rostered shift fall on a public holiday during that period, the amount of long service leave to be deducted is to be reduced by one day for the public holiday.

(vi)    Long Service Leave shall be taken at a time mutually arranged between the employer and the employee.

(vii)

(a)    On the termination of employment of an employee, otherwise than by his/her death, an employer shall pay to the employee the monetary value of all long service leave accrued and not taken at the date of such termination and such monetary value shall be determined according to the salary payable to the employee at the date of such termination: unless the employee transfers his or her leave entitlement in accordance with Section 17 of the NSW Health Policy Directive PD2014_029 Leave Matters for the NSW Health Service, as amended from time to time.

(b)    Where an employee who has acquired a right to long service leave, or after having had five years and less than ten years service dies, the widow or the widower of such employee, or if there is no such widow or widower, the children of such employee, or if there is no such widow or widower, the children of such employee, or if there is no such widow, widower, or children, such person who, in the opinion of the employer, was at the time of the death of such employee, a dependent relative of such employee, shall be entitled to receive the monetary value of the leave not taken or which would have accrued to such employee, had his/her services terminated as referred to in paragraph (b) of subclause (i) of this clause and such monetary value shall be determined according to the salary payable to the employee at the time of his/her death. Where there is a guardian of any children entitled under this paragraph the payment, to which such children are entitled, may be made to such guardian for their maintenance, education and advancement. Where there is no person entitled under this paragraph to receive the monetary value of any leave payable under the foregoing provisions payment in respect thereof shall be made to the legal personal representative of such employee.

(viii) The provisions of subclauses (i) to (v) of this clause shall not apply to part-time employees who receive an adjusted hourly rate (as defined per clause 6, Part 2, of this Award). Such employees shall be entitled to long service leave in accordance with the provisions of the Long Service Leave Act 1955, and/or Determination made under the Health Services Act 1997.

(ix)    A full-time employee shall be entitled to have previous part-time service which is the equivalent of at least two full days' duty per week taken into account for long service purposes in conjunction with fulltime service on the basis of the proportion that the actual number of hours worked each week bears to forty hours, provided the part-time service merges without break with the subsequent full-time service.

A permanent part-time employee shall be entitled to have previous part-time service which is the equivalent of at least two full days' duty per week taken into account for long service leave purposes in conjunction with full-time or permanent part-time service on the basis of the proportion that the actual number of hours worked each week bears to 35 hours for Radiographers and Radiation Therapists and 38 hours for other employees, provided that the part-time service merges without break with the subsequent full-time or permanent part-time service.

(x)    Except as provided for in subclause (xi) of this clause, rights to long service leave under this clause shall be in replacement of rights to long service leave, if any, which at the date of commencement of this Award may have accrued or may be accruing to an employee and shall apply only to persons in the employ of the employer on or after the date of commencement of this Award. Where an employee has been granted long service leave or has been paid its monetary value prior to the date of commencement of this Award, the employer shall be entitled to debit such leave against any leave to which the employee may be entitled pursuant to this clause.

(xi)    The following provisions shall apply only to employees employed in a hospital at the 1 January 1973:

(a)    An employee who –

(1)    has had service in a hospital, to which clause 5, Climatic and Isolation Allowance, applies, prior to the 1 January 1973;

(2)    Is employed in a hospital, to which the said clause 5 applies, at 1 January 1973 shall be granted long service leave in accordance with the long service leave provisions in force prior to the 1st January, 1973, in lieu of the provisions provided by this Award where such benefits are more favourable to the employee.

(b)    An employee employed –

(1) as a part-time employee at the 1st January 1973 may be allowed to continue to be granted long service leave in accordance with the long service provisions in force prior to the 1st January 1973 in lieu of the provisions of the Long Service Leave Act 1955, as provided for in sub-clause (viii) of this clause;

(2)    on a full-time basis at 1 January 1973, but who had prior part-time service, may be allowed to continue to be granted long service leave in accordance with the long service leave provisions in force prior to 1 January 1973, in lieu of the provisions provided by this award where such benefits are more favourable to the employee.

(c)    Provided that full and part-time employees who were employed in a public hospital as at 1 January 1973, and who had or were having service accrued at either time and one-half or double time, shall retain the option of having long service leave entitlements accrue under the old award provisions. This proviso shall apply regardless of any breaks in the continuity of service.”

