CATCHWORDS INDUSTRIAL LAW - Interpretation of an award - history of award clauses - breach or non-observance of award Industrial Relations Act 1988 s 178 Employee Relations Act 1992 (Vic) s24 Short v F.W. Hercus Pty Limited (1993) 40 FCR 511, 517-520 (per Burchett J) and 523 (per Drummond J). Registered Nurses (Salaries and Career Structure) Reference [No. 1] (1986) 2 VIR 205 Registered Nurses (Salaries and Career Structure) Reference [No 2] (1987) 2 VIR 296 Royal Australian Nursing Federation (Victorian Branch): Re Registered Nurses Award (1987) 3 VIR 60, 63 No. VI 1514 of 1995 AUSTRALIAN NURSING FEDERATION v HEALTHSCOPE LIMITED (T/AS THE MELBOURNE CLINIC) Marshall J Melbourne 18 September 1995 IN THE INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) ) No. VI 1514 of 1995 VICTORIA DISTRICT REGISTRY ) BETWEEN: AUSTRALIAN NURSING FEDERATION Applicant AND: HEALTHSCOPE LIMITED (T/AS THE MELBOURNE CLINIC) Respondent JUDGE: Marshall J PLACE: Melbourne DATE: 18 September 1995 ORDER THE COURT ORDERS THAT: 1. It is declared that the respondent has committed a breach or non-observance of clause 4 of the Nurses (Victorian Health Services) Roping-in No. 1 Award 1994 ("the award") by failing to pay Charles Leigh at the charge nurse rate provided for in the Nurses (Victorian Health Services) Award 1992 2. The respondent shall pay to Charles Leigh the sum of $10,781.10 being an amount that the respondent was required to pay under the award which Charles Leigh has not been paid. 3. The matter is adjourned until 9.30 a.m. on 16 October 1995 for the Court to hear submissions on the question of the penalty, if any, which should be imposed upon the respondent. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No. VI 1514 of 1995 BETWEEN: AUSTRALIAN NURSING FEDERATION Applicant AND: HEALTHSCOPE LIMITED (T/AS THE MELBOURNE CLINIC) Respondent JUDGE: Marshall J PLACE: Melbourne DATE: 18 September 1995 REASONS FOR JUDGMENT BACKGROUND This matter is an application under s178 Industrial Relations Act 1988 ("the Act") for the imposition of a penalty upon the respondent for an alleged breach of the Nurses (Victorian Health Services) Roping-in No. 1 Award 1994 ("the award"). The applicant is an organisation of employees registered under the Act. The respondent is a company which conducts a private psychiatric hospital known as The Melbourne Clinic ("the hospital"). The respondent employs several nurses at the hospital including Mr Charles Leigh. It is alleged by the applicant that the respondent has failed to pay Mr Leigh in accordance with the award. The applicant claims that Mr Leigh is entitled to receive a "higher duties" rate of pay when he works at the hospital on night shift. The respondent denies the applicant's claim and maintains that no such rate of pay is properly payable to Mr Leigh. The award is a consent award which was made by the Australian Industrial Relations Commission ("the Commission") on 23 February 1994 with effect from 17 February 1994. Clause 4 of the award provides as follows: "4 - TERMS (a) The terms and conditions of employment of employees to which this award applies shall be those provided for in the Nurses (Victorian Health Services) Award 1992 [Print K6359 [N0175]] as in force from time to time in respect of private sector employers. (b) Part A of the Nurses (Victorian Health Services) Award 1992 as in force from time to time shall be terms (altered as necessary) of this award." It is readily apparent that the purpose of the award was to rope the employer respondents to it into the Nurses (Victorian Health Services) Award 1992 ("the parent award"). Part B of the parent award applies to the employment of "Registered Nurses". Clause 3(r) of Part B of the parent award defines "Registered Nurse" as:- " - a person whose name appears in any section of the Register maintained by the Victorian Nursing Council, including Registered Psychiatric Nurses and Mental Retardation Nurses, but excluding for the purposes of this Part, Enrolled Nurses and Mothercraft Nurses and who are employed in a capacity other than those appearing elsewhere in this clause." Clause 7 of Part B of the parent award ("Clause 7") is entitled "HIGHER DUTIES" and provides as follows: "(a) Subject to subclauses 7(b) and 7(c) any employee (except a Deputy Director of Nursing, a Deputy Principal Nurse Educator or a Principal Nurse Educator) engaged in any one day or shift for more than two hours on duties carrying a higher rate than the classification in which she/he is ordinarily employed shall be paid for the full day or shift at the minimum rate for that higher classification but if so engaged for two hours or less only the time so worked shall be paid for at that higher rate. (b) Notwithstanding the provisions of subclause 7(a) the following provisions shall apply to employees who are appointed to relieve a Charge Nurse: Off duty shifts (i) (1) Where a work unit involves shift work, Associate Charge Nurses may be appointed to undertake in-charge functions during the off duty periods of the Charge Nurse. The rate, once appropriately set, shall be deemed to include the performance of the in-charge function during the off duty periods of the