Re Victorian Hospitals' Industry Association, Australian Nursing and Midwifery Federation and Health Services Union

IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
INDUSTRIAL DIVISION OF COURT

Case No. MAG-CI-230040419

VICTORIAN HOSPITALS’ INDUSTRY ASSOCIATION	First Plaintiff
AUSTRALIAN NURSING AND MIDWIFERY FEDERATION	Second Plaintiff
HEALTH SERVICES UNION	Third Plaintiff

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MAGISTRATE:	Magistrate K Fawcett
WHERE HELD:	Melbourne
DATE OF HEARING:	3 May 2023, Final Submissions 17 May 2023
DATE OF DECISION:	25 August 2023
CASE MAY BE CITED AS:	Re Victorian Hospitals’ Industry Association, Australian Nursing and Midwifery Federation and Health Services Union
MEDIUM NEUTRAL CITATION:	[2023] VMC 12

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INDUSTRIAL LAW – Long Service Leave Act 1992 – Fair Work Act 2009 (Cth) - Nurses and Midwives (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2020-2024 – Declaration that in the opinion of the Industrial Division of the Magistrates’ Court, the long service leave entitlements are more favourable under the employment agreement than those provided by the Long Service Leave Act - Jurisdiction and power of the Magistrates’ Court.

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APPEARANCES:	COUNSEL	SOLICITORS
For the Plaintiffs	Mr Andrew Palmer KC Mr Doug Porteous	Clayton Utz

HER HONOUR:

BACKGROUND

The Nurses and Midwives (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2020-2024 (the Agreement) is an enterprise agreement approved pursuant to the Fair Work Act 2009 (Cth) (FW Act).[1] The Agreement came into operation on 23 February 2022.[2]
[1] Nurses and Midwives (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement
2020-2024 [2022] FWCA 521.
[2] Ibid [5].

The Plaintiffs, being the Victorian Hospitals’ Industrial Association (VHIA), the Australian Nursing and Midwifery Federation (ANMF) and the Health Services Union of Australia (HSU), are each registered organisations and are each entitled to represent the interests of their members in accordance with their Rules pursuant to the Fair Work (Registered Organisations) Act 2009 (Cth). Each of the Plaintiffs was a bargaining representative for the Agreement.[3]
[3] Within the meaning of s 176 of the FW Act; [2022] FWCA 521.

The Agreement covers multiple employers who are Victorian public health services and stand-alone community health centres,[4] in respect of the employment of Registered Nurses, Registered Midwifes and Enrolled Nurses.[5] The Agreement also covers the ANMF and HSU.[6]
[4] The Agreement, cl 5, cl 4.1(s) and Appendix 1.
[5] The Agreement, cl 4.1(r).
[6] Pursuant to s 201(2) of the FW Act.

Clause 70 of the Agreement deals with long service leave (Agreement LSL Terms). This proceeding is concerned with cl 70.24 ‘Concurrent Service’.[7] In particular, the proceeding is concerned with the long service leave entitlements of casual Registered Nurses and casual Registered Midwives under cl 70.24 of the Agreement, and under the Long Service Leave Act 2018 (LSL Act).
[7] Clause 70.24 of the Agreement is set out at Appendix A to this Decision.

Clause 70.24 of the Agreement deals with circumstances in which an employee works for more than one employer covered by the Agreement (Employer). Clause 70.24(a) provides that ‘[s]ubject to subclause (b), concurrent service with two or more Employers remains separate and distinct’. Clause 70.24(b) makes provision in respect of certain ‘Award-entitled Employees’[8] who transfer from one Employer (the first Employer) to another Employer (the second Employer), as an Award-entitled Employee, but also continue to perform casual work for the first Employer.
[8] Clause 70.2 defines an Award-entitled Employee to mean a full-time or part-time Registered Nurse,
full-time or part-time Registered Midwife, or a full-time, part-time or casual Enrolled Nurse. Clause
70.24 in fact also has operation in respect of the residual casual employment of registered nurses or midwives, and it is that employment which this proceeding is concerned with.

The effect of cl 70.24 is that an employee may elect to ‘transfer’ service undertaken with the first Employer to the second Employer for long service leave purposes, or the second Employer may confirm in writing that the period of service has been so recognised. Where this occurs, the transferred service counts towards the employee’s service with the second Employer. However, the transferred service no longer counts towards either the accrual of long service leave or the calculation of normal weekly hours in respect of the employees’ residual casual employment with the first Employer (although it continues to count towards the period of employment with the first Employer for the purpose of qualifying for long service leave).

The operation of cl 70.24(b) is modified by cl 70.25, which deals with the interaction of cl 70.24(b) and the LSL Act, and provides as follows:

70.25 Savings
(a) Clause 70.24(b) shall not apply to Registered Nurses or Midwives unless the Industrial Division of the Magistrates Court provides an opinion that determines generally the rights of applicable Employees under this Agreement under subsection 23(2) of the LSL Act that the long service leave entitlements provided by this Agreement are more favourable to the relevant employees than those provided by the LSL Act.
(b) The ANMF and VHIA must make an application to the Magistrates Court under section 24 of the LSL Act for an opinion referred to in section 4.6(a) [sic] as soon as reasonably practicable after the Agreement has been approved by the Fair Work Commission.
(c) No Employee shall otherwise suffer any detriment as a result of the operation of this clause to their entitlement to long service leave existing immediately prior to the coming into force of this clause.

THE PROCEEDING

The proceeding before the court is unusual. It has the three Plaintiffs already mentioned. There is no Defendant. The Plaintiffs do not allege any breach of the LSL Act and the proceeding is not concerned with the specific operation of entitlements under the LSL Act.

The proceeding was commenced by Complaint,[9] which frames the proceeding as a request for an opinion of the Industrial Division of the Magistrates’ Court under s 24 of the LSL Act. The Plaintiffs rely on s 24(1)(h) which provides that the Industrial Division of the Magistrates’ Court has ‘any other jurisdiction given to it by or under this or any other Act.’ They submit that the relevant ‘other jurisdiction’ is found in ss 5(b) and 23(2) of the LSL Act.
[9] Form 13A Complaint pursuant to r 13.02 of the Magistrates’ Court (Miscellaneous Civil Proceedings)
Rules 2020.

Section 5 of the LSL Act relevantly provides:

5 Employees to whom this Act does not apply
This Act does not apply in relation to an employee who—
…
(b) is entitled to long service leave under an employment agreement (regardless of whether it was made before or after the commencement of this Act), to the extent of any inconsistency with that employment agreement if, in the opinion of the Industrial Division of the Magistrates' Court, the long service leave entitlements are more favourable under that agreement than those provided by this Act; or
… (emphasis added)

Section 23 of the LSL Act relevantly provides:

23 Contracting out prohibited
(1)     A provision in an employment agreement … that annuls, varies or excludes any provision of this Act or of the Long Service Leave Act 1992 is of no effect, regardless of whether the employment agreement … was made before or after the commencement of this Act.
(2)     This section does not affect any provision of an employment agreement … (regardless of whether it was made before or after the commencement of this Act), to the extent of any inconsistency with this Act if, in the opinion of the Industrial Division of the Magistrates' Court, the long service leave entitlements are more favourable under the agreement … than those provided by this Act. (emphasis added)
(3)     In this section—
employee includes a former employee;
employer includes a former employer;
…

The LSL Act defines ‘employment agreement’ to include a ‘fair work instrument’ and defines a ‘fair work instrument’ to have the same meaning as under the FW Act.[10] The FW Act definition of a ‘fair work instrument’ includes an Enterprise Agreement.[11]
[10] LSL Act s 3 (definition of ‘employment agreement’).
[11] FW Act s 12 (definition of ‘fair work instrument’).

