NSW Nurses Association v Ramsay Health Care Australia Pty Ltd
[2009] FMCA 579
•25 June 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NEW SOUTH WALES NURSES’ ASSOCIATION v RAMSAY HEALTH CARE AUSTRALIA PTY LTD & ORS | [2009] FMCA 579 |
| INDUSTRIAL LAW – Interpretation of a provision in a Notional Agreement Preserving a State Award – long service leave entitlement of employees with periods of part-time employment. |
| Federal Court Of Australia Act 1976 (Cth), s.21 Federal Magistrates Act 1999 (Cth), s.16 |
| Abebe v The Commonwealth of Australia (1999) 197 CLR 510 Ainsworth and Another v Criminal Justice Commission (1992) 175 CLR 564 Ambulance Service Victoria (South Western Region) v Australian Liquor, Hospitality & Miscellaneous Workers Union (1998) 80 IR 275 Amcor Limited v Construction, Forestry, Mining and Energy Union and Others (2005) 222 CLR 241 Ansett Australia Limited (subject to Deed of Company Arrangement) v Australian LicencedAircraft Engineers’ Association [2003] FCAFC 209 Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth and Others (1998) 82 FCR 175 Australian Nursing Federation v Royal Melbourne Hospital (1995) 58 IR 214 Australian Securities and Investments Commission v Edensor Nominees Pty Ltd and Others (2001) 204 CLR 559 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Skilled Engineering Ltd [2003] FCA 260 BGC Contracting Pty Ltd and Others v Construction Forestry Mining and Energy Union of Workers (2004) 140 FCR 53 City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813 City of Wanneroo v Holmes (1989) 30 IR 362 Collins v Charles Marshall Proprietary Limited (1955) 92 CLR 529 Collison v State Rail Authority (NSW) (1992) 43 IR 332 Commonwealth v BIS Clearway Ltd (2007) 214 FLR 271 Construction, Forestry, Mining and Energy Union v Mount Thorley Operations Pty Ltd (1997) 79 FCR 96 Curragh Queensland Mining Limited v Construction, Forestry, Mining & Energy Union and Others (1997) 77 IR 232 Endeavour Coal Pty Ltd and Others v Construction, Forestry, Mining and Energy Union (NSW) (2007) 165 FCR 1 Energy Union and Others (1997) 77 IR 232 Fencott and Others v Muller and Another (1983) 152 CLR 570 Finance Sector Union of Australia v Commonwealth Bank of Australia (2000) 106 FCR 16 Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 106 IR 172 Forestview Nominees Pty Ltd and Another v Perpetual Trustees WA Limited (1988) 193 CLR 154 In re the Judiciary Act 1903-1920 and In re the Navigation Act 1912-1920 (1921) 29 CLR 257 Kennedy v Board of Fire Commissioners [1967] AR (NSW) 455 Kucks v CSR Limited (1996) 66 IR 182 Lindner Pty Ltd v Builders Licensing Board [1982] 1 NSWLR 612 Master Builders’ Association of Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1981) 54 FLR 358 McSwiggan v Western Sydney Area Health Service [2000] NSWCIMC 39 McSwiggan v Western Area Health Service [2000] NSWCIMC 47 Minister for Immigration and Multicultural Affairs and Another v Ozmanian (1996) 71 FCR 1 New South Wales v The Commonwealth of Australia (2006) 229 CLR 1 Oil Basins Limited v The Commonwealth of Australia and Others (1993) 178 CLR 643 Re Food Preservers Award (1959) 3 FLR 425 Re Graphic Arts Award (1957) 1 FLR 22 Re Rubber Plastic and Cable Making Industry Award 1957 (1963) 8 FLR 395 Re Queensland Electricity Commission; Ex parte Electrical Trade Union of Australia (1987) 61 ALJR 393 Short v F W Hercus Pty Limited (1993) 40 FCR 511 Sibte v Expandite (Aust) Pty Ltd (1988) 28 IR 53 Soliman v University of Technology, Sydney [2008] FCA 1512 The Corporation of the City of Burnside v The Municipal Officers’ Association of Australia & Anor (1985) 10 IR 313 Truth About Motorways Pty Limited v Macquarie Infrastructure Investment Management Limited (2000) 200 CLR 591 United Firefighters’ Union of Australia and Another v Metropolitan Fire and Emergency Services Board (2006) 152 FCR 18 University of Western Australia v National Tertiary Education Industry Union (2003) 129 IR 348 Victoria v Australian Teachers' Union (1993) 49 IR 149 |
| Applicant: | NEW SOUTH WALES NURSES’ASSOCIATION |
| First Respondent: | RAMSAY HEALTH CARE AUSTRALIA PTY LTD (ABN 36 003 184 889) |
| Second Respondent: | AFFINITY HEALTH PTY LTD (ABN 53 106 722 347) |
| Third Respondent: | HCoA OPERATIONS (AUSTRALIA) PTY LTD (ABN 85 083 035 661) |
| File Number: | SYG 1862 of 2008 |
| Judgment of: | Barnes FM |
| Hearing dates: | 4 December 2008, 23 & 27 February 2009 |
| Date of Last Submission: | 2 March 2009 |
| Delivered at: | Sydney |
| Delivered on: | 25 June 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr M Gibian |
| Counsel for the Respondents: | Mr G J Hatcher SC Mr M Easton |
| Solicitor for the Respondents: | Colin J Graham |
ORDERS
The application in relation to the first respondent be dismissed.
The Court orders and declares that, on the proper construction of clause 26 of the Private Hospital Industry Nurses’ (State) Award (as that term is taken to be included in the NAPSA binding upon each of the second and third respondents), an employee who is entitled to long service leave on full pay under clause 26(2)(a) is entitled to be paid when taking such leave as follows:
(a)Long service leave accrued during periods of full-time employment is to be paid at the full-time weekly rate of salary for the employee’s classification applying at the time the leave is taken.
(b)Long service leave accrued during periods of part-time employment is to be paid at a proportion of the full-time weekly rate of salary for the employee’s classification applying at the time the leave is taken being the proportion that the average hours worked per week during the period of part-time employment bears to 38 hours.
The Court orders and declares that, on the proper construction of clause 26 of the Private Hospital Industry Nurses’ (State) Award (as that term is taken to be included in the NAPSA binding upon each of the second and third respondents), an employee having acquired a right to take long service leave in accordance with clause 26(2)(a)(i) whose employment is terminated prior to entering upon such leave is entitled to receive the monetary value of the leave to be calculated as follows:
(a)The monetary value of long service leave accrued during periods of full-time employment is to be calculated on the basis of the full-time weekly rate of salary for the employee’s classification applying immediately prior to the termination of employment.
(b)The monetary value of long service leave accrued during periods of part-time employment is to be calculated at a proportion of the full-time weekly rate of salary for the employee’s classification applying immediately prior to the termination of employment being the proportion that the average hours worked per week during the period of part-time employment bears to 38 hours.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1862 of 2008
| NEW SOUTH WALES NURSES’ ASSOCIATION |
Applicant
And
| RAMSAY HEALTH CARE AUSTRALIA PTY LTD (ABN 36 003 184 889) |
First Respondent
| AFFINITY HEALTH PTY LTD (ABN 53 106 722 347) |
Second Respondent
| HCoA OPERATIONS (AUSTRALIA) PTY LTD (ABN 85 083 035 661) |
Third Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings under the Workplace Relations Act 1996 (Cth) (the WRA). The applicant, the New South Wales Nurses’ Association, seeks declarations as to the proper construction of clause 26 of the Private Hospital Industry Nurses’ (State) Award as that term is taken to be included in a notional agreement preserving state awards (a NAPSA) binding on each of the second and third respondents. Clause 26 deals with the long service leave entitlement of employees.
The applicant also seeks a declaration as to the basis for payment to Ms Kaye Dawes for long service leave accrued during periods she was employed full time and part time at Dudley Private Hospital, Orange on the proper construction of clause 26.
The applicant now seeks proposed orders contained in a further further amended application filed on 2 March 2009 and relies on affidavits sworn by Harry Maratheftis on 10 September 2008 and 10 February 2009 and an affidavit of Kaye Harriet Dawes sworn on 4 September 2008. The respondents rely on affidavits of Keith Roper Richardson sworn on 30 November 2008 and Leana Merle Street sworn on 24 December 2008. Each of the parties filed extensive written submissions.
Application of the WRA
Consistent with the increased regulation of employment relations by the Commonwealth (see New South Wales v The Commonwealth of Australia (2006) 229 CLR 1), Schedule 8 to the WRA, which took effect from 27 March 2006, makes transitional arrangements for employers and employees previously covered by State awards or agreements who are now covered by the WRA.
Relevantly, where prior to 27 March 2006 the terms and conditions of employment of an employee in a single business or part thereof were determined in whole or in part under a State award or industrial law, a NAPSA is taken to have come into operation as of 27 March 2006 in respect of that business or part of the business (see Schedule 8 to the WARA, clauses 1(1) and 31). Such a “notional” agreement/NAPSA is given effect by and regulated under the WRA. Entitlements under the State award and certain entitlements under State industrial law become terms of the applicable NAPSA which may be enforced under the WRA (Schedule 8, clause 43).
Prior to 27 March 2006 the terms and conditions of nurses employed in certain private hospitals in New South Wales were governed by the Private Hospital Industry Nurses’ (State) Award (the “Award”). NAPSAs binding on each of the second and third respondents as employers came into effect as at 27 March 2006, including the terms of the Award as it stood at that time (see clauses 31 and 32 of Schedule 8 to the Act).
This application is brought under regulation 2.20 in Chapter 7 of the Workplace Relations Regulations made under the WRA which relevantly provides:
(1) The Court or the Federal Magistrates Court may give an interpretation of a transitional instrument on application by:
(a) the Minister; or
(b) an organisation or person bound by the transitional instrument; or
(c) an employee whose employment is subject to the transitional instrument.
(2) The decision of the Court or the Federal Magistrates Court is final and conclusive and is binding on:
(a) the organisations and persons bound by the transitional instrument; and
(b) the employees whose employment is subject to the transitional instrument;
who have been given an opportunity of being heard by the Court or the Federal Magistrates Court.
Under reg.2.20(3)(b) a “transitional instrument” includes a NAPSA within the meaning given by subclause 1(1) of Schedule 8 to the WRA.
The parties to these proceedings
The applicant is a registered organisation of employees registered under the Industrial Relations Act 1996 (NSW) and is a “transitionally registered organisation” under Schedule 10 to the WRA.
