Health Services Union v Barwon Health
[2008] VMC 8
•13 August 2008
IN THE MAGISTRATES COURT OF VICTORIA
AT MELBOURNE
INDUSTRIAL DIVISION
Case No. W02792466
| HEALTH SERVICES UNION | Plaintiff |
| v | |
| BARWON HEALTH | Defendant |
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| MAGISTRATE: | K. HAWKINS |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | DD MONTH YEAR |
| DATE OF DECISION: | 13 August 2008 |
| CASE MAY BE CITED AS: | HEALTH SERVICES UNION v BARWON HEALTH |
| REASONS FOR DECISION |
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Catchwords: Industrial Relations Act 1979 (Vic.), meaning of period of engagement, was
effective notice given.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | ||
| For the Defendant HER HONOUR: |
1. Barwon Health employed Patricia Hunter on 18 August 2005 as an oncology Social Worker in their Regional Integrated Cancer Services (RICS) Program.
2. They provided her with a contract that stated that the position was temporary full time commencing on 29 August 2005 and terminating on 29 August 2007. She started work in that position on 29 August 2005.
3. Initially it was hoped that the position would be ongoing unless there was a change in Government at the State level. However, in June 2007 Ms Hunter was informed that the position would not continue after August 2007.
4. Ms Hunter was aggrieved about this decision and pursued the matter through her Union. She understood that as the length of her contract exceeded the provisions of the relevant Award and Agreement for fixed term and temporary employment she should be accorded permanent employment status with Barwon Health.
5. Barwon Health took the contrary view, - that they were entitled to employ her in this position on a fixed term contract without entitlement to permanency.
6. On 29 August 2007, Ms Hunter’s employment ceased. She claims an entitlement to four weeks notice, or pay in lieu thereof, in the sum of $4956.17 together with interest.
7. Barwon Health was bound by the Health Professional Services-Public Sector-Victoria Award 2003 (`The Award’) and the Health Services Union of Australia – Health Professionals – Victorian Public Sector – Multi Business Certified Agreement 2004- 2007 (`The Agreement’).
8. The Union claims that penalties be imposed in respect of the following alleged breaches:
a.
Clause 5 of the Agreement by employing Ms Hunter as a temporary employee for a period exceeding three months; or alternatively as a fixed term employee for a period exceeding twelve months;
b.
Clause 6 of the Agreement by employing Ms Hunter as a fixed term employee for a period exceeding twelve months;
c.
Clause 5 of the Agreement by failing to give Ms Hunter four weeks notice of termination in writing or pay in lieu thereof;
d.
Clause 15 of the Award by employing Ms Hunter as a temporary employee for a period exceeding three months; or alternatively as a fixed term employee for a period exceeding twelve months; and
e.
Clause 18 of the Award for failing to give Ms Hunter four weeks notice of termination in writing or pay in lieu thereof.
9. The Union seeks that any penalty imposed be paid to it.
10.The Defendant argues that the claim is misconceived and fails both at law and in fact. It submits that the contract has not been terminated in a manner that enlivens any obligation to provide notice, rather that it ended by effluxion of time, not by action of the employer on notice or otherwise[1]. Barwon argues that even if there was an obligation to provide notice, it did so in the letter of appointment. It says Ms Hunter was engaged in the full knowledge that her employment would end on 29 August 2007.
[1] Victoria v Commonwealth (1996) 138 ALR 129 at 173
Relevant provisions
11.Clause 12 of the Award relevantly provided:
“12.1 Employees under this award may be employed in any one of the following
categories:
• Full-time employees; • Regular part-time employees;
• Fixed term or temporary employees; • Casual employees; or
• Employees with limited tenure.
12.2 at the time of engagement an employer shall inform each employee of the terms of their engagement, and in particular, whether they are to be full-time, regular part-time, fixed term or temporary employees, casual employees or employees with limited tenure.” 12.Clause 13 of the Award provided:
“13. FULL-TIME EMPLOYMENT” Except as provided in clause 24 – Hours of work, an employee ready, willing and available to work the full number of hours as required by the employer shall be paid the full weekly wage as prescribed by this award irrespective of the number of hours worked not exceeding 38.”