Charge Nurse. (2) Where an employee other than an Associate Charge Nurse is required to act in charge during the off duty period of a Charge Nurse (which event shall be the exception to the rule), such employee shall be paid at the minimum rate applicable to the Associate Charge Nurse position which would normally be in charge on that shift. (3) Provided that where no Associate Charge Nurse position has been appointed with respect to the relevant shift, the provisions of subclause (a) shall apply. Periods of Absence (ii) The provisions of paragraph 7(b)(i) shall apply to all periods of absence of a Charge Nurse up to and including five days. For absences in excess of five days, the relieving Associate Charge Nurse shall be paid at the minimum rate for the Charge Nurse for the entire period of relief and other employees who consequently act in a higher position shall be similarly remunerated at the minimum rate of that higher position for the entire period of relief. (c) A Deputy Director of Nursing, a Deputy Principal Nurse Educator or a Principal Nurse Educator who is called upon to relieve an employee in a higher classification for a period in excess of five days, shall be paid at the minimum of that higher classification for the entire period of relief." "Associate Charge Nurse" is defined in the parent award as:- " - a Registered Nurse who is appointed as such and who, within the guidelines and practices established by the Charge Nurse, assists in the overall clinical and administrative management of a ward or unit and deputises for the Charge Nurse when required within these limits." "Charge Nurse" is defined in the parent award as:- "(i) a Registered Nurse who is appointed as such in charge of a ward or unit; or (ii) a Registered Nurse who is appointed as such in charge of a ward or section of a facility within the extended care sector; or (iii) a Registered Nurse appointed as such in charge of a facility with less than 61 beds within the extended care sector." Other relevant definitions contained in the parent award are those of "Director of Nursing" and "Night Nurse in Charge (other than a Bush Nursing Hospital)". Those definitions are as follows:- "(m) 'Director of Nursing' a registered nurse appointed as the principal nursing executive officer, however styled, and who is responsible for the nursing service and any other service (including the training of nurses). In a working Director of Nursing, the Resident Nursing manager shall be classified and paid as the 'Director of Nursing'." "(p) (i) 'Night Nurse in Charge' (other than a Bush Nursing Hospital) - a Registered Nurse appointed as such to be in charge of a hospital, or of a facility of 61 or more beds within the extended care sector, at night." Mr Leigh is a registered psychiatric nurse and has been qualified as such since March 1966 when he commenced employment in the United Kingdom. He has been in Australia since 1981 and has worked at Willsmere and Ararat psychiatric hospitals in the public sector. He was first employed by the respondent in 1981 for some five years at the hospital and was re-employed there in 1991 and remains so employed. Throughout his employment with the respondent he has been engaged on night duty. His ordinary hours of work are from 9.30 p.m. until 7.30 a.m. the next morning. He has a half hour meal break during the course of the night. He performs four shifts per week which is equivalent to a full time load. He is responsible for the care and safety of the patients at the hospital in the ward or wards where he works. He regularly monitors the condition of the patients. He gives patients medication, does a tally of those present (as in a roll) and admits patients. Mr Leigh is required to make observations of patients at least on an hourly basis. He will attend on patients more frequently if the need arises. If there are matters that he believes should be referred to the night supervisor he makes the decision to do so. Whilst working in the west ward of the hospital (and occasionally, on his evidence, in the east ward), Mr Leigh works in the company of another registered nurse (Ms Henderson) who performs materially identical duties to those performed by Mr Leigh. No charge nurse or associate charge nurse is employed on his shifts. Occasionally, Mr Leigh has worked with other registered nurses (apart from Ms Henderson), enrolled nurses and agency personnel. There are other wards or units in the hospital known as south ward and ground ward. A self-contained intensive care unit is found within east ward's boundaries. A night supervisor is always on duty when Mr Leigh is working. The night supervisor has overall responsibility for the hospital during the night shift. There is not usually much in the way of problems or difficulties that Mr Leigh is required to refer to the night supervisor. Because the night supervisor has overall supervision of the hospital he or she is not always readily available to attend to immediately assist Mr Leigh. Only in extraordinary circumstances is Mr Leigh required to contact the night supervisor to seek assistance. When Mr Leigh is on duty there is no-one who works specifically in the west ward who has as