Monash Health

[2014] FWCA 1924

[2014] FWCA 1924

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.217—Enterprise agreement

Monash Health
(AG2013/11147)

Health and welfare services
COMMISSIONER GREGORY	MELBOURNE, 11 SEPTEMBER 2014

Application for variation of Clause 116 of the Victorian Public Health Sector (Health Professionals, Health and Allied Services, Managers & Administrative Officers) Multiple Enterprise Agreement 2011-2015.

Introduction

[1] Monash Health has made application to vary sub clause 116.2.3 of the Victorian Public Health Sector (Health Professionals, Health and Allied Services, Managers and Administrative Officers) Multiple Enterprise Agreement 2011 – 2015 1 (the 2011 Agreement) to remove an ambiguity or uncertainty. The 2011 Agreement is a multi employer Agreement covering 86 public sector health employers who employ more than 32,000 employees. It came into operation on 18 September 2012.

[2] The application concerns the meaning of the words “day” and “days” in the sub clause and how they are defined for the purpose of accruing and taking personal leave. “Day” is not defined in the Agreement. Monash Health contends the current meaning is ambiguous and uncertain and the sub clause should be varied to clearly define it means a standard working day of 7.6 hours.

[3] Two employees from Monash Health have previously lodged disputes about how the sub clause applies. Both work 40 hours per week in four 10 hour shifts with two hours in each week contributing to an accrued day off accumulating in each cycle. The two employees contend a “day” for the purposes of personal leave accumulation should equate to the hours they work each day, rather than being treated as a standard day of 7.6 hours. The dispute has been dealt with in conference by the Commission on several occasions, but to date has not been resolved

[4] The application is opposed by Health Services Advocates and Mediators (HSAM), an unregistered organisation of employees. It submits the meaning of the word “day” in the sub clause is not ambiguous or uncertain and simply means the hours normally worked by an employee on that day. For example, if an employee normally works a 10 hour shift each personal leave day accrued would be the equivalent of 10 hours, rather than 7.6 hours as Monash Health contends.

[5] Sub clause 116.2.3 of the 2011 Agreement states:

“116.2.3 Employees who are classified under Part 1, Part 2 and Part 3 of Schedule Gshall accrue personal/carer’s leave as follows:

a. one day will be available for each month of service in the first year of service;

b. 14 days will be available per annum in the second, third and fourth year of service; and

c. 21 days will be available per annum in each subsequent year of service.” 2

[6] Section 217 of the Fair Work Act 2009 (Cth) provides:

“(1) The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

(2) If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.” 3

[7] Monash Health was represented in the proceedings by the Victorian Hospitals’ Industrial Association (VHIA). The VHIA indicated it represents all of the public sector employers covered by the Agreement and the present application has their support. It also submits the application is supported by the Health Services Union.

[8] Mr Morris Addison was granted leave to appear on behalf of HSAM under s.596(2)(a) of the Act on the basis that the matter involves a degree of complexity and his involvement might enable it to be dealt with more effectively.

The Issue to be Determined

[9] Is there ambiguity or uncertainty in the meaning of the word “day” in sub clause 116.2.3 of the 2011 Agreement?

[10] If so, does that ambiguity or uncertainty warrant the Commission exercising its discretion to vary the 2011 Agreement and, if so, how should it be varied?

The Evidence and Submissions

[11] Monash Health set out the principles it submits the Commission must have regard to in an application under s.217. It submits the Commission must first be satisfied there is an ambiguity or uncertainty existing in the Agreement. It can come to this conclusion where there are “rival contentions” advanced, and an arguable case is made out for one or more of those contentions. However, it submits this is not sufficient. It is also necessary for the Commission to make an objective determination that an ambiguity or uncertainty exists and, if such a finding is made, the Commission then has a discretion as to whether the Agreement should be varied to remove that ambiguity or uncertainty. In exercising that discretion the Commission can have regard to the mutual intention of the parties at the time the Agreement was made. This can be ascertained from various sources, including witness evidence, the Award the sub clause was derived from, previous Agreements, as well as the negotiations leading up to the establishment of the current Agreement.

[12] In this context Monash Health made submissions about the Award and the Agreement in place prior to the establishment of the 2011 Agreement. It submits the Health and Allied Services – Public Sector – Victoria Consolidated Award 1998 4 existed prior to the enterprise agreements established in its place. The Award provided an entitlement to personal leave expressed in hours and based on the employee’s length of service, as follows:

“During the first year of service - eight hours for each month of service.

