Industrial Relations Commission of New South Wales CITATION: New South Wales Nurses Association v Calvary Retirement Community Cessnock [2006] NSWIRComm 333 PARTIES: New South Wales Nurses Association Calvary Retirement Community Cessnock FILE NUMBER(S): IRC 5780 of 2005; IRC 1063, 1064, 1065, 1066, 1067, 1068, 1069, 1070, 1071, 1072, 1073, 1074, 1075, 1076, 1270, 1271, 1383, 1611 of 2006 CORAM: Harrison DP CATCHWORDS: Notification under s 130 - Applications pursuant to s 84 - Application of State Government Nursing Homes Framework Agreement (SGNHFA) - displaced employees - meaning of displaced - application of award right to 19 day month unless agreed otherwise - option to employee - capacity of employer to dismiss or displace employees. Held - SGNHFA continues to apply - a displaced employee is as defined in Public Sector - employees not displaced within meaning of SGNHFA - restructure of employment by replacing full time positions with part time positions not valid - restructure attempt to avoid award right to 19 day month not available to employer. LEGISLATION CITED: Industrial Relations Act 1996 Nesci v TAFE Commission of NSW (No 2) [2005] NSWADT 183 Jozef Banas v State of New South Wales [2003] NSWIRComm 317 CASES CITED: Awards Nursing Homes, &c, Nurses' (State) Award 354 IG 550 Public Hospital Nurses (State) Interim Award 337 IG 180 HEARING DATES: 10/07/06, 20/07/06, 24/07/06, 21/08/06 DATE OF JUDGMENT: 10/27/2006 APPLICANT Counsel for NSW Nurses Association Mr N Dawson Solicitors for Hunter New England Area Health Service Ms C Wilkinson LEGAL REPRESENTATIVES: Mr J Kennedy Sparke Helmore Solicitors RESPONDENT Solicitor Ms B Wearne Service Industry Advisory Group (Legal) Pty Ltd JUDGMENT: - 47 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Friday, 27 October 2006 Matter No IRC 5780 of 2005 NOTIFICATION UNDER SECTION 130 BY NEW SOUTH WALES NURSES' ASSOCIATION OF A DISPUTE WITH CALVARY RETIREMENT COMMUNITY AND ANOTHER RE FAILURE TO RESOLVE DISAGREEMENTS Joined With Matter Nos IRC 1063, 1064, 1065, 1066, 1067, 1068, 1069, 1070, 1071, 1072, 1073, 1074, 1075, 1076, 1270, 1271, 1383, 1611 of 2006 NEW SOUTH WALES NURSES ASSOCIATION (O/B V NEWSTEAD AND OTHERS) AND CALVARY RETIREMENT COMMUNITY CESSNOCK Applications re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION 1 The Little Company of Mary Health Care Ltd (LCM) acquired the Allandale Aged Care Facility Cessnock ("Allandale") from the Hunter New England Area Health Service ("the Area Health Service") on 1 June 2002. The facility was renamed Calvary Retirement Community Cessnock (CRCC). 2 The transfer of assets and employees was subject to specific commercial arrangements between LCM and the Area Health Service. 3 The transfer of employees is also subject to an agreement, known as the State Government Nursing Homes Framework Agreement ("the Framework Agreement"), negotiated between the Department of Health and the Labor Council of New South Wales and affiliated unions, including the New South Wales Nurses' Association ("the Association"). 4 These proceedings were initiated by notification of a dispute pursuant to section 130 of the Industrial Relations Act 1996 ("the Act") by the Association on 11 November 2005 (Matter No IRC 5780 of 2005). 5 That notification advised of a dispute in the following terms: 4. The question, dispute or difficulty concerns the following industrial matters, namely: The failure of Calvary Retirement Community (CRCC) and the Calvary Retirement Community Branch of the NSW Nurses' Association to resolve fundamental disagreements relating to: o the manner in which the ordinary hours of work and free time of employees are arranged so that in each roster cycle of 28 calendar days, each employee shall not work his/her ordinary hours of work on more than 19 days in the cycle in accordance with Clause 2(iii)(a) of the Nursing Homes, &C., Nurses' (State) Award; o the unanimous rejection by the Calvary Retirement Community Branch of the NSW Nurses' Association on 8 November 2005 of a proposal by CRCC that nurses reduce their shift lengths to 7 hours 36 minutes per day and the loss of their rostered day off (RDO)and decreased leisure time; o CRCC's decision to restructure the nursing service by deleting thirty three (33) nursing positions held by 'transferred employees' and their redeployment/retraining, and or involuntary relocation to Hunter New England Area Health Service; AND o the threat to the occupational health and safety of CRCC nursing staff and the welfare of CRCC residents if the proposed restructuring of the nursing service at Calvary proceeds. 5. The Awards, agreements or determinations that apply to Association members are: • Nursing Homes, &C., Nurses' (State) Award • Public Hospital Nurses' State Award 6 Compulsory conference proceedings were convened by Commissioner Stanton who engaged the parties in conciliation without success. 