Liquor, Hospitality and Miscellaneous Union-Western Australian Branch v Health Solutions (WA) Pty Ltd T/A Peel Health Campus

[2010] FWA 5536

[2010] FWA 5536

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.238 - Application for a scope order

Liquor, Hospitality and Miscellaneous Union-Western Australian Branch
v
Health Solutions (WA) Pty Ltd T/A Peel Health Campus
(B2010/3210)

COMMISSIONER CLOGHAN PERTH, 28 JULY 2010

Scope order.

[1] On 15 July 2010, the Liquor, Hospitality and Miscellaneous Union (LHMU) (“the Applicant”) made application for a Scope Order pursuant to s.238 of the Fair Work Act 2009 (“the Act”).

[2] The Order is sought against Health Solutions (WA) Pty Ltd trading as Peel Health Campus (PHC) (“the Employer”).

[3] The LHMU is seeking an order that the proposed replacement enterprise agreement for the Peel Health Campus Enrolled Nurses & Support Services-LHMU-(Federal) Agreement 2005 (AG844314  PR965101) be a single enterprise agreement applying to all employees employed as Support Service Workers and Enrolled Nurses at the Peel Health Campus. Simply put, the replacement agreement be a single agreement and cover all employees who are currently covered by the existing agreement.

[4] The application was heard on 22 July 2010. At the hearing, evidence for the Applicant was given by Ms F Hebden and Ms E Palmer.

[5] The Employer was represented by Mr P Hatt. The other bargaining representatives were Ms V Holmes, Deputy Director of Nursing at the Hospital (38 employees whom she described as non-union) and Mr M Olson, Secretary, Australian Nursing Federation (ANF) (WA Branch) on behalf of enrolled nurses who are members of the ANF. The bargaining representatives made submissions on the application and no witnesses were called to give evidence on their behalf.

[6] To assist in expediting a conclusion to the replacement enterprise agreement, I gave a commitment to provide a decision to the parties by no later than 10:00am on 28 July 2010.

BACKGROUND

[7] The current enterprise agreement commenced on 14 November 2005 with a nominal expiry date of 13 November 2008.

[8] The parties to the current enterprise agreement are the Employer and the LHMU.

[9] The current enterprise agreement covers all employees who are employed at the Hospital as Hospital Workers (Support Service Workers) and Enrolled Nurses.

[10] The current enterprise agreement was negotiated between the Employer and the LHMU and each is a signatory to the agreement.

[11] The current enterprise agreement replaced and cancelled the Enrolled Nurses and Support Services Health Solutions-Peel Health Campus and ALHMWU (Federal) Agreement 2003. For all intent and purposes, the existing parties were the same in 2003 as they were in 2005.

[12] At Clause 36, the Employer acknowledges the important role played by LHMU workplace delegates in the prevention and settlement of disputes relating to the employment relationship. To this extent, LHMU delegates are provided with reasonable access to office resources, information relating to PHC organisation and strategic direction, and paid time off to represent the interests of other employees as well as their own development

NEGOTIATIONS FOR REPLACEMENT ENTERPRISE AGREEMENT

[13] The minutes of the first meeting to discuss the replacement enterprise agreement occurred on 15 January 2009. The Chief Executive of the Hospital acknowledged that the LHMU log of claims had been received on 21 November 2008 1.

[14] It is useful to note at that meeting: the Chief Executive apologised for the delay in commencing negotiations; the LHMU log of claims were discussed; Enrolled Nurse wage parity with the public sector was sought by the LHMU but considered inappropriate by the Employer; and the content of an ANF agreement at the Hospital considered irrelevant by the Employer, for the purposes of negotiations with the LHMU 2.

[15] From 15 January 2009 until May 2010, the parties met regularly and, although initially meetings were fortnightly, progress to reach agreement on a replacement agreement was slow.