The Plaintiffs seek a declaration that pursuant to ss 5(b) and 23(2) of the LSL Act, in the opinion of the Industrial Division of the Magistrates’ Court of Victoria, the long service leave entitlements provided under cl 70 of the Agreement are more favourable than those provided by the LSL Act.

The unusual nature of the proceeding gives rise to several issues as to the Court’s capacity to make the order sought, which are addressed throughout these reasons. The Plaintiffs filed written submissions in respect of these matters.[12] The absence of a contradictor in the proceeding meant that I have had only the benefit of the Plaintiffs’ position to inform consideration of these matters.
[12] Outline of Joint Submissions, 22 December 2022; Plaintiffs’ Submissions Concerning Jurisdiction, 6
April 2023; Plaintiffs’ Supplementary Submissions, 17 May 2023.

The Plaintiffs also filed an ‘Agreed Statement of Facts’ in the proceeding.[13] In the absence of a contradictor, this is something of a misnomer. However, with one exception, the facts on which this decision is based are in any event derived from the relevant legislation, the statutory status of the Plaintiffs, and the Agreement itself.
[13] Agreed Statement of Facts, 15 March 2023.

The one exception is the asserted fact that in the Victorian public health sector, there is a common practice amongst nurses and midwives to concurrently work for multiple employers covered by the Agreement. In light of the number of different Victorian public health employers within the sector, this is unremarkable, and I have had regard to this fact.

Noting this context, I am satisfied that the Court is empowered to grant the relief sought and should do so, for the reasons which follow.

WHY THE OPINION OF THE COURT IS REQUIRED

Long service leave for Victorian employees is regulated by both Commonwealth law (the FW Act) and State law (the LSL Act). Both Acts deal with the interaction of state and federal long service leave provisions.

FW Act Interaction Provisions

The FW Act makes provision for long service leave where there are ‘applicable award-derived long service leave terms’ in relation to an employee.[14] These are terms of an award that would have applied to the employee had they been in their current circumstances of employment immediately before the commencement of the relevant provisions.[15] For these employees, the FW Act excludes the operation of State long service leave laws.[16]
[14] FW Act s 113.
[15] FW Act ss 113(3), 113(3A).
[16] See FW Act ss 26(1), 27.

Otherwise, the FW Act does not prescribe long service leave terms and does not exclude the operation of state laws dealing with long service leave.[17] Further, the FW Act provides that a term of an enterprise agreement applies ‘subject to’ state laws about non-excluded matters such as long service leave.[18]
[17] Ibid.
[18] FW Act s 29(2).

Full-time and part-time Registered Nurses and Registered Midwives and full-time, part-time and casual Enrolled Nurses employed under the Agreement have ‘applicable award-derived long service leave terms’, derived from cl 20 of the Nurses (Victorian Health Services) Award 2000 (AP790805CRV) (Nurses Award).[19] Accordingly the FW Act long service leave provisions apply to these employees.
[19] Outline of Joint Submissions, [9].

However, Part C of the Nurses Award, which applies to Registered Nurses and Midwives, provides that its long service leave provisions ‘shall not apply in the case of a casual employee.’[20] The Plaintiffs say that these employees (Relevant Casual Employees) are therefore entitled to long service leave under the LSL Act. I will return to this issue later in more detail; however, I accept that to be the case for the purpose of this proceeding.
[20] Nurses Award, cl 30.3.4.

Given this, for Relevant Casual Employees, under the FW Act, the Agreement LSL Terms operate ‘subject to’ the LSL Act.

LSL Act Interaction Provisions

Sections 5 and 23 of the LSL Act, extracted above,[21] also deal with the interaction between the provisions of the LSL Act and the terms of employment agreements (including enterprise agreements).
[21] See paragraphs 10 and 11 above.

Pursuant to s 23, to the extent that the Agreement LSL Terms annul, vary or exclude the provisions of the LSL Act, they have no effect unless, in the opinion of the Industrial Division of the Magistrates’ Court, the Agreement LSL Terms are more favourable than the LSL Act to the extent of any inconsistency. Further, pursuant to s 5, if the requisite opinion is formed, the LSL Act does not apply in relation to an employee entitled to LSL under the Agreement LSL Terms to the extent of any inconsistency with those terms.

The Plaintiffs submitted, and I agree, that the portability arrangements in cl 70.24 purport to annul, vary or exclude provisions of the LSL Act. In particular:

a) by transferring service from one Employer to another as provided for in clause 70.24(b), pursuant to clause 70.24(c)(i), an employee extinguishes any entitlement to take (or be paid in lieu of taking) long service leave with the first Employer in respect of that period of transferred service, which is contrary to ss 6, 9 and 10 of the LSL Act; and

b) the formula for calculating ‘normal weekly hours’ with the first Employer in respect of an ongoing casual engagement in clause 70.24(c)(ii)(C) is contrary to ss 15 to 17 of the LSL Act.

The Plaintiffs say that the scheme for portability of long service leave between Employers covered by the Agreement mean that the Agreement provides more favourable long service leave entitlements than the LSL Act. They say that it is common for Registered Nurses and Registered Midwives to work concurrently for multiple Employers covered by the Agreement and it is beneficial for these employees to be able to ‘transfer’ their service with one Employer to another in order to access the cumulative benefit of the entire period of their service across both employers.

However, the Plaintiffs say that pursuant to the LSL Act, in the absence of the Industrial Division of the Magistrates’ Court forming the opinion that the Agreement LSL Terms are more favourable than the LSL Act entitlements, the Agreement LSL Terms have no application.

THE COURTS JURISDICTION TO DETERMINE THE MATTER

Pursuant to s 100(1)(d) of the Magistrates’ Court Act 1989 (MC Act), the Court has jurisdiction to hear and determine any cause of action if the Court is given jurisdiction to do so under any other Act.[22] The Plaintiffs submitted that the LSL Act provides the relevant jurisdiction to determine the matter.[23]
[22] Subject to the limitations in s 100(2) of the Magistrates’ Court Act 1989.
[23] Outline of Joint Submissions [4], [5], The Court’s jurisdiction to grant the equitable relief sought is
dealt with below at Part 5.1.

The Plaintiffs’ Submissions as to the Court’s Jurisdiction

The Plaintiffs say that the Court’s jurisdiction is derived from s 24(1)(h) of the LSL Act, which provides that the Industrial Division of the Magistrates’ Court has ‘any other jurisdiction given to it by or under this or any other Act.’

The Plaintiffs submitted that ss 5(b) and 23(2) confer upon the Industrial Division of the Magistrates’ Court that ‘other jurisdiction’, being the jurisdiction and power to provide an opinion that enables the ‘contracting out of’ provisions of the LSL Act.[24]
[24] Outline of joint submissions, [5].

The Plaintiffs, referring to the Interpretation of Legislation Act 1984,[25] and relevant authorities,[26] submitted that the starting point for ascertaining the meaning of ss 5 and 23 is the text, having regard to its context and purpose, and a construction of the provisions which promotes the purpose or object underlying the LSL Act is to be preferred.
[25] Section 35(a).
[26] SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362, [14] (Kiefel CJ, Nettle
and Gordon JJ); Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, [69].

They submitted that both provisions confer a power on the Magistrates’ Court to form an opinion whether the LSL entitlements under an employment agreement are or are not more favourable than under the LSL Act itself.