7 The Association subsequently filed 18 separate applications for relief from unfair dismissal pursuant to s 84 of the Act at various times on 1 March, 2 March and 7 March 2006. The reasons set out in the applications state: The threatened termination is harsh, unjust and unreasonable because: o It is not a bona fide redundancy but rather an attempt to replace the applicant with cheaper staff, o The applicant will suffer disadvantage by being transferred back to the public sector in that: § It is likely that they will be placed somewhere that will involve much more travelling time (and cost); § It is unlikely that they will be placed on a roster that gives them access to shift penalties and allowances, thus leading to a considerably reduced take­home pay; § It is unlikely that the applicant will be placed in aged care, their chosen area of work and expertise; § The applicant is unlikely to have as much independence in their, work in the public sector and unlikely to be as involved in "hands on" nursing. 8 These applications for relief from unfair dismissal gave rise to dispute between the parties over the capacity of CRCC to terminate employment. 9 The Association asserted that in their insistence that employees alter their working hours the management of CRCC was effectively terminating their employment in circumstances that were harsh, unreasonable and unjust. 10 The management of CRCC asserted that it could not be respondent to proceedings pursuant to s 84 of the Act as it did not possess the capacity to terminate employment, putting that the limit of its capacity was to return displaced employees to the Area Health Service in accordance with the Framework Agreement. 11 A Notice of Motion was filed by CRCC on 3 April 2006 (subsequently amended on 11 April 2006) seeking a declaration that it is not the employer of the applicants. 12 The grounds and reasons in support of the Notice of Motion CRCC put inter alia: 5. The special arrangements are such that the transferred employees cannot be dismissed or threatened with dismissal by CRCC as they are permanently employed by either CRCC or HNEAHS. 6. The employment of the transferred employees is, and was at all relevant times, subject to the State Government Nursing Homes Framework Agreement ("SGNHFA"). 8. At all relevant times, since the transfer in relation to all transferred employees, including those employees the subject of these proceedings, CRCC has acted in accordance with the SGNHFA, and have accepted that the HAHS and its successor HNEAHS have had responsibility for these employees when they became displaced. 9. At no time during the employment of the employees have CRCC considered making the employees' positions redundant nor dismissing nor threatening to dismiss them as special arrangements under which these employees are employed constrain CRCC from doing these things. 13 The Association sought alternate determination that the employees concerned remain employees of CRCC; that they are not surplus or displaced; they are not subject to dual employment by CRCC and the Area Health Service; and that they not be subject to any change of hours of work, conditions of employment or return to the Area Health Service without their consent. 14 The Notice of Motion was first listed by the Commission as presently constituted on 1 May 2006 resulting in Directions in the following terms: 1 The proceedings in this matter are adjourned to 10am, Friday 19 May 2006. 2 Matter No IRC 5780 of 2005, being a dispute between the New South Wales Nurses' Association ("the Association") and Calvary Retirement Community Cessnock ("Calvary") will also be listed that day for compulsory conference before the Commission as presently constituted. 3 The Hunter New England Area Health Service ("HNEAHS") has been identified as a relevant party by the Association in the s 130 dispute and is suggested by Calvary as an employer in conjunction with Calvary insofar as the s 84 matters are concerned. 4 The HNEAHS will be required to appear in the proceedings on 19 May 2006. 5 The Association and Calvary are directed to file and serve statements upon the HNEAHS detailing their view of the standing and responsibility of HNEAHS in each of the proceedings by close of business on 5 May 2006. 6 The present Notice of Motion is suspended without determination. Calvary is directed to file and serve amended Notice of Motion upon the Association and the Health Service by close of business on 5 May 2006. 7 The Association is directed to file and serve a statement of remedy sought in both the s 130 and s 84 proceedings, identifying those individuals which remain subject to the dispute and associated s 84 applications by close of business on Friday, 12 May 2006. 