The Award is an award that was made by the Industrial Relations Commission of New South Wales to apply to persons engaged in New South Wales in the profession of nursing in private hospitals. When the applicant commenced these proceedings by application filed on 21 July 2008, the only respondent named was Ramsay Health Care Australia Pty Ltd. Declarations were sought in relation to the rate at which a Ms Kaye Dawes accrued long service leave under the Award.
Initially, in points of defence filed on 4 August 2008, Ramsay Health Care Australia Pty Ltd admitted that it was the operator of Dudley Private Hospital, Orange and the employer of Ms Dawes who is a registered nurse at that hospital. At that time the orders sought by the applicant related specifically to claimed entitlements of Ms Dawes on the proper construction of the Award.
In 2006 an enterprise agreement was made between the New South Wales Nurses Association and a party described as “Ramsay Health Care Limited (Ramsay Health Care Australia Pty Ltd)” as the employer. This agreement commenced operation on 21 March 2006. Under Schedule 8 to the WRA some pre-reform enterprise awards became preserved collective state agreements on 27 March 2006. By an amended application filed on 10 September 2008 the applicant sought interpretation of clause 26 of the Award as that provision was contained in a PSA (preserved state agreement) specifically in relation to the entitlement of Ms Dawes. The first respondent was at that stage the only respondent in these proceedings.
Before the date on which this matter was listed to be heard it emerged that there was an issue as to the identity of the employer in hospitals such as the Dudley Private Hospital which had been acquired by the Ramsay group in 2005.
The first respondent subsequently amended its points of defence (with leave) to contend that it was not the employer of Ms Dawes, although it was acknowledged that on any view Ms Dawes’ employer was within the group of companies related to the first respondent.
It is not in dispute that the second and third respondents, to the extent to which each employed persons within the scope of the Award within New South Wales, were required to observe and comply with the conditions of the Award and that the Award (as varied) continued to have application to the second and third respondents up to and including 26 March 2006.
Nor is it disputed that on 27 March 2006, when the “Work Choices” amendments came into force, by operation of clause 31 of Schedule 8 to the WRA a NAPSA was taken to come into operation on and from 27 March 2006 in relation to the second respondent and also that to the extent that the third respondent employed employees within the area and incidence of the State Award, a further NAPSA was taken to come into operation in relation to the third respondent.
The second and third respondents admit that the applicant is entitled to apply to this Court for an interpretation of a transitional instrument, including a NAPSA, that is taken to include the terms of the Award under Regulation 2.20 in Chapter 7 of the Workplace Relations Regulations because it is an “organisation” and/or “person” bound by the NAPSA.
After this issue came to light, the applicant filed a further amended application (on 9 December 2008) joining the second and third respondents and seeking interpretation of terms in NAPSAs on the basis that each respondent (including the first respondent) was an “employer” under s.6 of the WRA and was bound by a NAPSA containing the terms of the Award.
The first respondent disputed that it was so bound and contended that relief based on the existence of a NAPSA (as distinct from a PSA) could only be sought against the second and third respondents, not the first respondent.
The first respondent’s present position is that it is not and never has been the employer of employees employed in the occupation or industry of nursing at the Dudley Private Hospital in Orange or the owner or operator of that hospital. The owner/operator of the hospital is said to be the third respondent. It is admitted that while the second respondent is not the operator of the hospital it is the employer of nursing staff working at the hospital.
It is apparent from the evidence of Mr Richardson, Human Resources Manager within the Ramsay group of companies, that there is some complexity in the corporate structure of the group, particularly associated with the acquisition of Affinity Health Limited, which was the operator of the Dudley Private Hospital. Mr Richardson’s evidence is that he is of the view that Ms Dawes (who first worked at Dudley Private Hospital in 1974, worked full time from 1975 to 2003 and thereafter permanent part time) is employed “either” by the second or third respondent.
The ultimate holding company within the Ramsay group of companies is Ramsay Health Care Limited. It controls Ramsay Health Care Investments Pty Ltd which in turn controls a number of wholly-owned subsidiaries (including the first and second respondents). The third respondent is a wholly-owned subsidiary of the second respondent. Private hospitals within the group are owned and operated by various subsidiaries of Ramsay Health Care Investments Pty Ltd. As indicated, it is admitted that the second and third respondents are employers for the purposes of s.6 of the WRA by virtue of being trading corporations and that from 27 March 2006 each of them employed persons in the profession of nursing at private hospitals and that each was bound by a NAPSA.
The applicant now relies on a further further amended application filed on 2 March 2009 to which there are three respondents: Ramsay Health Care Australia Pty Ltd, Affinity Health Pty Ltd and HCoA Operations (Australia) Pty Ltd.
The orders now sought are limited to the terms of NAPSAs binding on each of the second and third respondents. The first respondent points to the fact that no relief is now sought against it and seeks that the application against it be struck out or dismissed and that the applicant pay its costs (cf Oil Basins Ltd v The Commonwealth of Australia (1993) 178 CLR 643).
It appears on the material before the Court that to the extent to which the first respondent was an employer of nurses in private hospitals in New South Wales as at 27 March 2006 there may have been created a preserved collective state agreement under clause 10 of Schedule 8 to the WRA. However the present further further amended application does not seek orders either in relation to a PSA or in relation to a NAPSA binding on the first respondent.
The applicant submitted that the first respondent remained an appropriate respondent in order to express its views on the interpretation sought. Clearly, had the first respondent sought to be heard on the issue before the Court it had the opportunity to express such views. It did not do so. Insofar as the application is made in relation to the first respondent it should be dismissed.
It has been foreshadowed that there is also an issue in relation to the costs incurred by reason of the adjournment of the hearing on 4 December 2008. The costs applications raise issues of some complexity, given the time and manner in which the issue about the identification of the “employer” emerged, and the provisions of s.824 of the WRA. I consider it is appropriate to allow the parties the opportunity to be heard on the issue of costs.
The orders sought in these proceedings
In the further further amended application filed on 2 March 2009 the applicant seeks two generally expressed orders in the form of declarations as to the proper construction of clause 26 of the Award as that term is taken to be included in a NAPSA in relation to the rate of payment of an employee while on long service leave and the calculation of the monetary value of accrued long service leave on termination of employment of an employee. The orders sought in that respect are as follows:
1. An order declaring that, on the proper construction of clause 26 of the Private Hospital (sic) Nurses’ (State) Award (as that term is taken to be included in the NAPSA binding upon each of the second and third respondents), an employee who is entitled to long service leave on full pay under clause 26(2)(a) is entitled to be paid when taking such leave as follows:
(a) Long service leave accrued during periods of full-time employment is to be paid at the full-time weekly rate of salary for the employee’s classification applying at the time the leave is taken.
(b) Long service leave accrued during periods of part-time employment is to be paid at a proportion of the full-time weekly rate of salary for the employee’s classification applying at the time the leave is taken being the proportion that the average hours worked per week during the period of part-time employment bears to 38 hours.
2. A declaration that, on the proper construction of clause 26 of the Private Hospital (sic) Nurses’ (State) Award (as that term is taken to be included in the NAPSA binding upon each of the second and third respondent), an employee having acquired a right to take long service leave in accordance with clause 26(2)(a)(i) whose employment is terminated prior to entering upon such leave is entitled to receive the monetary value of the leave to be calculated as follows:
(a) The monetary value of long service leave accrued during periods of full-time employment is to be calculated on the basis of the full-time weekly rate of salary for the employee’s classification applying immediately prior to the termination of employment.
(b) The monetary value of long service leave accrued during periods of part-time employment is to be calculated at a proportion of the full-time weekly rate of salary for the employee’s classification applying immediately prior to the termination of employment being the proportion that the hours worked the average hours worked (sic) per week during the period of part-time employment bears to 38 hours.
In addition an order is sought relating specifically to the entitlement of Ms Dawes (proposed order three) as follows:
An order declaring that, on the proper construction of clause 26 of the Private Hospital Industry Nurses’ (State) Award as that provision is contained in the NAPSA binding upon either the second or third respondent, Ms Kaye Dawes accrued long service leave during the period she was employed full-time at Dudley Private Hospital to be paid on the basis of the full-time weekly rate of salary for the Ms Dawes’ classification -applying at the time the leave is taken and accrued long service leave during the period she was employed part-time to be paid on the basis of a proportion of the full-time weekly rate of salary for the Ms Dawes’ classification applying at the time the leave is taken being the proportion that the average number of hours worked per week bears to 38 hours.
It is convenient to consider first the application for orders one and two. The circumstances in which NAPSAs containing the terms of the award came into effect are outlined above. It is not disputed that the second and third respondents are subject to such NAPSAs, at least insofar as they each operate businesses in New South Wales or that the applicant is entitled to apply to the Court for an interpretation of a NAPSA under reg.2.20 of Chapter 7 of the Regulations.
The first and second respondents (referred to for convenience hereafter as the respondents) oppose the making of the orders sought on the alternative bases that the jurisdiction does not arise, that the Court should decline relief as a matter of discretion or that the proposed interpretation is wrong.
Jurisdiction
Clause 26 of the Award is headed “Long Service Leave”. It is set out in full at [83] below. Under clause 26(2)(a) every employee, after ten years continuous service with the same employer, is entitled to two months long service leave “on full pay” and an additional one month’s long service leave “on full pay” after 15 years continuous service. Thereafter for each five years continuous service, the employee is entitled to an additional one and a half month’s long service leave “on full pay”. Such leave “shall be taken at a time to be mutually arranged between the employer and the employee”. Provision is made for leave entitlement and payment of the monetary value of such leave on termination and (in clause 38) for continuation of rights and benefits where changes in hospital ownership occur.
Critically clause 26(2)(e) is as follows: “Any period(s) of part-time employment with the same employer shall count towards long service leave as provided for in paragraph 2(a) of this clause. Such long service leave shall be paid for on the basis of the proportion that the average numbers of hours worked per week bears to 38 hours.”
The orders sought by the applicant relate to the amount an employee is entitled to be paid when taking long service leave or when the employee’s employment is terminated prior to entering upon such leave where such long service leave has accrued during periods of full-time employment and periods of part-time employment. The issues raised involve a consideration of the relationship between the Award and the Long Service Leave Act 1955 (NSW).