90. It is settled that long service leave is a reward for long service and to provide for respite from work, for recuperative purposes: Kennedy at 456. The long service leave provided by clause 17 is considerably more generous than that provided by the Long Service Leave Act in amount; when leave accrues and may be taken; and what is to be paid on termination of employment. The Award also deals differently with continuity of service.

91. Why parties to awards which apply to employees in the Health Industry would agree to more generous leave provisions for long serving employees, than those provided by the Long Service Leave Act, is not difficult to appreciate, given the nature of the work performed in that industry. As the parties came to agree, clause 17, on its face, however, does not apply to all such employees, despite what the wide opening words of clause 17(i) that “each employee shall be entitled to” the long service leave there specified, immediately suggest.

92. How the leave of full-time and part-time employees who have past continuous service as a casual employee is calculated under clause 17, is still in issue. The question is whether any prior continuous casual service can be taken into account at all.

93. That depends on the proper construction of clause 17(ii) of the Conditions Award, which deals with the concept of ‘service’.

94. There is no question that under the Long Service Leave Act, so long as an employee’s service has the necessary continuity, past regular and ongoing casual service must be taken into account, in calculating the employee’s leave entitlement. The Health Secretary implements clause 17 of the Conditions Award, however, where there is no express exclusion for past continuous casual service being taken into account when long service leave entitlements are calculated, on the basis that such service is not relevant.

95. That approach is undoubtedly less favourable to those employees, than the provisions made in s 4 of the Long Service Leave Act, but the evidence sheds no light on how it was that the Commission was persuaded that it had power to make an award containing such a condition, if that is what clause 17 provides.

96. The facts which the parties agreed also shed no light on the past or present contractual arrangements of the employees there dealt with, who have each had past continuous service as a casual. If written, they have not been tendered and if oral, no evidence has been led as to their terms. Nor did the agreed facts address what, if any, breaks there had been in any of the employees’ service.

97. What was agreed included when each employee was first employed as a casual; the hours they worked in identified periods; and the identified capacities in which they worked, prior to them taking up their current full-time or part-time employment.

98. The parties’ agreement therefore leaves open the possibility that a casual with such a work history entered into only one contract of employment, a contract which originally provided for casual employment, but was later varied when permanent full-time or part-time employment was accepted. In that event, the original contract still remains on foot and there could be no possible question about the continuity of the employee’s service, albeit some of it being casual service.

99. Alternatively, over time the parties could have entered a series of contracts. In such a case, whether the employee’s service had the requisite continuity, depends on the circumstances in which each contract was entered, the ongoing service then provided and how the Conditions Award treats any breaks in service.

100. It is possible that such an employee’s casual employment came to an end in circumstances where the employee had already accrued an entitlement to long service leave under the Long Service Leave Act, which should have been paid out on the termination of that employment. It is also possible that the employment may have continued unbroken, despite the termination of the casual contract and entry into a further contract or contracts. This is a matter for evidence in each case.

101. The Union contended, however, that to interpret clause 17 as rendering irrelevant to the calculation of an employee’s continuous service, any service which had been given under a continuous contract of casual employment, would be antithetical to the purpose of the clause and would not accord with what s 6 of the Long Service Leave Act provided - it contemplating that an award should not contain “provisions relating to long service leave unless those provisions are more favourable to workers than the provisions of section 4”.

102. There is obvious force in these submissions, but the Secretary contended that this was a possibility of the kind dealt with in Kennedy, namely, that when the clause was inserted into the predecessor to the Conditions award, the provisions as a whole were weighed and the various pros and cons considered, with the result that it was concluded that the final balance which the clause achieved, was more favourable than what the Long Service Leave Act provides workers.

103. The difficulty with this submission is twofold. First, there is no evidence as to the basis on which the Commission was persuaded in 2015 to make the award which first included clause 17 in its current form. Such evidence could have established that in this required balancing exercise, consideration was given to continuous casual service not being taken into account, for the purpose of calculating the benefits provided by the clause, even though no reference at all is made to such casual service in the clause.

104. This is the second difficulty. That the clause makes no express provision for such service not being taken into account, suggests that if the parties had agreed that this was what was to be encapsulated in the clause, despite the absence of any reference to such an exclusion, the parties would have drawn the exclusion to the Commission’s attention at the hearing of the application; would have advanced an explanation of how the clause was to operate; and how it was that the clause was not, in those circumstances, inconsistent with s 5 of the Long Service Leave Act and thus within the Commission’s power to make, given the provisions of s 6.