Referring to ASIC v Edensor Nominees Pty Ltd,[27] the Plaintiffs submitted that the grant of a power brings with it the necessary jurisdiction, and an exercise of jurisdiction is attended by an exercise of power. They submitted further that where legislation confers either jurisdiction or power, it is presumed not to limit that jurisdiction, absent express words or a clear and unmistakeable implication. The Plaintiffs submitted that there is nothing express in ss 5 or 23 which limits the exercise of the power to the specific areas of jurisdiction otherwise granted in s 24(1) of the LSL Act.[28] The Plaintiffs submitted further that a conferral of jurisdiction or power carries with it everything necessary to allow the Court to exercise that jurisdiction or power.[29]
[27]        Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559,
590 [64] (Gleeson CJ, Gaudron and Gummow JJ).
[28]        Plaintiffs’ Submissions concerning Jurisdiction, [14].
[29]        Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy
Union (2018) 262 CLR 157, 171 [40] (Kiefel CJ), 175 [52] (Gageler J), 195 [115] (Keane, Nettle and
Gordon JJ).

The Context and Purpose of Sections 5 and 23

Part 1 of the LSL Act contains provisions as to the purpose and application of the LSL Act. Section 1(a) provides that its purposes include ‘to make provision with respect to the long service leave entitlements of certain employees, including public and private sector employees and police officers’. Part 1 includes s 5, which specifies the circumstances in which the Act does not apply in relation to an employee, including on the ground set out in s 5(b), upon which the Plaintiffs rely.

Part 2 of the LSL Act contains provisions which set out the substantive entitlement to long service leave under the LSL Act.[30] It also contains provisions which prescribe the details of that entitlement including when leave may be requested,[31] directed[32] or taken in advance,[33] calculation of the applicable payment and hours for the leave,[34] the circumstances in which the employee will be taken as having been employed with ‘one employer,’[35] having continuous employment,[36] absences that do or do not count for the purposes of the entitlement,[37] treatment of public holidays and annual leave,[38] and what happens in circumstances when the employment ends[39] or the employee dies[40] before leave is taken.
[30] LSL Act s 6.
[31] LSL Act s 18.
[32] LSL Act s 19.
[33] LSL Act s 8.
[34] LSL Act ss 16, 21.
[35] LSL Act s 11.
[36] LSL Act s 12.
[37] LSL Act ss 13, 14.
[38] LSL Act s 7.
[39] LSL Act s 9.
[40] LSL Act s 10.

In addition to the substantive provisions regarding the entitlement, Part 2 also contains s 23, upon which the Plaintiffs rely.

Part 3 of the LSL Act contains provisions dealing with enforcement. Division 1 deals with the jurisdiction of the Industrial Division of the Magistrates’ Court.

Section 24, Jurisdiction of the Industrial Division of the Magistrates’ Court, provides:

(1) The Industrial Division of the Magistrates' Court has—

(a)jurisdiction to deal with an application as to whether an employee is entitled to long service leave; and
(b)jurisdiction to deal with an application as to whether an employee (or an employee's personal representative) is entitled to a payment in lieu of long service leave; and
(c)jurisdiction to deal with an application as to an employer's refusal to grant long service leave under section 18(2); and
(d)jurisdiction to deal with an application as to a direction to take long service leave under section 19(1), including the length of long service leave; and
(e)jurisdiction to deal with an application as to the rate of ordinary pay of an employee for the purposes of calculating a long service leave entitlement; and
(f)jurisdiction to deal with an application as to an employer's refusal to grant a request under section 22(2); and
(g)jurisdiction to deal with an application as to payment of any amount owing to the employee (or the employee's personal representative) under this Act within the 6 years immediately before the day on which the application is made; and

(h) any other jurisdiction given to it by or under this or any other Act.
(2) An employee (or an employee's personal representative) may apply to the Industrial Division of the Magistrates' Court for an order in relation to any matter referred to in subsection (1).
(3) In determining an application under this section, the Industrial Division of the Magistrates' Court may take into account all the relevant circumstances, including the needs of the employee and the business needs of the employer.
(4) The Industrial Division of the Magistrates' Court may make an order in relation to any matter referred to in subsection (1) and may award costs to any party to the application and assess the amount of those costs.
(5) The Chief Magistrate, together with 2 or more Deputy Magistrates, may jointly make rules of court for or with respect to any matter relating to the practice and procedure of the Industrial Division of the Magistrates' Court.

Section 25 provides that proceedings for an offence under the Act are to be brought in the Industrial Division of the Magistrates’ Court.

Section 26, Recovery of money owed, provides that an employee to whom money is owed by an employer for long service leave may commence a proceeding in the Industrial Division of the Magistrates’ Court to recover the money owing.[41] It provides organisations with rights in certain circumstances to commence a proceeding on behalf of an employee,[42] sets a six year time limit for bringing a recovery proceeding,[43] requires a written demand to precede any commencement of a recovery proceeding,[44] and deals with the Court’s capacity to award interest.[45]
[41] LSL Act s 26(2).
[42] LSL Act s 26(3). See s 3 (definition of ‘organisation’).
[43] LSL Act s 26(4).
[44] LSL Act s 26(5).
[45] LSL Act ss 26(6)-(8).

Section 27 deals with the orders that the Court may make (reimbursement, reinstatement and compensation) in circumstances where an employer is found to have contravened s 36 of the LSL Act by taking adverse action against an employee. Section 28 permits the Court to order payment of arrears or compensation on a finding of guilt in respect of an offence under the LSL Act.

It is apparent from this summary that Part 3, Division 1 of the LSL Act, which deals expressly with the jurisdiction of the Industrial Division of the Magistrates’ Court, does not make provision for a proceeding of this nature to be brought. The substantive provisions relied upon by the Plaintiffs, ss 5(b) and 23(2), are in Part 1 and Part 2 of the LSL Act.

Notwithstanding this, ss 5(b) and 23(2) are critical to the operation of the LSL Act and the substantive provisions contained in it, as together they establish the circumstances in which these substantive provisions may be lawfully displaced by the terms of an employment agreement.

Jurisdiction and Power

The authorities referred to by the Plaintiffs establish that the concepts of jurisdiction and power are not discrete,[46] however there is a distinction.[47] Jurisdiction is the authority of the court to decide the range of matters that can be litigated before it; in the exercise of that jurisdiction the court has the necessary express or implied powers.[48]
[46] Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559,
590 [64] (Gleeson CJ, Gaudron and Gummow JJ).
[47] Ibid; Harris v Caladine (1991) 172 CLR 84, 136 (per Toohey J).
[48] Harris v Caladine (1991) 172 CLR 84.

From the text and legislative context, it is clear that both ss 5(b) and 23(2) provide the Court with power to form an opinion as to whether the LSL entitlements in the Agreement are more favourable under the Agreement than those provided by the LSL Act. That power need not be implied, as it is express. Here, the question is not whether the Court has power to form the requisite opinion for the purposes of exercising its jurisdiction. Here, the question is whether that grant of power carries with it additional jurisdiction to form the opinion in the context of a proceeding which otherwise does not fall within the scope of the jurisdiction specifically granted to the Court in Part 3, Division 1.

In Australian Building and Construction Commissioner v Construction Forestry Mining and Energy Union & Anor[49] the High Court considered whether the power to order a pecuniary penalty carried with it implied jurisdiction to order personal payment of that pecuniary penalty. Keifel CJ, citing Grassby v The Queen[50] and Pelechowski v Registrar, Court of Appeal (NSW)[51] summarised the relevant principle as follows:

Every court possesses jurisdiction arising by implication, upon the principle that a grant of power carries with it everything necessary for its exercise. The term ‘necessary’ in connection with the implied power is to be understood as identifying a power to make orders which are reasonably required or legally necessary to the accomplishment of what is specifically provided to be done by the statute.[52] (footnotes omitted)

[49] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy

Union (2018) 262 CLR 157, 171 [40] (Kiefel CJ), 175 [52] (Gageler J), 195 [115] (Keane, Nettle and

Gordon JJ).

[50] (1989) 168 CLR 1 at 16-17; [1989] HCA 45.