13.Clause 15 of the Award relevantly stated:
“15. FIXED TERM OR TEMPORARY EMPLOYEES 15.1 Provided an agreement is reached in writing, an employer may employ an
employee either:15.1.1 as a fixed-term employee who is employed for a specific period or, in the case of an employee replacing a person on parental leave, for a specified purpose, not exceeding twelve months; or
15.1.2 As a temporary employee who is employed on hours which may or may
not be fixed for a period not exceeding three months.
15.2 If the period of engagement exceeds that provided for in this clause or the employee engaged pursuant to this clause is re-engaged within five weeks (in addition to the total period of accrued annual leave paid on termination), the employee shall be deemed to have been originally employed under clause 13 – Full-time employment or clause 14 - Regular part-time employment.” 14.Clause 18 of the award provided:
“18. TERMINATION OF EMPLOYMENT” 18.1 In the event of termination of employment, four weeks written notice shall be given by the employee or the employer, or four weeks’ wages paid or forfeited as the case may be.” 15.The Agreement relevantly stated:
“1.1 Definitions
In this Agreement:
........................
Health Professionals Award means the Health Professional Services-Public Sector-
Victoria Award 2003
..........................”
“5.7 Maintenance of award conditions
(a)
The terms and conditions of the Health Professionals Award including its Pre-simplified terms will continue to apply...”
...............
“6.2 Fixed term employment Fixed term employment can only be offered for true fixed term arrangements, including special projects, postgraduate training, graduate year positions, maternity leave and long service leave relief. The application of this clause 6.2 should be consistent with the requirements of the Health Professionals Award.”
16.Barwon Health admits the application of the Award and the Agreement however argues that clause 15 of the Award constitutes a direct or indirect prohibition on the Defendant employing employees under fixed term contracts and/or as temporary employees, and is accordingly:
a. Not an allowable award matter under s.515(1)(d) of the Act; and b.
Has no effect pursuant to s.525 (1) of the Act and had no effect at the time of any alleged breach of the Award.
17. Alternatively Barwon pleads:
a. If at any time clause 15 of the Award had any operation, it was subject to the operation of clause 9.1 of the Award, which permits a departure from the terms of clause 15 by agreement between employer and employee; and b. The duration of the fixed term contract in this case constituted such a departure and accordingly was no breach of the Award. 18.Evidence in this case was by way of affidavit. The Union relied upon affidavits sworn by Ms Hunter and Fleur Harbridge, an officer of the HSU. Barwon Health relied upon an affidavit sworn by Perry Muncaster, Executive Director of Human Resources.
Ought Ms Hunter’s employment be deemed full-time?
19.Ms Hunter’s temporary employment clearly exceeded three months. I conclude, following an examination of her duties, that the nature of her role was never `temporary’ in fact. That employment was fixed term in nature. It also exceeded the 12 month period contemplated for fixed term engagements. Her role was not however for any of the specific purposes contemplated by clause 6.2 of the Agreement.
20.A breach is alleged of clause 5 of the Agreement for employing Ms Hunter as a temporary employee for a period exceeding three months.
21.Barwon submits that whilst clause 5 provides that the Award continues, and is not ousted by the making of the Agreement, a breach of Award remains such and does not become a breach of a certified agreement merely because the Agreement contemplates the continuing effect of the Award.
22.They further contend that the position of the Award in connection with clause 5 may be contrasted with the position of certain pre-existing certified agreements, which become “incorporated terms” under clause 5.4. Barwon submit the Award is not incorporated into the Agreement in this way and according the claim for breach of Agreement must fail.
23.Similarly, they argue there can be no breach of clause 5 in relation to engaging a fixed term employee for more than 12 months.
24.Alternatively, Barwon argue that if clause 6.2 of the Agreement has a separate life from the provisions of the Award, there has been no breach.
25.The HSU contends that the plain meaning of the clause is that “an employer may
employ an employee...as a fixed term employee for a specified period...not
exceeding twelve months.” To the extent that the meaning of this phrase is
ambiguous, the Court was referred to extrinsic material.26.Clause 15 had its genesis in the Health Professional Services Award (“the State Award”), an award of the Health Professional Services Board established under the Industrial Relations Act 1979 (Vic.) Clause 5(c) of the State Award relevantly provided a fundamentally similar deeming provision. The terms of the State Award were imported into the Health Services Union of Australia (Victoria – Public Sector) Interim Award 1993.
27.As part of the Award simplification process pursuant to the Workplace Relations Act amendments of 1996, the parties to the Interim Award proposed that the Interim Award be converted into separate vocational public sector awards.
