West Leederville Private Hospital Pty Ltd

[2021] FWCA 2760

[2021] FWCA 2760

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

West Leederville Private Hospital Pty Ltd
(AG2021/4951)

WEST LEEDERVILLE PRIVATE HOSPITAL ENTERPRISE AGREEMENT 2016

Health and welfare services
DEPUTY PRESIDENT BEAUMONT	PERTH, 30 JUNE 2021

Application for termination of the West Leederville Private Hospital Enterprise Agreement 2016.

[1] This decision concerns an application by West Leederville Private Hospital Pty Ltd (the Applicant) for the termination of the West Leederville Private Hospital Enterprise Agreement 2016 1(the Agreement) under s 225 of the Fair Work Act 2009 (the Act).

[2] This section of the Act allows an employer to apply to the Commission for the termination of an agreement that has passed its nominal expiry date.

[3] Section 226 of the Act, set out below, details the considerations for the Commission when dealing with such an application.

226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

[4] The Applicant held no objection to the application being determined on the papers and I consider that it is appropriate to do so.

[5] In support of its application, the Applicant has provided both a statutory declaration and a witness statement from Ms Anne Crouch (Ms Crouch). Ms Crouch is the National Quality and ESS Manager of the Cura Day Hospitals Group Pty Ltd (the owner of West Leederville Private Hospital Pty Ltd) (Cura).

[6] The Applicant provided context about the application to terminate the Agreement. It submitted that it had effectively ‘inherited’ the Agreement as a transferable instrument when the Applicant was acquired by Cura in late 2019. The Agreement was said to cover all of the Applicant’s employees who would otherwise be covered by either the Nurses Award 2010 (Nurses Award) or the Health Professionals and Support Services Award 2020.

[7] Having been acquired by Cura, the Applicant became one of three hospitals owned by Cura within a relatively small radius in the metropolitan region of Perth, Western Australia. The other hospitals were Subiaco Private Hospital, which is located 150 metres away from the Applicant, and Perth Eye Hospital, which is located 1.2 kilometres away from the Applicant. 2 Neither of these hospitals had an enterprise agreement in place.

[8] While the Applicant explained that it would like to have its employees work across all three hospitals, Ms Crouch said that the Applicant’s permanent part-time nursing employees were not generally engaged to perform work at the other hospitals because the Agreement contained terms and conditions that differed to those in the Nurses Award. 3 The difference between the terms and conditions in the Agreement when compared to the Nurses Award had created an administrative burden for Cura’s payroll processes and had impacted staffing budgets.4 Ms Crouch elaborated that the administrate burden extended to: (a) ensuring compliance with the Agreement terms; (b) completing, reviewing and authorising interhospital time sheets; and (c) issuing, paying and reconciling interhospital invoices for the back-charging of costs.

[9] It was submitted that the termination of the Agreement would remove the administrative barriers, allow employees to expand their areas of clinical practice, and also allow employees to secure more available working hours from time to time.

[10] Ms Crouch gave evidence of the comprehensive sessions that were conducted with employees to explain their options given the expired Agreement. 5 An external consultant was engaged, and a series of sessions were held over 2-3 March 2021. In these sessions the impact of the Agreement termination was traversed. By email dated 29 March 2021, a document was distributed to the employees titled ‘Important Information Document’.6 That document summarised the information that was said to have been provided in the sessions.

[11] A survey of the employees was conducted between 12 April 2021 and 23 April 2021. Ms Crouch said that survey forms were made available to all employees in hard copy during the survey period. Of the 42 survey forms completed, five employees indicated their preference to negotiate a new Agreement and 37 employees indicated their preference to terminate the Agreement with the Undertakings that had been provided by the Applicant. 7

[12] Those Undertakings were provided to the Commission. A fulsome account is provided at Annexure A. However, in short form they are replicated below:

a) not reduce the base rate of pay for any person employment by the Applicant as of the date of the Agreement’s termination;
b) maintain the current four hour minimum engagement period for casual employees;
c) maintain the current 25% night shift penalty for any nurse employed by the Applicant as of the date of the Agreement’s termination;
d) increase the afternoon shift penalty for any nurse employed by the Applicant as of the date of the Agreement’s termination from 12.5% to 15%;
e) provide a minimum 2% pay increase to any person employed by the Applicant as of the date of the Agreement’s termination.