It is not disputed that this Court has jurisdiction under reg.2.20 of Chapter 7 of the Regulations which may be exercised in a particular case provided there is a justiciable controversy. Jurisdiction is expressly conferred on this Court by s.847(4) of the WRA in relation to matters arising under the Act in relation to which, among other things, applications may be made to it under the Act. Regulation 2.20 of Chapter 7 expressly states that this Court may give an interpretation of a transitional instrument on application by an organisation or person bound by the transitional instrument (such as the applicant). Section 16 of the Federal Magistrates Act 1999 (Cth) is also relied on by the applicant in relation to proposed order three, as discussed below.
There is a distinction between the issue of whether the Court has jurisdiction to interpret a NAPSA and whether the Court should exercise its power to do so. While reg.2.20 of Chapter 7 of the Regulations has been applicable since 2006, it is based on and is in essentially the same terms as s.849 of the WRA (which applies to collective agreements) and replaced an earlier provision, s.413A, of the WRA. In turn, s.849 is in substantially the same terms as s.848 which applies in relation to awards. The predecessor to s.848 was s.413 of the Act, but comparable provisions also existed in the Industrial Relations Act 1988 (Cth) (s.51) and the Conciliation and Arbitration Act 1904 (Cth) (s.110). Hence there is a considerable body of authority of assistance in relation to the issues raised in the present application.
In relation to the issue of jurisdiction, counsel for the respondents submitted that there was no immediate right in issue. It was acknowledged that there was evidence before the Court as to the situation of three named employees. However it was submitted that these employees were not seeking to exercise an immediate right or entitlement under the long service leave provisions of the NAPSA and that the fact that the applicant had one view and the respondents another view of the operation of the award was not sufficient to give rise to a justiciable controversy.
In the context of an application by an organisation for a declaration as to the interpretation of an award, the Commonwealth Industrial Court in Re Rubber Plastic and Cable Making Industry Award 1957 (1963) 8 FLR 395 took a wide view of jurisdiction, finding that the fact that no party bound by the award disagreed with the interpretation sought would not deprive the Court of jurisdiction and that there was an actual as distinct from a hypothetical question to be answered as the Court was “asked to interpret the award in its application to an actual situation as to which controversy has arisen, though not between parties bound by the award” (at 397). The Court also referred to the fact that a decision of the Court would be authoritative and binding on the parties to the award.
Under reg.2.20(2) of Chapter 7 the decision of the Court is final and conclusive and binding on the organisations and persons bound by the transitional instrument and the employees whose employment is subject to the transitional instrument who have been given an opportunity of being heard by the Court.
The width of jurisdiction was also demonstrated in Curragh Queensland Mining Limited v Construction, Forestry, Mining & Energy Union and Others (1997) 77 IR 232 in which Merkel J was satisfied that there was a “justiciable controversy” before the Federal Court in relation to the interpretation of a clause of an award that made provision about retrenchment in circumstances where there was a restructuring proposal under consideration that would involve retrenchments, even though the clause would only operate when a decision to retrench employees was carried into effect. His Honour stated at 235:
Section 413(1) of the Act provides that the Court may give an interpretation of an award on application by an organisation bound by the award. The Court has exercised that jurisdiction when there is an actual, as distinct from a hypothetical, question or dispute to be decided: see Re Rubber Plastic and Cable Making Industry Award (1960) 8 FLR 395 at 397 and Sibte v Expandite (Australia) Pty Ltd (1988) 28 IR 53 at 56. In my view, it is abundantly clear that there is a genuine controversy between Curragh and the unions in relation to the operation of cl 24 of the Award and that the declaratory relief sought, if granted, will produce foreseeable consequences for the parties: see Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582, 595-597; Oil Basins Ltd v The Commonwealth of Australia (1993) 178 CLR 643 at 648-650 and Minister for Immigration and Multicultural Affairs v Ozmanian (1996) 141 ALR 322 at 349-351.
Accordingly, I am satisfied that there is a "matter", being a justiciable controversy, before the Court and that it is appropriate to exercise the Court's discretion to grant the declaratory relief sought if the grounds for it are made out.
In Construction, Forestry, Mining and Energy Union v Mount Thorley Operations Pty Ltd (1997) 79 FCR 96 Moore J was of the view that the Federal Court had power to interpret a provision in an award dealing with the procedure to be adopted if redundancies occurred, in circumstances where it was contended that an employer proposed to retrench some of its workforce. The employer appeared to contend that the application was brought in a hypothetical context (at 113). However, Moore J was satisfied that there was plainly a controversy between the parties about the meaning of the provision in question and found (at 114) that it was not necessary for the Court to be satisfied that the retrenchments would in fact occur: “Rather it is sufficient that there is a reasonable possibility that they will and that there is a controversy about the meaning, and thus the operation, [the provision of the award] if they do.”
Similarly, in University of Western Australia v National Tertiary Education Industry Union (2003) 129 IR 348 Carr J found that the Federal Court should exercise its power to interpret a provision in a certified agreement on the basis that the questions raised in the context of a dispute about a possible termination of a particular employee’s contract of employment were not hypothetical and there was plainly a controversy between the parties. In that case Carr J was addressing the issue of discretion rather than jurisdiction, but the approach taken is consistent with the view that there can be a justiciable controversy in relation to events which have not yet come to pass.
The evidence before the Court establishes that there is disagreement between the applicant and the respondents as to the method of calculating the long service leave entitlements of employees with mixed periods of full-time and part-time employment covered by a NAPSA that is an actual rather than a hypothetical question to be decided.
In her affidavit Ms Dawes explained that this was a matter of considerable importance to her because of her present plans for retirement and the need to plan financially for such retirement. The evidence of Mr Maratheftis was that this issue also affected other members of the Association (in particular two named other employees at the Dudley Private Hospital). The Association was said to be generally concerned to determine the proper interpretation of the long service leave provisions.
The fact that there is a genuine controversy about the meaning of the provisions in issue is evidenced by correspondence annexed to the affidavit of Mr Maratheftis between the Association and the Ramsay Group relating to Ms Dawes’ employment and the employment of other employees. The evidence of Ms Street for the respondents makes it clear that the respondents take a different view in relation to the interpretation of long service leave provisions. Mr Richardson acknowledged that there was a disagreement between the Association and Ramsay in relation to the proper interpretation of the long service leave provisions that apply to nurses within the Ramsay Group and that he would expect that if other issues of the same nature arose in the future that issue would continue to be a disagreement between the parties. This demonstrates a fundamental disagreement as to the interpretation of the provisions in relation to long service leave entitlement and payment of employees with a combination of full-time and part-time employment.
The Association (initially prompted by the concerns of another employee), made a number of representations to Ramsay Health Care in relation to calculation of the accrued long service leave entitlement of employees who had periods of both full-time and part-time employment. It is apparent that the respondents adopt a methodology to determine the amount of payment for long service leave which differs from that contended for by the applicant. In particular, the respondents were said to determine entitlement to payment for the entire period of long service leave on the basis of the average hours worked over the five years or the 12 months (whichever was the greater) before leave or payment on termination, consistent with the Long Service Leave Act 1955 (NSW), while the Association is of the view that the payment should be determined under clause 26 of the Award/NAPSA on a “pro rata” basis based on the average hours worked over a particular year of employment.
On the principles set out above, I am satisfied that there is in these circumstances a “matter”, being a justiciable controversy, before the Court. There is an actual as distinct from a hypothetical question to be decided and a genuine controversy between the Association and the respondents as to the operation of the provisions in relation to long service leave. Employees of the respondents have a right to accrue and (given sufficient years of employment) an immediate right to take long service leave with payment or to be paid the monetary value of their long service leave entitlement on resignation, retirement or termination. Consistent with the approach in Curragh, it is not necessary for there to be evidence of the actual implementation of provisions in relation to a particular employee for there to be a genuine controversy between the Association and the respondents in relation to which the relief sought would produce foreseeable consequences for the parties (in particular in relation to the extent of the respondents’ liability to employees entitled to long service leave).
As in Mount Thorley Operations, there is sufficient material before the Court for me to be satisfied that there is a “reasonable possibility” that the issue of the entitlement and payment for long service leave of workers with combined full and part-time employment will arise.
There is a justiciable controversy as to the correct calculation of the payment required by the provisions of the Award (as contained in the NAPSAs) when an employee takes long service leave or is paid out his or her long service leave if the employee has a history of mixed full-time and part-time employment. I am satisfied that the proceedings properly invoke the jurisdiction of the Court.
An issue raised by counsel for the respondents as to the wording of the proposed orders that was relevant to jurisdiction was addressed in the further further amended application. Prior to the filing of that application, the applicant sought an interpretation that under clause 26 of the Award/NAPSA, long service leave accrued during periods of full-time employment be paid at the weekly rate of salary for the employee’s classification set out in Table 1 of Part B (Monetary Rates) to the Award applying at the time the leave was taken or immediately prior to the termination of employment (and as a proportion of that weekly rate for periods of part-time employment).
Mr Hatcher for the respondents pointed out that the Table annexed to the Award no longer had any application as the source of rates of pay. Under the WRA if the Australian Fair Pay and Conditions Standard (AFPCS) makes provision for a matter in relation to an employee, then a term (other than a preserved notional term on specified matters not including rates of pay) that also deals with that matter in relation to an employee is unenforceable (clause 44 of Schedule 8). It is not in dispute that this has occurred in this case.
In light of the respondents’ submissions about the effect of the provisions in the WRA in relation to rates of pay (see Part 7 of the WRA, in particular ss.171, 178, 208 and Division 2 of Part 7) the applicant amended the proposed orders sought to replace the reference to Table 1 of Part B with a general reference to the weekly rate of salary for an employee’s classification applying at the relevant time.
Hence, insofar as the orders proposed in the further amended application filed in December 2008 sought relief in terms that could not be granted, this is no longer an obstacle to the jurisdiction to grant the orders now sought, or relevant to the discretion to grant relief or to the nature of any relief sought.
Discretion to interpret a transitional instrument
The respondents contended that the Court had a discretion as to whether or not it exercised its powers under reg.2.20 of Chapter 7 of the Regulations and that the Court should decline to exercise its powers or to grant the relief sought as a matter of discretion on a number of grounds.
Insofar as the respondents’ submissions were based on the drafting of the orders sought, the earlier reference to a NAPSA binding on each respondent was amended to refer to a NAPSA binding on each of the second and third respondents. The reference to the rate of pay in the Table annexed to the Award was also deleted and it can no longer be said on these bases that proposed orders one and two do not properly seek orders of interpretation of a transitional instrument or that the Court should decline to exercise its power on these bases.
