Victorian Psychiatric Services Certified Agreement 2004-2007
[2011] FWA 2470
•4 MAY 2011
[2011] FWA 2470 |
|
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 10 Sch. 3—Variation of transitional instrument
St Vincent’s Melbourne
(AG2010/18616)
VICTORIAN PSYCHIATRIC SERVICES CERTIFIED AGREEMENT 2004-2007
(ODN AG2004/8625) [AG838436]
Health and welfare services | |
COMMISSIONER GOOLEY | MELBOURNE, 4 MAY 2011 |
[1] St Vincent’s Health (St Vincent’s) made an application pursuant to Item 10 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) to vary the Victorian Psychiatric Services Certified Agreement 2004-2007 1 as extended and varied by order2 of Commissioner Cribb on 27 April 2010 (the 2010 Agreement).
[2] The Australian Nursing Federation (ANF) and the Health Services Union (HSU) are parties to and bound by the 2010 Agreement and opposed St Vincent’s application.
[3] The matter was heard on 14 and 15 February 2011 and 9 March 2011. Mr Val Gostencnik a legal practitioner appeared for St Vincent’s and Mr Craig Dowling of Counsel appeared for the ANF and Mr Brad Annson a legal practitioner appeared for the HSU. Permission was given to each legal practitioner to appear.
[4] Mr Alec Djoneff the Chief Executive Officer of the Victorian Hospitals’ Industrial Association (VHIA) gave evidence for St Vincent’s. Ms Leigh Svendsen a senior industrial officer with the Victoria No 2 Branch of the HSU gave evidence for the HSU and Mr Andrew Prendergast an industrial officer with the ANF gave evidence for the ANF.
The alleged ambiguity and uncertainty
The Annual Leave Clause
[5] St Vincent’s submitted that there is ambiguity or uncertainty about the annual leave entitlements for part time registered psychiatric nurses (RPNs) whose ordinary hours of work include work on weekends. 3 In this decision these employees will be referred to as part time RPNs. St Vincent’s claim that part time RPNs are entitled to five weeks’ annual leave and the ANF and HSU claim that part time RPNs are entitled to six week’s annual leave.
Dispute Resolution Clause
[6] Clause 10 of the Victorian Psychiatric Services Certified Agreement 2004-2007 4 (the 2004 Agreement) empowered the Australian Industrial Relations Commission (AIRC) to assist the parties to resolve disputes over the application of the agreement. In drafting the 2010 Agreement, the parties amended clause 10 consistent with the model dispute resolution clause contained in the Public Sector Industrial Relations Policy Manual 2010. As a consequence, references to the AIRC were amended and the words Fair Work Australia were inserted. In addition, reference was made to the National Employment Standards.
[7] When making this change the parties did not have regard to Schedule 19 of the Transitional Act. It was not intended by the parties that Fair Work Australia lose the power to settle disputes over the application of the 2010 Agreement. St Vincent’s submitted that the clause was ambiguous or uncertain as to:
(a) the existence and identification of an independent third party who is empowered to deal with disputes over the application of the 2010 Agreement, where the parties cannot otherwise resolve disputes amongst themselves;
(b) the scope of any independent third party’s powers is unclear and uncertain;
(c) clause 10.9.1 gives rise to uncertainty as to the manner in which any independent third party ought to exercise its powers.
[8] The ANF and HSU supported these contentions.
Annual Leave
The relevant clause
[9] Clause 25.1 of 2010 Agreement provides for annual leave as follows:
“25.1 Annual Leave
(a) Subject to employees’ annual leave accrued entitlements being adjusted into 38 hour equivalents and except as otherwise provided in this clause, all RPN employees shall be granted 190 hours of annual leave with ordinary pay on completion of 12 months service with the employer.
.....
(e) For all purposes of this clause in addition to the leave herein prescribed a full-time employee as defined required to work and who worked ordinary hours as prescribed under clause 35 of this Agreement on week days and on weekends throughout the qualifying 12 months period of service shall be allowed seven consecutive days leave including non-working days.
.....
(o) Clarification of annual leave entitlement for part-time RPNs. The parties agree that the present annual leave entitlement for part time RPNs is determined on a pro-rata based on the number of hours worked. This includes both entitlements to leave under clauses 25.1(a) & 25.1(e). Any disputes in relation to these entitlements will, if not resolved locally, be referred to VHIA.”
Orders sought by St Vincent’s
[10] St Vincent’s sought the following order:
“Delete current clause 25.1(o) and insert:
For the avoidance of doubt, a part-time employee is entitled to pro rata of 190 hours of annual leave calculated in accordance with clause 35(b)(i) with ordinary pay regardless of the pattern of ordinary hours worked by the employee.”
History of the Provision
[11] The 2004 Agreement was a multi-employer agreement and bound the parties to this proceeding..
[12] Clause 25.1(a) of the 2004 Agreement provided for annual leave as follows:
Subject to employees’ annual leave accrued entitlements being adjusted into 38 hour equivalents and except as otherwise provided in this clause, all RPN employees shall be granted 190 hours of annual eave with ordinary pay on completion of 12 months service with the employer.