105. The Secretary led no evidence about such matters. The case was rather advanced by submissions directed to the provisions of the 1998, 2006 and 2015 Conditions Awards and the Status Awards, which I have already discussed. What, if anything, it was about the provisions made in the clauses which preceded the current clause 17, which supported the approach adopted to the construction of the current clause 17, is not clear to me.

90. At the time of the 1998 Conditions Award, casual employment was not regulated by award. The 2000 Status Award introduced regulation of some casual employment, as I have explained. When the 2006 Conditions Award was made, it provided in clause 17(ii)(a) that “continuous service” was to have the same meaning as in the Transferred Officers’ Extended Leave Act 1961 (NSW).

91. That legislative scheme made provision for how periods of continuous employment with one employer, of persons employed in identified areas of public sector employment, including Commonwealth public sector employment and specified service with the armed forces, was to be taken into account, for the purpose of calculating entitlements to extended leave as an employee in the service of a second public sector employer. That legislative scheme did not deal with the type of employment which a person had elsewhere in the public sector, but with “continuous employment”. Nor did the Act deal with the concept of continuous service as a casual, which was dealt with in the Long Service Leave Act.

92. In clause 17(ii) of the 2008 Conditions Award it was provided that:

“(ii)    For the purposes of subclause (i) of this clause:

(a)    Service shall mean continuous service with the employer. For the purpose of this paragraph, continuous service will be determined in accordance with the provisions of the NSW Health Policy Directive PD2006_096 Staff Mobility, as amended from time to time.

(b)    Broken periods of service with the employer in one or more hospitals shall count as service.

(c)    Service shall not include –

(1)    any period of leave without pay, except in the case of employees who have completed at least ten years service (any period of absence without pay being excluded there from), in which case service shall include any period of leave without pay, not exceeding six months, taken after the 1 January 1973;

(2)    any period of part-time service, except as provided for in subclause (ix) of this clause.”

109. This new provision also made no reference to continuous casual service being excluded for the purpose of an employee’s entitlement to the long service leave provided in clause 17. Clause 17(ii) now provides that continuous service is to be determined “in accordance with” s 17 of the 2014 NSW Health Staff Mobility Directive, which is annexed to this judgment.

110. What clause 17 of the Conditions Award has not adopted are the provisions made in s 7 “Long Service Leave” of that Directive, which includes s 7.4.1 “Continuous Service” and s 7.5 “Part-time and casual employees – Long Service Leave Provisions”, where continuity of service for long service leave is also dealt with in s 7.5.2. Sections 7.4.1 and 7.5.2 of the Directive provide:

“7.5.1 Entitlement for Long Service

Part-time and casual employees may be entitled to long service leave after working for an unbroken period of ten years for an employer. The entitlement is for two months paid leave after ten years’ service and one month paid leave for each additional five years’ service.

An employee who has completed five years’ service (but less than ten years’ service) is entitled to a pro rata long service leave payment if they resign as a result of illness, incapacity, domestic or other pressing necessity, are dismissed for any reason other than serious and wilful misconduct or dies.

The correct application of Awards often precludes the engagement of long term casual employees and consequently the obligation to pay long service leave to casual employees. Nevertheless, casual employees engaged for a consistent period of continuous and ongoing employment that meets the provisions of the Long Service Leave Act 1955, are entitled to long service leave. Each case must be determined on its merits.

7.5.2 Continuity of Service for Long Service Leave

Section 4(11)(a1) of the Long Service Leave Act lists the circumstances which will not constitute a break in continuity of service.

These include changes in the method of employment, e.g. from part-time to casual employment or from full-time to part-time, absences on workers’ compensation or on account of illness or injury, interruptions in service made by the employer with the intention of avoiding an employee’s rights to long service leave, periods of absence for any reason by leave of the employer, absences caused by industrial disputes or interruptions made by the employer by reason of slackness in trade, or any other absence caused by the employer where the employee returns within two months.

Some absences, such as parental leave, are not counted as time worked. These absences are not included in an employee’s period of service when calculating long service leave.

Where a part-time or casual employee has previous full-time service in the NSW Health Service, this can be counted as service towards long service leave as long as it meets the requirements for continuity as provided under the Act.”

111. That these provisions are not incorporated into clause 17 is understandable, given that they are concerned with Long Service Leave Act entitlements.