much experience as him. He is the most experienced registered nurse at the clinic who is not designated as an associate charge nurse, a charge nurse or higher classification. Although 70 to 75% of the patients at the hospital usually sleep during the night shift, there are less staff members on duty than during the day and the range of problems that confront nurses during the day are capable of occurring at night. The employees on duty in the west ward (where Mr Leigh predominantly works at night) on day shift on week days are as follows:- (a) 1 charge nurse, referred to in the hospital as the unit manager. (b) A few associate charge nurses referred to in the hospital as program charge nurses. (c) A registered nurse A charge nurse has "in charge functions" in respect of each ward or unit during day shift at the hospital. The ordinary day shift hours of work of charge nurses are from 8.00 a.m. or 8.30 a.m. until 4.00 p.m. The charge nurses are subject to the overall management of the nursing supervisor and the director of nursing. The nursing supervisor commences work at 3.00 p.m. and concludes at 10.00 p.m., thereby having a half hour overlap (changeover) with the night supervisor. His or her duties are not materially distinguishable from those of the night supervisor. When the charge nurse leaves work at 4.00 p.m., the associate charge nurses who continue to work at the relevant hospital ward or unit jointly assume the in-charge functions which were carried out by the charge nurse. By the time Mr Leigh commences work at 9.30 p.m. no associate charge nurse is working in the west ward. At the conclusion of night shift the registered nurses concluding their shift hand over responsibility for the wards or units where they have worked to the charge nurses responsible for each such ward or unit. The respondent, through its counsel, Mr A Lindeman, contended that the in-charge functions of the charge nurse are taken over by the night supervisor on night shifts, who effectively "works down" carrying out his own normal duties and the lesser in-charge functions of charge nurses for the respective wards or units. The applicant, through its counsel, Mr A Lawrence, contended that the night supervisor does not carry out in-charge functions in respect of wards or units but has general responsibility for the hospital as a whole, as distinct from specific, in-charge responsibilities at the ward or unit level. THE HISTORY OF CLAUSE 7 Although Mr Lindeman initially resisted the proposition that the Court should have regard to the history of the parent award in construing its terms, it was ultimately common ground that it was appropriate for the Court to examine the circumstances of the making of the predecessor to the parent award and to have regard to the reasons for decision of the relevant industrial tribunal. See Short v F.W. Hercus Pty Limited (1993) 40 FCR 511, 517-520 (per Burchett J) and 523 (per Drummond J). The parent award was the first federal award applicable to nurses at the hospital. Part B of it is materially identical to the former Registered Nurses Award ("the State award") which was made by the Industrial Relations Commission of Victoria ("IRCV"). The career structure which is provided for in the parent award was introduced into the State award as a result of an application by the applicant through its Victorian Branch in 1986. In Registered Nurses (Salaries and Career Structure) Reference [No. 1] (1986) 2 VIR 205, the IRCV decided inter alia to introduce a new career structure for registered nurses. The original predecessor of clause 7 was introduced as clause 10 of the State award (see 2 VIR at 238-239). In Registered Nurses (Salaries and Career Structure) Reference [No 2] (1987) 2 VIR 296, the IRCV in referring to the new classification of Registered Nurse Grade 3, said as follows at 305:- "Any nurse appointed to be an associate charge nurse must be classified at grade 3. In major teaching hospitals and 13 major private hospitals as outlined in Ex PHAV 1A, the commencing salary upon appointment shall be $516.60 with one annual increment to $532.00. In non-major teaching hospitals the commencing salary upon appointment shall be $485.90 with one annual increment to $501.30. Where a nurse is appointed to be an associate charge nurse, all previous experience as an associate charge nurse must be taken into account for salary purposes. Any nurse who has not been appointed to the position of associate charge nurse or a higher position and who is placed in charge of a ward, department or unit, must be paid in accordance with the higher duties clause." It is clear from the IRCV's second decision on the new career structure that the higher duties clause was inextricably interwoven with the new career structure to promote career progression of nurses through the ranks of registered nurses to associate charge nurses, charge nurses and beyond. It is also clear from the above quotation from the IRCV's second decision on the new career structure that the higher duties clause was intended to apply notwithstanding the failure of an employer to formally appoint a registered nurse as an associate charge nurse. In Royal Australian