28.Both parties accepted the proposition that the intention was to “...create discreet
awards in sensible categories that reflect those former awards of the Industrial
Relations Commission.” There was no attempt to alter the effect of the former provisions of the State Award.
29.The HSU refers to transcript from the proceedings before the Full Bench of the Australian Industrial Relations Commission, during which the employer representative present at the hearing confirmed that clause 5.7 of the Agreement was intended to import the pre-simplified terms and conditions of the Award into the Agreement. (I.e. prior to the application of s.89A of the Workplace Relations Act 1996). Accordingly, it submits that the terms of the Award are applied by the Agreement.
30.The clear intention of the parties at that time was to maintain the existing meaning and effect of this provision, and to specifically incorporate the Award provisions into the Agreement.
31.Accordingly, I conclude that that clause means that if a person is engaged for a specific period, i.e. a fixed term exceeding twelve months she shall be deemed to have been originally employed as a permanent or ongoing employee. This was the case with Ms Hunter’s employment.
32.The language, “period of engagement” is used in clause 15 of the Award rather than the word “employment”. I accept that it is the period of engagement specified in the original appointment, which excites the deeming provision, and accordingly she is to be deemed to have commenced as a full time employee on 29 August 2005.
33.It is clear that the language of clause 6.2 of the Agreement additionally contemplates such a restriction upon the use of fixed–term employment. Given the context and history of the provision I find compelling the HSU submission that the Agreement clause means that if a person is employed for a fixed term arrangement, such as a special project, the terms of the Award clause nevertheless apply, and if the period of engagement exceeds twelve months the employee shall be deemed to have been originally employed as a permanent or ongoing employee.
Breach?
34. Barwon submit four reasons why there has been no breach of cl. 15 of the Award.
a. The Award does not contain a prohibition upon entering into fixed term contracts. Instead, it provides a mechanism for what is to happen to those contracts at the expiry date. Barwon submit that properly construed the Award has not been breached; instead its operation has been triggered. Whilst the effect of the mechanism may ultimately affect considerations regarding penalty, absence of a specific prohibition does not avoid the conclusion of breach of this term. b. There is ambiguity in the meaning of the award term. Barwon submit that on its plain reading the 12 month limitation applies to replacement employees during parental leave. It submits that the move away from a clear statement in earlier award/agreement provisions to a more ambiguous one ought to be construed against its interests. Having regard to the precise language and context of these provisions I do not find this submission compelling. c. Nor do I find force in Barwon’s third submission that the Award permits a departure from clause 15 by agreement between the individual employee and the employer. I am not satisfied on the facts that this is such a circumstance. 35.Finally, Barwon argue it is only in extending the fixed term employment beyond the 12 months that the alleged breach occurred. Accordingly, the alleged breach occurred on 29 August 2006. At that date, the Work Choices amendments had been made to the Act. Under s. 515 of the amended legislation, award provisions, which constitute a direct or indirect prohibition on the Defendant employing employees under fixed term contracts, are of no effect. They argue by virtue of the commencement of sections 515 and 525 of the Workplace Relations Act, clause 15 of the Award became unenforceable after 31 March 2006.
36.By a process of similar logic to that above, Barwon contend that in relation to the breach of cl.18 of the Award – failure to provide four weeks’ notice that to the extent that clause 15.2 is relied upon in negating the original fixed term arrangement, and substituting on-going employment, then that could not have happened until 29 August 2006, by which time clause 15 had ceased to operate in accordance with section 525 of the Act.
37.The HSU submit that sections 515 and 525 of the Act do not affect the operation of the Agreement, as the terms of the Award had been incorporated into the Agreement prior to the amending date. They argue the breaches occurred at the time of engagement – before the operation of the sections. Similarly, the Award breaches occurred at the time of engagement.
38.As a matter of fact, the Award was incorporated into the Agreement at the date of commencement of that instrument. That was prior to the amendments. The breaches of clause 15 of the Agreement were triggered by the letter of appointment, when the employment relationship was entered, for a period not permitted by the Agreement. I conclude therefore that the breach occurred prior to the commencement of the Work choices restrictions referred to above.
When was effective notice given?
39.Ms Hunter did not receive notice in writing of the termination or any pay in lieu of notice on termination. The letter of engagement was overtaken by the operation of the Agreement as the terms of the Agreement could not be contracted out of and overrode any purported private agreement. The agreement deemed the employment relationship to be permanent and ongoing. As such, any previously given “notice” could not be relied upon.