8 The proceedings on 19 May 2006 will firstly address the prospects of resolution of the matters by conciliation and subject to the success or otherwise of those efforts, then consider the process by which the remaining issues as identified are properly resolved. 15 In proceedings of 19 May 2006 the parties returned to conciliation which, though not resolving the dispute, brought issues into sharper focus, resulting in the issue of a Certificate of Attempted Conciliation in Matter No IRC 5780 of 2005. 16 Statement and Directions issued on 19 May 2006 state inter alia: … …it is appropriate that the Association pursue resolution pursuant to Matter No IRC 5780 of 2005, and in particular whether the circumstances enliven the State Government Nursing Home (SGNH) Framework Agreement and if so in what way. 17 A timetable for filing of material was established to bring the matter to hearing, commencing on 10 July 2006. 18 Pursuant to the Directions the Association filed an outline of remedy (Exhibit 4) in the following terms: 1. Clause 15.1 of the State Government Nursing Homes Framework Agreement ("the Agreement') states: Use of Framework Agreement: This Framework Agreement shall be able to be evidenced in any proceedings before any industrial tribunal with respect to questions, difficulties or disputes concerning the implementation of any of the matters contained herein. 2. Arising from clause 15.1 of the Agreement, the Association seeks arbitration of the following question concerning the implementation of the Agreement: 'Does the refusal by full time staff to reduce their daily working hours from 8 hours to 7.6 hours (and thereby give up their right to an additional day off per 28 days) make those staff surplus and subsequently displaced so that the provisions of clause 9 of the Framework Agreement become operative?" 3. The Association will be seeking the answer "No" to the above question. 19 Arbitration proceedings commenced at Cessnock Court House on 10 July 2006 and continued in Newcastle on 20 and 24 July and 21 August 2006. 20 On 10 July 2006 Mr Dawson of counsel appeared for the Association. 21 Mr Kennedy and Ms Wilkinson, solicitors of Sparke Helmore Lawyers, appeared on behalf of the Area Health Service. 22 Ms B Wearne, solicitor of the Service Industry Advisory Group (Legal) Pty Ltd, appeared on behalf of CRCC. 23 Mr Dawson brought evidence from Mr Brett Holmes, General Secretary of the Association; and Ms Donna St Clair, Organiser of the Association. 24 Mr Kennedy brought evidence from Mr Glenn Murray, currently employed by Northern Sydney and Central Coast Area Health Service as Human Resources Manager, Northern Sydney Sector; formerly employed by the New South Wales Department of Health in the position of Policy Officer, Structural and Funding Policy Branch; Mr David Dixon employed by the Area Health Service as the Director Workforce Development; and Mr Peter Turner, employed by the Area Health Service as the Manager Human Resources, Patient Support Services. 25 Ms Wearne brought evidence from Mr Vlad Aleksandric, National Director of Strategy Development, Little Company of Mary Health Care Limited; Mr E Coupe, Chief Executive Officer of CRCC; Ms Danae Jenkins, Executive Director of Care, CRCC; and on subpoena from Ms Tracey McCosker, Director, Corporate Services of the Area Health Service, and at the time of transfer of the Allandale Facility to LCM as Director, Care Network which included responsibility for employees at Allandale. 26 The present dispute has its foundation in a resolution by CRCC in response to financial pressures to reduce costs by requiring certain employees to alter their working arrangements from eight hours per shift worked over 19 days in a 28 day calendar period (a 19 day month), to 7.6 hours per shift worked over 20 days in a 28 day calendar period, resulting in a reduction in earnings and the loss of a rostered day off every 20 days. This is resisted by the Association on behalf of members affected. 27 The relevant industrial instrument is the Nursing Homes, &c, Nurses' (State) Award 354 IG 550 ("the Award") which prescribes hours of work at cl 2 in the following terms: 2. Hours of Work and Free Time of Employees Other Than Directors of Nursing (i) The ordinary hours of work for day workers, other than Directors of Nursing, exclusive of meal times, shall be 152 hours per 28 calendar days, to be worked Monday to Friday, inclusive, and to commence on such days at or after 6.00 a.m. and before 10.00 a.m. (ii) The ordinary hours of work for shift workers, other than Directors of Nursing, exclusive of meal times, shall not exceed an average of 38 hours per week in each roster cycle. (iii) (a) The hours of work prescribed in subclauses (i) and (ii) of this