During the second, third and fourth year of service - 112 hours in each year.

Thereafter - 168 hours in each year.” 5

[13] Monash Health submits the Award did not confer a different entitlement for employees working different shift lengths. Full-time employees had 8 hours deducted for each day of leave taken, and a pro rata deduction applied for part-time employees.

[14] The 2009 Agreement 6 was then negotiated and established in place of the Award. Monash submits no party in those negotiations sought to change the personal leave entitlements in the Award, and there was no claim from any party to change those provisions or have them apply in the way HSAM now contends. However, the wording was changed to express the entitlement in days rather than hours, in the following terms:

“(a) one day will be available for each month of service in the first year of service;

(b) 14 days will be available per annum in the second, third and fourth year of service; and

(c) 21 days will be available per annum in each subsequent year of service.” 7

[15] Monash Health submits the reference to “day” or “days,” instead of hours, came about because of the establishment and inclusion of the National Employment Standards (NES) in the Fair Work Act 2009, and the reference in s.96 of the Act to a minimum entitlement to personal leave of 10 days per year.

[16] Monash Health submits, “In expressing the entitlement in terms of days, it was the intention of the parties to maintain the current entitlement but to express it in a manner consistent with the NES with the term 'days' having the same meaning as it does under the NES.” 8 It submits the 2011 Agreement continues to express the quantum (now in sub clause 116.2.3) in the same way as the 2009 Agreement. It also submits no party in the negotiations leading up to the establishment of that Agreement made any claim to change those entitlements, or the way in which they were intended to apply.

[17] It also submits the way HSAM proposes the Agreement be interpreted has three “key effects.”

“(a) Employees who work the same number of hours but different configurations will accrue different amounts of personal leave in respect of hours and monetary value,

(b) Employees working more than a standard day receive more personal leave and those who work less than a standard day receive less personal leave (and have their entitlement reduced), and

(c) A part time employee's personal leave entitlement may no longer be proportionate to full time hours.” 9

[18] It submits, in particular, that HSAM’S approach reduces the entitlement of employees working less than 7.6 hours, who are predominantly female employees. It submits this is “at odds” with the anti discrimination provisions in the Agreement and the Fair Work Act 2009, and potentially provides a lesser entitlement than the NES, particularly for employees working less than full-time hours in their first year of employment.

[19] Mr Alec Djoneff is the Chief Executive Officer of the Victorian Hospitals Industrial Association (VHIA). He said he has had a long involvement in negotiating enterprise agreements on behalf of the VHIA’s members in the health sector. He said the Award and the subsequent Agreements typically expressed the entitlement to personal leave in hours. However, in drafting the 2009 Agreement the newly established NES were taken into account and the personal leave entitlements in the new Agreement expressed instead in “days” so as to be consistent with the terms of the NES. However, no party proposed any change to the actual entitlement, or the way in which it was to be applied.

[20] Mr Djoneff said the HSU and HSAM later made claims in the negotiations for the current Agreement about personal leave, but did not seek to change the way the entitlement operates, or to distinguish between employees working hours in different configurations. In addition, the final Heads of Agreement entered into by the parties at the conclusion of those negotiations did not refer to any change to how those entitlements apply.

[21] Mr Djoneff also acknowledged in cross-examination employees working more than the standard 7.6 hour day do not get 21 personal leave days each year. He also said he was aware of disputes before the Commission about clause 116 which claim a “day” means the day worked by the individual employee, rather than a standard day of 7.6 hours. He said this interpretation did not accord with the intention expressed by any of the representatives involved in negotiations for the current Agreement, or any of its predecessors. He indicated:

“In particular, there was no intention to create different entitlements for employees working the same hours but different configurations, to reduce the entitlement for employees working less than a standard day or to alter part time entitlements to personal leave so that it is no longer proportionate to full time hours.” 10

[22] Mr Philip Murphy is the Manager, Industrial Relations Services, at the VHIA. He was involved in drafting the 2009 Agreement and said during that process neither the VHIA, the HSU, or HSAM suggested the reference to “days,” instead of “hours,” changed the intent of the sub clause dealing with personal leave, or the entitlement of employees covered by the Agreement. The use of the term “days” was instead simply intended to be consistent with the terminology used in the NES.