Nursing Federation (Victorian Branch): Re Registered Nurses Award (1987) 3 VIR 60, the IRCV dealt with an application by the applicant for a declaration that the true intent and effect of the higher duties clause in the State award was that when no associate charge nurse position had been appointed with respect to a shift, the nurse who was in charge of the shift should be paid at the charge nurse rate. The relevant clause was then clause 11 of the State award. At 63, Deputy President Garlick (who constituted the IRCV in Court Session) said: "Turning to the RANF application I find in favour of the RANF contention as to how the provision should be interpreted. I do this upon the plain meaning of the words. If there were any doubts, however, they are quickly put to rest by reference to extracts from the transcript of the proceedings leading to Decision No 56/1986. At p 2971 of transcript in that case (on p 74 of Ex JK1 in these proceedings) Mr Gower for the ACM said of the draft higher duties clause being considered in these proceedings: 'In my submission, in the situation where an associate charge nurse has been appointed and then acts in the off-duty period of a charge nurse, he or she gets paid as an associate charge nurse, but where an associate charge nurse has not been appointed and an employee other than an associate charge nurse acts in the off-duty period of a charge nurse, in similar circumstances, he or she under this provision would get the charge nurse rate of pay.' He expressed concern about that particular draft clause but was under no illusions as to what it meant. All the other arguments as to what a declaration of true intent and effect of the award should pale into relative insignificance. The practical impact of the above declaration does not make it obligatory to appoint assistant charge nurses but it may certainly encourage that action: in Decision No 56/1986 the Commission decided that there should be a new career structure. Broadly, where an employee relieves a charge nurse he/she would normally receive the charge nurse rate of pay unless an associate charge nurse has been appointed with respect to the shift, in which case the employer is only liable to pay the associate charge nurse rate of pay. That is consistent with encouraging the development of a clinical career structure, a feature of Decision No 56/1986. The question of whether or not an employee 'is required to act in charge' (as the words appear in cl 11(b)(i)(b) of the Registered Nurses Award No 5 of 1986) is a question of fact. On the evidence of witness Mrs Deanna Finn, a charge sister at Diamond Valley Community Hospital required to be in charge of the surgical and general wards, I accept that it is physically impossible for her to be in charge of both wards at the same time, that registered nurses are actually doing in-charge tasks because Mrs Finn cannot be in two areas at the same time. I have no reason to doubt the assertion by Mr Kotsifas for the RANF, that a Director of Nursing (or other administrative classification) could not be regarded as actually in charge of a ward for a particular shift in the off-duty period of a charge nurse. It will not be enough for an employer to seek to avoid obligations by use of incorrect labels. It would not be enough to say that someone is 'required to act in charge' if they cannot in fact be in charge of a particular ward or unit for a particular shift. As a corollary, an employer could not avoid obligations by simply refusing to state that a person was in charge when the evidence may indicate that the person is in effect required to act in charge during the off duty period of a charge nurse. If establishment of the factual situation concerning each shift in each ward or unit becomes messy then it may be in the public interest that the Registered Nurses Board should consider appropriate amendments to the Registered Nurses Award." Immediately prior to the making of the parent award, the Higher Duties provision was found in clause 10 of the State award. The corresponding definitions to those referred to above from the parent award were contained in clause 1 of the State award. The respondent was not bound by the award until 17 February 1994, not being a respondent to the parent award. The State award applied unequivocally to the respondent's registered nurses until 1 March 1993 on the proclamation of the material provisions of the Employee Relations Act 1992 (Vic) ("the State Act"). Pursuant to s24(3) of the State Act, the State award constituted the terms of an individual employment agreement between the respondent and its registered nurses in the absence of any individual contracts being signed by the respondent and any of its registered nurses. There was no evidence before the Court of any such signed contracts and in any event if there were such contracts they would have ceased to have had any legal effect after 17 February 1994 when the respondent became bound by the award. THE PROPER INTERPRETATION Notwithstanding that the abovementioned historical factors tend to support the interpretation of clause 7 contended for by the applicant, the Court must examine the words of the parent award