Industrial Court of New South Wales CITATION: SSWAHS v Kim and others [2007] NSWIRComm 241 APPELLANT: Sydney South West Area Health Service PARTIES: RESPONDENTS: Jin-Ah Kim and others FILE NUMBER(S): IRC 52 of 2007 CORAM: Wright J President; Kavanagh J; Boland J CATCHWORDS: Appeal - Recovery of alleged award underpayments - Proceedings before the CIM - Small claims proceedings - Whether appropriate to take test case under the small claims provisions - Requirement under s 371 of the Industrial Relations Act 1996 for Industrial Magistrate to conciliate proceedings - Consequences of failure to conciliate - Proceedings invalid - Parties given further opportunity for conciliation before judge of the Court - Subject to conciliation, proceedings remitted to CIM for conciliation and, if necessary, hearing. LEGISLATION CITED: Industrial Relations Act 1996 ss 151A, 153, 188, 192, 197, 371, 379 Bilal (t/as Hornsby Medical Centre) v Marshall (2006) 158 IR 269 Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng (1999) 90 IR 432 CASES CITED: Faber v Greyhound & Harness Racing Regulatory Authority of New South Wales [2007] NSWIRComm 207 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Yetzotis v Crown in the Right of State of New South Wales (Commissioner of Corrective Services) (2005) 147 IR 50 HEARING DATES: 3 August 2007, 6 September 2007 DATE OF JUDGMENT: 26 September 2007 APPELLANT: Mr I Taylor of counsel Sydney South West Area Health Service (Mr A Dansie) LEGAL REPRESENTATIVES: RESPONDENTS: Ms C Howell of counsel New South Wales Nurses' Association (Ms J Moffitt) JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J, President KAVANAGH J BOLAND J Wednesday 26 September 2007 Matter No IRC 52 of 2007 SYDNEY SOUTH WEST AREA HEALTH SERVICE v JIN-AH KIM AND OTHERS Application by Sydney South West Area Health Service for leave to appeal and appeal against a decision of Chief Industrial Magistrate Hart given on 22 December 2006 in Matter Nos CIM106561 of 2006 and others JUDGMENT OF THE COURT [2007] NSWIRComm 241 1 These proceedings involve an application for leave to appeal and an appeal against the decision of the Chief Industrial Magistrate given on 22 December 2006 in proceedings brought by 21 respondents against the Sydney South West Area Health Service. The respondents were all employed as Nurses at the Royal Prince Alfred Hospital in Camperdown, an inner city suburb of Sydney. The hospital was operated by the appellant. 2 The nature of the claims of the respondents was described in the decision at first instance, as follows: [4] The claims made involved shifts worked by the applicants within the emergency department of Royal Prince Alfred Hospital within a period commencing in mid 2002 and ending in about mid 2005. The specific dates relied upon by each individual applicant are set out in a schedule which are attached to the applications. In the case of some applicants their claims span the entirety of the period in question whilst in other cases the claim relates to shorter periods falling within the time span referred to above. [5] The applications before the Court all rely upon an interpretation of the award which was the relevant award governing the employment of the applicants during the relevant period. It was common ground that the relevant award was the Public Hospital Nurses (State) Interim Award being an award of the Industrial Relations Commission of New South Wales made on 12 June 2002 in proceedings before a full bench of the Industrial Relations Commission of New South Wales. (No IRC 3810 of 2000) [6] The award made provision at clause 10 for the payment of special allowances. Sub-clause (v) of clause 10 was at relevant times in the following terms:- "10(v). A registered nurse who is designated to be in charge of a ward or unit during day, evening or night shifts, when the Nursing Unit Manager is not rostered for duty, shall be paid an allowance as set out in Item 8, of Table 2 of Part B per shift. Provided that the allowance shall also be paid when the Nursing Unit Manager is rostered on duty if the day to day clinical management role for the shift is delegated to a designated registered nurse." [7] To determine the claims brought before the Court by the applicants it is necessary for the Court to give consideration to the meaning of the proviso contained within clause 10(v) and in particular the term "day to day clinical management role" and the term "delegated to a designated registered nurse". [8] The applicants assert that on the occasions set out in the individual schedules attached to the applications they were rostered for duty within the emergency department of the Royal Prince Alfred Hospital in the role of "Acute Co-ordinator". Further, they assert that on the occasions specified nursing unit managers were also rostered on duty but spent a substantial period of the shift engaged in managerial tasks of an administrative nature including periods where they were physically removed from the floor of the ward thereby leaving to the rostered Acute Co-ordinator the task of acting as team leader for the clinical nursing team engaged in actual patient care and that as a consequence the day to day clinical management role for the shift was effectively delegated to them and that as a consequence they should have received the allowance referred to in clause 10(v). 