[13] Clause 25.1(e) of the 2004 Agreement provided for an additional week’s annual leave as follows:
For all purposes of this clause in addition to the leave herein prescribed a full-time employee as defined required to work and who worked ordinary hours as prescribed under clause 35 of this Agreement on week days and on weekends throughout the qualifying 12 months period of service shall be allowed seven days leave including non-working days.
[14] The 2004 Agreement’s nominal expiry date was 30 September 2007. Negotiations for a new agreement commenced in May or June 2007 when the HSU and ANF served separate logs of claims on the VHIA and the Department of Health (DHS). 5
[15] Included in the ANF claim was a claim for all nurses to have access to six weeks’ annual leave where they worked (including overtime) or were on call on weekends, either full time or part time. 6
[16] Included in the HSU claim was a claim that “all employees who work or are required to be on call on weekends on a regular basis shall be entitled to an additional week’s annual leave regardless of full time or part time (includes all classifications working in mental health.” 7
[17] In September 2007 the VHIA served a claim on the HSU and ANF. 8
[18] On 15 November 2007 the parties agreed on terms of settlement. 9
[19] The terms of settlement provided as follows:
“Clarification of annual leave entitlement for part time RPNs.
The parties agree that the present annual leave entitlement for part time RPNs is determined on a pro rata based on the number of hours worked. This includes both the entitlements to leave under clauses 25.1(a) &25.1(e). Any disputes in relation to these entitlements will, if not resolved locally, be referred to VHIA.”
[20] In February 2008 the parties entered into a Deed 10 which provided that the terms of the 2004 Agreement would be amended to include the amendments set out in Schedule 3 to the Deed. The terms of settlement were Schedule 2 to the Deed.
[21] Schedule 3 did not contain any proposed amendment to clause 25 of the 2004 Agreement.
[22] The parties then negotiated the terms of the proposed enterprise agreement. Draft agreements were circulated between the parties and those drafts were prepared by DHS and circulated to the VHIA, the ANF and HSU. The drafts proposed an amendment to clause 25.1 of the 2004 Agreement. The proposed amendments clearly provided that part time RPNs would receive an additional week’s annual leave if the part time RPNs worked ordinary hours on weekends.
[23] The parties continued to negotiate the terms of the enterprise agreement and in the final draft provided by the DHS clause 25.1 was changed to remove the entitlement of part time RPNs to the additional week’s annual leave. The removal of this clause was disputed by the ANF and HSU.
[24] On 13 November 2009 a conference conducted by Commissioner Smith was held to resolve the dispute over clause 25.
[25] After the conference the parties resolved the issue by including in the 2010 Agreement the words about annual leave agreed to in the terms of settlement.
Submissions and Evidence of the Applicant
[26] Mr Djoneff was a participant in the negotiations for the terms of settlement, the Deed and the 2010 Agreement. 11 It was his evidence that the employers never agreed to part time RPNs having an additional week’s annual leave.
[27] It was his evidence in chief that the intention of clause 25.1(e) was to specifically reward full time RPNs who worked weekends and shift work and that it was a common understanding during the negotiations for the 2010 Agreement that “there was to be a preference to maximise the number of full time employees rather than part time employees.” 12 Mr Djoneff accepted in cross examination that this view was never adopted by the unions during the negotiations for the 2010 Agreement nor did he give specific evidence of when it was raised by the VHIA in the negotiations.13
[28] Mr Djoneff gave evidence that at the same time as the negotiations were taking place for the 2010 Agreement the VHIA and DHS and the ANF were also negotiating an agreement to cover general nurses in the public hospital system. In those negotiations the ANF also sought six weeks’ annual leave for part time nurses. This claim was rejected by the VHIA and DHS and the deed of settlement reached between the parties to those negotiations did not include an additional week’s annual leave for part time nurses. 14 This was not disputed by the ANF.
[29] The negotiations of the general nurses’ agreement were concluded before the negotiations for the psychiatric services agreement were concluded.
[30] Mr Djoneff gave evidence that the general nurses’ agreement was their benchmark and there was no intention by VHIA or DHS to give greater core entitlements to part time RPNs than given to the general nurses. This, Mr Djoneff said, was accepted by the ANF. 15
[31] Mr Djoneff gave evidence that at the conference at the AIRC on 14 November 2007 the HSU and ANF continued to press for the additional week’s annual leave for part time RPNs 16, which Mr Djoneff says, was rejected by the VHIA and DHS.
[32] At the final negotiation session late on 14 November 2007 and the early hours of 15 November 2007 it was his evidence, and this was not contested, that this issue was discussed by the VHIA and the HSU and that the ANF were not present.
[33] It was his evidence that clause 25.1(o) was only included in the terms of settlement to clarify the existing entitlement of part time RPNs to annual leave as a dispute had arisen at Bendigo Health. 17 It was his evidence that it was not the intention of the parties to increase the entitlement to annual leave for part time RPNs.