[51] (1999) 198 CLR 435 at 452; [1999] HCA 19, [51].

[52] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy

Union (2018) 262 CLR 157, 171 [40] (Kiefel CJ), See also per Gaegler J 175 [52], per Keane, Nettle and Gordon JJ 195 [115].

If the power granted in ss 5(b) and 23(2) is able to be exercised effectively within the scope of the court’s express jurisdiction in Part 3, Division 1 then it will not be necessary to imply additional jurisdiction. But to the extent that power is granted in terms which would mean, absent an implied conferral of jurisdiction, orders which are reasonably required or legally necessary in the context of the purpose and scheme of the legislation cannot otherwise be made, then it will be necessary to imply that jurisdiction.

Is Implied Jurisdiction Necessary to Accomplish the Purpose of ss 5 and 23?

The purpose of ss 5(b) and 23(2) is apparent from the text of the provisions and their context. They complement each other. Section 23 renders of no effect any employment agreement provisions that annul, vary or exclude the provisions of the LSL Act unless in the court’s opinion they are more favourable than the LSL Act. Section 5(b) then provides that where that opinion is formed, the inconsistent LSL Act no longer applies. Together, they provide a mechanism which allows parties to an employment agreement to agree on more favourable long service leave arrangements than under the LSL Act, even if that agreement annuls, varies or excludes provisions in the LSL Act.

The provisions do not simply require the LSL entitlements under the employment agreement to be more favourable than under the LSL Act for that to occur. They impose an additional step, which is that the court must have formed the requisite opinion that the employment agreement terms are more favourable. Once a positive opinion to this effect has been formed, pursuant to s 5(b), the Act provisions do not apply and pursuant to s 23(2), the employment agreement provisions do apply. Critically, unless a positive opinion has been formed, the Act provisions do apply, and the agreement provisions do not.

Leaving aside s 24(1)(h), the jurisdiction granted by s 24 is concerned with the operation of the entitlement to long service leave contained in the LSL Act to a particular employee. These provisions are not concerned with the question of whether or not the LSL Act provision applies. The jurisdiction granted by s 26 similarly permits an employee to recover money owed for long service leave under the LSL Act, any other Act or under an employment agreement. It is also not concerned with a determination of which of these instruments apply.

The powers of the court in ss 5(b) and 23(2) could nonetheless be called upon by a party for use within a proceeding brought pursuant to the jurisdiction granted by ss 24 or 26. For example, an employer defending a claim that an employee is entitled to payment in lieu of long service leave could seek the opinion of the court that the relevant payment provisions forming the basis of that claim did not apply because an employment agreement provided for more favourable provisions which annulled, varied or excluded the provisions sought to be enforced. However, the employer and employee in this scenario would not know whether the provisions of the LSL Act or an employment agreement applied unless and until the court subsequently formed the requisite opinion.

The Plaintiffs submitted:

… [L]ong service leave entitlements in an employment agreement only become operative if and when the Magistrates’ Court has expressed an opinion that the entitlements in the agreement are more favourable than those under the LSL Act. This makes it impossible for employers and employees to know what their respective long service leave obligations and entitlements are, until the Magistrates’ Court has expressed the necessary opinion.
The Plaintiffs submit that the purposes of the LSL Act are better served if appropriate parties are able to seek the Court’s opinion prior to any long service leave issue having actually crystallised into one or more of the disputes in relation to which an application can be brought under paragraphs (a) to (g) of s.24(1).[53]

[53] Plaintiffs Submissions Concerning Jurisdiction, [18]-[20].

The Plaintiffs submitted that given the above, ss 5(b) and 23(2) must confer jurisdiction on the court to form the requisite opinion and make a determination outside of the confines of the express jurisdiction to deal with individual matters in Part 3, Division 1, and specifically in the circumstances of this case where the parties have entered the Agreement and its applicability or otherwise will only be determined once the opinion has been formed.

I agree with this submission. I consider that the legislature intended to provide jurisdiction to the court to make a determination about whether or not the LSL Act applies or is displaced by an employment agreement in a prospective manner. I consider it unlikely that the legislature intended that these powers only be capable of exercise in the specific circumstances set out in ss 24(1)(a)-(g) and s 26.

Otherwise, to the extent parties apply employment agreement provisions about long service leave which annul, vary or exclude a LSL Act provision, those provisions have no legal operation. Whilst the parties could themselves form a view that the terms of an employment agreement are more favourable, and apply those employment agreement provisions, unless and until the requisite opinion of the court is obtained, there is doubt as to whether they can lawfully be applied. Further, in the context of ss 24(1)(a)-(g) and s 26, the courts power to form the requisite opinion will always be exercised ‘retrospectively’ in the sense that the court will be determining whether employment agreement provisions which have already been applied are more or less favourable.

Accordingly, I consider that the power granted by ss 5(b) and 23(2) must carry with it the jurisdiction to make orders determining whether an employment agreement applies to the exclusion of provisions of the LSL Act with general application and outside the context of the specific enforcement provisions in ss 24(1)(a)-(g) and 26.

Several other matters raised by the Plaintiffs support this conclusion. Firstly, s 24(1)(h) recognises that the LSL may grant jurisdiction other than that set out in s 24, or Part 3, Division 1. Secondly, the express terms of ss 5(b) and 23(2) do not limit the circumstances in which the relevant powers may be exercised. Thirdly, ‘employment agreements’ as defined in the LSL Act include agreements which are collective in nature. The consequence of the court forming (or not) the relevant opinion will apply to all parties to that agreement, transcending any individual claim. Fourthly, the jurisdiction of the Industrial Division of the Magistrates’ Court in respect of civil claims for long service leave under the LSL Act is not exclusive. Because the opinion of the Industrial Division of the Magistrates’ Court may be material to the determination of a question which may arise in another forum, there must be the necessary jurisdiction for the opinion to be formed outside the confines of an action under s 24 or s 26.

Legislative History

The Plaintiffs submitted that the legislative history of the relevant provisions supported their position. They submitted that the power to determine whether an employment agreement is more or less favourable to an employee than the provisions of the LSL Act is a longstanding power, and that the LSL Act maintains the substance of what were ss 65(1) and 79 of the former Long Service Leave Act 1992 (the 1992 Act).[54]
[54] The Long Service Leave Act 1992 renamed what was formerly the Employee Relations Act 1992
and retained only the long service leave content of that Act.

Section 79 of the 1992 Act provided as follows:

79 Contracting out prohibited
(1) Unless expressly allowed by this Division, any provision in any employment agreement that annuls, varies or excludes any provision of this Division is of no effect, regardless of when the agreement was made.
(2) This section does not affect any provision of an employment agreement that confers greater rights on an employee than those conferred by this Division.
…

Section 79(1) of the 1992 Act is in similar terms to s 23(1) of the LSL Act. However, s 79(2) simply provided that a provision of an employment agreement that confers greater rights on an employee is not affected by s 79(1).

The genesis of s 23(2) of the LSL Act instead appears to be s 65(1)(b) of the 1992 Act. Section 65(1)(b) provided as follows:

65 Employees to whom this Division[55] does not apply
(1) This Division does not apply to any employee who—
…
(b)is in a class of employees who are entitled to long service leave under an employment agreement (regardless of whether it was made before or after the commencement of this Division) on a basis that, in the opinion of the Industrial Division of the Magistrates' Court, is more favourable than that provided by this Division;[56]

[55] The reference in section 65 to ‘Division’ is a reference to Part 5 Division 6 of the 1992 Act, which

contained all the substantive LSL entitlements in the Act.

[56] Under the Employee Relations Act 1992, the relevant opinion was that of the Employee Relations

Commission.