The respondents submitted that the application of the Long Service Leave Act 1955 (NSW) (the LSL Act) was relevant to the issue of whether the Court should exercise its jurisdiction. It was submitted that the question of the payment during long service leave in respect of accrued long service or on termination of the employment of an employee of either respondent with mixed periods of full-time and part-time employment to which a NAPSA containing the terms of the Award applied would be determined under the LSL Act. Hence it was contended that there would be no utility in the Court exercising the discretion to make an interpretation of clause 26 of the Award as contained in a NAPSA.
It was also submitted that relief should be declined because the long service leave provisions in question were not restricted to the respondents, as identical provisions were made in respect of the employment of private hospital nurses throughout the State of New South Wales. It was submitted that none of the other employers or employees who may be affected by any judicial determination of the operation of the provision were on notice of the proceedings, let alone heard in the proceedings. It was also contended that the respondents applied the provision in like fashion to other employers in the industry.
Reliance was placed on the evidence of Ms Street that in her experience the provisions of long service leave clauses in the various awards applicable to private hospital nurses in New South Wales that provided for payment of long service leave for employees employed full time and then part time had not changed since Ms Street first commenced providing industrial relations advice within the industry in 1988. Her evidence was that the view consistently taken and applied within the industry was that the long service leave provisions contained within the awards, including the Award in issue in this case, were to be read in conjunction with the provisions of the LSL Act on the basis that they did not provide comprehensive and exhaustive provisions for long service leave. For nursing employees, long service leave was said to be calculated in practice as the greater payment that would result from either the employee’s previous one or five years service. Service was taken as hours averaged over either a one year or five year period. The same approach was said to apply where an employee’s service was terminated.
It was suggested that this manner of payment for long service leave represented the industry practice in all private hospitals and similar facilities within the private sector within New South Wales. Ms Street stated that she was not aware of any prior dispute over the last 20 years between any affected nurse or any other employee and his or her employer employed in a private hospital or between the New South Wales Nurses’ Association and a private hospital employer with respect to this practice. The respondents also contended that the NAPSA and all other similar regulation in the industry had applied for many years without being subject to judicial determination or controversy.
It was also said to be relevant that the regulation of the employment conditions of members of the Association in the industry of private hospital nursing within New South Wales would change, as all NAPSAs would cease to have effect at the end of 31 December 2009 or any later date prescribed by the regulations unless a NAPSA ceased earlier because a workplace agreement or award under the WRA came into operation in relation to the employee (see the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 and Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009). It was submitted generally that the instrument that would regulate the area for the future was unlikely to have any relationship with the present instrument, apparently because there would be a federal instrument applying throughout the Commonwealth.
The applicant contended that there was no basis upon which the Court should decline to exercise its powers or to grant the relief sought in orders one and two as a matter of discretion. The Court was said to be empowered to give an interpretation of a NAPSA. It was submitted that whether the Court has a discretion to refuse to interpret an award or other industrial instrument upon application under equivalent provisions appeared to be an open question (see Victoria v Australian Teachers' Union (1993) 49 IR 149 per Northrop and Keely JJ at 151 and 161 and Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 106 IR 172 at 20). In any event it was contended that if a discretion to decline relief existed, it should be declined in strictly limited circumstances and that the jurisdiction should be exercised where, as here, there was a live and genuine dispute as to the interpretation of an instrument (see Finance Sector Union of Australia v Commonwealth Bank of Australia (2000) 106 FCR 16 at [42] and Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 106 IR 172 at [20]). It was submitted that if there was a genuine dispute that was likely to recur it would be an abdication of the Court’s responsibility to decline to deal with the interpretation question in issue (see Sibte v Expandite (Aust) Pty Ltd (1988) 28 IR 53 at 56).
In particular, the applicant submitted that the entitlement to and payment for long service leave accrued by full-time and permanent part-time employees was governed exclusively by the Award (not by the Award in conjunction with the LSA Act) and hence now by the same provisions in the NAPSA.
The applicant contended that the suggestion that the LSL Act remained applicable was misconceived. It was contended first that the LSL Act had, prior to the commencement of the NAPSA in 2006, no application in relation to the employment of employees falling within the coverage of the Award as their entitlement to long service leave was governed exclusively by the Award.
It was submitted that the exemption in s.5(1) of the LSL Act applied, as the Award made provisions more favourable than those of s.4 of that Act based on an evaluation of each set of provisions as a whole, weighing the various pros and cons and arriving at a final balance on an overall basis (see Kennedy at 459 and McSwiggan v Western Sydney Area Health Service [2000] NSWCIMC 39 and [2000] NSWCIMC 47). It was also contended that if the s.5 exemption applied to an individual worker, the provisions of the LSL Act were completely inapplicable (Kennedy at 457).
On this basis the applicant submitted that where long service leave fell due after 20 February 1981 (see clause 26(1) of the Award) the entitlements of employees other than casual employees under the Award (and now the NAPSA) were governed by the applicable Award/NAPSA provisions solely and that the provisions of the LSL Act did not apply so that there was utility in the exercise of the Court’s powers to determine the application.
The applicant acknowledged that the interpretation sought in the present case concerned the provision of notional agreements taken to have come into existence by the WRA and that a separate NAPSA was taken to come into existence binding only upon the individual employer to which it applied. Hence no other organisation was bound by the NAPSAs that were taken to come into effect in relation to the second and third respondents. On this basis there was said to be no occasion for other parties to be involved in the proceedings. Moreover, any interpretation given by the Court would only be binding upon the parties to the proceedings (reg.2.20(2)). In any event there was said to be no requirement that every person the subject of any award concerned be brought before the Court. Indeed the applicant pointed out that such an approach had been criticised in Australian Nursing Federation v Royal Melbourne Hospital (1995) 58 IR 214 at 219.
The applicant did not agree that the interpretation advocated by the respondents had been consistently applied throughout the industry, although it was aware of only a small number of members who had sought advice in relation to the issue raised in the proceedings. In any event it was contended that it was for the Court to construe the provisions of the NAPSA and that the conduct of the parties after the making of an instrument would generally not be admissible to determine its meaning (see Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth and Others (1998) 82 FCR 175 at 178 – 179).
Whether the Court has a discretion?
Early authorities in relation to the forerunners to s.848 of the WRA suggest that the Court has a discretion as to whether to determine an application for an interpretation of an award (see Re Graphic Arts Award (1957) 1 FLR 22; Re Food Preservers Award (1959) 3 FLR 425 at 430 – 431 and; Re Rubber Plastic and Cable Making Industry Award 1957 (1963) 8 FLR 395 at 397). Such discretion must be exercised judicially (ibid and see The Corporation of the City of Burnside v The Municipal Officers’ Association of Australia & Anor (1985) 10 IR 313 at 316). These authorities address the issue as a question of whether the Court should exercise its discretion or power of interpretation as distinct from whether the Court should grant the relief sought (see University of Western Australia v National Tertiary Education Industry Union (2003) 129 IR 348 and cf Ainsworth and Another v Criminal Justice Commission (1992) 175 CLR 564).
In Victoria v Australian Teachers' Union Northrop J (at 151) and Keely J (at 161) left open the question of whether the court had a discretion to refrain from providing an interpretation where an application was properly brought before it under the forerunner to s.848. However in my view the approach subsequently taken by Moore J in Mount Thorley Operations is in point. In addressing submissions that a number of matters justified the making of no order of interpretation of an award his Honour stated (at 113):
In considering these submissions the starting point is, in my opinion, the observations of Deane J in Re Queensland Electricity Commission; Ex parte Electrical Trade Union of Australia (1987) 61 ALJR 393 (at 399):
"The right to invoke the jurisdiction of the courts and other public tribunals of the land carries with it a prima facie right to insist upon the exercise of the jurisdiction invoked. That prima facie right to insist upon the exercise of jurisdiction is a concomitant of a basic element of the rule of law, namely, that every person and organisation, regardless of rank, condition or official standing, is `amenable to the jurisdiction' of the Courts and other public tribunals."
It may be accepted, however, that there is now a well established line of authority indicating that the power to make an order of interpretation is a discretionary one at least in the sense that certain circumstances might justify no order being made. The scope of the discretion remains an open question: see Victoria v Australian Teachers Union (1993) 49 IR 149 at 151 and 161. I earlier referred to authorities which establish that the power to give an order of interpretation is not one to be exercised where the interpretation depends upon disputed questions of fact.
I am of the view that there is a discretionary power in this sense and hence that it is necessary to consider whether the circumstances are such that it should not be exercised or no order should be made.
Exercise of the discretion
It is convenient to consider first the respondents’ submissions in relation to the application of the LSL Act.
Section 4(1) of the LSL Act is as follows:
Except as otherwise provided in this Act, every worker shall be entitled to long service leave on ordinary pay in respect of the service of the worker with an employer. Service with the employer before the commencement of this Act as well as service with the employer after such commencement shall be taken into account for the purposes of this section.
Section 4 then sets out statutory long service leave entitlements and provisions for calculating payment of a worker’s “ordinary pay” (as defined in s.3). Under the LSL Act a worker is entitled to two months of long service leave after 10 years service with an employer (s.4(2)(a)(i)(A)), then one month for each further 5 years service (s.4(2)(a)(i)(B)). Where a worker’s services are terminated after 15 years service the worker is also entitled to a further proportionate amount in respect of the number of years of service since the last entitlement, on the basis of 2 months for 10 years service (s.4(2)(a)(i)(C).
If a worker’s services are terminated or cease for any reason between 10 and 15 years of service the entitlement is a proportionate amount on the basis of 3 months for 15 years service (s.4(2)(a)(ii)), while if a worker’s services are terminated after 5 years service 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.”
Under s.4(2)(b)(i):
A worker entitled under this section to long service leave in respect of a period of service with an employer shall not, except in pursuance of an agreement between the worker and the employer entitling the worker to leave in the nature of long service leave in addition to long service leave under this Act, be entitled otherwise than under the provisions of this Act to leave in the nature of long service leave in respect of that period of service with that employer.
The entitlement to long service leave under s.4 is an entitlement to such leave “on ordinary pay in respect of the service of the worker with an employer” (s.4(1)). Ordinary pay is defined in s.3. In essence it provides that a worker who is remunerated wholly in relation to an ordinary time rate of pay fixed by the terms of that worker’s employment is to be paid long service leave at the amount of the ordinary remuneration of the worker at the date immediately preceding the date on which that worker enters or is deemed to have entered long service leave or calculated by reference to the average weekly amount of the ordinary remuneration earned by the worker during that part of the previous 5 years during which the worker was so remunerated, whichever is the greater.