clause shall, where possible, be arranged in such a manner that in each roster cycle of 28 calendar days each employee shall not work his/her ordinary hours of work on more than 19 days in the cycle. (b) Notwithstanding the provision of paragraph (a) of this subclause, employees may, with the agreement of the employer, work shifts of less than eight hours each over 20 days in each cycle of 28 days. (c) Provided that on the occasion of an employee's written request, and with the consent of the employer, a 9.5-day fortnight may be worked instead of the 19-day month. NOTE: This subclause is designed to ensure that rosters achieve increased leisure time for nurses, rather than reduced daily hours. This can be achieved by the working of shifts of longer than eight hours per day, with the result that less than 19 days are worked in 28, but without the accrual of an additional day off, as well as by the working of a 19-day month with an accrued additional day off. 28 The Public Hospital Nurses (State) Interim Award 337 IG 180 contains corresponding provisions at Cl 4, Hours of Work and Free Time of Employees Other Than Directors of Nursing and Area Managers, Nurse Education, in the following terms: (iii) (a) The hours of work prescribed in subclauses (i) and (ii) of this clause shall, where possible, be arranged in such a manner that in each roster cycle of 28 calendar days each employee shall not work his/her ordinary hours of work on more than nineteen days in the cycle. Provided that employees who work 8 hour shifts are entitled to 12 additional days off duty per annum , (as per Department of Health Circular No. 95/17 dated 13 March 1995), employees working 10 hour shifts are entitled to one additional day off duty each five weeks, employees working other combinations of shifts are entitled to such number of additional days off duty per annum as will ensure that their ordinary hours of work do not exceed an average of 38 hours per week. (b) Notwithstanding the provisions of paragraph (a) of this subclause, employees may, with the agreement of the employer work shifts of less than 8 hours each over 20 days in each cycle of 28 days. (iv) (a) Each shift shall consist of no more than 10 hours on a day shift or 11 hours on a night shift with not less than 10 hours break between each rostered shift, unless agreed otherwise between an employee and local nursing management. An employee shall not work more than 7 consecutive shifts unless the employee so requests and local nursing management agrees but in no case shall an employee be permitted to work more than 10 consecutive shifts. In any fortnightly pay period an employee shall not be rostered for more than three quick shifts, i.e. an evening shift followed by a morning shift, unless agreed otherwise between an employee and local nursing management. (b) Where 10 hour night shifts are in operation in any health facility, at the commencement date of this award or subsequent thereto, the length of these shifts must not be altered without the consent of the Head Office of the Association. (v) (a) The employee's additional day off duty prescribed in subclause (iii) of this clause (as a consequence of the implementation of the 38 hour week) shall be determined by mutual agreement between the employee and the employer having regard to the service requirements of the latter. Where practicable such additional day off duty shall be consecutive with the rostered days off duty prescribed in subclause (xv) of this clause. (b) Employees shall not be entitled to the provisions of paragraph (a) of subclauses (iii) and (v) of this clause (i.e. an additional day off as a consequence of a 38 hour week) when undertaking block training. (vi) Once set, the additional day off duty may not be changed in a current cycle unless there are genuine unforeseen circumstances prevailing. Where such circumstances exist and the additional day off duty is changed, another day shall be substituted in the current cycle. Should this not be practicable the day must be given and taken in the next cycle immediately following. (vii) (a) Where an employee and her/his local nursing management agree, an employee's additional days off duty (ADOs) may be accumulated up to a total of seven. This limit on accumulation means that any employee who has already accumulated seven AD0s must take the next ADO accruing to her/him when it falls due in accordance with the roster. (b) Employers must not unreasonably refuse to agree with an employee's request to accumulate ADOs or to take them off subsequent to such accumulation. (c) Any ADOs accumulated but not taken as at the date of termination of the employee must be paid out at ordinary rates. (viii) Except for breaks for meals the hours of duty each day shall be continuous. 