[34] It was his evidence that Schedule 3 of the Deed set out the “all matters that gave rise to new or altered entitlements or benefits to the employees and the terms of the 2004 Agreement that would be amended.” 18
[35] It was his evidence that there was to be no increase in the annual leave entitlements for part time RPNs and this was reflected in the Deed which did not propose any amendment to the 2004 Agreement annual leave clause. 19 The annual leave agreement was included in Schedule 2 of the Deed. Schedule 2 “was only intended to reflect in principle terms that were agreed to by the parties to the 2007 Deed, and the matters included in Schedule 2 were not intended to give rise to any new entitlements, benefits or amendments to the 2004 Agreement.”20
[36] However in cross examination Mr Djoneff accepted that there were amendments made to the 2004 Agreement which were incorporated into the 2010 Agreement which were not included in Schedule 3 of the Deed. 21
[37] The VHIA issued a bulletin on 16 November 2007 which advised their members of the in principle agreement. In March 2008 a further bulletin was published by the VHIA which outlined the key terms and additional entitlements. These bulletins did not advise VHIA members that part time RPNs got an additional week’s annual leave. 22 Mr Djoneff thought that these bulletins were sent to the ANF and HSU and that they did not object to the VHIA description of the outcome of the negotiations. In cross examination Mr Djoneff accepted that he could not prove they had been sent to the ANF and HSU but thought that, even if they hadn’t been, the ANF and HSU would have been provided with a copy. 23
[38] It was Mr Djoneff’s evidence that the terms agreed in the Deed were required to be implemented by the employers prior to the finalisation of the 2010 Agreement. An Agreement Implementation Committee (the Committee) was established to oversee the implementation of the Deed across the industry and to deal with any disputes which may have arisen in relation to the implementation or interpretation at the first instance. Mr Djoneff gave evidence that in the two years it took to finalise the 2010 Agreement no dispute about the additional annual leave entitlement for part time RPNs was referred to the Committee. 24
[39] It was his evidence that the VHIA and DHS considered that “there was no need to include the clause in the replacement agreement because it did not amend or provide any new entitlement not already provided for in the existing terms of the 2004 Agreement. This remained a contentious point throughout the many months of discussions on the drafting of the replacement agreement.” 25
[40] However Mr Djoneff accepted that the drafts of the 2010 Agreement produced by DHS between September 2008 and October 2009 had all included a clause which granted part time RPNs an additional week’s annual leave. 26 It was his evidence that this had been overlooked by the VHIA and that by October or November 2009 it was clear to the ANF and HSU that the position of the VHIA and DHS was that there was no agreement to increase the annual leave entitlement for part time RPNs.27 While Mr Djoneff accepted that the ANF and HSU thought they had a deal about the additional week’s annual leave,28 the VHIA and DHS did not agree to the claim.29
[41] It was Mr Djoneff’s evidence that the parties reached an impasse about this issue and it was agreed “as a matter of compromise” that the words of the terms of settlement would be included in the 2010 Agreement. 30 Mr Djoneff said that the VHIA and DHS were comfortable with the inclusion of these words because “there was a common understanding that the clause did not amend or provide any new entitlement not already provided for in the existing terms of the 2004 Agreement.” 31
[42] Mr Djoneff gave evidence that the VHIA circulated information to employers so that employers could explain the terms of the 2010 Agreement to employees prior to the vote. Nothing in the material circulated by the VHIA advised employers that part time RPNs would be entitled to an additional week’s annual leave. 32
[43] Mr Djoneff explained the reference in clause 25.1(o) to clauses 25.1(a) and (e) in the 2010 Agreement as “for no other purpose than for completeness”. 33 Further Mr Djoneff gave evidence that no health service had adopted the interpretation of the annual leave entitlement clause contended for by the ANF and HSU by providing part time RPNs with a pro rata entitlement to six week’s annual leave. 34 Mr Djoneff was not cross examined on this.
[44] St Vincent’s submitted that both they and the HSU agreed that the purpose of the clause was to clarify the existing entitlement to annual leave for part time RPNs.
[45] St Vincent’s submitted that the ANF’s contention was that the purpose of the clause was to create an additional entitlement to annual leave for part time RPNs.
[46] St Vincent’s submitted that the rival contentions are arguable and that this is sufficient to enliven Fair Work Australia’s jurisdiction. 35
[47] St Vincent’s submitted that once ambiguity or uncertainty has been identified then Fair Work Australia should exercise its discretion and remove the ambiguity or uncertainty. 36
[48] St Vincent’s submitted that in removing ambiguity or uncertainty regard should be had to the objectively ascertained mutual intentions of the parties at the time the 2010 Agreement was made. 37
[49] St Vincent’s submitted that the mutual intention of the parties was to clarify part time RPNs’ existing entitlement to annual leave and it was not the parties’ mutual intention to increase part time RPNs’ entitlement to annual leave. Regard can be had, it was submitted, to the terms of settlement and the Deed.
[50] St Vincent’s submitted that when the clause was included in the terms of settlement the HSU and the VHIA intended to clarify the existing entitlement of part time RPNs. While they differed on what were the existing entitlements it was not their intention to change the entitlements.
[51] St Vincent’s submitted that it is clear that under the 2004 Agreement part time RPNs were not entitled to an additional week’s annual leave and therefore the reference to “the present entitlement” in the 2010 Agreement must be a reference to their entitlement to five weeks annual leave. 38
[52] Support for this contention, it was submitted, can be found in the bulletins issued by the parties after agreement had been reached. It was submitted that the VHIA bulletins did not mention the additional one week’s annual leave for part time RPNs. Further St Vincent’s submitted that the ANF bulletins did not advise members of an additional annual leave entitlement for part time RPNs. 39 St Vincent’s submitted that the HSU bulletins also did not advise members of an additional annual leave entitlement for part time RPNs.