Where the worker is, on the day before leave is entered upon or deemed to be entered upon, remunerated otherwise than wholly in relation to an ordinary time rate of pay so fixed, that worker’s ordinary pay is the amount of the average weekly wage earned (excluding shift work, overtime or other penalty rates) during the period of 12 months or 5 years ending on the date the leave is entered upon or deemed to be entered upon, whichever amount of average weekly wage is the greater. In addition, in some circumstances bonuses and the value of board or lodging may be taken into account. There are further provisions elaborating on the meaning of ordinary pay and remuneration.
Under s.4(3) the employer shall give to the worker and the worker shall take the leave “as soon as is practicable having regard to the needs of the employer’s establishment, or, where the employer and the worker agree that the taking of the leave be postponed until an agreed date, as from that date”. There are limits on the number of periods in which leave can be taken (s.4(3)(b)) and provisions expanding on the meaning of continuous service with an employer (including where a business is transmitted to another employer).
The respondents did not suggest that provisions in the LSL Act applied to the exclusion of the long service leave provisions in the Award (and now terms in the NAPSA). Rather, it was suggested that the Award provisions were to be read in conjunction with the provisions of the LSL Act on the basis that the Award provisions were not comprehensive or exhaustive. In particular it was submitted that payment to workers with mixed full and part-time employment for long service leave taken or accrued on termination was to be calculated in accordance with the LSL Act.
However section 5(1) of the LSL Act relevantly provides:
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.
The applicant contended that the Award provisions were “more favourable to the worker” than those of s.4 of the LSL Act so that prior to the reform commencement s.4 had no application to any worker employed by either respondent as a member of a class of workers for whom provisions entitling the worker to long service leave were made by the provisions in the Award which are now terms of a NAPSA. The entitlement of employees with mixed periods of full-time and permanent part-time employment was said to have been governed exclusively by the Award.
There are no provisions entitling a worker to long service leave under the WRA. Long service leave is not identified as a “preserved entitlement” determined by a State industrial law that would be a term of a NAPSA under clause 34 of Schedule 8 to the Act. At the same time, the WRA does not exclude the operation of a State law dealing with long service leave (see s.16 and Endeavour Coal Pty Ltd and Others v Construction, Forestry, Mining and Energy Union (NSW) (2007) 165 FCR 1). Hence it is necessary to consider whether employees of the respondents to whom NAPSAs apply are employed as “a member of a class of workers” for whom provisions entitling the worker to leave in the nature of long service leave are made by the Award and whether such provisions are more favourable to the worker than those of s.4 of the LSL Act. There was no suggestion in these proceedings that the fact that a NAPSA had been taken to come into operation as from 27 March 2006 in place of the Award meant that the exception in s.5(1)(a) did not apply.
Clause 26 of the Award (now a term of the NAPSA) provides:
26. Long Service Leave
1.For long service leave falling due prior to 20th February 1981, see Long Service Leave Act 1955.
2.For long service leave falling due after 20th February 1981 the following provisions shall apply:
(a)
(i) Every employee after ten years' continuous service with the same employer shall be entitled to two months' long service leave on full pay; after fifteen years' continuous service to an additional one month's long service leave on full pay; and for each five years' continuous service thereafter to an additional one and one half months' long service leave on full pay. Such leave shall be taken at a time to be mutually arranged between the employer and the employee.
(ii) Where the service of an employee with at least five years' service is terminated, the employee shall be entitled for five years' service to one month's long service leave on full pay and for service after 5 years to a proportionate amount of such leave on full pay calculated on the basis of 2 months' long service leave for 10 years' service.
(b) Where an employee has acquired a right to extended leave under subclause (a) of this clause, then and in every such case:
(i) If before such leave has been entered upon the employment of such employee has been terminated such employee shall be entitled to receive the monetary value of the leave to which such employee has been entitled computed at the rate of salary which such employee had been receiving immediately prior to the termination of employment.
(ii) If such employee dies before entering upon such extended leave, or if after having entered upon the same dies before its termination, his widow, or in the case of a widower leaving children his children or their guardians or other dependent relatives or their legal representatives, shall be entitled to receive the monetary value of the leave not taken or not completed, as the case may be, and computed at the rate of salary which the employee had been receiving at the time of death.
(c)For the purpose of this clause:
(i) Continuous service in the same hospital prior to the coming into force of this award shall be taken into account.
(ii) One month equals four and one-third weeks.
(iii) Continuous service shall be deemed not to have been broken by:
a.any period of absence on leave without pay not exceeding six months;
b.absence of an employee from the hospital whilst a member of the Defence Forces of the Commonwealth in time of war.
(d)Where any employee has been granted a period of long service leave prior to the coming into force of this award the amount of such leave shall be debited against the amount of leave due under this award.
(e)Any period(s) of part-time employment with the same employer shall count towards long service leave as provided for in paragraph 2(a) of this clause. Such long service leave shall be paid for on the basis of the proportion that the average number of hours worked per week bears to 38 hours.
(f) Where an employee has accrued a right to an allocated day off duty on pay prior to entering a period of long service leave such day shall be taken on the next working day immediately following the period of long service leave.
An employee returning to duty from long service leave shall be given the next allocated day off duty in sequence irrespective of whether sufficient credits have been accumulated or not.
The Award made provision for minimum salaries per week in Table 1 – Salaries, of Part B, Monetary Rates. As discussed above, the Table is no longer applicable in light of the provisions in the WRA in relation to rates of pay. It was not, however, suggested that the “full pay” of a employee referred to in clause 26(2)(a) could not therefore be calculated by reference to the weekly rate of salary for the employee’s classification applying at the time leave was taken or immediately prior to termination. In that respect I note that under the Award, while certain special allowances are regarded as salary for the purposes of the Award (clause 12(iii)(d)), penalty rate payments for shift work and weekend work do not form part of an employee’s ordinary pay for the purposes of the Award, except as provided in relation to annual leave.
The Award makes specific provision for permanent part-time, casual and temporary employees in clause 22. Permanent part-time employees are to be paid an hourly rate calculated on the basis of one thirty-eighth of the salary rate and allowances prescribed. Specific provision is made in clause 22 for calculation of annual leave and public holiday entitlement for such employees. Relevantly, clause (ix) of Part I of clause 22 provides that employees engaged under that Part (that is, permanent part-time employees) shall be entitled to “all other benefits of this award not otherwise expressly provided for herein in the same proportion as their ordinary hours of work bear to full-time hours.”
Part II of clause 26 deals with Casual Employees. Clause (vi) of Part II states in relation to casual employees “For the entitlement to payment in respect of long service leave, see the Long Service Leave Act 1955”. No specific provision is made in relation to long service leave for temporary employees (who are those engaged for a set period not exceeding 13 weeks) (clause 22 Part III).
Under clause 38 award rights and benefits are to be continuous in the event of any change in ownership, licensee or management of any hospital or institution covered by the Award. On such change, no employee is to be paid out for accrued annual leave, long service leave or any other benefit and “such benefits shall be continuous”.
Hence it can be seen that the Award makes provision for leave in the nature of long service leave for workers other than casual employees (whose entitlement to payment in respect of long service leave is under the LSL Act). The Award also provides that long service leave for all employees falling due prior to 20 February 1981 is under the LSL Act.
The applicant submitted that, consistent with the approach taken by the New South Wales Industrial Commission in Kennedy, the assessment of whether an award made more favourable provisions for the purposes of s.5(1)(a) of the LSL Act required an evaluation of the provisions of the Award and s.4 of the LSL Act as a whole, weighing the various pros and cons and arriving at a final balance on an overall basis (also see McSwiggan v Western Sydney Area Health Service) and that on this basis it was clear that the Award made more favourable provisions with respect to long service leave than the LSL Act.
The respondents contended however, that one must look at the overall situation in relation to the entire class of employees covered by the Award to determine the operation of the exclusion and that the Award/NAPSA provision was not “more favourable” on this basis (in essence because casual employees and pre-1981 employment were excluded). It was contended that both the LSL Act and the NAPSA applied.
The respondents’ contention is that the concept a “class of workers” in s.5(1) must refer to all of the employees subject to the Award in question. No authority other than Kennedy was cited in support of this proposition.
In Kennedy what was in issue was whether the provisions of the LSL Act or an industrial agreement made between a worker’s former employer and unions applied to a particular worker whose employment had been terminated after more than 5 years service. If the LSL Act applied, the worker would have been entitled to a proportion of long service leave. If the agreement and not the Act applied, the applicant had no entitlement in respect of long service leave.
The Chief Industrial Magistrate found that the agreement (and not the LSL Act) applied to the worker. An appeal to the Industrial Commission was dismissed. The Commission not only found that the question of whether the award or industrial agreement made more favourable provisions was to be determined by examining each set of provisions as a whole, it also found that the question of whether industrial agreement provisions were more favourable had to be tested prospectively at the time the agreement commenced to operate.
In Kennedy there was no issue as to whether the industrial agreement in question applied to more than one “class” of workers. Hence the Commission did not have to determine the approach to be taken to s.5 when an award covers various categories of employees, but contains long service leave provisions that are not applicable to all such employees. The references in Kennedy to considering workers “as a group over the whole range of their possible employment” and to the “general body of employees” should be seen in light of this. I do not regard Kennedy as authority for the proposition that one must, in all cases, look at the overall situation in relation to all employees covered by an award so that the exclusion of casual workers and pre-1981 long service leave from the Award under clause 26, in relation to long service leave necessarily means that the Award does not make more favourable provisions than s.4 of the LSL Act.
The interpretation contended for by the respondents is contrary to the language of s.5 of the LSL Act which applies in relation to the entitlement of a particular worker where the worker is employed by an employer “as a member of a class of persons for whom provisions entitling the worker … to leave in the nature of long service leave are made … by an award etc.”
A casual worker subject to the Award is not a member of such a class, as no provision entitling casual workers to leave in the nature of long service leave is made under the Award. As the Industrial Commission stated in Kennedy at 459:
Just as each worker is given a grant of long service leave in s. 4 on an individual basis so too the grant is rendered inapplicable by s. 5 on an individual basis. The crucial matter is to decide the circumstances in which s. 4 does not apply to the individual worker. In our opinion, these are (a) that the individual worker is a member of a class of worker; (b) that provisions for long service leave have been made for that class of worker by industrial agreement; (c) that these provisions are, at the time when the decision has to be made, more favourable to that worker regarded as a member of the class than those provided by the Act.