In the 1992 Act, section 65(1)(c) provided an additional basis upon which the Division would not apply to an employee, as follows:

65 Employees to whom this Division does not apply
(1) This Division does not apply to any employee who—
…
(c)is employed by an employer who is exempted under this section from complying with this Division in respect of him or her.

(2)     An employer may apply to the Industrial Division of the Magistrates' Court to be exempted from complying with this Division in respect of all or any, or any class of, employees.
(3)     The Industrial Division of the Magistrates' Court may grant such an application if it is satisfied—
(a)that the employees in respect of whom the application is made are entitled under their terms and conditions of employment, on a basis no less favourable than that prescribed by this Division—
(i)      to long service leave;
(ii)(whether or not solely at the cost to the employer, but at a cost to the employer that is no less than the cost involved in providing long service leave under this Division) to superannuation benefits or to superannuation benefits and long service leave; and

(b)that the entitlement better serves the interests of the employees than the entitlement provided by this Division.

(4) The Industrial Division of the Magistrates' Court may grant the application subject to conditions and may at any time impose conditions or further conditions on the grant.
(5) The Industrial Division of the Magistrates' Court may revoke an exemption at any time.

Sections 65(2)-(5) of the 1992 Act provided for an application for exemption to be made by an employer and set out the basis on which the Industrial Division of the Magistrates’ Court could grant such an application. Whilst this also required a comparison by the Court of the alternative LSL entitlements of relevant employees, it did so in different terms. The conditions for the grant of an exemption pursuant to s 65(1)(c) were a ‘no less favourable’ test and included comparison of superannuation entitlements as well as long service leave entitlements, an assessment of the relative cost to the employer, and a requirement that the court be satisfied that the interests of the employees were better served than under the Act.

The LSL Act does not contain an equivalent to ss 65(1)(c) and 65(2)-(5) allowing an employer to obtain an exemption.

Having considered this history, I don’t consider it possible to infer any intention of the legislature, supportive or otherwise of the Plaintiffs’ submission, from the omission of the exemption provisions and the retention of the substance of s 65(1)(b) in ss 5(b) and 23(2).

On one view, the omission of the exemption provisions, and their clear grant of jurisdiction to the court, could give rise to an inference that the legislature no longer intended for employers to obtain a determination that the LSL Act does not apply to classes of employees. Alternatively, it could give rise to the opposite inference, that the legislature intended ss 5(b) and 23(2) to be the single mechanism through which the court is empowered to exclude the application of the LSL Act to classes of employees. Neither inference is clear. I was also not assisted by a review of the relevant explanatory memoranda.[57]
[57] Long Service Leave Bill 2017 Introduction Print Explanatory Memorandum; Long Service Leave Bill
2017 Amended Print Explanatory Memorandum.

Absence of Procedural Machinery

The Plaintiffs submitted that the absence of procedural machinery in the LSL Act is not fatal, and the court should provide the necessary machinery ‘in accordance with the demands of justice and common sense.’[58] The Plaintiffs submitted further that a conferral of jurisdiction or power carries with it everything necessary to permit the court to provide the machinery.[59]
[58] Plaintiffs’ Submissions Concerning Jurisdiction [9], citing Commissioner of Stamps (South Australia) v
Telegraph Investment Co Pty Ltd (1995) 184 CLR 453, 481.
[59] Ibid, citing Australian Building and Construction Commissioner v Construction, Forestry, Mining and
Energy Union.

The Plaintiffs referred to the decision of McHugh and Gummow JJ in Commissioner of Stamps v Telegraph Investment Company[60] in support of this submission. That decision concerned the capacity of the Supreme Court of South Australia to conduct an appeal from a decision of the Commissioner of Stamps in a manner which was not prescribed in the Stamp Duties Act 1923 (SA).
[60](1995) 184 CLR 453, 481 (McHugh and Gummow JJ).

In that matter the appeal called for an exercise of the court’s original jurisdiction and it was in that context that the court could prescribe the required machinery. Whilst in the context of this court the powers exercisable must have a statutory basis, having found that the powers in ss 5(b) and 23(2) confer jurisdiction on the court to form the requisite opinion, I accept that carries with it the necessary procedural powers to exercise that jurisdiction. I find support for this proposition in the decision of the High Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union,[61] also cited by the Plaintiffs in this respect.
[61] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy
Union (2018) 262 CLR 157, 171 [40] (Kiefel CJ), 175 [52] (Gageler J), 195 [115] (Keane, Nettle and
Gordon JJ).

Further, pursuant to the MC Act the court may give any direction as to the conduct of a proceeding conducive to its effective, complete, prompt and economical determination.[62]
[62] Magistrates’ Court Act 1989, s 136.

In addition, Rule 1.15 of the Magistrates’ Court General Civil Procedure Rules 2020 provides as follows:

1.15    Procedure wanting or in doubt
(1)    If the manner or form of the procedure—
(a)    for commencing, or for taking any step, in a proceeding; or
(b)    by which the jurisdiction, power or authority of the Court is exercisable—
is not prescribed by these Rules or by or under any Act, or for any other reason there is doubt as to the manner or form of that procedure, the Court must determine what procedure is to be adopted and may give directions.
(2)    An act done in accordance with a determination or direction under paragraph (1) is regular and sufficient.
(3)   An application for directions with respect to the commencement of a proceeding must be made by complaint in which no person is named as defendant and an application for directions with respect to a proceeding already commenced must be made by application in the proceeding.

This rule makes specific provision for the Court to determine the procedure to be adopted, and to give directions, where the manner or form of the procedure by which the jurisdiction, power or authority of the court is exercisable is not prescribed.[63]
[63] Magistrates’ Court (General Civil Procedure) Rules 2020, r 1.15.

The absence of procedural machinery does not lead me to conclude that there is an absence of jurisdiction to deal with the matter.

IS THE OPINION SOUGHT JUSTICIABLE?

Declaratory Relief and the Exercise of Judicial Power

The Plaintiffs seek relief by way of a declaration that the Industrial Division of the Magistrates’ Court holds the requisite opinion.

Section 100(1)(b) of the MC Act gives the court jurisdiction to hear and determine any claim for equitable relief within the jurisdictional limit of the court.

Further, s 31 of the Supreme Court Act 1986 provides that:

Every inferior court which has jurisdiction in equity or at law and in equity—
(a) has as regards all causes of action within its jurisdiction, power to grant in any proceedings before that court such relief, redress or remedy or combination of remedies, either absolute or conditional, as the [Supreme] Court has power to grant in the like case.

Accordingly, I am satisfied that there is a statutory basis for the Court to make a declaration.

In Ainsworth v Criminal Justice Commission, the joint judgment of Mason CJ, Dawson, Toohey and Gaudron JJ articulates that the power to grant declaratory relief is ‘confined by the considerations which mark out the boundaries of judicial power’[64] which is described, with reference to relevant authorities, as follows:

[D]eclaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions.[65] The person seeking relief must have a “real interest”[66] 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"[67] or if "the Court's declaration will produce no foreseeable consequences for the parties".[68]

[64] Ainsworth v Criminal Justice Commissioner (1992) 175 CLR 564, 581-582 [38] (Mason CJ, Dawson,

Toohey and Gaudron JJ).

[65] Ibid, citing In re Judiciary and Navigation Acts (1921) 29 CLR 257.

[66] Ibid, citing Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421, 437 (Gibbs J); Russian Commercial

and Industrial Bank v British Bank for Foreign Trade, Ltd [1921] 2 AC 438, 448 (Lord Dunedin).

[67] Ibid, citing University of New South Wales v Moorhouse (1975) 133 CLR 1, 10 (Gibbs J).

[68] Ibid, citing Gardner v Dairy Industry Authority (NSW) (1977) 52 ALJR 180, 188 (Mason J), 189 (Aickin

J); 18 ALR 55, 69, 71 respectively.