[53] Further support for its construction can be found, it was submitted, in the deletion from the draft 2010 Agreement of the words which would have clearly provided for an entitlement to an additional week’s annual leave for part time RPNs. 40
[54] St Vincent’s submitted that both the ANF and HSU were aware that the VHIA had not agreed to give part time RPNs an additional week’s annual leave. 41
[55] If Fair Work Australia accepted St Vincent’s contentions, St Vincent’s submitted that the variation proposed by them should be made operative from 20 January 2010 which was the date the Agreement came into operation.
[56] In the alternative St Vincent’s submitted that should Fair Work Australia not find ambiguity or uncertainty or even if the clause is found to be ambiguous or uncertain and Fair Work Australia decided not to exercise its discretion to vary the clause that Fair Work Australia could express a view about the meaning of the clause. 42
Evidence and submissions of the ANF and HSU
[57] Mr Prendergast represented the ANF in the negotiations for the terms of settlement, the Deed and the 2010 Agreement.
[58] Mr Prendergast accepted that the ANF was not present when the relevant clause was negotiated and included in the terms of settlement.
[59] It was his evidence that the ANF reviewed the relevant clause when they received the final document on 15 November 2007, and the ANF concluded that a new entitlement for part time RPNs had been agreed. 43
[60] It was Mr Prendergast’s evidence that the 2004 Agreement did not entitle part time RPNs to an additional week’s annual leave if they worked on weekends. 44
[61] Mr Prendergast gave evidence that at the conference before Commissioner Smith on 13 November 2009 about the dispute over annual leave entitlements for part time RPNs, that “Commissioner Smith stated that unless the matter was resolved there would be no change to the agreement and the status quo would be maintained, that is part time RPNs would have no pro rata entitlement to the sixth week of annual leave.” 45 Mr Prendergast was not cross examined on this evidence.
[62] Mr Prendergast’s evidence was that this matter remained unresolved and in further discussions the parties “ultimately resolved all issues including part timers’ pro rata entitlement to the sixth week of leave in the manner as currently provided for in the Agreement at Clause 25.1(o). 46
[63] Mr Prendergast rejected the evidence of Mr Djoneff that Schedule 3 of the Deed represented an exhaustive list of the new entitlements to be included in the 2010 Agreement. It was his evidence that there were changes to the 2004 Agreement which were not set out in Schedule 3 47. This was accepted by Mr Djoneff in cross examination.48
[64] Mr Prendergast gave evidence that the drafts prepared by the DHS in 2008 and 2009 reflected the ANF’s understanding of the Deed. Mr Prendergast said that at the last minute the VHIA and DHS “put it to the other parties that they did not wish to confer on part time RPNs a pro rata entitlement to the sixth week of annual leave.” This was not accepted by the ANF and HSU. This was the only outstanding issue between the parties at this time. The parties ultimately agreed to insert the words of the original terms of settlement into the varied and extended Agreement. These words were acceptable to the ANF, because of its understanding that the words gave part time RPNs a pro rata entitlement to the sixth week of annual leave. 49
[65] However it was also Mr Prendergast’s evidence that the ANF agreed to include the words from the Deed for the following reason:
“We agreed to them because they went back to the original deed and they were better than the alternative which was nothing, which was where we faced- that was the situation we faced after the conference before Smith C. In other words, if you don’t agree on something, nothing will go in and the status quo will be maintained. So in our view it was preferable to have those words in because in our view they were clear as to their meaning.” 50
[66] Mr Prendergast rejected the suggestion put to him in cross examination that the clause only clarified the existing entitlement under the 2004 Agreement. 51
[67] Ms Svendsen represented the HSU in the negotiations for the terms of settlement, the Deed and the 2010 Agreement. It was her evidence that the claim for the additional week’s annual leave was part of the HSU claim and it was pursued throughout the negotiations. It was her evidence that at no time did the VHIA or DHS reject the claim outright. 52
[68] On 13 November 2007 DHS advised HSU that the annual leave equalisation was not within capacity. 53 However the issue continued to be negotiated. Annual leave was still part of the negotiations when the parties resumed negotiations at 18.30pm on 14 November 2007 without the ANF.
[69] It was Ms Svendsen’s evidence that “the word clarification was used because it was about clarifying the entitlement that should equitably apply and that appeared on the plain meaning of the words of the 2004 agreement to apply.” 54
[70] It was Ms Svendsen’s evidence that “HACSU contented that the additional leave was an existing entitlement for part time RPNs when you read all the leave provisions, together with clause 35(b)(i) Modes of Employment, Part time employment”:
“The base provisions of annual leave entitlements are expressed at 25.1(a) as 190 hours annually for RPN employees. The entitlements of part time RPNs are then identified as accruing on a pro rata basis. The entitlement to an additional weeks leave for performing normal hours at weekends is expressed as applying to full time RPNs. We contended there was nothing to differentiate the application of pro rata applicability to 25.1(e) any more than to 25.1(a) and therefore clearly the additional weeks leave applied to part time RPN staff. Part time employees are clearly entitled to annual leave on a pro rata basis under 35(b)(i).” 55
[71] Clause 35(b)(i) of the 2004 Agreement provided as follows:
“A part time employee is one who is employed and who is ready willing and available to work on a regular basis any number of hours less than 38 hours in any one week (or less than 76 hours in a fortnight) provided that the number of hours worked may vary from week to week by mutual agreement between the employer and the employee. Such employee shall be paid per hour worked an amount equal to one thirty-eight (1/38th) of the weekly wage as appropriate to the employee’s classification and payment in respect of any period of annual leave or long service leave to which an employee may become entitled shall be paid on a pro rata basis according to the number of hours the employee worked on average over the past 12 months.”
