NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd

[2011] FMCA 225

FEDERAL MAGISTRATES COURT OF AUSTRALIA

NSW NURSES' ASSOCIATION v SOS NURSING AND HOME CARE SERVICE PTY LTD & ANOR [2011] FMCA 225

INDUSTRIAL LAW – Whether employer breached collective agreement by failing to pay for time travelled in the course of employment in addition to face to face time – whether employer breached collective agreement by unilaterally reducing rate of pay – whether second respondent was knowingly concerned in contraventions – whether common law breach of contract of employment – whether compensatory damages should be paid.

Work Place Relations Act 1996 (Cth), ss.340; 342; 346E(1); 346M(1)(b); 346N; 346P(2); 346R(2)(b); 346T(2); 346X; 346ZD; 347(1); 354; 550; 717(a)(b)(iv); 718; 719(1); 719(6); 728; pt. 14
Trade Practices Act 1974 (Cth), s.75B
Fair Work Act 2009 (Cth), ss.50; 539; 545; 546; 550; pt. 4-1
Fair Work (Transitional Provisions and Consequential Amendments Act 2009 (Cth), Schedule 2, Item 11; Schedule 16 Item 2; Schedule 16 Item 16
Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Cth), Schedule 1, Item 2, Schedule 7B, Item 2

Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241
Kucks v CSR Ltd (1996) 66 IR 182
United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board (2006) 152 FCR 18
National Union of Workers v Graincorp Operations Ltd (2002) 117 IR 136
AFMEPKIU v Skilled Engineering Ltd [2003] FCA 260
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Australian Rail, Tram and Bus Industry Union v Rail Corporation New South Wales [2009] FCA 894
George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498
City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426
Endeavour Coal Pty Ltd v CFMEU (2007) 161 IR 96
Short v FW Hercus Pty Ltd (1993) 40 FCR 511
Australian Municipal, Administrative, Clerical and Services Union v Treasurer of Commonwealth (1998) 82 FCR 175
Ryan v Textile & Footwear Union of Australia (1996) 66 IR 258
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
AWU v Pasminco Australia Ltd (2003) 131 IR 1
NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd (2009) 190 IR 112
Byrne and Frew v Australian Airlines (1995) 131 ALR 422
Advertiser Newspapers Pty Ltd v Industrial Relations Commission of SA (1999) 90 IR 211
Tokyo Network Computing Pty Ltd v Tanaka [2004] NSWCA 263
Affinity Health Pty Ltd v Keene (2009) 186 IR 251
Dowling v Kirk [2007] FMCA 2106
Buckingham v KSN Engineering Pty Ltd [2008] FMCA 546
Armstrong v Bigeni Contracting Pty Ltd and Anor [2008] FMCA 485
Fair Work Ombudsman v Praglowski [2010] FMCA 621
Fair Work Ombudsman v Kentwood Industries Pty Ltd (No.2) [2010] FCA 1156

Applicant: NSW NURSES' ASSOCIATION

First Respondent: SOS NURSING AND HOME CARE SERVICE PTY LTD (ACN 050 096 350)

Second Respondent: ROSEMARY HYLES

File Number: SYG 868 of 2010

Judgment of: Emmett FM

Hearing dates: 14 February 2011, 15 February 2011, 16 February 2011, 17 February 2011

Date of Last Submission: 17 February 2011

Delivered at: Sydney

Delivered on: 12 April 2011

REPRESENTATION

Counsel for the Applicant: Mr. M. Gibian

Solicitors for the Applicant: C. Blair, NSW Nurses’ Association

Counsel for the Respondents: Mr. S. Coleman

Solicitors for the Respondents: B. Moylan, Webb & Boland Lawyers

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 868 of 2010

NSW NURSES' ASSOCIATION

Applicant

And

SOS NURSING AND HOME CARE SERVICE PTY LTD
(ACN 050 096 350)

First Respondent

ROSEMARY HYLES

Second Respondent

REASONS FOR JUDGMENT

Table of contents

1.      Introduction	Paragraphs  1-12
2.      The fairness test as it applied to the SOS Agreement	Paragraphs 13- 28
3.      The SOS Agreement	Paragraphs 29-37
4.      Relevant legal principles for construing the SOS Agreement	Paragraphs 38- 45
5.      The alleged contraventions	Paragraphs 46- 49
6.      The applicant’s evidence in relation to contravention (i)

6.1.   Mr Blair’s evidence	Paragraphs 50- 52
6.2.   Ms Cornish’s evidence	Paragraphs 53- 64
6.3.   Ms Blackford’s evidence	Paragraphs 65- 78
7.      The respondents’ evidence in relation to contravention (i)
7.1.   Ms Hawkins’ evidence	Paragraphs 79- 93
8.      Findings in relation to contravention (i) on the evidence relied upon by the parties	Paragraphs 94- 99
9.      Consideration of contravention (i) - Whether Ms Cornish was entitled to be paid travel time between client visits under the SOS Agreement	Paragraphs 100- 135
10.    Contravention (ii) - What was the applicable hourly rate of pay in the period after December 2009 under the SOS Agreement	Paragraphs 136- 151
11.    Common law breach of contract of employment	Paragraphs 152- 159
12.    Involvement of the second respondent	Paragraphs 160- 177
13.    Summary of conclusions	Paragraphs 178-182

1. Introduction

1. The applicant seeks declarations and damages, including pecuniary penalties, against the first and second respondents for alleged contraventions of the Workplace Relations Act 1996 (Cth) (“the WRA”) and the Fair Work Act 2009 (Cth) (“the FWA”). The respondents deny that the contraventions occurred.

2. The applicant is an organisation of employees and has standing to bring this proceeding on behalf of its member, Ms Helen Cornish, a registered nurse employed by the first respondent, pursuant to s.718(1) item 4C and ss.718(6)(f) and (g) of the WRA. Section 539(2) of the FWA provides for certain persons, such as the applicant, to apply to courts for orders in relation to contraventions of civil remedy provisions. Ms Cornish has been employed by the first respondent from approximately 1993 as a casually employed registered nurse.

3. The first respondent is a corporation that provides nursing and homecare support services in New South Wales and Queensland. The second respondent is the founder and managing director of the first respondent.

4. The applicant alleges that the first respondent breached terms of a collective agreement, known as the SOS Nursing and Homecare Employee Collective Agreement of 2007 (“the SOS Agreement”), lodged with the Workplace Authority on 3 August 2007. The breaches relate to allegations of a failure by the first respondent to pay Ms Cornish for travel time between clients where her work involved consecutive and continuous visits; and, a unilateral reduction in her hourly rate of pay.

5. The WRA was repealed with effect from 1 July 2009. However, the relevant transitional provisions with respect to the repeal of the WRA, as set out in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (“the Transitional Act”), provided that the WRA continued to apply in relation to conduct that occurred before the WRA was repealed (Schedule 2, Item 11 of the Transitional Act).

6. Accordingly, pursuant to the Transitional Act, the WRA continued to apply to the SOS Agreement, including the fairness test, referred to below. The WRA contained provisions relating to a fairness test to be applied by the Workplace Authority Director (‘WAD’) in respect of collective agreements, such as the SOS Agreement, once such agreements are lodged with the WAD. Those provisions as they applied to the SOS Agreement are discussed below.

7. The fairness test provisions of the WRA were repealed with effect from 20 March 2008 by the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Cth), Schedule 1 Item 2. However, pursuant to Schedule 7B, Item 2(1)(c), the fairness test continued to apply, relevantly, to collective agreements made and lodged with the WAD before 20 March 2008. Accordingly, it is common ground that, at all relevant times, the fairness test provisions continued to apply to the SOS Agreement.

8. Section 719(1) of the WRA relevantly provides that this Court may impose a penalty on a person if the person breaches an applicable provision by which he or she is bound. An applicable provision is defined in s.717(a)(b)(iv) as including a term of a collective agreement. Section 719(6) of the WRA provides that the Court may also order the employer to pay the amount of the underpayment where an employee of an employer has not been paid an amount that the employer was required to pay under an applicable provision.

9. After 1 July 2009, the SOS Agreement continued in existence as an agreement-based transitional instrument pursuant to Schedule 2, Item 2 of the Transitional Act.

10. On 1 July 2009, the FWA came into force. Sections 545(1) and (2) of the FWA provide that this Court can make any orders it considers appropriate in respect of a contravention of a civil remedy provision including an order for compensation. Section 546 of the FWA also provides for the imposition of a pecuniary penalty in respect of a contravention of a civil remedy provision.

11. Schedule 16, Item 2(2) of the Transitional Act prohibits the contravention of a term of an agreement-based transitional instrument (in this case the SOS Agreement). Item 16 of that Schedule deems such a contravention of an agreement-based transitional instrument to constitute a contravention of a civil remedy provision for the purposes of s.546 of the FWA, in the same way as a breach of an enterprise agreement made under the FWA is treated as a breach of a civil remedy provision. Section 50 of the FWA provides that a person must not contravene an enterprise agreement. It is common ground that the SOS Agreement is such an enterprise agreement.