[16] On 19 May 2010, some 17 months after the first negotiating meeting, Mr Hatt attended as the newly appointed Chief Operating Officer. Ms Holmes, at the meeting, on behalf of the employees whom she represented, stated that they, “really want this dispute resolved” and Mr Heffernan representing the ANF asked whether the “current agreement could be split into two (the EN’s (sic) in one and all support staff in another). Mr Hatt responded for the Employer, that this suggestion would not be considered in this round of negotiations 3.

[17] At a further meeting on 22 May 2010, there was general discussion on the “splitting” of the current enterprise agreement. By this time, the Employer had changed its original position and now “all proposals would be considered in line with employee rights and employer obligations” 4. At this point, I should note that Mr Hatt refers to “employee rights”. This is an issue of contention which is addressed later in this Decision.

[18] On 29, 30 June and 1 July 2010, in accordance with s.181 of the Act, a single replacement enterprise agreement was put by the Employer to a ballot of employees and rejected.

[19] The reasons for rejection of the replacement enterprise agreement were discussed at a meeting on 7 July 2010 and are disputed. For the LHMU, the rejection of the proposed agreement relates to: the wages offer; the lack of retrospectivity and trade off of penalties while on sick leave. Ms Holmes advised at the meeting, that Enrolled Nurses she represented, were seeking a separate agreement (Ms Holmes represents five (5) Enrolled Nurses in her portfolio of 38 employees). Although I have not been provided with any evidence or documentation directly from the ANF, it appears from the application, Ms Holmes’ advice was consistent with feedback she received from the ANF.

[20] Approximately 110 of the 130 employees voted in the ballot. Approximately 65% of those who cast a vote, rejected the proposed agreement 5.

[21] After receiving feedback from the bargaining representatives, the Employer:

“...decided to survey our enrolled nurses, which consist of 37 out of the 130 employees. So we sent out a note to the enrolled nurses and I also had one of our secretaries ring the enrolled nurses to get their feedback on what their preference was...Out of the feedback from the survey we undertook out of the 37, 27 indicated they preferred a separate agreement, two indicated no and eight chose not to - or we couldn't contact or chose not to give any feedback. So based on that and out of the employees that indicated they voted or responded to the survey, approximately 94 per cent said they wanted a separate agreement. So taking into account our objective is to get agreement, we decided that from management's point of view it was in the interests of our employees to have two separate agreements.” 6

[22] While I can understand the desire of the Employer to “test” or validate, the feedback from the bargaining representatives, Ms Palmer gave uncontested evidence:

“...I did ask Mr Hatt if, given that, you know, they'd indicated they would go ahead with the ballot [of Enrolled Nurses], if he would let all of the parties know what the process was to be for the ballot. He confirmed that they would but we never heard anything more until, I believe, Ms Hebden heard from the members as she described. That some kind of telephone ballot had been held.” 7

[23] Since the telephone ballot of Enrolled Nurses, the Employer has revised its position in relation to the log of claims and the LHMU has, despite its preferred position, worked on both a consolidated replacement agreement, and also two separate replacement agreements for Support Service Workers and Enrolled Nurses. The revised agreements, subject to the ballot of employees, appear to be satisfactory from the perspective of all bargaining representatives.

[24] The Applicant emphasised that its principal position is that contained in the application of a single agreement. Notwithstanding this, in the context of good faith bargaining, the LHMU has continued to “work hard to progress the negotiation to its overdue conclusion” 8. Simply put, the Applicant’s position should be assessed as at 15 July 2010 and not on what has taken place since that date.

LEGISLATION

[25] The material provisions of the Act which apply are:

• Section 238 - Scope orders

Bargaining representatives may apply for scope orders

(1) A bargaining representative for a proposed single-enterprise agreement may apply to FWA for an order (a scope order ) under this section if:

(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and

(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.

No scope order if a single interest employer authorisation is in operation

(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.

Bargaining representative must have given notice of concerns

(3) The bargaining representative may only apply for the scope order if the bargaining representative:

(a) has given a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and

(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and

(c) considers that the relevant bargaining representatives have not responded appropriately.