[72] In cross examination Ms Svendsen made it clear that this view about the entitlement under the 2004 Agreement was definitely her view but there were mixed views within the HSU. 56
[73] Ms Svendsen’s evidence was that during the negotiations neither the VHIA nor DHS challenged the HSU’s interpretation of the 2004 Agreement. Ms Svendsen accepted in cross examination that she did not in any of the discussions articulate the basis of her interpretation of the 2004 Agreement. 57 Ms Svendsen’s evidence was that Mr Djoneff agreed with her interpretation and said that “we all know it applies and if there are any queries they can be referred to me and I will advise them accordingly.”58 Mr Djoneff rejected this evidence. In examination in chief he said that Ms Svendsen’s evidence “is not the essence of what I said. There was considerable debate about the necessity for a set of words. The union was utterly adamant and our objective was to find a settlement and to that extent we said, well, we’re happy to deal with any disputes that might come to us through whatever the ordinary industrial processes are. But there was nothing that I said that would of - could possibly have been construed as conceding that the entitlement for a six-week annual leave already exists.”59 Ms Svendsen said the reference of disputes to the VHIA did not satisfy the HSU so “the plain words that the leave under both 25.1(a) and (e) applied to part time RPNs was included in the terms of settlement.”60
[74] However Ms Svendsen made it clear in cross examination that the clause was included to “ensure that they were paid the sixth week of annual leave” 61 notwithstanding her view that there was an existing entitlement. In re-examination Ms Svendsen acknowledged that the clause was included because, notwithstanding Mr Djoneff indicating that it applied to part time RPNs the HSU said, “well it isn’t being paid everywhere thereforewe want to do something about it. It was clear that the people in the room were talking about the sixth week of annual leave applying to part time RPNs as well as full-time RPNs.”62
[75] Ms Svendsen said the words “clarification” was used “because Mr Djoneff had made it clear that he also believed the sixth week applied on a pro rata basis.” 63
[76] Ms Svendsen gave uncontested evidence that neither the VHIA or DHS made any statement to the effect that clause 25.1(e) did not apply to part time RPNs at the time it was negotiated, nor at any time during the negotiations over several months. 64
[77] Ms Svendsen said that the first draft of the agreement prepared by DHS was provided to the unions “following significant internal consultation between DHS and VHIA about the changes.” 65 All the drafts provided by DHS made it clear that part time RPNs would receive an additional week’s annual leave if they worked weekends. It was her evidence that there were no disputes or discussions about the annual leave clause until late in 2009.66
[78] In the final negotiations about the terms of the 2010 Agreement it was Ms Svendsen’s evidence that it was the HSU and the ANF’s view that the words in the drafts proposed by DHS “reflected the agreement reached on 15 November 2007. DHS and VHIA were equally opposed to the words initially drafted and refused to vary their position. In the end the clauses from the terms of settlement were the only words that could be agreed between the parties. HACSU and ANF could not achieve better and DHS and VHIA would not remove the words below those that had been agreed in the terms of settlement.” 67
[79] The HSU circulated a bulletin to its members concerning the negotiations for the 2010 Agreement which advised members that “part time RPNs [were] to get full annual leave on a pro rata basis.” 68
[80] Ms Svendsen gave evidence that at some time in 2009 she knew of one hospital that paid part time RPNs the additional week’s annual leave. 69
[81] The ANF submitted that the first step is for Fair Work Australia to determine if there is ambiguity or uncertainty. The ANF submitted that the identification of an ambiguity or uncertainty involves an objective assessment of the words used in the Agreement having regard to their context. 70
[82] The ANF submitted that the evidence did not support the proposition that there is ambiguity or uncertainty. The ANF submitted that the words “present annual leave entitlement” can only refer to the entitlement in the 2010 Agreement. 71 The ANF submitted that the 2010 Agreement makes it clear that this includes both entitlements to leave under clauses 25.1(a) and (e).72
[83] The ANF submitted that the heading “clarification of annual leave entitlements for part time RPNs” is not an operative part of the clause. Further if there is inconsistency between the heading and the clause, the heading must give way. 73
[84] The ANF further submitted that if Fair Work Australia determines that clause 25 is ambiguous or uncertain it must determine the mutual intention of the parties. It submitted that the mutual intention was to provide that part time RPNs receive a pro rata amount of leave provided for by clauses 25(a) and 25(e). 74
[85] The ANF submitted that Fair Work Australia should reject Mr Djoneff’s interpretation of clause 25.1(o) and his evidence about the purpose of the clause, the history of the claim, the relevance of the outcome of the general nurses negotiations and that the new entitlement did not appear in Schedule 3. 75
[86] The ANF submitted that there was no evidence to support the contention that the parties wanted to maximise full time employment. The ANF pointed to clauses in the 2010 Agreement which clearly showed that the parties were in fact committed to maximising both full time and part time employment at the expense of casual employment. 76 Further Mr Djoneff accepted that the unions never articulated this view during negotiations and it is not clear how Mr Djoneff articulated this view, if he in fact did.77 The ANF and HSU’s uncontested evidence was that no mention was made of this during negotiations.78
[87] Mr Djoneff accepted that the claim for an increase in the annual leave entitlement for part time RPNs was raised by the ANF in the 2004 negotiations which is inconsistent with his evidence that this was a new claim. 79
[88] In response to Mr Djoneff’s reliance on the outcome of the general nurses negotiations the ANF submitted that the VHIA did not explain why, if the outcomes were the same, the wording of the agreements differed. 80 The ANF submitted that Fair Work Australia should conclude that the different words were intended to have different results.