12. In the circumstances, any contraventions of the SOS Agreement are capable of being enforced under Part 14 of the WRA in relation to contraventions between 3 August 2007 and 1 July 2009 and under Part 4-1 of the FWA in relation to contraventions after 1 July 2009.

2. The fairness test as it applied to the SOS Agreement

1. On 3 August 2007, the SOS Agreement was lodged with the WAD following a vote by members of the applicant, including Ms Cornish, made in accordance with s.340 of the WRA.

2. Section 342 of the WRA requires that once a collective agreement is voted upon by employees, it is required to be lodged with the WAD. Section 347(1) of the WRA provided that a collective agreement, such as the SOS Agreement, came into effect on the day that it was lodged.

3. Accordingly, from 3 August 2007, Ms Cornish’s employment with the first respondent was covered by the SOS Agreement.

4. Once the SOS Agreement was lodged, the WAD was required to decide whether it passed the fairness test pursuant to s.346E(1) of the WRA.

5. Section 346N has the effect that, in deciding whether the SOS Agreement passes or does not pass the fairness test, the WAD must consider the SOS Agreement as in force immediately after its lodgement on 3 August 2007.

6. Section 346M(1)(b) relevantly required the WAD to determine whether the collective agreement provided “fair compensation” in its overall effect in lieu of the exclusion or modification of protected award conditions.

7. Section 354 of the WRA relates to protected award conditions. It provides that if the employment is subject to a workplace agreement and protected conditions would have effect but for the workplace agreement, those protected conditions are taken to be part of the workplace agreement unless expressly excluded or modified by the workplace agreement. A workplace agreement that excludes or modifies protected conditions is subject to the fairness test. Relevantly, protected conditions include monetary allowances for expenses incurred in the course of employment, loadings for working overtime or shift work, and penalty rates. The SOS Agreement expressly excluded or modified those protected conditions.

8. On 17 February 2009, the WAD determined that the SOS Agreement did not pass the fairness test and duly notified the first respondent as it was required to do pursuant to s.346P(2) of the WRA.

9. Section 346R(2)(b) of the WRA provided that where the WAD has decided that the collective agreement does not pass the fairness test, the employer may lodge a variation to the collective agreement by giving a written undertaking to the WAD in relation to the collective agreement.

10. There was evidence before the Court of written and oral communications between the first respondent and the WAD between 3 August 2007 and 1 September 2009 in relation to the SOS Agreement including variations to ensure that the SOS Agreement would pass the fairness test. Those communications included a letter from the first respondent to the WAD stating, inter alia, that the hourly rates in the SOS Agreement had been increased on 31 March 2008 and 30 March 2009.

11. Further, in one of the communications from the WAD, the first respondent was requested to provide details of use of private vehicles for work related travel and the average daily kilometres travelled. The response stated that when nurses used their own private vehicles they were paid 20 cents per kilometre starting from home to their last job. The average kilometres travelled by a registered nurse such as Ms Cornish was said to be 22.8 kilometres per day. The response also stated that if the nurses travelled over 50 kilometres to their first job, then they were paid travel time at the same rate of service that they were rostered to complete. However, this answer was different to the expressed practice of payment of travel time when asked to perform a service more than 50 kilometres one way to a client’s home.

12. On 31 August 2009, the WAD notified the first respondent that it had received an undertaking from the first respondent on 28 August 2009 that the SOS Agreement now passed the fairness test. The WAD’s letter informed the first respondent that the SOS Agreement, as changed by the undertaking, continued to operate from the date the undertaking was received by the WAD, pursuant to s.346T(2) of the WRA. Whilst there was no evidence before the Court of the undertaking itself, it is common ground that the first respondent did give an undertaking to the WAD which the WAD determined would have effect from 1 September 2009.

13. Pursuant to s.346X of the WRA, if a collective agreement as varied then passes the fairness test, it continues in operation and employees are entitled to compensation from the date of issue of the notification that the collective agreement now passes the fairness test under s.346ZD of the WRA. A note to s.346ZD of the WRA states that compensation may be payable in respect of the period when the collective agreement did not pass the fairness test even though it did so as varied.

14. The notification to the first respondent from the WAD varied the hourly rates and included clause 12.3 as a variation to the SOS Agreement, effective from 1 September 2009 following receipt of the first respondent’s undertaking. Those 2 variations are explained below.

15. The WAD’s further variation to the SOS Agreement was to the hourly rates of the SOS Agreement. The determination of the WAD was that the hourly rate for that period should have been $27.30 rather than $26.20 as provided under Appendix B to the SOS Agreement. As a consequence, pursuant to s.346ZD, Ms Cornish was entitled to compensation for the period 3 August 2007 to 31 March 2008 for the shortfall in the hourly rate she was paid by the first respondent for that period. It is common ground that such compensation was paid to Ms Cornish for that period by the first respondent.

16. The addition to the SOS Agreement of clause 12.3 by the WAD provided for payment for travel time where an employee travelled more than 50 kilometres to the first visit. Such a clause was not included in the original SOS Agreement prior to the variation. Neither is it asserted that such a practice was in place prior to the SOS Agreement.

3. The SOS Agreement

1. It is common ground that the question of whether time travelled between clients, other than in excess of a distance of 50 kilometres, was required to be paid to Ms Cornish depends on the proper construction of the SOS Agreement.

2. The SOS Agreement stated that the purpose of the agreement is to streamline and consolidate existing employment conditions into a single agreement.

3. The SOS Agreement stated that, unless otherwise specified in writing, each employee is deemed to be a casual employee.

4. Relevantly, clause 7 stated as follows:

   “7. ENGAGEMENT

   Unless otherwise specified in writing each employee is deemed to be a casual employee. It is (sic) SOS to decide whether an employee is a causal employee. Given the variable nature of the client base and services provided, there is no guarantee that a minimum hour’s requirement will always be met due to unforseen circumstances. If this occurs, SOS shall not be liable for paying and (sic) shortfall in hours or other related entitlements.

   Employees are engaged as “Casual employees” on an hourly basis. Given the variable nature of our client base and timing of the work required to be performed by SOS, there is no permanency of employment or certainty in the timing or ongoing availability of work. Each engagement represents a discrete and non continuous period of work.

   Notwithstanding the above employment environment, we recognise the importance of reliability, dependability and the need to plan to ensure the effective provision of our professional services. Employees and SOS will work cooperatively to ensure the maximum amount of reasonable notice is provided in the scheduling of work and satisfaction of employee expectations for the reasonable continuation of such variable work.

   In return employees will be committed to attending their shifts as rostered or work with their supervisors to find a replacement employee within the required time frame. Casual employees will not be entitled to any annual leave, personal leave, compassionate leave or parental leave unless otherwise prescribed by the Act. New employees shall have a 3 month qualifying period of employment. At the cessation of this qualifying period both the employer and employee will have the option to make a decision as to the continuation of employment. ” (Emphasis added).

5. Clauses 1 to 7 deal with the arrangement, title, application and parties bound by the agreement, date and terms, aims and objectives and commitment to continuous improvement.

6. Following clause 7, the SOS Agreement deals with duties and responsibilities, legal obligations, confidentiality, intellectual property, return of documentation and property, other employment and conflict of interest, security, legal action, gifts, criminal record check and health status, licenses / registration and unplanned interruption.

7. Relevantly, clause 11 deals with rates of pay and states as follows:

   “11. RATES OF PAYMENT

   11.1 The aggregated rates of pay in Appendix B to this Agreement incorporate all penalty rates, overtime and allowances, including, but not limited to the casual loading into a single aggregated wage. The method of calculating the total aggregated rates of pay was based on the working patterns of all employees leading up to the Agreement. These rates will be the wage level defined for superannuation purposes. Any Health Care Worker required to work on Christmas Day shall be paid double their hourly rate according to this agreement. 

   11.2 Wage levels contained in Appendix B will be reviewed on an annual basis following any adjustments in the level of government funding and subscriptions provided to SOS.

   11.3 Employees shall be paid an hourly rate at the level of work allocated to them by SOS and for which they possess the appropriate professional qualifications and competence that are required to be safely performed. Employees shall be paid at a combination of hourly rates for one day depending upon the nature and level of care required and allocated by SOS to be provided to the variety of clients for that day. Health Care Workers where capable, shall be able to work in grades attracting lower remuneration and whilst in that classification, be paid at the rate applicable to the lower classification. An employee shall not receive a payment for public holidays when rostered off as this has been included in the aggregated rate of pay.

   11.4 Employees shall be required to record each visit or service provided to a client on the appropriate form and to submit this form to SOS each fourteen days for payment. Payment for services provided should be fortnightly (depending on the employee’s prompt lodgement of timesheets etc by the required time) by the electronic transfer of funds into a financial institution account approved by SOS. The Employer may delay an Employee’s pay until such time as it received in reasonable order, the required client service forms.