[13] The Applicant elaborated, submitting that the termination of the Agreement would not be contrary to the public interest because the abovementioned Undertakings would ensure:

a) the current bases of rates of pay, all of which are higher and, in some cases, much higher - than the corresponding Modern Award rates – will be preserved for all those employed by the Applicant as of the date of the Agreement’s termination;
b) the current minimum engagement periods for casual employees, all of which are more generous than the corresponding minimum engagement periods provided by the otherwise applicable Modern Awards – will be preserved for all employees if the Agreement is terminated;
c) the current 25% night shift penalty being paid to nurses, which is significantly higher than the rate provided by the Nurses Award – will be preserved for all nurses employed by the Applicant as of the date of the Agreement’s termination;
d) the afternoon shift penalty will be increased from the current 12.5% to 15% for all nurses employed by the Applicant as of the date of the Agreement’s termination; and
e) all employees will also receive a minimum 2% increase to their current base rate of pay from the first full pay period following the Agreement’s termination. 8

Consideration

[14] I am satisfied the requirements of s 225 of the Act are met. The Agreement has passed its nominal expiry date, and pursuant to s 225(a), Ms Crouch declared the Applicant is the employer covered by the Agreement. As such, the Applicant has standing to bring the Application under s 225(a) of the Act.

Section 226(a) of the Act – Not contrary to the public interest

[15] Attention first turns to whether I am satisfied that termination of the Agreement is ‘not contrary to the public interest’.

[16] The ‘public interest’ refers to matters that might affect the public as a whole, such as the achievement or otherwise of the object of the Act, employment levels, inflation, and the maintenance of proper industrial standards. 9 It is distinct in nature from the interests of the parties, though those interests may be simultaneously affected.10

[17] The object of the Act set out in s 3 is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians. The object is to be achieved, among other things, by ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions, and by achieving productivity and fairness through an emphasis on enterprise-level collective bargaining. Section 578 requires that in performing functions or exercising powers, the Commission must take this object into account.

[18] It is also relevant to highlight that the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd (Aurizon) concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. 11 This is because the Act contemplates the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement.

[19] If the Agreement was terminated and the Applicant engaged new employees, those future employees would be covered by theAward, as will the existing ones. On this basis, the termination of the Agreement would not adversely affect the public interest in so far as the maintenance of proper industrial standards was concerned.

[20] The Applicant contended that the foreseeable consequences of the termination are: (a) it being better positioned to roster employees on weekends and public holidays whilst ensuring appropriate rates of pay and accommodating employees’ preferences; (b) decreasing the administrative burden arises from dealing with the loaded rates.

[21] Based on the material contained in the declaration of the Applicant filed with the application and additional materials filed, I am satisfied that the termination of the Agreement is not contrary to the public interest.

Section 226(b) of the Act – Appropriateness

[22] The approach to assessing ‘appropriateness’ in the context of ss 226(b)(i) and (ii) of the Act was detailed by the Full Bench in Aurizon. It said:

[A]ll of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s. 226(b)(i) and (ii). 12

[23] I intend to adopt this approach.

[24] The Applicant has undertaken a comprehensive consultative process with its employees regarding the proposed termination and the effect that it would have on them. Those same employees have demonstrated support for the termination, albeit some opted not to vote. During the consultative process, the Applicant has provided the employees with the Undertakings that are attached at Annexure A.

[25] Taking into account all of the circumstances including those in ss 226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

Conclusion

[26] An Order 13 will be issued terminating the Agreement with effect on 30 June 2021.

DEPUTY PRESIDENT

 1   [2017] FWCA 800; AE423283; PR 590078.

 2   Witness Statement of Anne Crouch (Crouch Statement) [11] and [13].

 3 Crouch Statement [16].

 4   Ibid.

 5 Crouch Statement [21].

 6   Crouch Statement [29] Exhibit AC-7.

 7 Crouch Statement [36].

 8   Applicant’s Outline of Submissions of 29 June 2021.

 9   Re Aurizon Operations Limited[2015] FWCFB 540 (‘Aurizon’) [129].

 10   Re Kellogg Brown and Root Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2004 PR955357 [23].

 11   Aurizon [176].

 12 Ibid [167].

 13   PR731202.

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