[23] Mr Murphy said he was also involved in the negotiations for the 2011 Agreement. Again, there was no attempt by any party to change the way in which the personal leave entitlements applied. He also said that to his knowledge the entitlement did not vary in circumstances where employees work the same number of hours each week, but in different configurations. He said if this were the case it could reduce the entitlements of part-time employees.

[24] Mr Murphy also indicated in cross-examination the personal leave entitlement depends on the construction of the word “day,” which for the accrual of personal leave was treated as 7.6 hours, accruing at 21 times 7.6 hours per year for a full-time employee with more than 4 years service.

[25] Mr Tim Nagle is the Manager of Employee Relations at Monash Health. He said it employs around 3,470 employees covered by the 2011 Agreement, and they work a variety of shift rosters ranging in length from 3 to 10 ordinary hours per day. Approximately 75 percent are female and more than half of the weekly employees work on a part-time basis.

[26] Mr Nagle said Monash Health administers the personal leave entitlements under the 2011 Agreement on the basis that a “day” is considered to be 7.6 hours. This means employees with the same length of service accrue the same entitlement regardless of the length of their shift. Part-time employees therefore receive a pro rata entitlement based on the proportion of their hours worked to full-time hours.

[27] He also confirmed two employees working regular 10 hour shifts had lodged dispute notifications claiming the Agreement should be interpreted so as to base their leave entitlements on a 10 hour working day. In cross examination Mr Nagle acknowledged they have less personal leave days each year, but did not believe this represented a reduction in their entitlement. In his view, the entitlement for all full-time employees is 21 days each year multiplied by 7.6 hours, being a total of 159.6 hours each year.

[28] Monash Health submits, in conclusion, the word “day” as a unit of measurement is intended to have a consistent meaning and is not intended to vary from person to person, depending upon the length of a shift worked. It also submits the Concise Oxford Dictionary made clear the term “day” has many meanings, and its meaning in this case should not be limited in the way HSAM contends. It also submits the Commission needs to be satisfied an arguable case, rather than simply a “self serving” one, exists to support the position put by HSAM.

[29] It also submitted:

“Should the Commission accept that there is an arguable case in the favour of each contention and makes a positive finding to that effect, the jurisdiction to vary is enlivened. We do acknowledge that the Commission has discretion as to whether a variation to remove an ambiguity or uncertainty is made. Further, in considering whether to exercise their discretion the Commission is to have regard to the mutual intention of the parties at the time the agreement was made. In terms of intention our outline of submissions provides a history of the personal leave provision.” 11

[30] Monash Health also provided the following response to a question from the Commission about what happens when leave is taken if the rate of accrual is at 7.6 hours, representing a day:

“There is a fundamental distinction between accrual of leave and the rate at which it is paid. If a full-time employee works on a particular day two hours because that's the way the hours are configured, it is not the case that they receive 7.6 hours' pay for that day whether it be personal leave or annual leave or any other kind of accrued leave. They receive the pay they would have received had they gone to work, but there is a distinction between accrual and that is the matter at issue here, as opposed to the rate of pay, how much you are paid when you take the leave, which is not in contest, if the commission pleases.” 12

[31] Monash Health provided the following additional response to a question from the Commission about whether the deduction for an employee regularly working 10 hour shifts would be 7.6 hours or 10 hours. It indicated:

“Again with the caveat with respect to ADO's, it would reflect the amount that they were paid which would not be 7.6 hours. It would be the greater amount in the same way that a person who was rostered to work for six hours would not be arguably overpaid for that period of leave. They would simply receive what they were rostered to work for that day.” 13

[32] It also submitted in response to a question from the Commission that employees were not disadvantaged by this approach.