   11.5 During the life of this Agreement SOS may engage trainees or other persons under a government traineeship or similar employment scheme. Their all inclusive rates of pay shall be expressed as a percentage proportion of the Health Care Worker Level 3 (AIN) rate contained in Appendix B. All other employment provisions and conditions shall be in accordance with this Agreement and any prescribed by the employment scheme.”  (Emphasis added).

1. Clause 12 deals with vehicle allowance and is as follows:

   “12. VEHICLE ALOWANCE

   12.1 From commencement of this Agreement, employees who use their vehicle as part of the performance of their duties shall complete all prerequisite details in the “vehicle log book” provided by the company on completion of each work related journey. The logbook shall meet all the requirements of the ATO for the employee to claim travel and related expenses reimbursement as part of their personal tax return.

   12.2 Employees required to use their own private vehicle must ensure that it remains insured, registered and road worthy at all times. An allowance of $0.20 per kilometre for each kilometre travelled from home to the employee’s last job. Travel must be via the most direct route, and excludes travel not directly between each service.

2. Thereafter, the SOS Agreement contains conditions relating to living away from home allowance, sleepovers, leave provisions, termination of employment, staff development, staff and client case conference meetings, superannuation, risk management, grievance and dispute settlement procedure and no extra claims commitment. Appendix A to the Agreement contains level descriptions and Appendix B the rates of aggregated pay and allowances.

4. Relevant legal principles for construing the SOS Agreement

1. The Court’s finding as to whether there has been a breach will depend upon how the relevant instrument is construed.

2. It is common ground that the nature of the SOS Agreement, the manner of its expression, the context in which it operated, and the industrial purpose served should be construed in a manner that “contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the agreement” (Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [96] per Kirby J). I accept that the SOS Agreement is the type of agreement that may “commonly lack the precise drafting of legislation” and “bear…common hallmarks of colloquial language and a measure of imprecision” (Amcor Ltd at [94] per Kirby J). Moreover, Kirby J accepted the view of Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182 at 184 that 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” (see also United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board (2006) 152 FCR 18 at [51]).

3. The following principles are relevant in construing industrial instruments such as the SOS Agreement (National Union of Workers v Graincorp Operations Ltd (2002) 117 IR 136; [2002] AIRC 638 at [47]) per Ives DP:

   “Among the general principles to be followed in the interpretation of awards and certified agreements are these:

   (a)  if the terms of an industrial instrument are clear and unambiguous, then the industrial instrument must be interpreted in accordance with that clear and unambiguous meaning (Re Clothing Trades Award (1950) 68 CAR 597);

   (b)  the words used in an industrial instrument should not be interpreted in a strict, technical fashion, because those who framed the industrial instrument are often non-lawyers drafting words in the context of custom and practice in an industry or particular enterprise (Bond & Co Ltd (in liq) v McKenzie (1929) 28 AR (NSW) 499; Hancock SDP in Public Transport Corporation of Victoria v Australian Rail, Tram and Bus Industry Union (Hancock SDD, 16 February 1995, Print L9550]);

   (c)  each clause should be interpreted within its context, that is, the meaning of particular words should be read in the context of the industrial instrument as a whole (Australian Workers’ Union v Abbey (1939) 40 CAR 494) and in the context of the clause/section in which it falls (Avondale Motors (Parts) Pty Ltd v Federal Commissioner of Taxation (1971) 45 ALJR 280 at 283);

   (d)  the court or tribunal should strive to give effect to the intention of the authority which made the award (or, presumably, in the case of an agreement, the intent of the parties to the agreement), provided that the words appearing in the instrument can reasonably be interpreted to mean that which the authority/parties intended them to mean (Australian Timber Workers’ Union v W Angliss and Co Pty Ltd (1924) 19 CAR 172);

   (e)  the court or tribunal’s recourse to extrinsic material in the interpretation of industrial instruments is not dependent upon the existence of ambiguity in the industrial instrument (Australian Municipal, Administrative, Clerical & Services Union v Treasurer (Cth) (1998) 82 FCR 175 ; 80 IR 345).”

4. I accept the submission of counsel for the applicant that when construing the SOS Agreement, the task is objectively to determine the intention of the parties from the words of the instrument rather than the actual subjective intentions of the parties (AFMEPKIU v Skilled Engineering Ltd [2003] FCA 260 at [21]. The High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 ; [2004] HCA 52 at [40] stated as follows:

   “This Court, in Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”

5. The following principles were also submitted in Australian Rail, Tram and Bus Industry Union v Rail Corporation New South Wales [2009] FCA 894 and adopted by Jagot J at [17]:

   “(a) Industrial instruments are not to be interpreted narrowly or pedantically: Kucks v CSR Ltd (1996) 66 IR 182 at 184 per Madgwick J.

   (b)  The aim is to determine what meaning was intended by the framers, keeping in mind that they “were likely of a practical bent of mind”: Kucks at 184.

   (c)  It is necessary to have regard to the practical purpose of the instrument intended to be served by the parties and the context in which it was made: Kucks at 184.

   (d)  Generally, ordinary or well-understood words should be given their ordinary or usual meaning: Kucks at 184.

   (e)  A strict literal interpretation is to be avoided. Clauses must be viewed broadly and in context: Australasian Meat Industry Employees Union (WA Branch) v Woolworths Ltd (2007) 164 FCR 420;] [2007] FCAFC 201 at [21] per Siopis J.

   (f)  The agreement must be construed in relation to the matrix of facts that existed at the time the agreement was made: Finance Sector Union v Commonwealth Bank (2001) 106 IR 172] [2001] FCA 335.

   (g)  Where a clause in an award (or an agreement) is the “product of a history”, regard can be had to that history: Short v F W Hercus Pty Ltd (1993) 40 FCR 511 at 518.

   (h)  Whether the clause in question accords with business common sense is a relevant consideration: Australasian Meat Industry Employees Union (WA Branch) v Woolworths Ltd (2007) 164 FCR 420] ; [2007] FCAFC 201 at [19]–[21] per Siopis J; Van Efferen v CMA Corporation Ltd [2009] FCA 597 at [37].”

6. I also accept that there is a tradition of adopting a “generous construction over a strictly literal approach” in the interpretation of industrial awards and agreements and that they are to be treated as beneficial instruments (see George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-50 per Street J; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [57] per French J; and Endeavour Coal Pty Ltd v CFMEU (2007) 161 IR 96 at [44] per the Court).

7. It is apparent that the context and purpose of an instrument need not be confined to the words of the instrument and may properly extend to “other documents with which there is an association” and may also include “…ideas that gave rise to an expression in a document from which it has been taken” (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 per Burchett J, accepted by French J in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [53]

8. In this regard, Jagot J in dealing with an industrial agreement in Australian Rail, Tram and Bus Industry Union v Rail Corporation New South Wales [2009] FCA 894 at [20], applied the principle enunciated by Marshall J in respect of the interpretation of industrial awards in Australian Municipal, Administrative, Clerical and Services Union v Treasurer of Commonwealth (1998) 82 FCR 175 at 178. That principle states that it is impermissible to have regard to the conduct of parties subsequent to the making of the award in interpreting an award. In the circumstances, I accept counsel for the applicant’s submission that the conduct of the parties subsequent to the making of an agreement is entirely irrelevant in its interpretation: Ryan v Textile & Footwear Union of Australia (1996) 66 IR 258 at 285-286; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [26]; AWU v Pasminco Australia Ltd (2003) 131 IR 1 at [39].

5. The alleged contraventions

1. The alleged contraventions of the SOS Agreement by the first respondent are said to be:

   (i)A failure to pay Ms Cornish for time spent travelling between the homes of clients. The applicant submits that, properly construed, the SOS Agreement imposes an obligation upon the first respondent to pay Ms Cornish an hourly rate of pay for all time worked, including time spent travelling.

   (ii)The first respondent failed to pay Ms Cornish the applicable rate of pay in the period after December 2009 in contravention of clause 11 of the SOS Agreement.

   (iii)In the alternative to (ii) above, the applicant alleges that the first respondent breached the contract of employment of Ms Cornish by unilaterally reducing her rate of pay in or around December 2009.

2. The applicant also alleges that the second respondent was knowingly concerned in the contraventions in breach of s.728(1) of the WRA and s.550(1) of the FWA.

3. The relevant periods of the alleged contraventions pursuant to the WRA were between 3 August 2007 and 1 July 2009 and the alleged contraventions pursuant to Part 4 – 1 of the FWA were from 1 July 2009 to date.

4. In the event that any of the alleged contraventions is found proved, the parties have agreed upon the amount of compensatory damages to be paid to Ms Cornish.

6 The applicant’s evidence in relation to contravention (i)

6.1. Mr Blair’s evidence

1. Mr Christopher Mark Blair’s affidavits, sworn 4 August 2010 and 16 December 2010, were read. Mr Blair is an industrial officer of the applicant responsible for the enforcement of various industrial instruments. Mr Blair’s affidavits went largely to the history of the SOS Agreement and communications between the applicant and the first respondent. Those communications included correspondence following the SOS Agreement passing the fairness test, including back payments to be made pursuant to s.346ZD of the WRA.