112. What is adopted includes ss 17.1 and 17.1.1 of the Directive. They deal differently with continuity of service, providing:

“17.1 Government Sector Staff Mobility

The cross government sector leave arrangements are subject to the employee ceasing with one NSW government sector service and commencing service immediately with another NSW government sector service or with the service being regarded as continuous

The definitions of “continuous” and “immediately follows” in Schedule 2 of the Government Sector Employment Regulation 2014 should be considered when determining if an employee is entitled to the provisions. Generally, under the definition of “immediately follows”, a break of up to two months is allowed between the periods of employment.

The definition of “continuous” and “immediately follows” may also be applied to employees who cease employment in the NSW Health Service at one NSW Health organisation and then take up such employment at another NSW Health organisation.

17.1.1 Up to Two Months Break – Effect on Leave

Where an employee does not commence duty on the next working day after ceasing a period of employment, a period of time of up to two months between ceasing and starting a new period of employment does not break continuity of service but it does not count towards the accrual of any leave entitlements. This does not apply if the employee is on approved leave during the time between the two periods of employment.

When the employee commences they retain any relevant anniversary dates for accrual of leave from the former period of employment. Future leave entitlements are adjusted to take account of any leave that is transferred or paid out on ceasing a period of employment and the time between the two periods of employment.”

113. For its part, Schedule 2 “Government Sector employees extended leave entitlement – recognition of prior government service” to the Government Sector Employment Regulation 2014 (NSW), provides in clause 3 “Meaning of Continuous”:

“(1)    For the purposes of this Schedule, a person’s employment by an employer is continuous in relation to a period if the person remains employed by that employer for the whole of the period.

(2)    The person is taken to remain employed by the employer for the whole of any period even if, during that period, the person ceases to be employed by the employer on the grounds of retrenchment or reduction of work but is re-employed by the employer within the next 12 months.”

Tab 5

114. The concept of “immediately follows” is dealt with in clause 4 “Meaning of Immediately follows” of the Schedule to the Regulation, which relevantly provides:

“(1)    For the purposes of this Schedule, a person’s period of employment immediately follows another period of employment if:

(a)    the later period commences:

(i)    except as provided by subparagraph (ii), within 2 months after the end of the earlier period, or

(ii)    if the earlier period comprises full-time war service as a member of the Australian Defence Force, within 12 months after the end of the earlier period, and

(b)    the earlier period ends otherwise than by reason of the person’s dismissal for disciplinary reasons.”

115. These provisions do not support the Secretary’s construction of clause 17 as not requiring prior continuous casual service to be taken into account, when an employees’ entitlement to leave under the clause is determined. To the contrary, these provisions explain why it is that in the cases of the employees dealt with in the agreed facts, the Secretary accepts that their prior casual service was continuous.

116. These provisions also do not support the Secretary’s argument, that if the Union’s construction of clause 17 is correct, it would only apply to those casuals who had transferred to full-time or part-time employment on or after 1 July 2015, when the clause in its current form took effect.

117. It is the current award provision which arises for construction and which the Secretary is bound to apply, when calculating the long service leave entitlement of an employee to whom clause 17 applies. It is that clause, not its predecessors, which determines what the entitlements of the employees to whom that clause applies now are. The clause does not provide that this depends on when it was that an employee’s full-time or part-time employment commenced. The required calculation must be made at the time that the leave is taken, following the requisite service being achieved, or on termination of employment, when that entitlement must be paid out.

118. In any event, as I have explained, the provisions made in clause 17 of the predecessor awards also provide no basis for the conclusion that prior continuous casual service did not have to be taken into account, when long service leave was calculated under those clauses.

119. It is thus necessary to consider that while clause 17(ix) deals expressly with how some types of past service are not to be taken into account, it makes no such provision for past continuous casual service. It will be remembered that it provides:

“(ix)    A full-time employee shall be entitled to have previous part-time service which is the equivalent of at least two full days' duty per week taken into account for long service purposes in conjunction with fulltime service on the basis of the proportion that the actual number of hours worked each week bears to forty hours, provided the part-time service merges without break with the subsequent full-time service.

A permanent part-time employee shall be entitled to have previous part-time service which is the equivalent of at least two full days' duty per week taken into account for long service leave purposes in conjunction with full-time or permanent part-time service on the basis of the proportion that the actual number of hours worked each week bears to 35 hours for Radiographers and Radiation Therapists and 38 hours for other employees, provided that the part-time service merges without break with the subsequent full-time or permanent part-time service.”