When FWA may make scope order

(4)  FWA may make the scope order if FWA is satisfied:

(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and

(b) that making the order will promote the fair and efficient conduct of bargaining; and

(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and

(d) it is reasonable in all the circumstances to make the order.

Matters which FWA must take into account

(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Scope order must specify employer and employees to be covered

(5) The scope order must specify, in relation to a proposed single-enterprise agreement:

 (a)  the employer, or employers, that will be covered by the agreement; and

 (b)  the employees who will be covered by the agreement.

Scope order must be in accordance with this section etc.

(6)  The scope order:

 (a)  must be in accordance with this section; and

 (b)  may relate to more than one proposed single-enterprise agreement.

Orders etc. that FWA may make

(7)  If FWA makes the scope order, FWA may also:

(a)  amend any existing bargaining orders; and

(b)  make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by FWA, or take such other actions, as FWA considers appropriate.

[26] It was not contested, and evidence demonstrated, that the Applicant has concerns that the bargaining for the agreement was not proceeding efficiently or fairly, and this related to the appropriate coverage as set out in s.238(1) of the Act. Secondly, that the provisions in s.238(2) of the Act are not applicable, and s.238(3) of the Act had been complied with. Consequently, essentially, it is necessary for the Tribunal to address the provision of s.238(4) and (4A).

RELEVANT MATTERS FOR CONSIDERATION

Is the LHMU bargaining in good faith? (Section 238(4)(a) of the Act)

[27] The LHMU asserted that it was bargaining in good faith before and since the application was made. This position was unchallenged by the Employer, Ms Holmes and the ANF.

[28] I should emphasise the LHMU application is made within Division 8 of Part 2-4 of the Act. Division 8 enables Fair Work Australia to facilitate bargaining by making orders such as scope orders. Further, the objects of Part 2-4 are to provide a simple, flexible and fair framework that enables collective bargaining in good faith at the enterprise level.

[29] Neither the Employer nor the bargaining representatives submitted that between 15 January 2009 and 19 May 2010, the issue of whether there was one replacement agreement or two was a topic of discussion. It would appear that the inability to reach agreement during this period can be attributed to hard bargaining.

[30] Notwithstanding the preliminary discussion on 19 and 22 May 2010 regarding two replacement agreements, a single agreement was put to a ballot on 29, 30 June and 1 July 2010. Why employees vote the way they do is often a mystery, but ordinarily, if the offer is satisfactory, the form in which it comes is usually of a secondary consideration. Presumably, if the offer, which has now been agreed between the Employer and the bargaining representatives, was put in the first instance, it may have received the approval of employees; however, such a proposition is not provable, but a claim which can be made.

[31] What is a fact, is that after the ballot, the Employer conducted a telephone survey of Enrolled Nurses. I make three observations regarding the telephone survey. Firstly, the failure to follow up with the LHMU on the implementation of the survey is hardly a positive example of good faith bargaining. Second, the fact that the survey was conducted by “one of the secretaries” does not give the process the integrity it should have demanded. Third, the Employer did not provide any documentation or witness evidence on the outcome of the survey which could be tested by the Applicant. In view of the fact that the survey was the views of the Enrolled Nurses themselves, and independent of any third party (bargaining representatives), such an omission at the hearing, causes uncertainty regarding the assertion that Enrolled Nurses are seeking a separate agreement. In contrast, the LHMU was prepared to have its arguments for one replacement agreement tested in the witness box.