Brennan J in a separate judgment addressing the same issue said:

The circumstances that call for the making of a declaration are not present if there be no real controversy to be determined. The characteristics of a controversy fit for determination by judicial declaration were stated by Viscount Dunedin in Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd:
“The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought”.[69] (footnotes omitted)

[69] Ibid, 596 [24] (Brennan J), citing Re Tooth & Co Ltd (1978) 31 FLR 314, 331; Russian Commercial

and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438, 448 (Lord Dunedin).

Real Controversy to be Determined

Whilst the subject matter of the declaration is the ‘opinion’ of the court, the Plaintiffs submitted that the opinion sought is neither hypothetical nor in the nature of an advisory opinion, but has a substantive legal effect and will produce foreseeable consequences for those bound by the Agreement.[70] The substantive effect on the rights and liabilities of the parties to the Agreement arises because absent the opinion, cl 70.24 of the Agreement is not enforceable in respect of the Relevant Casual Employees, even if the Agreement provides more favourable entitlements than the LSL Act.[71]
[70] Plaintiffs’ Submissions Concerning Jurisdiction, [26], citing Ainsworth v Criminal Justice
Commissioner (1992) 175 CLR 564, 581-582 [38] (Mason CJ, Dawson, Toohey and Gaudron JJ).
[71] Plaintiffs’ Submissions Concerning Jurisdiction, [12]-[13], citing Rizeq v Western Australia (2017) 262
CLR 1, 48-49 [130]-[133] (Edelman J).

I am satisfied that the opinion formed by the court pursuant to ss 5(b) and 23(2) is determinative of which long service leave entitlements apply in respect of the Relevant Casual Employees to whom the Agreement applies, and accordingly it will have a substantive legal consequence, for the rights and obligations of those employees, and their employers, in respect of long service leave. The opinion is not sought in circumstances which are theoretical, hypothetical or abstract but in a particular context affecting particular categories of employees and their employers.

No Contradictor

A further element of a controversy capable of determination by declaration in the passage from Lord Dunedin in Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd cited by Brennan J in Ainsworth v Criminal Justice Commission is the need for a ‘proper contradictor’. In this proceeding, there is no contradictor.

The Plaintiffs submit, referring to Re Rubber Plastic and Cable Making Industry Award[72] that it is no impediment to the Court providing the opinion sought in the Complaint that it does not arise in the context of a proceeding between disputing parties.
[72] Re Rubber Plastic and Cable Making Industry Award (1963) 8 FLR 395.

In that case, the Commonwealth Industrial Court considered an application under s 110 of the Conciliation and Arbitration Act 1904 (Cth), which empowered the court to give an interpretation of an award made under the Act. The Application was made by Dunlop Rubber Australia Ltd, a party to the award, and the interpretation contended for was supported by all the other parties to the award that appeared in the proceeding, including the Federated Rubber and Allied Workers Union of Australia and several other employers. No party bound by the award contested that interpretation.

The court held that the absence of a controversy between parties who would be bound by the decision did not derogate from the court’s jurisdiction. The court said:

In our opinion, we have jurisdiction to give an interpretation in this case, and we think we should exercise it.
Although the classical definition of judicial power is framed in terms of controversy, it is not necessary to the exercise of judicial power that there should be controversy in a particular case. A default Judgment or a consent Judgment is none the less an exercise of judicial power, even though the defendant does not contest, or concurs in, the decision … [T]he fact that no party bound by the award disagreed with the interpretation sought by the applicant would not deprive the Court of jurisdiction to make the order sought. In so far as the exercise of judicial power requires that there should be an actual, as distinct from a hypothetical question to be decided, this condition is satisfied in the present case.
We are 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. Our decision in relation to the matter in controversy is authoritative and binding on the parties to the award.[73]

[73] Ibid, 397 (per Spicer CJ, Dunphy and Eggleston JJ).

I am satisfied that notwithstanding the absence of a contradictor, expressing the opinion sought in this matter is nonetheless an exercise of judicial power, for the reasons articulated above, namely the determination of a substantive legal controversy regarding the application of the long service leave provisions in the Agreement vis a vis the LSL Act for the Relevant Casual Employees and their employers.

Persons with a Real Interest

Both the joint judgment and the judgment of Brennan J in Ainsworth identified that the person seeking declaratory relief must have a ‘real interest’ in the controversy in question.[74]
[74] Ainsworth v Criminal Justice Commissioner (1992) 175 CLR 564, 582 (Mason CJ, Dawson,
Toohey and Gaudron JJ), 596 (Brennan J).

Related to this is the question of the Plaintiffs’ standing to bring the proceeding. Sections 5(b) and 23(2) are silent as to who may seek the opinion of the court.

Here, in support of their interest in the controversy, the Plaintiffs identified that the proceeding is concerned with the enforceability of entitlements in the Agreement, and referred to their status as organisations registered under the FW Act, who were bargaining representatives for the Agreement, who have responsibilities under the Agreement (and in the case of the ANMF and HSU, are covered by the Agreement) and who may represent the interests of their members to whom the Agreement applies. The Plaintiffs further referred to their obligations pursuant to cl 70.25(b) of the Agreement to bring this proceeding.[75]
[75] Outline of Joint Submissions, [12]-[14].

Under Commonwealth law, the Plaintiffs each have a particular statutory status in respect of the Agreement and in respect of their members to which the Agreement applies. They are each registered organisations and are each entitled to represent the interests of their members in accordance with their Rules pursuant to the Fair Work (Registered Organisations) Act 2009 (Cth).[76] Each held the statutory role of Bargaining Representative for the Agreement[77] in which the terms of cl 70.24 were negotiated. The ANMF and the HSU are covered by the Agreement.[78] Clause 70.25(b) of the Agreement specifically obliges the VHIA and the ANMF to bring this proceeding.
[76] Registered Rules of the Victorian Hospitals’ Industrial Association, 289V, rr 4, 5; Registered Rules of
the Australian Nursing and Midwifery Federation, 145V, r 5; Registered Rules of the Health Services
Union, 015V, r 3.
[77] Within the meaning of s 176 of the FW Act; [2022] FWCA 521.
[78] FW Act ss 183(1), 201(2); [2022] FWCA 521.

Whilst the statutory status of the Plaintiffs under Commonwealth law has some recognition under the LSL Act,[79] it does not ordinarily or automatically result in any special right or standing to bring proceedings under the LSL Act. However, the opinion expressed by the Court in this proceeding will have the effect of binding all other parties to the Agreement, including 116 public health employers and community health centres,[80] and their employees, a proportion of whom are Registered Nurses and Registered Midwives who may potentially find themselves in the circumstances contemplated by cl 70.24 during their employment. If the proceeding were brought by an individual employer or employee, the effect of the order sought would have the same general application to the Agreement. In this context, the statutory representative role of the Plaintiffs makes it at least equally appropriate for them to bring the proceeding.
[79] Under the LSL Act, the status of the ANMF and HSU as registered organisations of employees under
Commonwealth law provides them with a right to bring a proceeding for recovery of money owed to
an employee, at the employee’s request, pursuant to section 26(3).
[80] The Agreement, Appendix A.

I am satisfied that the Plaintiffs are persons with a real interest in the controversy in question in this proceeding and have standing to bring the proceeding.

ARE THE TERMS OF THE AGREEMENT MORE FAVOURABLE THAN THE LSL ACT?

Clause 70 other than 70.24

The Plaintiffs submitted that for Relevant Casual Employees, the Agreement LSL Terms are not inconsistent with the LSL Act except in respect of cl 70.24. Having considered these provisions, I agree with that submission.