40.Whilst her letter of appointment did express an intent to terminate the employment on 29 August 2007 such notice was rendered ineffective by the actions of Barwon’s servants and/or agents acting in positions of apparent authority. Ms Hunter was consistently reassured during the course of her employment that her position would be ongoing.
41.Despite these representations, I accept that Barwon’s final notice of termination was given by letter dated 10 August. I find that the notice period ought to run from this date.
42.Ms Hunter was given 19 days notice of the termination of her employment, rather than the requirement of 28. Accordingly, she is entitled to nine calendar days notice until 7 September, amounting to 6 working days.
43. In conclusion I find the following breaches proven and I so declare:
a.
Clause 5 of the Agreement by employing Ms Hunter as a fixed term employee for a period exceeding twelve months;
b.
Clause 6 of the Agreement by employing Ms Hunter as a fixed term employee for a period exceeding twelve months;
c.
Clause 5 of the Agreement by failing to give Ms Hunter four weeks notice of termination in writing or pay in lieu thereof;
d.
Clause 15 of the Award by employing Ms Hunter as a fixed term employee for a period exceeding twelve months; and
e.
Clause 18 of the Award for failing to give Ms Hunter four weeks notice of termination in writing or pay in lieu thereof.
Penalty
44.This claim is brought under the WR Act in relation to breaches of the Award and the Agreement. I have concluded that these breaches occurred both before and after the commencement of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) on 27 March 2006.
45.Section 178(1) of the pre-reform WR Act enabled this Court to impose a penalty in respect of a breach of a term of an award or order of the Australian Industrial Relations Commission. Section 178(2) provided that where two or more breaches of a term of an award or order are committed by the same person, and the breaches arose out of a course of conduct by the person, the breaches shall, for the purposes of section 178, be taken to constitute a single breach of the term.
46.Section 719(1) of the post-reform WR Act enables this Court to impose a penalty in respect of a breach of an applicable provision by a person bound by the provision. “Applicable provision” is defined in section 717 to include a term of an award, or collective agreement.
47.Like its pre-reform counterpart, s. 719(2) provides that where two or more breaches of an applicable provision are committed by the same person, and the breaches arose out of a course of conduct by the person, the breaches shall, for the purposes of s 719 be taken to constitute a single breach of the term.
48.Section 719(4)(a) prescribes the maximum penalty that may be imposed by this Court to be, in the case of a body corporate, 300 penalty units, or $33,000 in respect of each breach. This maximum penalty was in force during the whole of the employee’s employment, under s 178(4) (a) of the pr-reform WR Act and the current section 719(4) (a).
49.In determining penalty, I have regard to the principles discussed by the Full Court of the Federal Court in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 and the factors approved by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14.
50.Each breach of the Award and the Agreement is a separate contravention of a term of an applicable provision for the purposes of s. 719. However, I consider that there is considerable overlap between the five breaches proven. For the purposes of considering penalty, I shall group the breaches regarding the employment of a fixed term employee for a period greater than 12 months as a single breach and the failure to give notice breaches as a single breach. To do otherwise would be to penalise the Defendant more than once for the same conduct.
51.The Defendant was on notice that the HSU considered it to be in breach of its obligations before it terminated the employment of Ms Hunter. However, I accept that Barwon Health had a legitimate argument regarding the application of the subject provisions. Whilst the breach was deliberate, it was not malicious or done with wilful disregard of the law. In any event, by virtue of the amendments to the Act the actions as far as they breach the award are historical only. The provisions of the Agreement however remain.
52.No previous breaching conduct is alleged against Barwon. The organisation runs the Geelong Hospital, a large tertiary teaching facility and employees some 5500 people. It is a public hospital and in this case, I accept that Ms Hunter’s position was tied to a specific grant of funding.
53.Ms Hunter is and was a skilled professional. After termination by Barwon, she was unemployed for a period of approximately six weeks.
54.Given the specific nature of this breaching conduct, the parties have not submitted that general deterrence should be given great weight.
55.Applying the “instinctive synthesis” test and having regard to the entire factors particular to this case, I consider that a total penalty of $10,000 is appropriate.
ORDERS
1. That the Defendant pay to Ms Hunter a sum equivalent to 6 working days pay;
2. That pursuant to s.719 of the WR Act a penalty be imposed upon the Defendant of
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2
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