3 The Chief Industrial Magistrate in substance upheld the claim of the respondents holding: [38] The Court concludes that the applicants are correct in their assertions concerning the actual performance of the task of playing the role of team leader engaged in the task of clinical management notwithstanding the fact that NUMs were rostered on duty and were ultimately accountable for what occurred on the shift. [39] In the view of the Court the purpose of the special allowance described in clause 10(v) of the award as an in charge of shift allowance was intended to compensate registered nurses usually acute co-ordinators performing the task of team leader in the role of ongoing clinical management. In the view of the Court it was not intended that the mere rostering on duty of an NUM would negative the entitlement to the allowance. Further, it is, in the view of the Court, an artificial construct to suggest that the allowance is only payable where there is some formal and documented delegation whilst permitting the respondent to have, at least at ward level, a de facto delegation system whereby the rostered NUM could focus on a range of administrative matters whilst leaving it to the acute co-ordinator to fill the team leader role and juggle on a minute by minute basis the resources of the department with the flow of patients being brought to the department for emergency assistance. [40] On the balance of probabilities I am satisfied that the applicants performed the work as they allege on the shifts nominated in the schedules to their applications. I reject the interpretation of the term "delegation" which is relied upon by the respondent and I find that notwithstanding the lack of formal documented delegations a system of de facto delegation was in place and that the applicants are accordingly entitled to receive payment for those shifts upon which they were left to perform the duties which are relevant to clause 10(v) of the 2002 award. 4 The appellant seeks leave to appeal and appeals on the following bases: 1. The decision of the Chief Industrial Magistrate (the "CIM") that the Appellant pay to the Respondents the 'in-charge of shift' allowance (as contained in clause 10(v) of the Public Hospital Nurses' (State) Interim Award, 337 IG 180) in respect of the dates and shifts (the "Shifts") nominated by the Respondents in the schedule to their applications. 2. The CIM's decision in so far as his Honour found that the Appellant had in place a de facto delegation system that required the Respondents to be in-charge of the day to day clinical management role of the Shifts, despite the evidence that such role was performed by the Nursing Unit Manager rostered on the unit for those Shifts. 3. The CIM's decision in so far as his Honour found that the 'in-charge of shift' allowance was payable to the Respondents in circumstances where there was no formal delegation of the day to day clinical management role for the Shifts to the Respondents. 4. The CIM's decision in so far as his Honour found that the 'in-charge of shift' allowance was payable to the Respondents in circumstances where a Nursing Unit Manager was on duty and performing the day to day clinical management role for the Shifts. 5 However, during the proceedings two important issues became clear as a result of matters raised by the Court with the parties. The first issue was that the proceeding at first instance before his Honour was essentially a test case (or perhaps a series of cases which would result in a test case decision) in respect of clause 10(v) of the Public Hospital Nurses' (State) Interim Award which relates to payment of an in-charge allowance for performance of the work of Nursing Unit Managers. 6 Related to this aspect was the fact that the claims were brought pursuant to the small claims procedure provided by s 379 of the Industrial Relations Act 1996. 