“There is no disadvantage; absolutely not. The intention of the agreement is that employees have the precise same pool in terms of hours and monetary value. They receive the same pay. To take an example, where somebody works their hours over fewer days, the argument is also present to say that they have been paid more than a person who is rostered for a shorter shift, that is, they have received a greater entitlement. It is also the case that a person who works fewer days has fewer days in which they need to seek relief for personal leave. There are fewer days available to them upon which they can fall sick and need to call upon that entitlement.” 14

[33] It continued to submit:

“Interpreting ‘day’ to mean shift length, as contended by Mr Addison, has three key effects: first, employees who work the same number of hours but different configurations accrue different amounts of personal leave in terms of hours and monetary value. That is at the heart of the disputes that have been before the Commission concerning Mr Sullivan and Mr Gonzales; second, those who work more than a standard day will receive more personal leave and those working less than a standard day will receive less personal leave and have their entitlement reduced; third, the personal leave entitlement of part-time employees may no longer be proportionate to full-time hours.” 15

[34] Monash Health also indicated in response to a question from the Commission that if it believed it appropriate to make a variation to the Agreement it proposed the following additional words:

“...for the avoidance of doubt ‘a day’ means 7.6 hours and ‘days’ has a corresponding meaning for the purpose of personal leave.” 16

[35] It proposed this be included following existing sub clause 116.2.3.

[36] HSAM did not provide written submissions in response to the directions issued by the Commission. However, it agreed the dispute was about the meaning of the word “day” in the sub clause and it saw no need to respond to the submissions filed by Monash Health “because there's virtually no dispute on the facts.” 17

[37] It also indicated it relied on a document headed “Response by Kevin Sullivan and Marcelo Gonzalez to enquiry from Commissioner Johns,” 18 which was prepared and provided to the Commissioner when the matter was first allocated to him.

[38] HSAM did not object to the sequence of events detailed in the evidence of Monash Health. It also agreed the task before the Tribunal was to:

“...come to a definite position that the word or words in dispute in the instrument are ambiguous or uncertain and in that that there are two contentions which both have an arguable base...” 19

[39] However, in its submission the entitlement in the Agreement is clear; it is an entitlement to 21 days of personal leave, and “day” has a plain and ordinary meaning and should be interpreted in that way. Accordingly, it is not to be read down or qualified by reference to 7.6 hours, but is instead based upon the hours worked by an employee on the day. In its submission this approach also provides a consistent application of the provisions for part-time employees.

[40] It continued to indicate:

“We say the dispute at this point in time is very, very discrete, as I said, the word ‘day’ or ‘days’ and it's for the applicant to convince you that the word ‘day’ or ‘days’ constitutes an ambiguity and uncertainty. If you're convinced on that, then you have a discretion. You don't have to vary the agreement. You can if you want but you don't have to.” 20

[41] HSAM submits, in conclusion there is, firstly, no “rival contention” and the 2011 Agreement is instead clear and unambiguous in stating employees have an entitlement to 21 days personal leave each year. It also submits the onus is on Monash Health, as the Applicant, to establish its contention has an arguable case. In its submission the evidence indicates there is a common understanding about the meaning of the word “day” in an industrial context; it is the length of the day that an individual employee works.

[42] It also submits Monash Health has failed to demonstrate the existence of any ambiguity or uncertainty and the application should accordingly fail. In this context it referred to the decision in Print R2431 21 where a Full Bench found it was not sufficient to assert an ambiguity or uncertainty existed because the parties had different views about what a particular clause meant, or was intended to mean. In its submission the necessary jurisdictional pre-requisite was not met by a party simply indicating they meant something different from what is actually stated in an Agreement. It also submits the decision is authority for the proposition the Commission should ignore long-standing practice where the words in the instrument have a clear and unambiguous meaning. In addition, in its submission the circumstances of part-time employees do not assist Monash Health and those employees simply have an entitlement to 21 personal leave days paid on the basis of the hours they would normally work on that day.

[43] In any case it submits any intention to express the entitlement in hours was set aside by the deliberate decision in the drafting of the 2009 Agreement to express the entitlement in “days.” This clear and unambiguous intention was carried over into the existing 2011 Agreement.

[44] It also submits that the witness evidence indicates Monash Health’s position is unworkable when considered in the context of employees working 10 hour shifts. It points to the evidence of Mr Nagle, in particular, in support of its submission that those employees only receive 15.9 days of personal leave each year, if a “day” is considered to be 7.6 hours. This is because they are being deemed to accrue an entitlement at the rate of 7.6 hours per day, but have deductions from that entitlement at the rate of 10 hours per day when leave is taken.