[89] The ANF submitted that no reliance should be placed on Mr Djoneff’s evidence that Schedule 3 of the Deed was an exhaustive list of any new entitlements. Mr Djoneff accepted that there were new entitlements in the 2010 Agreement which were not included in Schedule 3. 81
[90] The ANF submitted that from November 2007 to late 2009 all the parties agreed that the words in the Deed which were then replicated in the 2010 Agreement created an entitlement to the sixth week of leave for part time RPNs and that when the VHIA agreed to the inclusion of the clause in the 2010 Agreement the VHIA knew what the unions thought the clause meant. 82
[91] The ANF submitted that the unions were entitled to rely upon the words in the Deed because “they are the words upon which the parties conducted themselves (over 2007, 2008 and 2009) to clearly reflect an intention that the relevant part timers are entitled to the sixth week of annual leave.” 83
[92] The ANF submitted that it does not matter that the ANF and HSU had different views about whether the entitlement was an existing or new entitlement. Both unions had made it clear that they wanted the entitlement included in the 2010 Agreement. 84
[93] The ANF submitted that Fair Work Australia should draw an inference from the failure of any representative of DHS to give evidence that the evidence of DHS would not have assisted St Vincent’s case. The ANF submitted that Fair Work Australia should draw an inference that DHS knew, understood and intended that clause 25.1(o) would operate in the way contended for by the ANF and HSU. 85
[94] The HSU adopted the submissions of the ANF.
St Vincent’s in reply
[95] St Vincent’s rejected the submissions of the ANF that Mr Djoneff’s use of the word compromise meant that the VHIA and DHS agreed to the additional entitlement. They also rejected the submissions that an inference should be drawn from the failure to call the DHS. It was submitted that no such inferences should be drawn as the DHS was not a party to the 2010 Agreement and it is the intention of the parties that is relevant, 86 and in any event, the documents produced by DHS were only drafts.
Conclusion
[96] The parties are in agreement about the approach to be taken by Fair Work Australia in determining if there is ambiguity or uncertainty in an agreement.
[97] Where they differ is whether there is ambiguity or uncertainty in the 2010 Agreement.
[98] I do not accept the submissions of St Vincent’s that clause 25, when read with clause 35, creates an ambiguity.
[99] I however do agree with St Vincent’s that clause 35 does not create an entitlement to annual leave. It provides a mechanism for working out how many hours per week a part time employee is paid whilst on annual leave. Clause 35 provides that the part time employee is paid pro rata according to the number of hours worked on average over the past 12 months. So a part time employee who worked an average of 30 hours per week and who is entitled to five weeks or six weeks annual leave, will be paid 30 hours holiday pay per week for five or six weeks.
[100] It is accepted by all parties the full time RPNs receive five weeks annual leave and if they qualify can be paid an additional week’s annual leave.
[101] Clause 25.1 (o) which is headed “clarification of annual leave entitlement for part time RPNs refers to the present entitlement for part time RPNs and this present entitlement includes both entitlements under clause 25.1(a) and 25.1(e). Any disputes in relation to these entitlements will, if not resolved locally, be referred to VHIA. (my emphasis)
[102] One of the difficulties with clause 25.1(o) is this:
If the VHIA is correct and there was no intention to create a new entitlement why was clause 25.1(e) included in clause 25(o). Further the VHIA knew that if they left the clause unamended the status quo would remain so why was clause 25.1(o) included at all.
[103] If the ANF and HSU are correct then why wasn’t the DHS draft clause included in the Agreement or why was the word “present” used in clause 25.1(o).
[104] There is uncertainty about whether clause 25.1(o) creates an entitlement to an additional week’s annual leave for part time RPNs. Rival contentions have been advanced and an arguable case has been made out for more than one contention.
[105] I find that the relevant provision of the Agreement is susceptible to more than one meaning and I therefore find that there is ambiguity or uncertainty in the 2010 Agreement.
What was the mutual intention of the parties
[106] The HSU contended that part time RPNs had an existing entitlement under the 2004 Agreement to the additional week’s annual leave. If that construction is correct this dispute would be resolved as St Vincent’s submitted that the clause was intended to confirm that the entitlement to annual leave of part time RPNs under the 2010 Agreement was the same as existed under the 2004 Agreement.