7 The second issue was that, notwithstanding the requirements of s 371 of the Industrial Relations Act 1996 which applied to the proceedings before his Honour, there was no attempt by his Honour to comply with the obligation on him to conciliate the proceedings before him. 8 We will deal with each of these matters in turn. 9 As to the first matter we consider it surprising that parties who would seek a test case decision on an industrial matter would do so by the use of the small claims procedures under s 379 of the Industrial Relations Act. The purpose of such proceedings is to provide a simple, straightforward and inexpensive procedure for the recovery of relatively small sums of money. Because of that purpose there are consequent limitations on the scope of procedures available relating to the relative formality of the proceedings, the rules of evidence, legal representation, etc. 10 In such circumstances, it is highly unlikely that any decision made in the proceedings utilising the small claims provisions could seriously be considered a test case decision. An applicant considering taking such test case proceedings may well consider it appropriate to commence them in this Court. 11 Turning then to the second matter. Section 371 of the Industrial Relations Act provides: 371 Conciliation to be attempted before order made (1) The industrial court is not to make an order under this Part until it has brought, or has used its best endeavours to bring, the parties to the application for the order to a settlement acceptable to those parties. (2) If such a settlement is made, the industrial court is required to make an order that, to the extent authorised by this Act, gives effect to the terms of the settlement. 12 The proceedings at first instance before his Honour occurred on 14 August 2006. As noted earlier, his Honour's decision was delivered on 22 December 2006. On 23 September 2005, the Full Bench of this Court handed down its decision in Yetzotis v Crown in the Right of State of New South Wales (Commissioner of Corrective Services) (2005) 147 IR 50 and on 8 November 2006 the subsequent Full Bench decision in Bilal (t/as Hornsby Medical Centre) v Marshall (2006) 158 IR 269 which applied Yetzotis was handed down. 13 The Full Bench's decisions in Yetzotis and Bilal both made abundantly clear that there was an obligation on an Industrial Magistrate to comply with the requirements of s 371, and that, in the absence of such compliance any such decision made in the proceedings would be a nullity. The first of these decisions was made well before the proceedings at first instance took place. 14 After the significance of s 371 was raised by the parties to these proceedings they were offered the facility of conciliation of the matter before a Member of the Full Bench. Conciliation occurred before Kavanagh J on 3 and 13 August 2007. Unfortunately, conciliation was unsuccessful. 15 Kavanagh J then gave directions as to the filing of submissions on the s 371 issue (the parties not having earlier addressed that issue in their submissions) and the parties acquiesced in that issue being determined "on the papers". 16 These submissions have now been received. Although it is unnecessary to set out their full detail it is significant to note that the appellant relied upon the terms of s 371 and the decisions in Yetzotis and Faber v Greyhound & Harness Racing Regulatory Authority of New South Wales [2007] NSWIRComm 207 (the latter being a decision issued on 10 August this year subsequent to the decisions in Yetzotis and Bilal) and submitted that, consistent with the authority of Yetzotis and Faber, the Court should grant leave to appeal and uphold the appeal. The respondents submitted that the matter should be reheard and that, given the test case nature of the proceeding it would be appropriate that the Court determine that the matter be reheard by a Member of the Industrial Court of New South Wales pursuant to s 192(1)(b) of the Industrial Relations Act. 17 The respondents' submissions note the agreement of the parties that the Chief Industrial Magistrate took no steps to endeavour to bring about a settlement between the parties as required by s 371. Then, after noting that the previous decisions of the Full Bench of the Court in Yetzotis and Faber have held that the failure to comply with s 371 renders any decision and orders made under s 365 of the statute as invalid, the respondents indicate that they "can identify no basis to distinguish the present facts from the facts in those appeals"; and that if "the Court determines that the matter is to be reheard, the respondent concurs with the appellant's view that it would be appropriate that a member of the Industrial Court of New South Wales rehear the matter". 18 In view of the clear terms of s 371 of the Industrial Relations Act, the clear statements in previous judgments as to the meaning of that section, and the consequences of the non-compliance with the provision, it is clear that the decision and orders issued at first instance are invalid. 