2. Mr Blair also stated that most of the nurse employees are employed on a casual basis and live and work in north west New South Wales, the New England region of New South Wales and the central coast of New South Wales, as well as Southern Queensland and other areas of New South Wales.

3. Mr Blair was not cross-examined following his affidavits being read and rulings made in respect of various objections.

6.2. Ms Cornish’s evidence

1. Ms Helen Cornish’s affidavits, sworn 31 July 2010 and 22 December 2010, were read without objection. Ms Cornish stated that she authorised the applicant to act on her behalf in this proceeding. Ms Cornish was cross-examined on her evidence.

2. Ms Cornish gave evidence that generally she visited clients of the first respondent pursuant to a rostered shift where those clients were visited consecutively and continuously. However, she was paid only for the face to face time, subject to payment of travel time where she travelled more than 50 kilometres to a client’s home.

3. Ms Cornish stated that her duties as a registered nurse with the first respondent involved using her car to travel to clients to provide nursing care in their homes. She stated that most of the clients she visited were referred from the Commonwealth Department of Veteran Affairs (“DVA”) to the first respondent and that one of the purposes of community nursing was to provide support to keep those clients in their homes.

4. Ms Cornish stated that for at least 6 years up until June 2009, Ms Kathryn Blackford was the Warialda – Bingara manager for the first respondent and was her immediate supervisor. Ms Cornish stated that work was allocated to her by the first respondent through a roster and regular discussions that she had with Ms Blackford.

5. Ms Cornish stated that to the best of her knowledge, the rostering and time sheet arrangements did not change when her pay and conditions changed in August 2007 from being governed by the Nurses Other Than In Hospitals & c.(State) Award (“NAPSA”) to being governed by the SOS Agreement.

6. Ms Cornish stated that Ms Blackford resigned in June 2009 and from that time on, various employees of the first respondent made up her roster. Ms Cornish stated that the rostering during this period was often unworkable as the employees of the first respondent providing her roster did not work in the Bingara area and did not know the needs of her clients. Ms Cornish stated that in order to overcome those difficulties, she suggested that she develop a 28 day draft registered nurse roster for herself or her relief to regular clients in Bingara. Ms Cornish stated that she would submit those draft 28 day rosters to the first respondent’s representative in advance for their review and approval.

7. Ms Cornish stated that from approximately 17 May 2010, the first respondent returned to providing her with a roster which she worked subject to agreed changes.

8. Ms Cornish stated that it was her understanding that she worked to her roster as directed, including when she drafted rosters for approval by the first respondent.

9. Ms Cornish stated that she was required to complete a time sheet on a fortnightly basis for each individual client which was then submitted to the first respondent.

10. Ms Cornish stated that she used her own vehicle and was paid a vehicle allowance of 20 cents per kilometre for the use of the vehicle where she travelled more than 20 kilometres a day, pursuant to the SOS Agreement. She stated that she was not generally paid by the first respondent for the time it took for travel from her home to her first client nor from her last client back to her home. She stated that she was not paid for the time it took to travel from one client to another client as directed by the first respondent. Ms Cornish stated that she was only paid at the hourly rate for the time spent in providing face to face nursing care to the client in their home.

11. In cross examination, Ms Cornish agreed that the travelling distances in Bingara and Warialda were generally less than 3 kilometres. However in re-examination, Ms Cornish stated that she also travelled to other country towns where the distances were greater.

12. Ms Cornish stated that generally she worked at similar times per week and those times were generally unchanged from when she was working under the NAPSA. She stated that she would try to service the clients continuously but this was not always possible. She stated that sometimes she was required to see a client in the morning and again later that day.

6.3. Ms Blackford’s evidence

1. Ms Kathryn Ellen Blackford’s affidavits, sworn 30 July 2010 and 15 December 2010, were read without objection following certain parts of her evidence not being read. Ms Blackford was cross-examined on her evidence.

2. Ms Blackford stated that in about 2000 she became an area manager nursing co-ordinator employed by the first respondent for managing the work force in the Warialda – Bingara districts. Ms Blackford stated that one of the nurses she managed was Ms Cornish. Ms Blackford subsequently resigned from the first respondent on 14 June 2009.

3. Ms Blackford worked from the Moree office of the first respondent, being the home of the second respondent. Ms Blackford stated that her duties included rostering of employees that she managed as well as providing registered nursing care herself to clients.

4. Ms Blackford stated that clients of the first respondent were allocated to employees for ongoing services. She stated that after discussions with staff she would roster nurse employees, including Ms Cornish, to provide those services to the clients at their homes at a particular time or times per day and on a particular day or days in a week. She stated that employees were directed by her to attend those clients as per their roster at an allocated time. Ms Blackford stated that rosters were prepared and updated by her on a regular basis and employees contacted her for requested changes to their roster. Ms Blackford stated that this system remained in operation until 25 May 2009 when she was directed by the second respondent to stop rostering employees.

5. Ms Blackford stated that part of her role as area manager nursing co-ordinator was to respond to queries by employees of the first respondent about their terms and conditions of employment. She stated that, as a general rule, no travel time was paid by the first respondent to employees, including Ms Cornish, when travelling between clients either before or after the commencement of the SOS Agreement. She stated that on several occasions she contacted the second respondent to see if the first respondent would pay travel time for particular services for a particular employee. Ms Blackford stated that on those occasions she was told by the second respondent:

   “We won’t pay travel time. DVA does not pay travel time, we don’t get the funding for travel time and therefore we don’t pay it.”

6. That evidence was not objected to by the respondents and the second respondent did not give any evidence during the proceeding.

7. Ms Blackford stated that correspondence was sent by the first respondent dated 11 September 2007 relating to travel, including the following statement:

   “If you are asked to perform a service that is over 50 kilometres one way to the clients home you will be paid travel time and the full kilometres”

8. Ms Blackford also stated that employees were paid travel time by the first respondent when they travelled more than 50 kilometres to reach a client in accordance with the notice of 11 September 2007.

9. In any event, this practice was modified by clause 12.3 of the SOS Agreement, which was inserted pursuant to the WAD’s variation and became effective from 1 September 2009. As stated above, clause 12.3 provided for travel time where more than 50 kilometres was travelled to the first visit.

10. Ms Blackford also stated that she recalled other occasions where employees were paid travel time when the first respondent was sub-contracted by another provider such as Commonwealth Carer Respite Centre.

11. Ms Blackford stated that she was in fact paid travel time from Warialda to Bingara, which is 44 kilometres, for all her travel time during her employment as the area manager nursing co-ordinator from approximately 2000 until she resigned.

12. Ms Blackford stated that on 25 May 2009 she received an email from the second respondent. Relevantly, the email stated as follows:

    “ As discussed, please discontinue your visit to Bingara except for one day per week. RN visits can be covered by the RNs in Bingara as the funding will not cover your travel.”

1. In cross examination, Ms Blackford said that in Warialda clients were generally 3 to 4 kilometres apart and up to 20 kilometres apart. Ms Blackford also agreed in cross examination that the first respondent had a minimum period of start time which she said was 30 minutes. It was put to her in cross examination by the respondents’ counsel, Mr Coleman, that the visits were often 20 minutes. Ms Blackford responded that they were usually 30 minutes. However, she agreed that if they were 20 minutes there would be a minimum payment for 30 minutes. When it was put to her that if the nurses worked for 20 minutes they would be paid for 30 minutes, she responded, no, that they would be paid for 20 minutes. 

2. Further, a second affidavit of Ms Blackford, sworn 15 December 2010, states that when rostering staff, she would regularly roster employees to work morning runs within a span from approximately 8:00am until noon and then an afternoon run between 4:00pm and 6:00pm. She stated that depending on the clients and employees, employees may have done the morning and or afternoon run. She stated that she would roster employees to go to clients back to back continuously as much as possible and that in her experience nurses in rural areas preferred to work continuously and then finish for the day rather than to have their day broken up by work.

7. The respondents’ evidence in relation to contravention (i)

7.1. Ms Hawkins’ evidence

1. The respondents read the affidavit of Ms Amanda Hawkins, affirmed 26 November 2010. The affidavit, subject to those parts not read, was tendered and marked “Exhibit 2 R”. Ms Hawkins was cross-examined.

2. Ms Hawkins stated that she had been employed by the first respondent since 10 December 2005 and was currently the general manager responsible for managing day to day operations.

3. Ms Hawkins stated that it is a practice of the first respondent to roster staff for a minimum start time where staff were not self rostering and the minimum period is 30 minutes, excluding time spent on administering medication. Ms Hawkins stated that to her knowledge senior staff nurses regularly self rostered, providing themselves with flexibility. In those circumstances, the first respondent would not always pay a 30 minute minimum where it was not appropriate.