[45] HSAM also referred to the decision in Textile, Clothing and Footwear Union of Australia v Givoni 22 which it submits is authority for the proposition “the words in the agreement are the words in the agreement.”23 In the present matter those words, in its submission, are clear and unambiguous and there is no requirement or ability to have regard to other “extrinsic material.” It also submits its approach does not create a situation of disadvantage or discrimination when compared with the requirements of the NES. It submits, in conclusion, the application should be dismissed because Monash Health has not been able to demonstrate any “propositions within the instrument that show an ambiguity or uncertainty.”24

[46] After the initial hearing had concluded the Commission also became aware of a recent Full Bench decision which, prima facie, appeared to deal with similar circumstances to the present matter. It involved an original application under s.739 in respect of the accrual of sick leave by employees, and issues to do with whether the leave accrues based on the hours actually worked by the employees, or on a notional day of 7.6 hours. The original application was determined by Commissioner Wilson and his decision then taken on appeal to a Full Bench. The Full Bench decision was handed down on 5 May 2014. 25

[47] The Commission subsequently sent a further directions to the parties indicating in part:

“[1] In the course of determining the above matter I have become aware of a recent Full Bench decision handed down on 5 May 2014 dealing with similar circumstances.

[2] The matter is Australian Municipal, Administrative, Clerical and Services Union v Hobson’s Bay City Council[2014] FWCFB 2823.

[3] I accordingly propose to provide the parties with the opportunity to make further submissions, if they wish, about the relevance, if any, of the decision of the Full Bench. I propose to do so in accordance with the following Directions.” 26

[48] The notice then continued to set out a timetable in which those submissions were to be provided.

[49] The Applicant submitted in response that while the Full Bench decision originated from an application under s.739, and not s.217, the matters both concern the accrual of personal leave and are “otherwise comparable.” In its submission the Full Bench decision is particularly relevant with respect to the following matters:

• " Whether there is an arguable case in favour of each contention to enliven jurisdiction, and
• Whether the Commission should exercise its discretion to vary the Agreement.” 27

[50] It continued to submit the Full Bench decision is consistent with its contention and supported the view it has an arguable case. However, it also submits the decision reinforces the view the Respondent’s contention is not arguable. In those circumstances it submits the Commission could find the Respondent’s case was simply “self-serving,” and the application should go no further. Alternatively, it submits the Full Bench decision is relevant to the exercise of the Commission’s discretion under s.217 if it concludes it is appropriate to exercise that discretion. For example, if the Commission acts to vary the Agreement, in the manner proposed by Monash Health, it submits the Full Bench decision provides support for the view this is consistent with the intent of the Agreement and does not involve “rewriting the Agreement.” 28 It also lends support, in its submission, to the Commission exercising its discretion.

[51] The Respondent rejects this view for two reasons, in particular, being the “nature of the respective proceedings and the clauses in dispute.” 29 It submits, firstly, that the power being exercised by Commissioner Wilson, and then the Full Bench, was a power to interpret terms of a certified agreement to resolve the dispute between the industrial parties. That power was derived from the dispute settling procedure in the Agreement. However, the present application is made under s.217 and requires Monash Health to demonstrate at the outset that an ambiguity or uncertainty exists as an initial jurisdictional prerequisite. In its submission an ambiguity or uncertainty must also derive from the Agreement itself, and not from anything that has gone before or been in place previously.

[52] It submits the proceedings are therefore different in character and, “There can be no principle drawn from the Full Bench decision that can have any application in relation to this section 217 matter.” 30 The Respondent also submits the clauses and the wording in each case are different, as are the principles to be applied in each case. It notes, in particular, that the clause in the Hobson’s Bay Agreement made reference to “ordinary day” instead of “day(s),” as in the present matter. The subject matter that requires interpretation is accordingly, in its submission, different from that in the present matter. It concluded, “It is the submission of the respondent that there is no applicable principal or even similarity in relation to the decision in the Hobson’s Bay case and the current natter (sic) before the Commission.”31

Consideration

[53] In coming to a decision in this matter I have had regard to a number of decisions of this Tribunal and its predecessors.

[54] The decision of the Full Bench in Tenix Defence Systems Pty Limited Certified Agreement 2001–2004 32 contains a relevant summary of the proper construction and application of s.217 of the Act. In that matter the Full Bench was dealing with provisions in section 170MD(6) of the Workplace Relations Act 1996, which reflect those now contained in s. 217. The Full Bench described the proper construction and the application of the section in the following terms (references omitted):

“[28] Before the Commission exercises its discretion to vary an agreement pursuant to s.170MD(6)(a) it must first identify an ambiguity or uncertainty. It may then exercise the discretion to remove that ambiguity or uncertainty by varying the agreement.