and clause 7 in particular to determine if "a plain meaning" may be discerned. Clause 7 is not free from ambiguity. Clause 7(b) provides that "... the following provisions shall apply to employees who are appointed (emphasis supplied) to relieve a Charge Nurse ...". However, the very provisions that follow contain the proviso that:- "where no Associate Charge Nurse position has been appointed with respect to the relevant shift, the provisions of sub-clause (a) shall apply" Clause 7(a) provides an entitlement to a higher rate than the classification in which an employee is ordinarily employed when engaged on a shift for more than two hours on duties where such higher rate is applicable. Construed as a whole and in the context of the definitions in the parent award and the career structure contained in the parent award, it is my view that the interpretation of clause 7 for which the applicant contends is the correct interpretation. Although the respondent made no formal appointment of Mr Leigh to the associate charge nurse position, it is clear to the Court that the in-charge functions in the individual ward or wards where Mr Leigh worked were undertaken by him after having been performed by the charge nurse and associate charge nurses respectively on day shift. Mr Lindeman conceded that a formal appointment was not a necessary pre-condition to the application of clause 7 and that an appointment may be made by implication (transcript p179). The charge nurse on day shift similarly resumed from Mr Leigh the in-charge function in respect of the ward or wards in which he was employed during the night shift. I reject the submission of the respondent that the night supervisor had such functions and "worked down" in doing so. I do so for two reasons. First, the night supervisor has overall responsibility for the hospital and does not have ward specific responsibilities. Second, the concept of "working down" is totally at odds with the career structure which the parent award provides. It does not matter that neither Mr Leigh nor Ms Henderson equally share responsibilities at the ward level at night. It is really no different from the joint in-charge position of the associate charge nurses once the charge nurse finishes her or his shift. It is in the hands of the respondent to remedy the situation by formally appointing Mr Leigh or Ms Henderson as the associate charge nurse on night shift. In the absence of such formal act, both registered nurses on duty on night shift are entitled, in my view, to be paid at the charge nurse rate. The respondent submitted that I should not favour the above interpretation of clause 7 because the hospital is unique and overall night supervision by the night supervisor meant that no one is specifically required for in-charge duty during the night. Whether or not the respondent requires someone to perform such duties is irrelevant if the award properly construed and applied to the circumstances of Mr Leigh's employment compels a contrary conclusion as I have found it does. It is open to the respondent to make application to the Commission should it so desire to seek a variation to the award so that clause 7 of the parent award does not apply or does not apply in the same terms on night shift as it does on day shift. It is not the function of the Court to consider the merits of an award provision being applicable to the respondent. Its role is to properly construe the award and apply that interpretation to the facts before it. Of course, I do not intend by the preceding discussion to indicate that the award provision ought be amended to suit the respondent. That matter will be entirely in the Commission's hands in the event of any such application being made. The applicant provided the Court with an exhibit detailing what it contended was the shortfall in moneys owing to Mr Leigh under the award. The respondent raised no issue in relation to that exhibit which showed a shortfall of $10,781.10 from 17 February 1994 until the lodging of the application in the District Registry. In the circumstances, the Court makes the following orders: 1. It is declared that the respondent has committed a breach or non-observance of clause 4 of the Nurses (Victorian Health Services) Roping-in No. 1 Award 1994 ("the award") by failing to pay Charles Leigh at the charge nurse rate provided for in the Nurses (Victorian Health Services) Award 1992 2. The respondent shall pay to Charles Leigh the sum of $10,781.10 being an amount that the respondent was required to pay under the award which Charles Leigh has not been paid. 3. The matter is adjourned until 9.30. a.m. on 16 October 1995 for the Court to hear submissions on the question of the penalty, if any, which should be imposed upon the respondent. I certify that this and the preceding 15 pages are a true copy of the Reasons for Judgment herein of his Honour Justice Marshall. Associate: Date: 18 September 1995 Counsel for the Applicant: Mr A. Lawrence Solicitor for the Applicant: Ryan Carlisle Thomas Counsel for the Respondent: Mr A Lindeman Solicitor for the Respondent: Abbott Stillman & Wilson Date of hearing: 7 and 8 September 1995 Date of judgment: 18 September 1995