I am not persuaded that the fact that no provision is made for long service leave in respect of casual employees under the Award (other than to refer to the LSL Act) means that the award does not make “more favourable provisions” in respect of a class of workers consisting of nurses other than casual employees (i.e., full-time and permanent part-time employees) in relation to long service leave falling due after 20 February 1981 (when long service leave provisions were included in the predecessor to the Award). Nor do I consider that the fact that the Award does not provide for long service leave falling due prior to 20 February 1981 means that it is not more favourable than s.4 of the LSL Act. Clearly the comparison must be made in situations where the Award does make provision for long service leave. This is consistent with the fact that the Award itself indicates both an awareness of the LSL Act and an intention to make provision after 1981 for long service leave for employees other than casual employees.
I am of the view that in considering whether the Award makes more favourable provisions within s.5(1) of the LSL Act, it is appropriate to look to the overall situation in relation to the class of workers in respect of whom provision for long service leave is made in the Award (see Kennedy at 457) and that the fact that the long service leave provisions do not apply to certain employees covered by other aspects of the Award is not determinative.
As the applicant submitted, the comparison must be between the Award and s.4 of the LSL Act “based on an estimate of what is likely to be best for the majority of individuals involved” (Kennedy at 459) – that is, best for the majority of the class of workers for whom provision for long service leave is made in the Award. As stated in Kennedy at 459 this requires an examination “of each set of provisions as a whole, weighing the various pros and cons and arriving at a final balance on an overall basis.”
In Kennedy the comparison was made on the basis of the quantum of long service leave to which workers were entitled under the industrial agreement and the Act. Given the necessarily prospective (and in that sense hypothetical, as no individual worker is in issue) nature of the comparison, such an approach reflects the principle of considering “the greatest good for the greatest number” (Kennedy at 459), when comparing the schemes in the Award and the Act as a whole, before the position of individuals in relation to the fulfilment of any conditions of entitlements is known.
The Award confers an entitlement to accrue one and a half months’ long service leave for each 5 years of service after 15 years service (clause 26(3)(a)(i). This is much more favourable than the one month for equivalent service under the LSL Act (s.4(3)(a)(i)(B)) and reflects the “basic social purpose” of rewarding long service referred to in Kennedy at 460. In addition, the Award is more beneficial for employees terminated after 5 (but before 10) years of service. Such employees are entitled under the Award to pro rata payment of accrued long service leave after 5 years service if terminated for any reason (clause 26(2)(a)(ii)), whereas the LSL Act only requires pro rata payment after five years service if the worker’s 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.
I am satisfied that the long service leave provisions of the Award are more favourable to a worker in the class of workers for whom the Award makes provision for long service leave than the provisions in s.4 of the LSL Act. Hence s.4 does not apply to any worker who is a member of the class of workers for whom long service leave provisions are made under the Award. As the Award is applicable to such workers it cannot be said that there is no utility in giving an interpretation of clause 26 of the Award as that term is contained in a NAPSA.
Moreover the respondents’ contentions in relation to the concurrent operation of the Award/NAPSA provisions and the provisions of s.4 of the LSL Act are not such as to warrant refraining from an interpretation of the Award/NAPSA.
The Industrial Commission in Kennedy rejected a contention that the intention of the LSL Act was that no worker should in any circumstances be entitled to long service leave less favourable than those provided by the Act (at 457). In so doing the Commission referred to the fact that industrial agreements, awards and Acts of Parliaments “contain composite schemes covering the whole range of employment”. The Commission stated at 457:
It is clear that [s.5] contemplates that there may be in existence provisions in industrial agreements in relation to long service leave which render s. 4 completely inapplicable. (Emphasis added).
Importantly, the Commission also referred to the fact that s.4 “operates fully or not at all” (at 458 and see s.4(2)(b)). Consistent with this approach, the Commission stated that under s.5(2) “the choice must be between the Act as a whole and the scheme [conducted by the employer] as a whole”, and pointed out at 458 that “It would be illegal in the extreme if total exemption from s. 4 is permitted to schemes conducted by the employer but not to schemes contained in awards, industrial agreements or Acts of Parliament”.
These statements are inconsistent with any assertion that the provisions of the Award in relation to the quantum of long service leave should apply but that payment for such leave should be calculated under the LSL Act. The Award (as explained further below) makes provision for both quantum of leave and payment for those to whom the long service leave provisions apply. I am not persuaded that there is no utility in considering whether to make the orders sought interpreting clause 26 on any basis related to the existence or operation of the LSL Act.
I am satisfied that in the particular circumstances of this case, notwithstanding the respondents’ other submissions, the Court should exercise its jurisdiction to interpret the NAPSA. The Court’s jurisdiction in relation to proposed orders one and two is clearly based on the WRA, rather than simply invoking the Court’s power under s.16 of the Federal Magistrates Act to make a declaration. The observations of Deane J in Re Queensland Electricity Commission are in point. There is, as discussed above, clearly a controversy between the Association and the respondents about the meaning of clause 26 of the Award/NAPSA. I am satisfied that there is a reasonable possibility that employees with combined full-time and part-time employment will exercise an entitlement to long service leave or cease employment with each of the respondents in circumstances that will raise the issues in question in this case (as considered in Mount Thorley Operations at 114) and that, as MooreJ pointed out at 115, there are in such circumstances “fairly compelling reasons for a court to give an interpretation if called upon to do so”.
I have considered the respondents’ claim that identical provision is made in relation to employment of nurses in private hospitals throughout New South Wales apart from under these particular NAPSAs and that others who may be affected were not on notice or heard in the proceedings. However the only parties to the NAPSAs in question have been given an opportunity to be heard.
There is no doubt that the Ramsay Group, as a major employer of nurses in private hospitals in New South Wales, is effectively on notice of these proceedings. The first respondent did not seek to be heard on the issue of the correct interpretation of clause 26 (which is also contained in the PSA discussed above). In any event, as Northrop J pointed out in Australian Nursing Federation v Royal Melbourne Hospital (1995) 58 IR 214 at 219: “The purpose of an interpretation … is to resolve a difference between opposing parties. Provided all reasonable arguments are in fact put, the Court is in a position to express its opinion.” In this case I am satisfied that all reasonable arguments were put. Northrop J pointed out that any interpretation of an award has persuasive effect on all parties to the award even if it is not binding on them. Because of the unusual nature of NAPSAs there are no other parties. The possibility that an interpretation of a clause which appears in other transitional agreements may be of some persuasive value in other circumstances is not in all the circumstances a reason to decline to express an opinion.
The fact that the clause has been in existence for some time is not such as to warrant refraining from exercising jurisdiction where a genuine controversy about the meaning of a term of a NAPSA exists (see Re Food Preservers Award (1959) 3 FLR 425 at 431). Nor, in all the circumstances, are the claims about the views of the employers in the industry. The fact that a dispute as to the interpretation of an instrument has arisen from the circumstances of an individual employee or a limited number of employees (or, indeed, that it arose recently) does not prevent the Court from interpreting the disputed provisions (see University of Western Australia v National Tertiary Education Industry Union at [16] – [23]) and is not such as to persuade me that the discretion should not be exercised or that I should refrain from making orders interpreting clause 26 in the Award/NAPSA.
I do not consider that I should refrain from exercising the discretion because NAPSAs are “temporary” and will cease to have effect. In that respect I note that in Mount Thorley Operations at 114 – 115 Moore J rejected a submission that he should refrain from giving an interpretation of a provision in an Award because an application had been made to the Industrial Relations Commission to vary it.
The respondents submitted that the fact that the NAPSAs will be replaced by some other form of regulation of conditions of employment of nurses in private hospitals in New South Wales was of relevance. However an interpretation at this time may prevent likely friction between the parties and prevent a possible breach (see Sibte v Expandite (Aust) Pty Ltd (1988) 28 IR 53). The Association has raised the question of the correct interpretation of a provision and the matter has been fully argued before the Court (see The Corporation of the City of Burnside v The Municipal Officers’ Association of Australia & Anor (1985) 10 IR 313 at 317 – 318). Consideration of this issue may in fact assist employers and employees to choose the most appropriate form of future regulation for their particular circumstances (see University of Western Australia v National Tertiary Education Industry Union at 352).
Finally, the interpretation sought by proposed orders one and two does not depend on a detailed examination of the facts leading to the dispute or on resolving any disputed questions of fact relating to the employment of Ms Dawes or any other employee of either of the respondents (University of Western Australia v National Tertiary Education Industry Union at [23]). In all the circumstances, none of the obstacles raised by the respondents, either individually or cumulatively, are such as to satisfy me that the Court should refrain from exercising its jurisdiction or from making orders interpreting clause 26 in the Award/NAPSA.
Principles of interpretation
The parties agreed generally on the principles applicable to interpretation in a case such as this. As the applicant contended, awards and legislation making provision for long service leave are instruments made pursuant to beneficial social legislation and should be interpreted beneficially and not subjected to an overly literal construction (see Lindner Pty Ltd v Builders Licensing Board [1982] 1 NSWLR 612; Collison v State Rail Authority (NSW) (1992) 43 IR 332 and Endeavour Coal Pty Ltd and Others v Construction, Forestry, Mining and Energy Union (NSW) (2007) 165 FCR 1 at [44]). Where ambiguity exists it should be resolved in favour of affording a more generous entitlement rather than depriving employees of a benefit that was reasonably open on the words used in the award.
As stated in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Skilled Engineering Ltd [2003] FCA 260 at [21] when construing the provisions of an award or industrial instrument the task is to determine objectively the intention of the parties from the words of the instrument. An instrument must be read so as to give effect to its evident purposes, despite mere inconsistencies or infelicities of expression which might tend to some other reading (see Kucks v CSR Limited (1996) 66 IR 182 at 184 and United Firefighters’ Union of Australia and Another v Metropolitan Fire and Emergency Services Board (2006) 152 FCR 18 at [51] – [52]).
As submitted for the respondents, while the interpretation of an industrial instrument turns on its language, the language used must be understood in the light of its industrial context and purpose (see Amcor Limited v Construction, Forestry, Mining and Energy Union and Others (2005) 222 CLR 241 per Gleeson CJ and McHugh J at [2]).