4. Ms Hawkins stated that it was her observation from practice that 15 minutes for the administration of medication was ample time and also typically included the travel time. She stated that:

   “It is something that, in the context of the day to day life of Registered nurses in rural areas, such as Bingara, suits them. They call in on their way to other jobs or maybe on their way down to do their own groceries.”

5. It was put to her that 15 minutes was not ample time in which to provide medication with which she disagreed. Ms Blackford did not agree with Ms Hawkins’ evidence that 15 minutes for the administration of medication was ample time and also typically included travel time. Ms Blackford stated that “it may be so in the case of some eye drops, however, most of the administration of medications and travel time would take over fifteen minutes.”

6. Having regard to the qualifications and experience of Ms Blackford who herself is a registered nurse and Ms Hawkins who has no nursing qualifications and no direct knowledge, I prefer the evidence of Ms Blackford where it departs from that of Ms Hawkins.

7. Ms Hawkins stated that the payment for time spent travelling more than 50 kilometres to a client was simply overlooked in the drafting of the SOS Agreement. However, she did not assert that such a payment was made prior to the SOS Agreement.

8. Ms Hawkins exhibited to her affidavit staff timesheets of Ms Cornish that showed consecutive and continuous appointments. Ms Hawkins also exhibited to her affidavit various staff time sheets in respect of Ms Cornish which showed the day, date, start time, finish time, time spent, personal care, comments and client signature. Each of the time sheets records only the face to face time spent by Ms Cornish with each client and does not identify any time for travel between clients.

9. Also exhibited to Ms Hawkins’ affidavit are staff travel allowance claim sheets in the name of Ms Cornish. The staff travel allowance claims sheets disclose the total kilometres travelled, presumably in order that employees may recover the amount under the agreement of 20 cents per kilometre where they are using their own vehicle and have travelled more than 20 kilometres in a day.

10. Ms Hawkins stated that the practice of self rostering was stopped following a reorganisation of the first respondent in June 2009. She stated, however, that Ms Cornish did not put the change in policy into practice and that it came to her attention in July 2010 that she was still self rostering.

11. However, in cross examination, Ms Hawkins agreed that she was not a nurse and did not direct or supervise nurses, nor had she ever been a rostering clerk for the first respondent, except as a replacement when staff were on holidays. She agreed she had no direct knowledge of the care provided by the nurses in the homes. It was put to her in cross examination that she had never had any discussion with Ms Cornish about her roster to which she responded that she “may have once or twice”. Ultimately, she agreed that she could not recollect any discussion with Ms Cornish with respect to rostering.

12. Ms Hawkins would not agree in cross examination that nurses who were self rostering were directed by the respondent where to go.

13. It was also put to Ms Hawkins in cross examination that Ms Cornish was not paid separately for travel time between clients to which Ms Hawkins responded that it was in her hourly rate. She agreed that if Ms Cornish had a service for half an hour, travel time for fifteen minutes and another service for half an hour, she would be paid for one hour, rather than one hour and fifteen minutes.

14. It was also put to Ms Hawkins that she did not otherwise have any documents that suggested that employees were paid travel time between clients. Again, Ms Hawkins repeated somewhat unresponsively that the travel time was included in their hourly rate.

15. In cross examination Ms Hawkins agreed that Ms Blackford was paid for all travel time and work at the hourly rate, although offered the explanation that such payments were made because she had a home office and an agreement with the second respondent.

8. Findings in relation to contravention (i) on the evidence relied upon by the parties

1. On the evidence before me, for the most part Ms Cornish saw clients in Bingara where the distance from one end of the town to the other was about 3 kilometres and the travel time usually only several minutes. Similarly, I am satisfied that the distances travelled in Warialda were a little longer but not significantly different to the distances travelled by Ms Cornish in Bingara.

2. I am also satisfied on the evidence before me that where Ms Cornish was self rostering, her proposed rosters were submitted to the first respondent for approval prior to her undertaking that work. In the circumstances, I am satisfied that all work performed by Ms Cornish in respect of her nursing duties was done at the direction of the first respondent. I am also satisfied that Ms Cornish’s rosters were regularly for consecutive and continuous visits between clients, either in morning or afternoon shifts.

3. I do not accept the evidence of Ms Hawkins that the nurses were paid travel time through the payment of a higher hourly rate. There is no evidence to support such a proposition other than the assertion of Ms Hawkins. For example, there is no evidence before the Court of any discussion at any time before the SOS Agreement that nurses were paid a higher hourly rate in order to compensate them for travel time between client visits.

4. I am also satisfied that in respect of some employees, such as Ms Blackford, travel time was paid.  I do not accept as satisfactory the explanation offered by Ms Hawkins that Ms Blackford was paid travel time because she had a home office. Counsel for the respondents submitted that it was because she was carrying out administrative duties for the first respondent. However, Ms Hawkins conceded that she also carried out nursing duties and that her time sheets showed that she was paid for travel time of only a few minutes between clients.

5. The time sheets in evidence before me disclose that the date, duration of service and reason for service were recorded by Ms Cornish. They are plainly records that do not simply reflect Ms Cornish’s entitlement to pay. Rather, they appear to be more directed to contain the necessary information about the patient, duration of visit and nature of visit. It appears they were used to tally up the face to face time spent by Ms Cornish in respect of each client for which she was then paid the hourly rate. As stated above, there was no additional payment made to her for travel time between clients.

6. On the evidence before me, including that of Ms Hawkins, I am satisfied that travel time was not paid at the hourly rate to Ms Cornish in addition to the face to face time, except insofar as she may have travelled more that 50 kilometres to visit a client.

9. Consideration of contravention (i) - Whether Ms Cornish was entitled to be paid travel time between client visits under the SOS Agreement

1. Counsel for the applicant, Mr Gibian, contended that Ms Cornish was entitled under the SOS Agreement to be paid for all time worked including travel time between clients.

2. Counsel for the respondents, Mr Coleman conceded that Ms Cornish was entitled to be paid for all time worked including travel time. However, Mr Coleman contended that Ms Cornish was paid a higher hourly rate that would compensate her for the time travelled between clients without being paid additionally for that travel time. 

3. Mr Coleman submitted that the hourly rate of pay included travel time because it was expressed in the SOS Agreement to be an aggregated rate of pay inclusive of all penalty rates, overtime and allowances, including but not limited to the casual loading into a single aggregated wage.

4. Clause 11 makes no specific reference to travel time between clients as being taken into account in a single aggregated wage.

5. The matters that are said to be included in clause 11.1 of the SOS Agreement in the aggregated rate of pay are some of the protected award conditions identified in s.354 of the WRA and which the SOS Agreement is intended to displace. There is no provision in s.354 of the WRA to include travel time as part of the protected award conditions. In the circumstances, I do not accept Mr Coleman’s submission that the aggregated wage includes travel time, other than the travel allowances specifically referred to in the SOS Agreement.

6. Mr Coleman also asserted that the DVA website stated that the cost components covered by the fees for the provision of community nursing services included face to face time and travel time and did not otherwise pay the first respondent travel time. However, it is clear on the evidence before me that Ms Cornish’s clients included clients other than those only of the DVA. In such circumstances, the arrangement for payment between the DVA and the first respondent are irrelevant in construing the terms and conditions in the SOS Agreement. 

7. As referred to above, following the passing of the fairness test, clause 12.3 was inserted in the SOS Agreement, effective 1 September 2009, and stated that:

   “Where employees travel in excess of 50 klms for the first service, they are paid travel time at their relevant hourly rate of pay.”

8. Mr Coleman contended that the insertion of clause 12.3 by the WAD, following discussions with the first respondent, is part of the context to which the Court can have regard in construing the SOS Agreement.

9. Mr Coleman submitted that the SOS Agreement should be read so as to give effect to its evident purposes which involved a search for the meaning intended by the framers of the document. Mr Coleman contended that “evident purposes” was not a reference to the industrial context and purpose of the SOS Agreement, as submitted by counsel for the applicant in his opening. Mr Coleman referred the Court to Kucks v CSR Limited (1967) 66 IR 182 at 184 per Madgwick J. To that end, Mr Coleman submitted that the genesis of clause 12.3, although slightly different, was found in the practice of paying nurses for travel time where a client was more than 50 kilometres away from the nurse’s home. Mr Coleman submitted that the fact that that practice and clause 12.3 dealt with payment of travel time in specific circumstances led to the inference that the SOS Agreement, properly construed, did not include additional payment for time travelled between clients other than in those circumstances; and, that payment for all other travel time was therefore included in the hourly rate.

10. There was no evidence led by the first respondent to suggest that the practice of payment for travel when a nurse travelled more than 50 kilometres to a client’s home was in existence prior to the SOS Agreement. Further, no such contention was put to Ms Blackford or Ms Cornish in cross-examination.  In the circumstances, I am satisfied that Ms Cornish was not paid travel time for visits which exceeded 50 kilometres from her home before the SOS Agreement.