Clause 70 is divided into four Parts. Clause 70.1 provides that Part 3 (Cls 70.12-70.19) sets out the long service leave entitlement of employees employed as casual Registered Nurses or casual Registered Midwives, and Part 4 (Cls 70.20-70.25) contains a series of common provisions that apply in respect of all employees.

In Part 3:

a) clause 70.12 sets out the application of the provisions;

b) clause 70.13 – Interpretation – sets out definitions with direct reference to the definitions in the LSL Act;

c) clause 70.14 – Entitlement – describes the entitlement to long service leave consistently with the description of the entitlement in s 6 of the LSL Act;

d) clause 70.15 deals with when leave can be taken. Clause 70.15(a) and (b) are consistent with ss 18(2) and 18(1) respectively of the LSL Act. Clause 70.15(c) – long service leave in advance – has the same effect as ss 6 and 8 and 14 of the LSL Act. Clause 70.15(d) is considered separately below;

e) clause 70.16 – Payment on termination of employment is of the same effect as ss 9 and 10 of the LSL Act;

f) clause 70.17 – Public Holidays and Annual leave is of the same effect as s 7 of the LSL Act;

g) clause 70.18 – No entitlement arising for periods of leave already taken has the same effect as s 6 of the LSL Act; and

h) clause 70.19 provides that any other term or condition necessary for the operation of this part shall be in accordance with the applicable LSL Act provision.

Clause 70.15(d) – Flexible taking of leave: double leave at half pay – articulates an additional basis upon which an employer may refuse a request to take double leave at half pay than that provided for under s 22 of the LSL Act. Clause 70.15(d) provides:

…

(ii) An Employer must grant such a request unless:
(A) granting the request would result in an additional cost to the Employer; or
(B) the Employer otherwise has reasonable business grounds for refusing the request.
…

In contrast, s 22 of the LSL Act provides simply that a request must be granted by an employer unless the employer has reasonable grounds for refusing the request.

It was submitted by the Plaintiffs that this provision is part of a group of provisions which mirror the LSL Act. Noting that submission, in my view cl 70.15(d) has the same effect as s 22 of the LSL Act. I consider the use of the word ‘otherwise’ in cl 70.15(d)(ii)(B) implies a requirement in sub-s (A) that any additional cost to the Employer relied upon must also be a reasonable business ground. Whilst the additional cost ground is separately articulated in the Agreement, it in fact falls within the class of permitted reasons for refusal in the LSL Act.

In Part 4:

a) clause 70.20 provides for payment for long service leave consistently with ss 20 and 21 of the Act;

b) clause 70.21 deals with proof of service and I accept as submitted that it has no practical application to the Relevant Casual Employees;

c) clause 70.22 requires the employer to keep LSL records for each employee. Failure to keep records under the LSL Act is an offence. Whilst the offence provisions would no longer apply if the agreement provision applies, there are mechanisms available for enforcement of the agreement provision, and other record keeping obligations in the FW Act, such that the provisions are practically equivalent; and

d) clause 70.23 is in practical terms of the same effect as s 11(3) of the LSL Act and in any event, would be supplemented to the extent necessary by the LSL Act consistent with clause 70.19.

Clause 70.24

As set out earlier in these reasons, the Plaintiffs submit that the scheme for portability of long service leave between employers covered by the Agreement means that the Agreement provides more favourable long service leave entitlements than the LSL Act. This is based on the common practice of nurses and midwives working concurrently for multiple employers covered by the Agreement.[81] The Plaintiffs say that the primary benefit to employees is the capacity to have greater control over how their long service leave entitlements are treated where they move between different employers covered by the Agreement, and that it prevents an employee’s entitlement from being extinguished at the time they cease casual employment with an employer. The Plaintiffs sought to illustrate the benefit through the example scenario at Appendix B.
[81] Agreed Statement of Facts, [8].

The effect of cl 70.24 is to provide an employee with the right to elect to transfer a period of employment from one employer to another, so that the second employer is obliged to recognise the service as though it were performed with the second employer. This right to elect with which employer service is recognised to best suit the employee in itself constitutes a benefit to employees which is not available under the LSL Act.

In addition, recognising the difference in the substantive entitlements between employees entitled to long service leave under the LSL Act (calculated at 1/60^th of an employee’s period of employment, equivalent to 3 months long service leave after 15 years’ employment) and pursuant to the Nurses Award (calculated based on six months’ long service leave after 15 years employment) there is an even greater benefit available for the Relevant Casual Employees, which is to have their relevant full time or part time service with the First Employer recognised under Nurses Award conditions upon the transfer of that service to the Second Employer, rather than have that service count towards a lower LSL Act entitlement by virtue of their ongoing casual employment relationship with the First Employer.

I have considered whether there is any disadvantage to employees which may arise by virtue of the provisions of the Agreement applying and displacing the provisions of the LSL Act. The Plaintiffs did not identify any. Given the decision as to whether to transfer service lies with the employee, I am also unable to identify any. The employee is at all times in a position to elect the option which best suits their circumstances.

Having considered the operation of cl 70.24 of the Agreement, and the illustrative example, I am satisfied, and have formed the opinion, that the long service leave entitlements of the Relevant Casual Employees are more favourable under cl 70.24 of the Agreement than under the provisions of the LSL Act.

IMPACT OF THE CONROY’S DECISION

After this proceeding was issued on 7 March 2023, on 19 April 2023 the Full Court of the Federal Court handed down its decision in Conroy’s Smallgoods v Australasian Meat Industry Employees Union (Conroy’s Smallgoods).[82] The decision concerns an appeal from the decision of the South Australian Employment Tribunal that an employee was entitled to long service leave under the Long Service Leave Act 1987 (SA) and involves the interpretation of s 113 of the FW Act. The majority of the Full Court concluded that ‘“applicable award-derived long service leave terms” means terms in a pre-modern award which provided for long service leave, irrespective of whether the employee is included or excluded from those provisions’,[83] and held that an award ‘would have entitled’ an employee to long service leave notwithstanding that the employee was not eligible to accrue and receive long service leave under those provisions.
[82] [2023] FCAFC 59.
[83] Ibid, [214].

In Conroy’s Smallgoods, the Federal Meat Industry (Smallgoods) Award 2000 (Meat Award) ‘[did] not entitle casual employees to take long service leave, but rather entitle[d] casual employees to a loaded rate of pay in lieu of certain entitlements including long service leave’.[84] On that basis, the majority held that the award ‘would have entitled’ the employee concerned to long service leave, meaning that s 113 of the FW Act was enlivened and the state long service leave legislation (which entitles casual employees to long service leave) had no application.
[84] Ibid, [182].

The Plaintiffs filed supplementary submissions addressing the impact of Conroy’s Smallgoods on the current proceeding. They submitted that:

Conroy’s Smallgoods clearly stands for the proposition that where terms apply to exclude a person from long service leave entitlements, that person is subject to “applicable award-derived long service leave terms”. It does not necessarily extend to the proposition that a provision which says that particular long service leave terms do not apply to the employee has the effect that that employee is thereby subject to “applicable award-derived long service leave terms”.
In the present case, clause 30.3.4 of the … Nurses Award provides that “The provisions of clause 17 – Annual leave, clause 20 – Long service leave, and clause 16 – Termination of employment, shall not apply in the case of a casual employee” (emphasis added). The Award does not contain any term which is equivalent to clause 8.6.3 of the Meat Industry Award. That is, there is no term of the Nurses Award which provides that the casual loading includes payment in lieu of long service leave (see clause 30.3.2).
The Plaintiffs submit that the Nurses Award can thus be distinguished from the Meat Industry Award, on the basis that whereas the Meat Industry Award provides that the casual loading includes a payment in lieu of long service leave and excludes casual employees from any other entitlement to long service leave, the Nurses Award simply provides that its long service leave provisions do not apply to casual employees while saying nothing about whether any other long service leave provisions apply to casual employees.