However, as French J pointed out in City of Wanneroo v Holmes (1989) 30 IR 362 at 378: “Evidence of the conduct of the parties subsequent to the making of the award … cannot be relied upon to construe it” although “[t]hat is not to say the words must be interpreted in a vacuum divorced from industry realities.”
The respondents did not dispute that the proper approach to construction of the provisions of the Award as terms of a NAPSA was that suggested by Madgwick J in Kucks v CSR Limited (1996) 66 IR 182 at 184 as follows:
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.
Clause 26(2)(e) is clearly intended to qualify the operation of clause 26(2)(a) in relation to leave accrued during periods of part-time employment. The respondent’s view would give little meaning to the concluding sentence in para (2)(e). First, the reference to “such” long service leave appears on its ordinary meaning to be a reference to that portion of long service leave accrued as a result of periods of part-time employment. Were the provision intended to provide that all long service leave was to be paid for on the proportionate basis applicable to an employee taking leave or on termination at a time when employed part-time, there would be no need for the reference to “such” long service leave, as “full pay” for a part-time employee would be the weekly amount paid to that employee (that is, reflecting the hours worked by that employee at the time leave was taken).
Moreover, the interpretation contended for by the applicant gives effect to the evident purpose of the Award to ensure that permanent part-time employees receive benefits under the Award on a proportionate basis. This intention must be related to benefits accrued during periods of part-time employment. To adopt an interpretation under which employees who were previously full time but became part time were paid in respect of benefits accrued during full-time employment on a part-time basis purely because of the timing of the taking of leave or termination would be contrary to the intention of the parties to the Award/NAPSA, given that the framers of such award were “likely of a practical mind” (Kucks at 184) and having regard to the long tradition of “generous construction over a strictly literal approach” considered by French J in Wanneroo [2005] at [57].
Consistent with this view, it is relevant that the interpretation contended for by the applicant is also consistent with the way in which other forms of leave are treated by the Award. Thus Part I of clause 22 provides for the calculation of “average” hours worked by a permanent part-time employee over a week, a fortnight or four weeks, but utilises the concept of the proportion the average number of hours worked per week bears to 38 hours (appearing in clause 26(2)(e)) for the purposes of calculating payment for annual leave where an employee has “any period of permanent part-time employment during any 12 month qualifying period for annual leave.” (See para (iii) of Part I of clause 22). Consistent with the interpretation of clause 26(2)(e) contended for by the applicant, payment for “such” annual leave shall be calculated on the basis of the proportion that the average number of hours worked each week bears to 38 hours. In other words, the payment for both annual leave and long service leave would reflect the actual hours worked over the qualifying period. Moreover, the basis for payment during the set period of annual leave does not depend solely on the working arrangements at the time the leave is taken, but reflects the pattern of work over the period in which it is accrued.
Similarly, permanent part-time employees are entitled to sick leave under clause 25(iii) on a proportionate basis. While this provision relates to hours of sick leave (not payment), consistent with the applicant’s approach to clause 26, it indicates a general purpose and intention of the Award that part-time employees receive proportionate benefits in relation to periods of part-time employment.
Accordingly, I consider that the interpretation contended for by the applicants is correct and that it is appropriate to make orders substantially in the terms sought by the applicant but expressed in relation to clause 26 of the Private Hospital Industry Nurses’ (State) Award (as that term is taken to be included in the NAPSA binding on each of the second and third respondents).
Proposed declaration in relation to the entitlement of an individual
Proposed order three sought by the applicant is as follows:
An order declaring that, on the proper construction of clause 26 of the Private Hospital Industry Nurses’ (State) Award as that provision is contained in the NAPSA binding upon either the second or third respondent, Ms Kaye Dawes accrued long service leave during the period she was employed full-time at Dudley Private Hospital to be paid on the basis of the full-time weekly rate of salary for the Ms Dawes’ classification -applying at the time the leave is taken and accrued long service leave during the period she was employed part-time to be paid on the basis of a proportion of the full-time weekly rate of salary for the Ms Dawes’ classification applying at the time the leave is taken being the proportion that the average number of hours worked per week bears to 38 hours.
The drafting of the proposed order in relation to Ms Dawes has undergone some modification in the course of these proceedings. The applicant has had the opportunity to address perceived inaccuracies, inadequacies or shortcomings in the drafting and scope of the order sought. The order now sought is an order as to the accrual of long service leave by Ms Dawes and the basis on which such leave is “to be paid” at “the time the leave is taken”.
Much argument was addressed to the issue of whether such an order, could, would or should be made, whether as an interpretation of a transitional instrument under reg.2.20 of Chapter 7 in the Workplace Relations Regulations or as a binding declaration of right under s.16 of the Federal Magistrates Act 1999 (Cth) which is as follows:
(1) The Federal Magistrates Court may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.
(2) A proceeding is not open to objection on the ground that a declaratory order only is sought.
Section 16 is in identical terms to s.21 of the Federal Court of Australia Act 1976 (Cth). As counsel for the respondents pointed out, the jurisdiction of the Court to make a binding declaration of right exists only “in relation to a matter in which it has original jurisdiction”.
A number of issues arise in relation to the jurisdiction and discretion to make the particular order sought. Insofar as the order is sought under Chapter 7 reg 2.20 there are limits on the scope of the power under that provision. For example, it has been said that where the effect of an order is to seek enforcement of an award rather than interpretation of the provisions of an award the Court does not have jurisdiction under a provision such as s.848 (Re Metal Industry Award [1978] IAS Current Review 543. The same may apply to Chapter 7 reg.2.20.
The respondents submitted that the declaration sought in proposed order three could not be said to be an application for an interpretation for the purposes of reg.2.20 in Chapter 7 of the Regulations, as it sought a declaration as to an asserted right that an individual employee had under an instrument rather than as to the proper construction of a provision in the instrument.
Counsel for the respondents also suggested that the WRA was a code in relation to instruments under the WRA and that there was no power under the WRA to grant declaratory relief in the strict sense in relation to rights and entitlements arising under an industrial instrument. In Soliman v University of Technology, Sydney [2008] FCA 1512 at [74] – [81]) Jagot J made remarks to this effect in the context of considering what remedies were available for breach of an agreement. Her Honour did, as the applicant submitted, leave open the possibility that a consequential declaration could have been made. However that possibility related to the possibility of a declaration in relation to interpretation of an agreement under s.849 and in that context Jagot J found (at [111]) that in the circumstances of the case, “particularly the focus on the applicant’s individual position” it was not appropriate to make any consequential declarations. Such remarks must be seen in light of her Honour’s earlier acceptance, in considering general principles relating to the construction of industrial instruments, that in the task of construction “‘consideration is had to the general, not to any particular individual whether an employer or employee (Ambulance Service Victoria (South Western Region) v Australian Liquor, Hospitality & Miscellaneous Workers Union (1998) 80 IR 275 at 280)”.
Northrop J pointed out in Ambulance Service Victoria (South Western Region) v Australian Liquor, Hospitality & Miscellaneous Workers Union at 280 in relation to ss.413 and 413A of the WRA:
The wording of ss 413 and 413A of the Workplace Relations Act, relating as they do to interpretation of awards and certified agreements respectively, is not identical but each has similar effect. Each identifies the persons enabled to make an application. Each provides that an interpretation given by the Court is final and conclusive and is binding, with respect to awards, "on the organisations and persons bound by the award who have been given an opportunity of being heard by the Court". With respect to certified agreements, the equivalent provision is that the interpretation given by the Court is final and conclusive and binding on the organisations and persons bound by the agreement and the employees whose employment is subject to the agreement who have been given an opportunity of being heard by the Court. As a result, an interpretation, normally, is expressed in a general form having general application. The present application is seeking general interpretations of Cl 12 of the agreements. Where such an application is made, the Court has held that consideration is had to the general, not to any particular individual whether an employer or employee. This principle is discussed at some length with respect to the equivalent provisions of the Conciliation and Arbitration Act in Master Builders' Association of Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1981) 54 FLR 358 by Evatt and Northrop JJ at 360-363. See also Australian Nursing Federation v Royal Melbourne Hospital (1995) 58 IR 214 and the authorities referred to therein. See also State of Victoria v Australian Teachers' Union (1993) 49 IR 149 at 151. (Emphasis added).
The same reasoning would apply to an application for interpretation of a transitional instrument. An order under reg.2.20 of Chapter 7 is binding on the organisation and persons bound by the transitional instrument and the employees whose employment is subject to the transitional instrument. However he order sought relates to a particular individual rather than the proper construction of a provision in the instrument. In this case, even if the Court has jurisdiction under reg.2.20 of Chapter 7 of the Regulations to make proposed order three, I would decline to make the order sought in the exercise of my discretion. I have had regard to all the circumstances, including the fact that I consider it appropriate to make orders in general terms interpreting the long service leave provisions in the NAPSA. Proposed order three does not seek a general interpretation, it addresses the circumstances of a particular employee, contrary to the approach suggested in the authorities referred to above. I am not persuaded that such an order is appropriately made (or necessary to be made) as an interpretation of a NAPSA. I note also that in University of Western Australia v National Tertiary Education Industry Union (2003) 129 IR 348 where an interpretation was sought in circumstances arising out of a dispute involving a particular employee, the declaration Carr J saw it as appropriate to make was expressed in general terms and not in relation to the particular circumstances of the employee in relation to whom the dispute had arisen.
It is not necessary in this case to resolve the issue of whether the WRA is a code so that no declaratory relief other than in the form of an interpretation under reg.2.20 of Chapter 7 of the Regulations is available as, even if the Court has power to make a declaration of right under s.16 of the Federal Magistrates Act, I am not persuaded either that there is a justiciable controversy in relation to the particular declaration sought or that the declaration sought should, as a matter of discretion, be made.
Counsel for the applicant made detailed written submissions on the law in relation to the need for a justiciable controversy to found the jurisdiction of the Court to make a declaration of right. There must be a matter that is the subject matter for determination in the proceedings identifiable independently of the proceedings (see Fencott and Others v Muller and Another (1983) 152 CLR 570 at 603 – 606, Australian Securities and Investments Commission v Edensor Nominees Pty Ltd and Others (2001) 204 CLR 559 at [54] and Abebe v The Commonwealth of Australia (1999) 197 CLR 510 at [140]). It is well established (in the context of cases considering the constitutional meaning of the term “matter” and the scope of judicial power) that there must be a matter in the sense of a controversy as to “some immediate right, duty or liability to be established by the determination of the Court” (In re the Judiciary Act 1903-1920 and In re the Navigation Act 1912-1920 (1921) 29 CLR 257 at 265 and Truth About Motorways Pty Limited v Macquarie Infrastructure Investment Management Limited (2000) 200 CLR 591 at [48]).