11. Had such a practice existed prior to the SOS Agreement, it may have mitigated against travel time being payable to Ms Cornish at her hourly rate in addition to the face to face client time; because, if she was entitled to be paid for travel time in addition to face to face time in any event, there would have been no need for any such practice of paying travel time where a nurse is asked to perform a service that is more than 50 kilometres away, because that travel time would already have been part of the nurse’s working time.

12. As stated above, in the circumstances, any such payment for travel time where more than 50 kilometres was travelled to a client from the nurse’s home did not form part of the SOS Agreement and is not relevant to its proper construction and the fact of such payments is not relevant to the proper construction of the SOS Agreement.  Similarly, clause 12.3 is also not relevant to the proper construction of the SOS Agreement as at 3 August 2007. The SOS Agreement as varied by the WAD specifically stated that clause 12.3 had effect from 1 September 2009. In such circumstances, it cannot be relevant to the proper construction of the SOS Agreement as at 3 August 2007.

13. The applicant’s counsel, Mr Gibian, submitted that Ms Cornish was entitled to be paid for all working time which included travel time between clients at the hourly rate specified in the SOS Agreement where Ms Cornish travelled consecutively and continuously between clients on her shift.

14. Mr Gibian referred to the decision of Perram J in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd (2009) 190 IR 112 at [22] in support of that proposition.

15. Perram J considered whether or not nurses employed by the respondent were entitled to be paid for the time spent travelling between clients in accordance with the NAPSA. The case involved the same parties as in the proceeding before this Court. However, the case before Perram J related to the construction of the NAPSA which governed the employment of nurses by the first respondent prior to the parties entering into the SOS Agreement on 3 August 2007.

16. The applicant in the case before Perram J sought a declaration, ultimately made by Perram J, in the following terms:

    “Where an employee whose employment is subject to the NAPSA spends time travelling between the residences of clients of the employer for the purpose of providing services to those clients on behalf of the employer, the employee is, during that travelling time, on duty and working for all purposes under the NAPSA.”

17. Perram J summarised the arguments before him as follows:

    “[17] Miss Howell, who appeared for the applicant, put the matter very shortly. The notional agreement fixed ordinary working of 38 hours per week. Clause 2(v) provided ordinary hours were to be worked between 7.00 am and 7.00 pm and were to be “consecutive except for breaks or meals”. Because the hours had to be worked consecutively there was no room for a construction of the notional agreement which, in effect, meant that a nurse would work for a short period in one client’s home, stop working whilst travelling to the next client’s home, and then recommence work on arrival at that client’s home.

    [18] Quite apart from that, cl 5(ii) of the notional agreement showed that part-time and casual employees were entitled to two or three hours minimum pay for each shift. If there could be a cessation of work during the travel period this would mean that the nurses were entitled to two or three hours of pay for each client. This, so it was submitted, was an unlikely outcome.

    [19] Counsel for the respondent did not seek to engage directly with Ms Howell’s argument. Instead, he submitted that the declaratory relief should be declined because, if made, it would have the effect of requiring the respondent to pay travel time even in those cases in which nurses were working in rural New South Wales, where the distances between clients were, in general, great. This would be, so it was submitted, to write into the notional agreement an obligation to pay for travel time which was not there.”

18. Perram J noted that there was no room in the terms of the NAPSA for work done intermittently, in that clause 2(v) of the NAPSA provided:

    “[20] It is plain that the notional agreement contemplates that the work done is to be done consecutively. Clause 2(v) provides:

    Day Workers — the ordinary hours of work for day workers shall not exceed 38 hours per week to be worked between the hours of 7.00 am and 7.00 pm in five days of not more than eight hours, Monday to Friday, inclusive and shall be consecutive except for breaks for meals.”

19. Perram J further noted that the NAPSA provided for vehicle allowances which he found showed that the NAPSA contemplated that the performance of the nurses’ duties may involve travel. Perram J stated as follows:

    “[22] This clause shows that the notional agreement contemplates that the performance of the nurses’ duties may involve travel. That is consistent with the notion that they should be paid for the performance of those duties. Finally, the proposition that the notional agreement should be interpreted so that employees are not paid for periods of time when they are performing duties for the employer is surprising, and not lightly to be embraced in the absence of a clarity of expression which the notional agreement clearly lacks. It follows that, in principle, the declaration should be granted.”

20. Unlike in Perram J’s case, the proceeding before this Court is brought by the applicant on behalf of its member, Ms Cornish, pursuant to s.718 item 4C and s.718(6)(f) and (g) of the WRA.

21. Perram J’s declaration relates to the working time of nurses which he found to include travelling between clients for the purposes of providing services to those clients.

22. The first respondent contended that Perram J’s judgment was not relevant to the construction of the SOS Agreement because it related to the construction of the NAPSA. However, Perram J’s case involved the same parties doing the same work, including Ms Cornish, shortly before the SOS Agreement was entered into. The SOS Agreement is expressed to be for the purpose of streamlining and consolidating existing employment conditions into a single agreement.

23. Ms Cornish gave evidence that generally she visited clients of the first respondent pursuant to a rostered shift where those clients were visited consecutively and continuously and that her work habits were the same under the SOS Agreement as they had been under the NAPSA. However, under the SOS Agreement she was only paid at her hourly rate for the time spent in face to face visits. She was otherwise not paid for any travel time, other than where she travelled more than 50 kilometres to visit a client.

1. I accept that the work patterns of Ms Cornish typically involved consecutive and continuous travel between clients and that it is proper to have regard to those work patterns prior to 3 August 2007, in construing the SOS Agreement.

2. In the circumstances, Perram J’s judgment supported the applicant’s contention that working time under the SOS Agreement was intended to include face to face time and travel time between clients visited on a consecutive and continuous basis. As stated above, Ms Cornish was paid only for face to face time at her hourly rate without any additional payment at her hourly rate for the time travelled between clients where that travel was in respect of consecutive and continuous visits.

3. It was not suggested by the respondents that the working patterns of Ms Cornish were any different to those considered by Perram J. Nor did the respondents suggest that the declaration by Perram J was not relevant in considering the “working patterns” of the nurses governed by the SOS Agreement. The SOS Agreement stated that “the method of calculating the total aggregated rates of pay was based on the working patterns of all employees leading up to the Agreement” (emphasis added).

4. To construe the SOS Agreement as also including payment for travel time where that travel time was part of the working time is in keeping with the “working patterns” of the first respondent’s employees prior to the SOS Agreement. Such a construction also contributes to a sensible industrial outcome as should be attributed to the parties who negotiated and executed the SOS Agreement (see Amcor per Kirby J). The High Court made clear in Toll at [40] that “What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe… That, normally, requires consideration not only of the text, but also the surrounding circumstance known to the parties, and the purpose and object of the transaction.”

5. The SOS Agreement provided in clause 7 that “each engagement represents a discrete and non continuous period of work”. Neither party made any particular submission about the manner in which that part of clause 7 should be construed. However, in my view it is necessary to construe that part of clause 7 in considering what “each engagement” was intended to cover. If, on a fair construction “each engagement” was intended to refer to every visit then, the travel time between such visits may not be part of the nurses working time. However, a beneficial construction of that clause would suggest that “each engagement” is intended to refer to a rostered shift which required visits to clients on a consecutive and continuous basis. Such a construction is consistent with the approach by Perram J in NSW Nurses’ Association v SOS Nursing and Home care Service Pty Ltd (2009) 190 IR 112.

6. In the case before this Court, it is clear that when the nurses were paid in accordance with the NAPSA, they were to be paid for travel time when visiting clients on a consecutive and continuous basis. As stated above, there is no evidence before this Court of any change in the working patterns of the nurses generally, or Ms Cornish in particular, to suggest that the rostered shifts operated differently under the NAPSA as opposed to under the SOS Agreement.

7. However, I note that the clause contained in the NAPSA and construed by Perram J required that inter alia, “the ordinary hours of work for day workers… shall be consecutive except for their breaks for meals.” Whilst that clause is different to clause 7, both contemplate consecutive and continuous visits to clients. Both parties before this Court agree that working time must therefore include any time involved in travel between clients being seen consecutively and continuously for that period of work.

8. Counsel for the respondents, submitted that Perram J’s decision related to construing the relevant NAPSA which did not provide explicitly for travel time payments whereas in Mr Coleman’s submission the SOS Agreement explicitly does provide for payment of travel time. However, in making that submission, Mr Coleman was referring to clause 12.3 which I have already found not to be relevant in construing the SOS Agreement because it was a variation required by the WAD in order that the SOS Agreement passed the fairness test and was effective only from 1 September 2009.

9. In the circumstances, I find that if the time between visits involved any use of private time by the nurse, or any break longer than the time reasonably required to travel to the next client, then such time would not be included as part of the working time of that particular rostered shift or engagement

10. In the circumstances, Ms Cornish was entitled under the SOS Agreement to be paid travel time where that time was part of her working time in circumstances where she was visiting clients on a consecutive and continuous basis, whatever the distance between those clients.