Will making the order promote the fair and efficient conduct of bargaining? (Section 238(4)(b) of the Act)

[32] The Applicant submitted that in seeking the order it has proposed, it would promote fair conduct of bargaining for the following reasons:

• historically, both sets of occupational groups (Support Service Workers and Enrolled Nurses) have been the subject of one enterprise agreement;



• the “splitting” of the replacement enterprise agreement into two discrete occupational groups has only been raised after 17 months of negotiations;



• together, both occupational groups have, relative to the Employer, fairer bargaining powers than if they were separate. For the Applicant, the splitting of the replacement agreement would be a case of “divide and conquer”, and separately, each occupational group would have lesser bargaining power;



• a single replacement enterprise agreement can, and does, accommodate occupation specific issues Furthermore, the “log of claims” submitted by the LHMU to the Employer, set out specific claims on behalf of Enrolled Nurses;



• the proposed departure from the custom and practice of one agreement was sought only from Enrolled Nurses who were consulted and not Support Service Workers who are also affected by the proposal to split the replacement enterprise agreement; and



• the ballot of Enrolled Nurses was conducted without the Applicant’s knowledge, input and therefore, it is questionable whether the Enrolled Nurses made an informed decision.

[33] For the Employer, the splitting of the replacement enterprise agreement would promote fair conduct of bargaining for the following reasons:

• two (ANF and Ms Holmes) of the three bargaining representatives, indicated that the Enrolled Nurses are seeking a separate replacement enterprise agreement. The Enrolled Nurses represent 37 out of approximately 130 employees covered by the current agreement;



• a separate agreement for Enrolled Nurses was confirmed by a telephone ballot conducted by the Employer; and



• the Applicant’s application to the Tribunal is delaying the conclusion of a replacement agreement.

[34] For Ms Holmes, the splitting of the replacement enterprise agreement would reflect the organisational structure and, consequently, the Hospital reporting arrangements. Further, the desire to split the replacement enterprise agreement is reflective of the wishes of the Enrolled Nurses which she represents.

[35] For the ANF, the desire to have the replacement enterprise agreement split into two occupational groups arises simply because it is what the Enrolled Nurses want; in short, the employees wish to exercise a choice. Further, ANF involvement in negotiations arose out of frustration regarding the lack of progress in negotiations. Similar to the Employer, Mr Olson, for the ANF, expressed the view that the only thing standing in the way of concluding negotiations, is these proceedings. Finally, Mr Olson concurred with the view that the Enrolled Nurses are more closely aligned to the nursing structure at the Hospital.

[36] With regard to efficiency, the Applicant put the proposition that two agreements would simply require duplication of time, effort and resources than one agreement. While Mr Olson focussed on minimal additional time, effort and resources, to now conclude two agreements. Such an assertion, is requiring the Tribunal to, as a matter of practical consideration, ignore what could and would have happened in the negotiation process if two separate agreements had been agreed upon at the outset of these negotiations.

Was the group of employees who will be covered by the agreement proposed to be specified in the scope order fairly chosen? (Section 238(4)(c) of the Act)

[37] I am satisfied that the Applicant, the Employer and the bargaining representatives could properly argue that the group of employees for either a single or two separate replacement enterprise agreements, was fairly chosen. Both the Applicant and the ANF demonstrated, by examples, that the industry has a variety of enterprise agreements to support each other’s contentions.

DISCUSSION AND CONCLUSION

[38] For the purposes of simplicity, what follows is what I observed in these proceedings and now form part of my reasons.

[39] There exists a current single enterprise agreement, and prior to that, an enterprise agreement which covered both Support Service Workers and Enrolled Nurses. No evidence was produced to say that this arrangement had not worked satisfactorily or the concerns of either occupational group, had been disadvantaged through such an arrangement.

[40] For over 17 months, negotiations were based on a single replacement enterprise agreement. Further, the Employer’s initial response to two separate agreements from the ANF, was to reject such a proposal. Further, it was not until after a ballot which rejected the Employer’s offer, did the issue of splitting the proposed replacement enterprise agreement, gain momentum. I am satisfied and taking into account all the matters submitted and considered that it would be unfair that, after such an extensive period, the form of two agreements should be granted when so much of the content is similar and can be accommodated in one agreement.