[29] The first part of the process - identifying an ambiguity or uncertainty - involves an objective assessment of the words used in the provision under examination. The words used are construed having regard to their context, including where appropriate the relevant parts of a related award. As Munro J observed in Re Linfox - CFMEU (CSR Timber) Enterprise Agreement 1997:

‘The identification of whether or not a provision in an instrument can be said to contain an `ambiguity' requires a judgment to be made of whether, on its proper construction, the wording of the relevant provision is susceptible to more than one meaning. Essentially the task requires that the words used in the provision be construed in their context, including where appropriate the relevant parts of the `parent' award with which a complimentary provision is to be read.’

[30] We agree that context is important. Section 170MD(6)(a) is not confined to the identification of a word or words of a clause which give rise to an ambiguity or uncertainty. A combination of clauses may have that effect.

[31] The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention.

[32] Once an ambiguity or uncertainty has been identified it is a matter of discretion as to whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion the Commission is to have regard to the mutual intention of the parties at the time the agreement was made.

[33] We agree with Tenix that the first step in dealing with a s.170MD(6)(a) application - the identification of an ambiguity or uncertainty - requires the determination of a ‘jurisdictional fact’. In Corporation of the City of Enfield v Developmental Assessment Commission the joint judgment of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ described the term ‘jurisdictional fact’ in these terms:

‘The term `jurisdictional fact' (which may be a complex of elements) is often used to identify that criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion.’

[34] Similarly in Re: CFMEU - Termination of Bargaining Periods, Lee and Madgwick JJ said:

‘. . . the question presents as one of whether the Commission may have erred as to a `jurisdictional fact', that is, the existence or non-existence of a state of affairs which was a statutory precondition to the Commission acting. . .’

[35] In the context of s.170MD(6)(a) the Commission must first identify the existence of an ambiguity or uncertainty before exercising its discretion to vary the agreement. We agree with the Full Bench in Re: CFMEU Appeal which described the existence of an ambiguity or uncertainty as ‘a necessary statutory prerequisite to any variation being made.’” 33

[55] I have also had regard to the finding of Munro J. in the Linfox 34 decision referred to above, when he held:

“In other words, the power must be exercised to remove any ambiguity. It may not appropriately be used to re-write an agreement to install something that was not inherent to the agreement when it was made” 35

[56] I also note the conclusions of the Full Bench in the matter of The Public Transport Corporation of Victoria and Australian Rail, Tram and Bus Industry Union and others 36 when it held:

“In our view the approach adopted by his Honour Gray J. in the PKIU case is a sensible one and should be applied by the Commission in dealing with applications to vary agreements for the purpose of removing ambiguity or uncertainty. Accordingly the Commission would generally err on the side of finding an ambiguity or uncertainty in circumstances where there are rival contentions advanced before it and an arguable case can be made out for more than one contention.

Once an ambiguity or uncertainty has been identified it is then a matter of discretion as to whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion the factors to which the Commission should have regard would include the intention of the parties at the time the Agreement was made. Such an intention may be discerned from the circumstances at the time and the subsequent conduct of the parties.” 37

[57] I have applied the principles established in these decisions in coming to a decision in this matter. I am satisfied, firstly, based on an objective assessment that there is ambiguity and uncertainty in the meaning of sub clause 116.2.3 because the meaning of the word “day” is susceptible to more than one meaning. The basis of the respective contentions of Monash Health and HSAM in this regard have been set out in some detail and are not restated at length again.

[58] However, Monash Health acknowledges “day” is not specifically defined in the Agreement but, as the Oxford Dictionary indicates, is a word that can have many meanings. It also points to the fact the terms of the Agreement are generally structured around a 38 hour working week and a standard working day of 7.6 hours. In addition, the recent Agreements and the pre-existing Award typically based leave entitlements on the number of hours in a standard working day. The recent change in wording only came about, in its submission, because of a desire to bring that wording in line with the newly established NES. However, there was no intention to change the intent of the sub clause, or how it applies.