120. The Secretary’s case was that if cl17 intended for continuous casual service to be included, provision would have been made in subclause (ix,) as to how it was to be treated. This cannot be accepted.

121. True it is that clause 17 does not refer to prior continuous casual service. That must obviously not be overlooked, but in my view, given the statutory context in which this Award was made, that does not lead to the conclusion for which the Secretary contended.

122. It is difficult to see how the exclusion of prior continuous casual service, to which no reference is made and which before the Conditions Award regulated long service leave, would have attracted benefits under the Long Service Leave Act, once the requisite period of service had been given, can properly be inferred into clause 17. Given the express exclusion of specified part-time service, but the absence of any exclusion of continuous casual service, I am satisfied that such an inference is not available.

123. In the statutory context in which the 2015 Award was made, had such an exclusion been intended, it would have had to be expressly provided, given the very substantial change that would have introduced for the long service leave benefits which such service had already attracted under s 4 of the Long Service Leave Act. When that is considered in light of the requirements of ss 5 and 6 of that Act, which I have already discussed, I do not consider that absent such an express exclusion, one can be inferred into clause 17, framed in the way that it is.

124. That conclusion is supported by the Jones v Dunkel inference which I consider runs against the Secretary on this issue. Clause 17, poorly drafted as it was, reflects an agreement reached by the award parties and accepted by the Commission, as being an award provision which it was empowered to make, namely, one more favourable to those to whom it was to apply, than the benefits provided by s 4 of the Long Service Leave Act.

125. It must be inferred from the Secretary’s failure to lead any evidence supporting the existence of an agreement that it was intended that the clause would have the result that full-time and part-time employees to whom the clause applied, would lose their statutory right to have their continuous casual service taken into account, when their long service leave entitlements under clause 17 are calculated, that no such evidence exists.

126. That there is no decision of the Commission, which might have supported the construction for which the Secretary advanced, also supports this conclusion, given the limited nature of the Commission’s award making powers in relation to long service leave.

127. In the result, it must be concluded that on this aspect of the construction of clause 17 of the Conditions Award, the Union’s construction is correct.

Clause 17 does not apply to casual employees

128. Despite these conclusions, I have also concluded that clause 17 does not apply to casual employees who have had continuous service, to whom it makes no reference and that their rights to long service leave remain regulated by the Long Service Leave Act. On this aspect of the construction of clause 17 of the Conditions Award, the Union’s construction is incorrect.

129. The structure of the clause is admittedly awkward. The resulting ambiguity has left open the parties’ dispute over the proper construction of the clause, as I have explained. Nevertheless, it must be concluded that the clause does not apply to casual employees. If the clause did apply to them, it would have said so directly.

130. The reasons for this conclusion commence with the fact that, as the parties accepted, despite the wide introductory words of clause 17(i), it does not apply to identified employees, including those part-time employees who receive “an adjusted hourly rate”, as defined in clause 6 of Part 2: clause 17(viii). The parties also finally agreed that it excludes part-time employees who do not have the equivalent of at least two full days duty per week, over the course of their employment: clause 17(ix). It also does not apply to the full-time and part-time employees dealt with in clause 17(ix). Their long service leave remains regulated by the Long Service Leave Act.

131. Contrary to the Union’s case, in the result, the term “each employee” used as it is in clause 17(i), must be understood to mean “each employee to whom the clause applies”, rather “every employee” or “all employees”.

132. Given that no reference at all is made in the clause to how the long service leave benefits of casual employees with continuous service are to be calculated, they are not employees to whom the clause applies.

Practical consequences of the Union’s construction

133. This conclusion is supported by the practical consequences which would flow from the Union’s approach to the construction of clause 17.

134. Those consequences include that no matter the hours which a casual employee has worked in the past, whether as a casual, a part-time or full-time employee, so long as his or her service has been continuous for the requisite period, the casual acquires an entitlement to the considerably more generous long service leave benefits provided by clause 17. Further, none of the limitations specified in the clause on the benefits of full-time or part-time employees, would apply to such casuals.

135. On that approach, the clause grants casuals considerably more generous long service leave entitlements than either the full-time or part-time employees to whom the clause unarguably applies. It also grants casual employees even more generous benefits than those part-time employees who have given similar hours of continuous service to those given by casual employees, but whose entitlements to long service leave remain regulated by the Long Service Leave Act.