[41] From the material presented to the Tribunal, I am satisfied that rejection of the Employer’s offer was as a result of its content not being satisfactory to employees, and not because of a desire to have two separate agreements.

[42] I find nothing unsatisfactory in the Applicant not seeking the views of its members as to whether there should be a separate agreement for Enrolled Nurses prior to, or at the commencement, of negotiations in November 2008. In making such a finding, I note that there was nothing to stop the Employer gaining such an understanding, if it wished to do so, also in November 2008.

[43] I am not satisfied, from what was put to the Tribunal, that the manner in which the Employer balloted Enrolled Nurses to determine if they wanted a separate agreement was satisfactory, from at least two perspectives. Firstly, the process could have, and should have, had the inclusive participation of the bargaining representatives. Second, in view of the significance to the negotiations, it is not appropriate to have a secretary telephone to gain feedback for a number of reasons including the possibility of inherent bias, flaws and interpretation of responses. Further, and as a matter of fairness, it would have been appropriate for the Employer to canvass the views of the Support Service Workers in reaching its position on two replacement enterprise agreements. This is not to say that if they were against such a proposal, it was binding on the Employer. However, such a proposal is consistent with its earlier statement about “employee rights”.

[44] No evidence was presented to say that a single agreement, as proposed by the Applicant, will not contain and address matters relating to either group of employees. Certainly, it was not contested that the LHMU log of claims included issues specific to Enrolled Nurses.

[45] Intuitively, it is easy to put the position that duplication of agreements is less efficient in terms of time, effort and resources. In this respect, the ANF submitted, at this stage of negotiations, additional effort was minimal; that appears to be the case. However, the parties are dealing with the end point of negotiations and not its entire period. Finally, I make the observation that efficiency of bargaining is not only about “inputs” but also about “outputs”. Simply put, the quality of discrete replacement agreements may be such, that the additional time, effort and resources, would be offset by a better quality replacement agreement, than if it was in a composite single agreement.

[46] From submissions and evidence, the two replacement agreements have a large proportion of common conditions, and the differences, relate only to occupational specific provisions. In part, this situation reflects the fact that both groups of employees are geographically, operationally and organisationally close.

[47] Intuitively again, it is reasonable to put the proposition that Enrolled Nurses are operationally and organisationally aligned with Registered Nurses. However, the parties proposing this view, brought no evidence to support this assertion and have it tested. For this reason, I am reluctant to reach the inference sought by the parties opposing the scope order, but would indicate it is an issue, which requires best evidence and not general assertions.

[48] Finally, the LHMU and ANF engaged in considerable speculation about whether single or separate replacement agreements, both now and in the future, would produce better or worse outcomes for Enrolled Nurses. The gist of what each party wanted to establish was essentially based on their own position on the application. There is nothing improper or misleading in adopting this position. However, speculation or conjecture is merely opinion on incomplete grounds. In short, a guess. For the purposes of this Decision, I have decided not to compound the situation by further speculating on their speculations, but to determine the matter on the facts and evidence put to me.

[49] Having considered the submissions, evidence and exhibits, I am satisfied that the scope order sought by the Applicant meets the provisions of s.238(4)(a), (b) and (c), taking into account s.238(4A) and it is reasonable in all the circumstances to make the order. An order giving effect to this Decision is now made (PR999799).

COMMISSIONER

Appearances:

Ms E Palmer and Mr T Cook for the Liquor, Hospitality and Miscellaneous Union

Mr P Hatt for Health Solutions (WA) Pty Ltd trading as Peel Health Campus

Ms V Holmes, bargaining representative for 38 employees

Mr M Olson for the Australian Nursing Federation

Hearing details:

2010:

Perth

22 July

 1   Exhibit A1

 2   Exhibit A1

 3   Exhibit A3

 4   Exhibits A4 and A5

 5   PN 312

 6   PN 313

 7   PN 194

 8   PN 380

Printed by authority of the Commonwealth Government Printer

<Price code C, PR999711>