For the purposes of this proceeding, I am prepared to accept the submission that the Nurses Award provisions are materially different to those considered in the Meat Award and that accordingly the circumstances in this matter can be distinguished from those in Conroy’s Smallgoods.

I do so cognisant that if I am wrong about that, the effect of Conroy’s Smallgoods would be that the Relevant Casual Employees have no entitlement to long service leave under the LSL Act and the Agreement terms would clearly be more favourable.

ORDER

Accordingly, I will make the declaration sought, that pursuant to ss 5(b) and 23(2) of the Long Service Leave Act 2018, in the opinion of the Industrial Division of the Magistrates’ Court of Victoria, the long service leave entitlements provided under cl 70 of the Nurses and Midwives (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2020-2024 are more favourable than those provided by the Long Service Leave Act 2018.

APPENDIX A - Sections 70.24 and 70.25 of the Agreement

70.24 Concurrent Service

(a) Subject to subclause (b), concurrent service with two or more Employers remains separate and distinct.
(b) If an Award-entitled Employee transfers from an Employer (the first Employer) to a new Employer (the new Employer) as an Award-entitled Employee, but retains concurrent employment with the first Employer as a casual Employee, then the Employee's service with the first Employer may transfer to the new Employer (despite the Employee remaining employed with the first Employer), if:
(i) the Employee does not have an entitlement to take long service leave under clause 70.4(a); [with the first Employer – 6 months after 15 years]
(ii) the Employee has not already taken or been paid in lieu of long service leave in respect of the relevant period; and

(iii) either:
(A) the Employee transfers their entitlement to the new Employer in accordance with sub-clause 70.8(c) (Election for payment of entitlement or transfer of entitlement at termination); or
(B) the second Employer otherwise confirms in writing to the first Employer that the period of service has been so recognised (e.g. in accordance with Appendix 6). For the removal of doubt, where the second Employer recognises the Employee's service with the first Employer, it must provide written notification of its determination to the first Employer.

(c) If an Award-entitled Employee's long service leave entitlement is transferred in accordance with subclause 70.24(b):
(i) the first Employer will no longer be liable for the service, and the long service leave liability for the service as an Award-entitled Employee with the first Employer will transfer to the new Employer;
(ii) any casual service that occurs with the first Employer after the transfer referred to in (b) above will be considered separate and distinct service commencing from when the employee ceased being an Award-entitled employee with the first Employer, provided that:
(A) the qualifying period required to manifest an entitlement to long service leave with the First Employer does not reset (that is, the Employee's prior service with the first Employer can be counted when calculating any future entitlement to long service leave with the first Employer);
(B) no benefit to long service leave will arise with the first Employer in respect of the prior period of employment with the first Employer; and
(C) the Employee's prior service with the first Employer is to be disregarded when calculating the Employee's normal weekly hours with the first Employer (e.g. for the purpose of sections 16 and 17 of the LSL Act).

(iii) If the Employee is not entitled to transfer their service as an Award entitled Employee from the first Employer to the new Employer, or does not take the steps required in sub-clause 70.24(b), the first Employer will, where applicable, make payment in lieu of long service leave for the Continuous Service with the first Employer upon ceasing permanent employment with the first Employer (under clause 70.8(b) - Basic entitlement at termination of employment.)

Example 1:
An Award-entitled Employee is employed at the same time by Employer A, and Employer B.
The Award-entitled Employee accrues service towards long service leave at each of Employer A and Employer B.
If the Award-entitled Employee had been employed by Employer A for 11 years and Employer B for 6 years the Award-entitled Employee can take LSL from Employer A, but would need to continue working at Employer B until sufficient Continuous Service had accrued.
If the Award-entitled Employee resigned from both Employer A and Employer B, and went to work for Employer C, the Award-entitled Employee could:
(a) transfer the 6 years' service with Employer B to Employer C; and
(b) have the accrued LSL from the 11 years' service with Employer A paid out in lieu on termination.

Example 2:
An Award-entitled Employee has worked for Employer A for 6 years. On 1 June 2021, the Employee commences employment with Employer B as an Award-entitled Employee. To take up this opportunity, the Employee ceases permanent employment with Employer A. However, the Employee commences a casual employment relationship with Employer A within 12 weeks after resigning from their permanent position with Employer A.
The Employee:
(a) could transfer the 6 years' service with Employer A to Employer B, and would be eligible to take LSL with Employer B once sufficient Continuous Service had accrued (taking into account the transferred service); and
(b) could take LSL on a pro rata basis with Employer A after sufficient Continuous Service had accrued, save that no entitlement would arise in respect of the prior 6 years' service that has been transferred to Employer B.

70.25 Savings

(a) Clause 70.24(b) shall not apply to Registered Nurses or Midwives unless the Industrial Division of the Magistrates Court provides an opinion that determines generally the rights of applicable Employees under this Agreement under subsection 23(2) of the LSL Act that the long service leave entitlements provided by this Agreement are more favourable to the relevant employees than those provided by the LSL Act.
(b) The ANMF and VHIA must make an application to the Magistrates Court under section 24 of the LSL Act for an opinion referred to in section 4.6(a) as soon as reasonably practicable after the Agreement has been approved by the Fair Work Commission.
(c) No Employee shall otherwise suffer any detriment as a result of the operation of this clause to their entitlement to long service leave existing immediately prior to the coming into force of this clause

APPENDIX B – ILLUSTRATIVE EXAMPLE

(a) An employee works for an employer covered by the Agreement (Employer A) as a casual Registered Nurse for 1 year, following which, the employee converts to fulltime employment.
(b) After 6 years’ total continuous employment, the employee takes up primary employment with a different employer covered by the Agreement (Employer B). That employment is on a part-time basis. At the time this occurs, the employee has not accrued an entitlement to LSL under either the Agreement, or any underpinning instrument (i.e. the LSL Act or Nurses Award).
(c) In order to take up primary employment with Employer B, the employee ceases fulltime employment with Employer A, but joins Employer A’s “casual bank” and picks up sufficient shifts to retain continuous employment with Employer A.
(d) After 2 years, the employee ceases employment with Employer A in order to take up full-time employment with Employer B. As the employee has accrued more than 7 years’ continuous employment with Employer A, Employer A would be obliged to pay the employee any accrued untaken LSL upon cessation of employment (per section 9 of the LSL Act). When calculated in accordance with section 6 of the LSL Act, the quantum of that entitlement is approximately 7 weeks, being 1/60th of 8 years’ employment.
(e) As a result of being paid in lieu of that entitlement, the employee may no longer rely upon any prior service with Employer A for the purpose of calculating their “continuous service” with Employer B. This is because the relevant period of service no longer counts as “service for which long service leave, or payment in lieu, has not been received” for the purposes of clause 20.2.1 of the Nurses Award. The employee will therefore need to serve a longer qualifying period of employment with Employer B before an entitlement to LSL arises.

If the same scenario arose under the Agreement, clause 70.24 would have allowed the employee to make an election to transfer their service with Employer A to Employer B at the time they commenced employment with Employer B. If such an election was made, the Employee’s total period of continuous employment with Employer A and Employer B would be identical, save that only Employer B would be obliged to provide an LSL benefit to the Employee in respect of the period of transferred service. Accordingly:
(a) at the time the employee ceases employment with Employer A, they would have only received accrued untaken LSL in respect of the subsequent 2 year period of casual employment. This would have no bearing on the employee’s entitlement to take LSL with Employer B; and
(b) the employee’s entitlement with Employer B would remain unaffected. Therefore, any LSL entitlement would be calculated using the full period of employment, and at the more generous rate of 1/30th of the total period of employment.

[2023] VMC 12

25 August 2023