11. The failure to pay Ms Cornish that travel time between clients in accordance with the hourly rate, where she was engaged in continuous and consecutive visits, is a contravention of the SOS Agreement.

12. Accordingly, Ms Cornish is entitled to compensatory damages from the first respondent for its breach of the SOS Agreement to pay her in respect of all time spent travelling between clients for which she was not paid.

13. The amount of compensatory damages to be awarded pursuant to s.719(6) of the WRA and s.545(2)(b) of the FWA in the event that such a breach of the SOS Agreement is found, has been agreed by the parties to be $8000.

10. Contravention (ii) - What was the applicable hourly rate of pay in the period after December 2009  under the SOS Agreement

1. I am satisfied, on the evidence before me, that from 3 August 2007 to 31 March 2008 the first respondent paid the wage rates in accordance with Appendix B of the SOS Agreement. On 31 March 2008, in accordance with the SOS Agreement, the rates of pay were reviewed as per clause 11.2 of the SOS Agreement. As a result of the review, Ms Cornish’s hourly rate was increased.

2. A similar review was conducted on 30 March 2009 and again the hourly rate of pay was increased.

3. Ultimately, on 1 September 2009, the WAD decided that the fairness test required the rate of pay to be $27.30 per hour as at 3 August 2007. A useful table on the pay rates for Ms Cornish was prepared by Counsel for the applicant. The table shows the original hourly rate payable as at 3 August 2007; the hourly rate following the review in March 2008; the hourly rate following the review in March 2009; the hourly rate paid by the first respondent following the WAD’s determination of the fairness test from 7 December 2009; and the hourly rate determined by the fairness test. The table is as follows:

   “48. The rates of pay applied by the first respondent during the period between 3 August 2007 and the present were as follows:

SOS Agreement Rates of Pay 3 August 2007	March 2008 Rates	March 2009 Rates	7 December 2009 Rates	SOS Agreement Fairness Test Rates of Pay
Monday-Friday	26.20	28.60	30.35	28.60	27.30
Saturday	30.50	35.75	36.75	33.00	33.00
Sunday	36.30	42.90	42.89	39.50	39.50
Public Holiday	55.00	71.50	71.50	57.50	57.50

1. The applicant contended that having conducted the annual review in March of 2008 and March of 2009, in accordance with clause 11. 2 of the SOS Agreement and having increased those rates of pay, the new rates of pay became the rates payable under the SOS Agreement.

2. Upon the receipt of the determination of the WAD, following its application of the fairness test that the rate of pay as at 3 August 2007 was required to be $27.30, the respondents contended that Ms Cornish was not entitled to be paid any more than the hourly rate as varied by the fairness test.  The first respondent contended, therefore, that it was entitled to reduce the March 2009 hourly rate from $30.35 to $28.60 from December 2009.

3. However, correspondence between the first respondent and the applicant makes clear that the first respondent was seeking to reduce the hourly rate from March 2009. That correspondence is as follows:

   (i)On 17 September 2009, the first respondent wrote to Ms Cornish informing her of its obligation to make back payments to her because the SOS Agreement now passed the fairness test. The letter requested that Ms Cornish accept continuation of her current pay in lieu of back pay instead of reducing her hourly rate to that set by the WAD.

   (ii)On 7 October 2009, the applicant wrote to the first respondent’s solicitor on behalf of its members in relation to this request. The letter stated that the proposals in the first respondent’s letter were unlawful and that the employees were entitled to be paid their back pay and that it was unlawful for the first respondent to reduce the hourly rate of pay to the minimum requirement of the fairness test.

4. As stated earlier in these reasons, having provided undertakings to the WAD, once the SOS Agreement was found to have passed the fairness test, the SOS Agreement continued in operation pursuant to s.346X(a). Part of the information provided by the first respondent to the WAD in order to pass the fairness test were the March 2008 and the March 2009 increases in the hourly rates. In the circumstances, those increases formed part of the relevant context considered by the WAD in varying the hourly rates of pay to pass the fairness test.

5. The applicant submits that the consequence of the determination that the SOS Agreement now passed the fairness test with the undertakings, was that clause 11.2 of the SOS Agreement and the increases made on review, which had been implemented under that clause, continued in operation.

6. Counsel for the respondents submitted that the variations made to the SOS Agreement relating to the hourly rates as a result of the application of the fairness test, displaced any contractual right Ms Cornish may have had to the higher rate following the March 2009 review.

7. Mr Coleman submitted that because s.346ZD provided an employee with an entitlement to compensation where a workplace agreement did not pass the fairness test and that there was no obligation under the SOS Agreement to increase the hourly rate, merely to review, the variation of the SOS Agreement by the WAD, in concert with a right to compensation under s.346ZD, displaced any purported right to compensation.

8. Mr Coleman referred in his written submissions to Byrne and Frew v Australian Airlines (1995) 131 ALR 422 in support of his submission referred to above. However, I note that in Byrne and Frew, the High Court of Australia was construing the impact of an award upon a contractual right. The case predated the introduction of the fairness test and appears to be dealing with the sort of situation that the fairness test was intended to address. It does not seem to be particularly relevant or helpful in considering the application of the variations to the SOS Agreement made by the WAD pursuant to the fairness test and the WAD’s ultimate decision that the SOS Agreement passed the fairness test subject to the undertakings provided by the first respondent. This is particularly so where the hourly rate paid from 31 March 2008 onwards was higher than the varied hourly rate determined by the fairness test.  

9. It is common ground that on 20 December 2009, Ms Cornish was paid back-pay in respect of the period 3 August 2007 to 31 March 2008, being the period determined by the WAD not to have passed the fairness test. As stated above, the contravention is said to exist in the unilateral reduction in the hourly rate of pay from 7 December 2009 to be $28.60 rather than the hourly rate decided in the March 2009 review of $30.35.

10. However, I accept the submission of counsel for the applicant that the fairness test involved an assessment of whether the SOS Agreement provided at least fair compensation for the removal of any protected award conditions by the SOS Agreement. It did not prevent more favourable conditions.

11. In the circumstances, the first respondent’s failure to pay the March 2009 rate of pay after 7 December 2009 in accordance with the review conducted in March 2009, constituted a contravention of clause 11 of the SOS Agreement.

12. Accordingly, Ms Cornish is entitled to be paid the amount representing the underpayment occurring as a result of the unilateral reduction of the rate of pay from 7 December 2009 in breach of the SOS Agreement.

13. The amount of compensatory damages to be awarded pursuant to s.719(6) of the WRA and s.545(2)(b) of the FWA, in the event that such a breach of the SOS Agreement is found, has been agreed by the parties to be $373.06.

11. Common law breach of contract of employment

1. The second contravention alleged by the applicant is in respect of the correct rate of pay under the SOS Agreement payable to Ms Cornish. The applicant contends that the first respondent contravened the SOS Agreement by unilaterally reducing Ms Cornish’s rate of pay. In the alternative, the applicant contends the first respondent breached Ms Cornish’s contract of employment in the period after December 2009 by unilaterally reducing Ms Cornish’s hourly rate of pay.

2. The first respondent contended that even if such a breach occurred, any contractual breach is displaced by the rights established by the SOS Agreement within the statutory framework as that framework affects industrial instruments. The applicant contended that in such a case, the principle espoused by Mr Coleman was confined to awards and therefore the existence of the SOS Agreement did not mitigate against the first respondent’s employees’ common law rights.

3. I accept the applicant’s submissions that a contract of employment can properly provide for more beneficial pay and conditions of employment to those contained in a collective agreement and will be enforceable under the law of contract. I accept that pay is a central term of any contract of employment.

4. In the ordinary course, a unilateral reduction in the rate of pay applying under a contract of employment is a breach of that contract. Advertiser Newspapers Pty Ltd v Industrial Relations Commission of SA (1999) 90 IR 211 at [50] per Bleby J (with whom Doyle CJ and Martin J agreed); Tokyo Network Computing Pty Ltd v Tanaka [2004] NSWCA 263 at [6] per Handley JA (with whom Mason P and Tobias JA agreed); Affinity Health Pty Ltd v Keene (2009) 186 IR 251 at [25].

5. There was no term in the SOS Agreement that entitled the first respondent to unilaterally reduce Ms Cornish’s pay, nor was it submitted by the respondents that there was any such term. I accept that the first respondent was not required under the agreement to increase the hourly rate at its annual review. Clause 11.2 of the SOS Agreement did no more than require the first respondent to conduct an annual review of the hourly rate of pay.

6. I accept that Ms Cornish accepted the variation increase as a result of the review by the first respondent of her pay in March 2009 and that Ms Cornish’s acceptance is reflected in her continuing to work for the first respondent pursuant to that new rate.

7. Mr Coleman submitted that if there is a breach of contract, the right to recover pursuant to statute which presently exists, that is, the right to recover under s.346ZD of the WRA, would operate to the exclusion of any alleged contractual remedy.