136. That casual employees are given such considerably more generous benefits by a clause which does not refer to them at all, is a very unlikely, even if it be accepted, a conceivable part of the balance which the parties’ agreement sought to establish in clause 17.

137. The Union led no evidence which supported the conclusion that this was what had been agreed the clause would encapsulate. In this case that leads to the inference that the Union’s approach to the construction of the clause does not reflect the parties’ agreement: Jones v Dunkel.

138. It must not be overlooked that a “permanent part-time employee” is defined in clause 6 of Part 2(i) of the Conditions Award to be:

“… one who is appointed by the employer to work a specified number of hours each roster cycle which are less than those prescribed for a full-time employee.”

139. Casual employees may also work such hours.

140. The Conditions Award also deals separately with part-time employees employed on other than a permanent part-time basis, for no less than 8 hours or more than 30 per week: Part 2(i), cl 6. Casual employees may also work such hours.

141. There are different loadings which apply to the rates of pay which part time and casuals must be paid for their work, but no evidence was led as to what these respective loadings are intended to compensate for, which would explain why their entitlements to long service leave differ in the way for which the Union contended.

142. That clause 17 expressly excludes from its benefits specified part-time employees who do not have the equivalent of at least two full days duty per week over the course of their employment, but does not exclude casual employees who have had such a work history, is consistent with the clause not applying to casuals at all.

143. The Commission’s award making power being as it is, to set “fair and reasonable conditions of employment”, if the clause applied both to casual employees as well as the employees who are identified in the clause , it would be expected that they would be treated similarly. That the clause not only contains no such provision, but does not refer at all to casuals, suggests that the result that casual employees have more generous entitlements under the clause than do other employees with similar periods of continuous service and working hours, is not what the clause provides.

144. That is another powerful reason for not accepting the construction for which the Union contended.

Other award provisions

145. While the Union supported the construction for which it contended, by reference to the provisions made in the Conditions Award for certain other types of leave, I am satisfied that does not detract from the conclusion I have reached as to the proper construction of clause 17.

146. Provision for annual leave is made in clause 16, which commences in subclause (1) with “All employees: see Annual Holidays Act”. Clause 17 does not make similar provision, understandably, given that neither under the Long Service Leave Act nor clause 17, do “all employees” accrue entitlements to long service leave.

147. Other clauses which refer to “all employees” do not contain exclusions of the kind contained in clause 17. Clause 18 “Sick leave” does not use either the expression “all employees” or even “each employee”. It deals separately with full-time and part-time employees and also makes no reference to casual employees, as does clause 41 “Maternity, Adoption and Parental leave”.

145. Clause 28 “Family and Community Services leave and Personal Carers Leave” expressly specifies which types of such leave casuals are and are not entitled to receive.

146. It follows, in my view, that the answer to the proper construction of this badly drawn clause is not to be found in the other award provisions on which the Union relied.

Conclusion

150. In the result, it must be concluded that a casual employee who has continuous service for a period which satisfies the requirements of s 4 of the Long Service Leave Act, will accrue an entitlement to such leave under that legislative scheme, rather than under clause 17 of the Conditions Award.

151. It follows that the only possible exception to the conclusion that clause 17 of the Conditions Award does not apply to casual employees, is if by a casual’s contract of employment, it has been agreed that the casual will receive the benefit of the clause. In that event the entitlement would arise, however, under the contract of employment, not under the Conditions Award.

152. What contractual terms have been agreed in a particular case is, however, a question of fact. In the event of a dispute over long service leave entitlements which cannot be resolved and which results in recovery proceedings, that will be a matter for evidence.

Orders

153. For the reasons I have explained, I am satisfied that the Union is entitled to declaratory relief.

154. The parties are directed to confer as to the terms in which that relief should be granted, to reflect the conclusions I have reached. The proposed orders should be filed within 7 days.

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ANNEXURE: Clause 17 NSW Health Staff Mobility Directive (250 KB, pdf)

Amendments

01 December 2017 - Typographical amendments:

Coversheet - catchwords

[14] - 19(f) amended to 19(3)(f) and 19(g) amended 19(3)(g).

[41] - “applies” amended to “apply”.

[91], [130] and [131] - 17(1) amended to 17(i)

Decision last updated: 01 December 2017