[59] Monash Health also submits its approach to the meaning of the sub clause “makes sense” when applied in the workplace because it means the entitlement remains the same for each employee, regardless of the length or the number of shifts worked each week. Its approach also ensures the entitlement of part-time employees remains proportionate at all times with that of full-time employees.

[60] The Commission suggested to Monash Health its approach could mean employees working longer shifts in accordance with mutually agreed arrangements entered into under sub clause 98.1 might not receive 21 separate days of leave in a year. This is because the entitlement is accruing at the rate of 21 times 7.6 hours each year, but being deducted at the number of hours normally worked by the employee in each shift when leave is taken. Monash Health rejected any suggestion employees were being disadvantaged in these circumstances, drawing a distinction between the rate of accrual of leave and the rate at which leave is taken. It also submits the converse approach would give a greater entitlement to employees working longer shifts. In addition, employees working on less days each week were less likely to require as many personal leave absences from work.

[61] In summary, based on an objective assessment I am satisfied that an arguable case can be made out, for all the reasons indicated, for the contention advanced by Monash Health in terms of how the sub clause should be applied.

[62] I am also satisfied that a similar conclusion can be reached in response to HSAM’s contention. It also acknowledges that “day” can have more than one meaning, but submits it also has a commonly understood meaning in an industrial context, being the length of the shift an employee would normally work on the day. In its submission the word has a plain and ordinary meaning and should be interpreted in that way. It also submits that instead of creating inconsistency in terms of how the entitlement applies its approach has the opposite effect, in that the leave entitlement accrues at the same rate as the rate at which leave is taken. For example, an employee accrues 21 days of personal leave. One day is then deducted for each day of personal leave taken. As indicated, I am satisfied an arguable case can be made out, on an objective basis, for the sub clause to be applied in this way.

[63] I also note that in coming to these conclusions it has been held that the Commission should generally err on the side of finding an ambiguity or uncertainty exists in terms of the meaning and intent of the provisions in question, in circumstances where there are rival contentions advanced by more than one party, and it is determined an arguable case can be made out for each.

[64] Having come to these conclusions about the respective contentions advanced by Monash Health and HSAM I am satisfied, based on the authorities referred to, that it is now open to the Commission to vary the Agreement pursuant to s.217. However, it is also evident the Commission has a discretion as to whether it elects to exercise this power. Having come to the conclusion that there is an arguable case for the contentions of both Monash Health and HSAM, and that ambiguity and/or uncertainty exists as to the meaning of sub clause 116.2.3, I am satisfied it is appropriate to exercise this discretion in order to remove that ambiguity or uncertainty as to the meaning of the sub clause. To not do so would leave that ambiguity or uncertainty in place in circumstances where there are already disputes existing about the application of the sub clause.

[65] In exercising this discretion I am also satisfied the mutual intention of the parties at the time the Agreement was made can be considered and understood based on the witness evidence and the circumstances existing at the time the Agreement was made, as well as the derivation of the sub clause, and the subsequent conduct of the parties.

[66] Monash Health made extensive submissions about these matters and they have already been referred to in some detail in this decision. The Award on which the subsequent Agreements, including the current Agreement, are based expressed the personal leave entitlement in hours, not days. Secondly, no party in any of the negotiations for a new agreement sought to express the entitlement in hours, rather than days. The change, in its submission, only came about because of the introduction of the NES, and an intention to express the sub clause in a manner that was consistent with these new statutory provisions. No party indicated any intention to change the entitlement or the way in which it had been traditionally applied.

[67] This was confirmed by the evidence of Mr Djoneff and Mr Philip Murphy. Both gave evidence that no party in the negotiations in the lead up to the establishment of either the 2009 or the 2011 Agreements suggested it was intended to change the accrual of leave to a calculation based on hours rather than days.

[68] Mr Nagle’s evidence also indicated that Monash Health has a long-standing practice of administering the personal leave entitlements of employees on the basis that a day is considered to be 7.6 hours, meaning employees accrue the same entitlement to leave regardless of the length of their shift.