8. However, it is not necessary for me to make a finding on this issue having found that the first respondent contravened clause 11 of the SOS Agreement. The common law contractual claim put forward by the applicant is intended as an alternative to the claim for breach of the FWA for failure to pay the applicant the hourly rate of pay due pursuant to clause 11 of the SOS Agreement as varied by the WAD.

12.  Involvement of the second respondent

1. The applicant also seeks penalty damages against both respondents.

2. In relation to the second respondent, Section 728(1) of the WRA and s.550(1) of the FWA provide that a person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision. If such involvement is found, the Court may make an award for penalty damages in respect of the second respondent.

3. The applicant relied only on section 728(2)(c) of the WRA and s.550(2) (c) of the FWA. Section 728(2)(c) provides that for the purposes of s.728(1), a person is involved in a contravention of a civil remedy provision if, and only if, the person:

   “(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention;”

4. Section 550(2)(c) of the FWA defines the concept of involvement in a contravention in identical terms.

5. The applicant contended that the second respondent was directly or indirectly, knowingly concerned in or party to the contraventions established above. The applicant therefore contends that the second respondent breached s.728(1) of the WRA in relation to the period between 3 August 2007 and 1 July 2009, and s.550 of the FWA in relation to the period after 1 July 2009 by being knowingly concerned in the contravention.

6. It has been established that the concept of involvement in s.728(2) of the WRA and s.550(2) of the FWA is very similar to the concept of involvement which is found in s.75B of the Trade Practices Act 1974 (Cth) (see Dowling v Kirk [2007] FMCA 2106 at [24] to [34] per Cameron FM; Buckingham v KSN Engineering Pty Ltd [2008] FMCA 546 at [40] per Lucev FM) . In this respect, for a person to be liable under s.728(2) or s550(2), he or she:

   “a)  must have knowledge of the essential facts constituting the contravention;

   b)  must be knowingly concerned in the contravention;

   c)  must be an intentional participant in the contravention based on actual not constructive knowledge of the essential facts constituting the contravention — although constructive knowledge may be sufficient under s 728(2)(c) in cases of wilful blindness; and

   d) need not know that the matters in question constituted a contravention.” See Dowling v Kirk [2007] FMCA 2106 at [33] per Cameron FM; Armstrong v Bigeni Contracting Pty Ltd and Anor [2008] FMCA 485 at [23] per Cameron FM; Fair Work Ombudsman v Praglowski [2010] FMCA 621 at [36] per Driver FM.  

7. Furthermore, in Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 2) [2010] FCA 1156 at [198] Mckerracher J observed that:

   “For accessorial liability sourced in s 728 of the WR Act to lie, it must be proven that the person sought to be made liable on that basis was sufficiently aware of all of the relevant facts going to the primary contraventions and, with that knowledge of those essential matters, committed acts or omissions which constitute aiding or abetting, counselling or procuring the contraventions, inducing the contraventions, or being knowingly concerned in the contraventions (as the case may be) (Yorke v Lucas (1985) 158 CLR 661 at [666]–[667]).” (Emphasis added).

8. The second respondent is a founder and managing director of the first respondent. On the evidence before me, the second respondent was at all material times the person responsible for the management of the first respondent and for making decisions in relation to the rate of pay and conditions of employment and giving direction to administrative staff. Both Ms Blackford and Ms Hawkins confirmed in their evidence that they had discussed with the second respondent terms and conditions including travel time and pay rates with the second respondent in order to seek clarification of those entitlements.

9. The second respondent elected not to put on any evidence in this proceeding.

10. Counsel for the applicant submitted that the following summary deals with the evidence before the Court of dealings with the second respondent in relation to the contraventions found to have occurred. That summary is as follows:

    “64. The essential facts constituting the contraventions were raised repeatedly by employees and the applicant directly with the second respondent, including as follows:

    a) On or around 4 October 2007, a large number of employees of the first respondent sent a petition addressed directly to the second respondent in relation to “unsatisfactory conditions of the SOS Employee Collective Agreement and ballot related issues.

    b) On 1 November 2007, a meeting was held involving employees, a representative of the applicant and administrative staff of the first respondent (and the second respondent) to raise concerns about pay and conditions, including travel time. 

    c) The applicant sent numerous pieces of correspondence to the first respondent (addressed directly to the second respondent) each directly raising the issue of failure to pay time spent by employees between clients travelling.  This included letters dated 15 November 2007, 14 February 2008, 5 September 2008, 7 October 2009 and 4 February 2010.  For example, as early as 14 February 2008, the applicant wrote to the second respondent notified her that:

    In   to the SOS Nursing and Home Care Service Employee Collective Agreement we reasonably suspect that SOS has failed to pay travel time and failed to pay certain vehicle allowances contained in clause 12.  

    d) Employees of the first respondent directly raised the failure to pay employees for time spent travelling and made complaint in relation to that matter.  For example, Kathryn Blackford gave evidence of contacting the second respondent on a number of occasions to request payment of travel time for employees, but being refused.  This included specific request made in or around late 2008.

    e) Following the decision to reduce rates of pay which was announced in or around September 2009, the applicant wrote directly to the second respondent by letter dated 7 October 2009 contending that there was no right to reduce the rates of pay and that the proposed reduction in rates of pay was unlawful. 

    f) The applicant lodged a dispute with the Industrial Relations Commission of NSW raising the issue in relation to travel time and underpayment of wages.  The applicant served a further letter of demand dated 14 February 2010.  The first respondent’s solicitor responded to that correspondence only after having had the opportunity to obtain instructions from the second respondent.”

1. In relation to (a) and (b) above, there was no specific complaint about a failure to pay travel time between clients.

2. However, I accept that Mr Gibian’s summary in (c), (d) and (f) above accurately summarises the effect of the evidence of the involvement and knowledge of the second respondent in the matters the subject of the contraventions.

3. The evidence before me is that the second respondent was directly and knowingly concerned in contravening the FWA by breaching clause 11 of the SOS Agreement as varied in that she was an intentional participant. For example, the second respondent told Ms Blackford that the first respondent would not pay for travel time between clients because the first respondent did not receive payment from the DVA for travel time (see paragraph 69 above). The second respondent also sent an email to Ms Blackford on 25 May 2009 stating that funding did not cover travel for registered nurses (see paragraph 76 above).

4. In relation to (e) above, the applicant’s letter dated 7 October 2009 addressed to the first respondent’s solicitors made clear that the applicant regarded the unilateral reduction in the hourly rate of pay to be “unlawful”. Whilst there is no direct evidence that this letter was brought to the attention of the second respondent, I draw the inference that as the managing director and owner of the first respondent, it would have been the second respondent that instructed solicitors on behalf of the first respondent and that her solicitors informed her of the applicant’s letter dated 7 October 2009.

5. In the circumstance, I am satisfied that the second respondent had detailed knowledge of the essential facts that constituted the contraventions, namely, that Ms Cornish spent time travelling between clients forming part of her working time for which she was not paid at the hourly rate; and, that the rate of pay was unilaterally reduced in December 2009 in breach of the SOS Agreement.

6. On the evidence before me, I am satisfied that the second respondent was directly made aware of the applicant’s contentions that the first respondent was contravening the SOS Agreement. I accept that there is no evidence to suggest that the second respondent conceded that the first respondent was in breach of the SOS Agreement, except insofar as the first respondent gave an undertaking to the WAD varying the SOS Agreement in order to pass the fairness test.

7. However, as the law referred to above makes clear, it is not necessary that the second respondent knew that the conduct in which she had engaged constituted a contravention of the FWA.

8. In the circumstances, the second respondent was knowingly concerned in the contraventions of the SOS Agreement by the first respondent.

13. Summary of conclusions

1. The first respondent breached the SOS Agreement in failing to pay Ms Cornish at her hourly rate for travel time in addition to face to face time where Ms Cornish was engaged in consecutive and continuous visits to clients.

2. Ms Cornish is entitled to compensatory damages from the first respondent for its breach of the SOS Agreement to pay her in respect of all time spent travelling between clients for which she was not paid. The amount of compensatory damages to be awarded pursuant to s.719(6) of the WRA and s.545(2)(b) of the FWA in the event that such a breach of the SOS Agreement is found, has been agreed by the parties to be $8000.

3. The first respondent breached the SOS Agreement in unilaterally reducing Ms Cornish’s hourly rate of pay effective from 7 December 2009.

4. Ms Cornish is entitled to be paid the amount representing the underpayment occurring as a result of the reduction of the rate of pay from 7 December 2009 in breach of the SOS Agreement. The amount of compensatory damages to be awarded pursuant to s.719(6) of the WRA and s.545(2)(b) of the FWA, in the event that such a breach of the SOS Agreement is found, has been agreed by the parties to be $373.06.

5. The second respondent was knowingly concerned in the contraventions of the SOS Agreement by the first respondent.

I certify that the preceding one hundred and eighty-two (182) paragraphs are a true copy of the reasons for judgment of Emmett FM

Date:  12 April 2011