[107] I do not accept the construction of the 2004 Agreement as put by the HSU. As set out at paragraph 99 I do not accept that clause 35(b) of the 2004 Agreement like clause 35(b) of the 2010 Agreement created an entitlement to annual leave. It simply provided a mechanism for calculating what a part time RPN will be paid for any annual leave entitlement provided for elsewhere in the Agreement.
[108] The 2004 Agreement clearly provided that only full time RPNs were entitled to the additional week’s annual leave.
[109] This is consistent with Mr Djoneff’s evidence that no health service provider bound by the 2004 Agreement granted part time RPNs the additional week’s annual leave. Mr Djoneff was not cross examined on this evidence.
[110] The parties submitted that in construing the clause in the 2010 Agreement, regard can be had to the history of the negotiations for the Agreement including the negotiations for the terms of settlement and the Deed.
[111] The parties also submitted that I am required to determine the mutual intentions of the parties and if I cannot determine a mutual intention, I should not vary the Agreement. 87
[112] Much of the evidence before me was evidence of a particular party’s intention when they agreed to clause 25.1(o) but very little of the evidence before me went to the mutual intention of the parties.
[113] I accept the submissions of the ANF that there was no agreement between the parties to prefer full time employment over part time employment. Further I accept the submissions that the outcome of the general nurses’ agreement is not a relevant matter in these proceedings. The parties to the 2010 Agreement are not the same parties as were parties to the general nurses’ agreement. Further it is clear that the VHIA and DHS did agree to a different outcome in the 2010 Agreement compared to the general nurses’ agreement in that they included clause 25.1(o) in the 2010 Agreement. No such clause was included in the general nurses’ agreement. I also accept the submissions of the ANF that Schedule 3 of the Deed did not provide an exhaustive list of the clauses in the 2004 Agreement that were to be varied in the 2010 Agreement. The evidence shows that other clauses were changed.
[114] I also accept that the post agreement conduct of the parties is not a relevant consideration in determining the mutual intention of the parties “unless it provides some evidence of the parties’ objective intention at the time the agreement was made.” 88
[115] However it is a relevant consideration that the terms of settlement contained the equivalent of clause 25.1(o) and the Deed required the employers to immediately “comply with the terms of settlement, observe and apply the amendments to the 2004 Agreement set out in Schedule 3.” 89
[116] The ANF and HSU were only able to point to one hospital that granted part time RPNs the additional week’s annual leave in the period from the signing of the Deed and the making of the 2010 Agreement. The ANF submitted that it could not be concluded on that evidence that only one hospital was providing the additional leave. 90
[117] The ANF submitted that no inference should be drawn because no dispute had been raised about the failure of the hospitals to pass on the additional week’s annual leave to the part time RPNs during the time between the signing of the Deed and making of the Agreement. 91
[118] Mr Djoneff was not cross examined on his evidence that since 19 January 2005 no health service had adopted the interpretation of the annual leave entitlement put forward by the ANF and HSU. While I accept that there may have been more than one hospital that granted the additional week’s annual leave to part time RPNs, on the evidence before me, it is clear that this was not an entitlement generally available to part time RPNs.
[119] The fact that hospitals, generally, did not provide for an additional week’s annual leave after the Deed was signed, and it can be assumed that this was known to the ANF and HSU, supports the contentions advanced by St Vincent’s that the words in the Deed were not intended to create an entitlement to an additional week’s annual leave for part time RPNs and when the parties included those same words into the 2010 Agreement it could be anticipated that the same construction of the clause would be adopted.
[120] St Vincent’s submitted that the HSU agreed with their construction of the clause because the HSU believed that the entitlement to the additional week’s annual leave arose from the 2004 Agreement. I consider that St Vincent’s have mischaracterised the HSU’s position. While it is true that the HSU was of the view that the 2004 Agreement created the entitlement to the additional week’s annual leave for part time RPNs, when they negotiated the 2010 Agreement they knew part time RPNs were not receiving the additional week’s annual leave. Notwithstanding their view about the 2004 Agreement the HSU wanted to make it clear in the 2010 Agreement that part time RPNs received the additional week’s annual leave.
[121] The ANF submitted that the mutual intention of the parties can be found in the drafts of the 2010 Agreement prepared by DHS. Further the ANF submitted that an adverse inference could be drawn from the failure of St Vincent’s to call DHS. However even if DHS had given evidence that it was their understanding that terms of settlement and the Deed were intended to provide for an additional week’s annual leave for part time RPNs this does not resolve the issue.
[122] Further even if the ANF and HSU are correct and in late 2009 the VHIA and DHS reneged on the deal they had done in 2007, and I do not find that they did, that doesn’t change the fact that when the 2010 Agreement was made, as is clear from the evidence, the parties did not agree about the entitlement to annual leave for part time RPNs. When they resolved this disagreement by including clause 25.1(o) in the 2010 Agreement the VHIA knew that the unions considered the clause gave part time RPNs an additional week’s annual leave and the unions knew that the VHIA had not agreed that the clause gave part time RPNs an additional week’s annual leave.
[123] I have therefore concluded that I am not able to determine the mutual intention of the parties in including clause 25.1(o) in the Agreement.