19 The remaining question is whether the proceedings should be remitted for rehearing and, if so, to which forum. The parties both relied on s 192(1)(b) as providing the power to remit the matter to a Member of this Court to deal with the matter. That provision is in the following terms: 192 Powers on appeal (1) On an appeal under this Part to a Full Bench of the Commission, the Full Bench may (in accordance with this Act): ... (b) direct a member of the Commission to take further action under this Act to carry its decision on the appeal into effect, ... By virtue of the terms of ss 151A and 153(1)(j) of the Industrial Relations Act the reference to the Full Bench of the Commission in s 192 (if applicable) is to be taken in this matter as a reference to the Full Bench of the Industrial Court. Nevertheless, we do not consider that s 192 authorises referral of proceedings, such as the present, to a judge of the Industrial Court because s 192 does not apply to these proceedings. 20 Proceedings, such as the present, are brought pursuant to s 197 of the statute and are governed by the terms of that section. Although previous decisions of the Full Bench have held that other provisions in Part 7 of Chapter 4 of the statute apply to appeals pursuant to s 197 (see, for example, Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng (1999) 90 IR 432 and Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464) which held that appeals under s 197 are subject to the leave requirements specified in s 188, there has been no decision of which we are aware which has held that the terms of s 192 applies to appeals brought pursuant to s 197. In any event, we consider that the terms of s 197(4) make plain that the power in s 192(1) does not apply to the present proceedings. Section 197(4) provides: (4) The Full Bench of the Commission in Court Session may refer a matter the subject of an appeal back to the Local Court with such directions or recommendations as it considers appropriate. 21 It is to be noted that that provision parallels the power in s 192(1)(c) which provides that the Full Bench may: (c) refer the matter back to the member of the Commission, with such directions or recommendations as the Full Bench considers appropriate. 22 When s 192(1)(c) is read with s 192(1)(b) and together compared with the terms of s 197(4) it is obvious that the legislature intended that the question of referrals in s 197 appeals is to be dealt with pursuant to s 197(4) and not s 192. 23 It is also pertinent that the provision relied upon by the parties, s 192(1)(b), does not by its terms deal with the referral or remitter of the matter to another level of the judicial hierarchy to be dealt with again. What s 192(1)(b) deals with is the situation where the Full Bench has made a decision in the appeal but where certain aspects of the decision or of the proceedings require further attention and action for their conclusion. That is not the situation here and the terms and form of s 192(1)(b) make reasonably clear that they are more suited to the implementation and completion of arbitral proceedings rather than judicial proceedings since it would be the former type of proceedings which might, subsequent to appeal, require the utilisation of the additional powers provided by this provision. It is not immediately clear why powers of that kind would be necessary in respect of a decision made on appeal in judicial proceedings. 24 In the circumstances and subject to one other consideration, we consider that there is no alternative but to refer the relevant proceedings back to the Chief Industrial Magistrate's Court with such directions as the Court considers appropriate. In view of the longstanding failure of that Court to comply with the relevant requirements, it is appropriate to direct the Chief Industrial Magistrate to comply with the relevant requirements. 25 The other matter we should raise relates to the possibility of a further conciliation before Kavanagh J, if the parties wish that to occur. We will provide, in the orders we make, for that possibility. 26 The Full Bench of the Court accordingly makes the following orders and directions: 1. Leave to appeal is granted. 2. Appeal upheld and the decision and orders of the Chief Industrial Magistrate are set aside. 3. The matters the subject of this appeal are referred back to the Chief Industrial Magistrate's Court. 4. The Chief Industrial Magistrate shall prior to any hearing and determination of the proceedings, pursuant to s 371 of the Industrial Relations Act 1996 bring, or use its best endeavours to bring, the parties to the proceedings to a settlement acceptable to those parties; and, if such a settlement is made, to make an order that, to the extent authorised by the Industrial Relations Act 1996, gives effect to the terms of the settlement. 5. Orders 3 and 4 are stayed for seven days to allow the parties to seek a further conciliation before Kavanagh J, if they wish to do so. If any party makes such application, those orders will then be stayed until further order of her Honour. ____________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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