[69] HSAM did not go into any detail in regard to these matters. This is understandable because its primary submission is that Monash Health has not made out an objectively valid “rival contention”. However, it submits Monash Health’s own witness evidence confirms its contention about how the sub clause applies is unworkable for employees working 10 hour shifts because they only receive 15.9 days of personal leave each year, instead of 21, if a day is considered to be 7.6 hours and accrues at that rate, but is deducted from the employee’s entitlement at the rate of 10 hours per day when leave is taken. This outcome was acknowledged in the witness evidence of Mr Djoneff and Mr Nagle, although neither suggested it represented any reduction in entitlements. It is also noted this was considered in the Full Bench decision in Hobson’s Bay in regard to a similar clause. The Full Bench concluded this did not of itself mean the clause was being incorrectly applied as it made a clear distinction between the rate at which leave accrues and the rate at which it is taken. In this context the Full Bench stated at [41]:

“As to the deduction to be made when sick or carer’s leave is taken, the entitlement to such leave being “without loss of pay” in clauses 39.2.2 and 39.2.3 of the Agreement, in our view, necessitates that the deduction reflects the actual hours which would have been worked on the day or days of absence. The practical effect of this is that sick and carer’s leave accrue at a rate different to the rate at which they are taken. This in turn necessitates that for administrative purposes the entitlement be converted to hours to ensure that employees are neither disadvantaged nor advantaged vis-a-vis the Agreement.” 38

[70] In concluding, I am satisfied the intention has been throughout to treat the accrual of personal leave as based upon a day being 7.6 hours, with the accrual for a full-time employee with more than 4 years service being 21 days multiplied by 7.6 hours. Given the evident ambiguity and/or uncertainty of the existing words in sub clause 116.2.3 I am also satisfied it is appropriate to vary the Agreement to remove this ambiguity or uncertainty. It is accordingly determined that the following words be added at the conclusion of the existing sub clause:

“For the avoidance of doubt a “day” means 7.6 hours and “days” has a corresponding meaning for the purposes of personal leave accrual.”

[71] The sub clause will now state as follows:

“116.2.3 Employees who are classified under Part 1, Part 2 and Part 3 of Schedule G shall accrue personal/carer’s leave as follows:

a. one day will be available for each month of service in the first year of service;

b. 14 days will be available per annum in the second, third and fourth year of service; and

c. 21 days will be available per annum in each subsequent year of service.

For the avoidance of doubt a “day” means 7. 6 hours and “days” has a corresponding meaning for the purposes of personal leave accrual.”

COMMISSIONER

Appearances:

Stuart McCullough of the Victorian Hospitals’ Industrial Association appeared on behalf of the Applicant.

Maurice Addison appeared on behalf of HSAM.

Hearing details:

2014.

Melbourne:

5 March;

6 March;

17 June.

 1   AE896737

 2   Ibid at cl.116.2.3

 3   Fair Work Act 2009 (Cth) s.217

 4   AP783945

 5   Ibid at cl.33.2.2

 6   Victorian Public Health Sector (Health and Allied Services, Managers and Administrative Officers) Multiple Enterprise Agreement 2009 - 2011, AE887198

 7   Ibid at cl.50.2.3

 8   Exhibit VHIA1 at para 29

 9   Ibid at para 38

 10   Exhibit VHIA3 at para 30

 11   Transcript at PN128

 12   Ibid at PN136

 13   Ibid at PN140

 14   Ibid at PN158

 15   Ibid at PN144

 16   Ibid at PN174

 17   Ibid at PN35

 18   Received by email from Pauline Fegan to the Chambers of Commissioner Johns on 29 November 2013

 19   Transcript at PN51

 20   Ibid at PN61

 21   Application by the Construction, Forestry, Mining and Energy Union, Senior Deputy President Harrison, Deputy President Drake and Commissioner Larkin, Sydney, 25 February 1999

 22 [2002] FCA 1406

 23   Transcript at PN957

 24   Ibid at PN972

 25   [2014] FWCFB 2823

 26   Directions issued by Commissioner Gregory on 28 May 2014

 27   Exhibit VHIA5 at para 21

 28   Ibid at para 32

 29   Transcript 17 June 2014, PN11

 30   HSAM2 at para 12

 31   Ibid at para 22

 32   PR917548

 33   Ibid at [28]-[35]

 34   Print Q2603

 35   Ibid at [29]

 36   Print M2454, Vice President Ross, Senior Deputy President Polites and Commissioner Grimshaw, Melbourne, 7 June 1995

 37   Ibid

 38   [2014] FWCFB 2823 at [41]

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