[124] In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and others v Qantas Airways Limited 92North J found that the clauses relied upon by the applicants were ambiguous. As the applicant bore the onus of proof in the matter the application for breach of the agreement was dismissed. His Honour said this “In the case of a certified agreement which has a provision which is ambiguous, the Commission has power to vary the agreement “for the purpose of removing ambiguity or uncertainty”: s170MD (6) (a). In a case such as the present an application to the Commission is likely to provide a more constructive resolution to the problem of ambiguity. While the Court can identify the ambiguity, it cannot remove it. The Commission is empowered to remove the ambiguity.”93
[125] While it is not disputed that Fair Work Australia has the power to remove the ambiguity or uncertainty and it is preferable that instruments which regulate employees’ terms and conditions are not ambiguous or uncertain I have decided not to vary the agreement to remove the ambiguity or uncertainty.
[126] I do so in circumstances where the parties consciously included in the 2010 Agreement a term on which there was no final agreement. To vary the agreement as proposed by St Vincent’s would impose on the ANF and HSU an outcome which they did not agree to when they made the 2010 Agreement. To vary the Agreement to make it clear that part time RPNs are entitled to an additional week’s annual leave would be to impose on St Vincent’s and other employers something they did not agree to.
[127] I therefore dismiss the application made by St Vincent’s to vary clause 25 of the 2010 Agreement.
Dispute Resolution Procedure
[128] The parties submitted that the dispute resolution procedure in the 2010 Agreement is ambiguous or uncertain.
[129] Based on the submissions and the evidence before Fair Work Australia I find that there is uncertainty about the role of Fair Work Australia in the dispute resolution procedure.
[130] The evidence on this before Fair Work Australia is uncontested. The parties intended that Fair Work Australia be able to resolve disputes under the dispute resolution procedure in the 2010 Agreement. The parties have proposed a consent variation to clause 10 of the 2010 Agreement. The parties propose that the variation be retrospective to the operative date of the 2010 Agreement. I will vary clause 10 of the 2010 Agreement in accordance with the draft variation proposed by the parties.
COMMISSIONER
Appearances:
Mr Val Gostencnik for St Vincent’s Health.
Mr C Dowling for the Australian Nursing Federation.
Mr B Annson for the Health Services Union.
Hearing details:
2011.
Melbourne:
February 14, 15.
March 9.
1 AG838436
2 PR992979
3 Amended application of St Vincent’s filed 5 November 2010.
4 PR955229
5 Exhibit R1 at [11]
6 Ibid attachment AD 3
7 ibid
8 Ibid at AD 4
9 Ibid at AD 5
10 ibid
11 Exhibit R1 at [12]
12 Ibid at [10]
13 Transcript PN 172-180
14 Exhibit R1 at [14]
15 Ibid at [15]
16 Ibid at [16]
17 Ibid
18 Ibid at [19
19 Ibid at [18]
20 Ibid at [21]
21 Transcript PN 367-369
22 Exhibit R1 at [22]
23 Transcript PN 118 and 415
24 Exhibit R1 at [25]
25 Ibid at [28]
26 Transcript PN 329
27 Exhibit R1 at [30] and Transcript PN 337
28 Transcript PN 348
29 Ibid PN 341
30 Exhibit R1 at [28]
31 Ibid at [32]
32 Ibid at [34]
33 Ibid at [39
34 Ibid at [40]
35 Exhibit R 5 at [4] and [5]
36 Ibid at [10]
37 Ibid at [12(b)]
38 Ibid at [28]
39 Ibid at [26(c)]
40 Ibid [26(d)]
41 Ibid [26(c)]
42 Transcript PN 1256
43 Ibid PN 677-678
44 Ibid PN 616
45 Exhibit ANF 3 at [21]
46 Ibid at [22]
47 Transcript PN 903
48 Transcript PN 369
49 Exhibit ANF 3 at [28]
50 Transcript PN 699
51 Ibid PN 880
52 Exhibit HSU 1 at [ 29-41]
53 Ibid at [ 49]
54 Ibid at [62]
55 Ibid at [63]-[64]
56 Transcript PN 988
57 Ibid PN 1122
58 Exhibit HSU 1 at [71]
59 Transcript PN 124
60 Exhibit HSU 1 at [72]
61 Transcript PN 1008
62 Ibid PN 1188
63 Ibid PN 1150
64 Exhibit HSU 1 at [76]
65 Ibid at [78]
66 Ibid at [83]
67 Ibid at [86-87]
68 Ibid at LS7
69 Transcript PN 1163
70 Exhibit ANF 4 at [6]
71 Ibid at [25]
72 Ibid at [26]
73 Ibid at [31]
74 Ibid at [36]
75 Ibid at [37]
76 Ibid at [43]
77 Ibid
78 Ibid
79 Ibid at [47]
80 Ibid at [51]
81 Ibid at [55]
82 Ibid at [61]-[62]
83 Ibid at [80]
84 Ibid at [81]
85 Ibid at [83]-[84]
86 Transcript PN 1455
87 Exhibit ANF 4 at [100] and Transcript PN 1471
88 Exhibit R 5 at [12(b)]
89 Exhibit R 1 at AD 5
90 Transcript PN 1318
91 Ibid PN 1320-1322
92 106 IR 307
93 Ibid at [69]
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<Price code C, AG838436, PR508696 >
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