As the applicant submitted, this does not mean that for there to be a justiciable controversy there must be in issue an immediate right that has been infringed or a duty that has been breached or an immediate liability to pay damages or to suffer some other consequential remedy (Commonwealth v BIS Clearway Ltd (2007) 214 FLR 271 at [15] and see Ainsworth and Another v Criminal Justice Commission (1992) 175 CLR 564 at 581 – 582).
Nor is it necessary for the right, duty or liability in issue to be immediately enforceable. Thus, in Curragh at 235 (albeit in regard to a statutory provision for interpretation) Merkel J had regard to the fact that there was a genuine controversy between the parties in relation to the operation of a particular clause of an award and that the declaratory relief sought, if granted, would produce foreseeable consequences for the parties. More generally, in Ainsworth the majority of the High Court pointed out (at 581 – 582) that it was “neither possible nor desirable to fetter” the power to grant declaratory relief by laying down rules as to the manner of its exercise. However, consistent with the boundaries of the exercise of judicial power, such relief (at 582):
…must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have "a real interest" and relief will not be granted if the question "is purely hypothetical", if relief is "claimed in relation to circumstances that [have] not occurred and might never happen" or if "the Court's declaration will produce no foreseeable consequences for the parties”
Such “foreseeable consequences” are not limited to immediate legal consequences, but extend to practical consequences (Ainsworth at 582, BGC Contracting Pty Ltd and Others v Construction Forestry Mining and Energy Union of Workers (2004) 140 FCR 53 at [67] and Commonwealth v BIS Clearway Ltd (2007) 214 FLR 271 at [16]).
The applicant submitted that a justiciable and genuine controversy existed in relation to Ms Dawes. The respondents submitted that insofar as a specific declaration was sought in relation to Ms Dawes an initial question arose as to whether, for the exercise of the judicial power of the Commonwealth, a “matter” existed for the purposes of the conferral of the original jurisdiction of the Court. It was submitted that the Court lacked the jurisdiction to make the declaration sought by the applicant as there was no justiciable controversy as there was no “immediate right, duty or liability” to be established by the determination of the Court and therefore no “matter” existed such as to establish the Court’s jurisdiction in the proper exercise of its powers. Reference was made to the approach taken by the High Court in In re the Judiciary Act 1903-1920 and In re the Navigation Act 1912-1920 (1921) 29 CLR 257 at 265 in which the Court said:
It was suggested in argument that “matter” meant no more than legal proceeding, and that Parliament might at its discretion create or invent a legal proceeding in which this Court might be called on to interpret the Constitution by a declaration at large. We do not accept this contention; we do not think that the word “matter” in sect 76 means a legal proceeding, but rather the subject matter for determination in a legal proceeding. In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court. If the matter exists, the legislature may no doubt prescribe the means by which the determination of the Court is to be obtained, and for that purpose may, we think, adopt any existing method of legal procedure or inventing new ones. But it cannot authorise this Court to make a declaration of the law divorced from any attempt to administer that law.
It was submitted in relation to proposed order three sought by the applicant that there was no immediate right, duty or liability to be established by the determination of the Court as the declaration sought relates not to the entitlement to long service leave of Ms Dawes or indeed the length of long service leave to which she is entitled, but rather to the rate of payment to which she is entitled when the leave is taken, expressed as a declaration that she accrued long service leave during certain periods to be paid on the basis of certain rates of pay applying “at the time the leave is taken”.
The respondents also submitted that there must be a genuine controversy, as opposed to a desire to obtain an advisory opinion from the Court in circumstances divorced from such a controversy, and that in this instance there could be no justiciable controversy arising between Ms Dawes and her employer until she either took long service leave whilst in employment or ultimately upon the termination of her service became entitled for payment for the leave at that time. It was contended that this was apparent when one had regard to the provisions of clause 26(2) in the Award which, after setting out the entitlement of employees to certain periods of long service leave after specified periods of service, provide in paragraph (2)(b) that:
(b) Where an employee has acquired a right to extended leave under subclause (a) of this clause, then and in every such case:
(i) If before such leave has been entered upon the employment of such employee has been terminated such employee shall be entitled to receive the monetary value of the leave to which such employee has been entitled computed at the rate of salary which such employee had been receiving immediately prior to the termination of employment.
It was said to be apparent that no right was “acquired’ until the circumstances identified in the provision had arisen and that so far as Ms Dawes was concerned those circumstances had not arisen. More particularly it was submitted that clause 26 of the Award did not entitle an employee to accrue payments, but rather to accrue leave, and that leave was then granted at the rate set forth in the clause so that until the circumstance arose where leave was granted there was no requirement on the employer to “accrue” anything in relation to the employee. It was submitted that the relief was claimed “in relation to circumstances that [have] not occurred and might never happened” (Ainsworth at 581 – 582).
The respondents referred to the statements by Gaudron J in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Limited (2000) 200 CLR 591 at 48 and 52 in relation to the need for an immediate right, duty or liability and the fact that a declaration cannot be made if it would produce no foreseeable consequences for the parties. This was said to be the position in respect of the Association’s application for proposed order three.
The applicant contended that the respondents’ submissions misstated the requirement of a justiciable controversy sufficient to establish the jurisdiction of the Court. It was acknowledged that this requirement arose from the necessity for there to be a “matter” which referred to the subject matter for determination in the proceedings identifiable independently of the proceedings. It was submitted that the requirement of an immediate right, duty or liability did not mean that there must be in issue an immediate right that has been infringed or a duty that has been breached or an immediate liability to pay damages or to suffer some other consequential remedy (Commonwealth v BIS Clearway Limited at [15] and also see Ainsworth at 581 – 582) and that it was not necessary for the right, duty or liability at issue to be immediately enforceable. It was said that in this case there was a real controversy about the meaning of an award or agreement and that the declaration sought could produce foreseeable consequences for the parties (Ainsworth at 582 and Oil Basins Limited v Commonwealth (1993) 178 CLR 643 at 648 – 650) and thus this was sufficient to ground the Court’s jurisdiction.
In that respect it was also said to be relevant that such consequences were not limited to immediate legal consequences but extended to practical consequences or effects (see Ainsworth at 582, BGC Contracting Pty Limited at [67] and Commonwealth v BIS Clearway Limited at [16]). Counsel for the applicant reiterated that courts have made declarations concerning redundancy entitlements of employees even though no redundancy had in fact occurred and none may ever occur (Mount Thorley Operations and Curragh and that in those cases it was necessary for the court to be satisfied that retrenchments would in fact take place but sufficient that there was a reasonable possibility that they would and a controversy about the meaning and operation of the award.
In this case there was said to be plainly an immediate right and liability in issue, as employees had an immediate right arising under the award as contained in the NAPSAs to accrue long service leave as one of their conditions of employment. It was submitted that hence there was an immediate right to take long service leave and be paid during any period of long service leave or to be paid the monetary value of long service leave on resignation, retirement or termination.
The applicant submitted that there was justiciable controversy as to the method of payment required by the provisions of the award as contained in the NAPSAs when the employee took long service leave or was paid out long service leave in the circumstances of an employee with a history of mixed full-time and part-time employment that was susceptible to the jurisdiction of the Court not only to make an interpretation of the provisions of the NAPSA but also a declaration in relation to the circumstances of Ms Dawes.
While the applicant’s submissions were such as to satisfy me that there was a justiciable controversy in relation to the generally expressed interpretation sought in proposed orders one and two, I am not satisfied that the same can be said in relation to the order sought specifically in relation to Ms Dawes. In such a context the need for an actual rather than a hypothetical question has a particular focus, as does the principle that relief will not be granted if claimed in relation to circumstances that have not occurred and might never happen.
The proposed order sought would require the Court to make findings that Ms Dawes was employed full time at Dudley Private Hospital and was covered by the Award and also that she was employed for a period as a permanent part-time employee under the Award and hence was covered by the Award. The proposed order, somewhat unsatisfactorily, leaves open the identification of Ms Dawes’ employer as either the second or third respondent.
However it is not necessary to attempt to determine these issues because the difficulty facing the applicant is that the “right” sought to be addressed under proposed order three is not simply a right to long service leave as such, but rather a right on the part of Ms Dawes to be paid on particular bases applying “at the time the leave is taken”. However it is entirely possible that Ms Dawes will not “take” long service leave. Instead circumstances may arise (such as termination, resignation or retirement) in which she seeks to receive “the monetary value” of the leave to which she has become entitled under clause 26(2)(b) of the Award. Such a situation is not addressed in the proposed order sought.
While Ms Dawes would have accrued an entitlement to a period of long service leave with pay if she met the temporal and employment requirements in the Award, no entitlement to be paid would arise until she either took such long service leave whilst in employment or became entitled to be paid the monetary value of the leave on termination, resignation, or retirement. In these circumstances, I am not persuaded that a justiciable controversy, as distinct from a desire to obtain an advisory opinion or the answer to a hypothetical question, is established in relation to the particular order sought by the applicant in relation to Ms Dawes. It is not the mere “futility” of the order sought that is the obstacle but rather the fact that the circumstances it seeks to address may not come to pass (see University of Western Australia v National Tertiary Education Industry Union at [74]; Ainsworth at 581 – 582 and Forestview Nominees Pty Ltd and Another v Perpetual Trustees WA Limited (1988) 193 CLR 154 at 172 at 172).
Moreover, even if the Court has jurisdiction to make a declaration under s.16, the nature of the order is in itself a factor against the exercise of the discretion to make the declaration sought, particularly in circumstances where an interpretation in general terms has been made under Chapter 7 reg.2.20. In all the circumstances and having regard to the factors considered above in relation to the exercise of the discretion under reg.2.20 of Chapter 7 in relation to proposed order three, I do not consider that it is appropriate to make the declaration sought in proposed order three. I would decline to make proposed order three as sought in the further further amended application.
I intend to give the parties the opportunity to be heard in relation to foreshadowed costs applications.
I certify that the preceding two hundred and nine (209) paragraphs are a true copy of the reasons for judgment of Barnes FM
Associate:
Date: 25 June 2009
11
32
5