29 Those employees who did not agree to change their hours of work to 7.6 hours per shift have been declared displaced by the CRCC, in their submission invoking provisions of the Framework Agreement, allowing CRCC to return those employees to the Area Health Service. 30 The Area Health Service, incorporating the former Hunter Area Health Service, do not accept that these circumstances invoke the Framework Agreement. The Area Health Service do not resile from a responsibility to manage displaced employees in accordance with the relevant departmental procedures. 31 It is appropriate to set out the Framework Agreement (Exhibit 6) in full: STATE GOVERNMENT NURSING HOMES (SGNH) FRAMEWORK AGREEMENT 1. Parties Bound: The NSW Department of Health (the Department), the Labor Council of NSW, the NSW Nurses' Association, the Health and Research Employees' Association of NSW (HREA), the Public Service Association (PSA - registered as the Public Service Association of NSW and the Professional Officers' Association NSW Amalgamated Union), the Australian Salaried Medical Officers' Federation (ASMOF), the Construction Forestry Mining & Energy Union (CFMEU), the Electrical Trades Union of Australia, NSW Branch (ETU), the Plumbing and Gasfitters Employees' Union (PGEU) and the Australian Manufacturing Workers Union (AMWU - registered in NSW as the AFMEPKIU). 2. Scope: This Framework Agreement sets out the policies and conditions which are to apply to SGNH staff who agree to transfer their employment to a Non Government Organisation (NGO) during transfer of SGNH beds to the Commonwealth's aged care funding model (as at July 1997 known as Care Aggregated Module and Standard Aggregated Module - CAM/SAM). 3.1. Intent: It is the agreed intention of the parties that except as otherwise expressly provided for in this Framework Agreement, that all the terms, conditions and entitlements of the relevant public health system industrial instruments (including relevant departmental circulars and memoranda relating to the industrial instruments) applying to SGNH staff at their time of transfer, and/or as those terms, conditions and entitlements are amended or varied from time to time, will continue to apply for as long as those staff remain in continuous employment with the NGO to which they agree to transfer. All accrued benefits for long service leave, annual leave and sick leave will be transferred in full and the public health system accrual rate for leave will continue. 3.2. Public hospital industrial instrument provisions and other public health system conditions of employment or arrangements (eg departmental role delineation guidelines), which deal with skillsmix and/or patient staffing ratios and/or the grading and appointment of senior staff, shall not apply to SGNH staff transferred to a NGO. The relevant private sector award provisions shall apply in respect of such matters. 4. Consultation at the State Level: The SGNH Consultative Group which developed this Framework Agreement, consisting of departmental representatives and Labor Council together with representatives from the health unions, ie the Nurses' Association, HREA, PSA, ASMOF, CFMEU, ETU, PGEU and AMWU, will continue to be available to discuss any issue concerning the operation of this Framework Agreement. 5. Consultation at the Local Level: It is the parties intention that joint consultative committees should be established at the Area Health Service level and with appropriate NGO representation will establish processes and procedures for applying this Framework Agreement at the local level, including the establishment and operation of grievance handling procedures. Where appropriate, existing consultative mechanisms may be utilised. 6. Dispute Resolution Procedures 6.1. Local Disputes: Disputes or grievances concerning implementation/interpretation and transitional arrangements shall be dealt with in accordance with local grievance/dispute resolution procedures, as outlined in 5 above. Unresolved disputes or grievances may be referred to the SGNH Consultative Group. 6.2. Grievance/dispute resolution procedures shall not preclude any party from seeking assistance of the Industrial Relations Commission. 6.3. Statewide Policy Disputes: Disputes concerning policy issues arising from this Framework Agreement shall in the first instance be discussed by the SGNH Consultative Group, and failing agreement at that level, may be referred to the Health Industry Liaison Committee (HILC). 7.1. Application of Framework Agreement to Long Term Temporary Staff: In addition to all permanent full-time and part-time SGNH staff, the Framework Agreement shall also apply to all long term temporary employees with continuous SGNH service in excess of 12 months and for whom ongoing work is available (ie not engaged for a fixed term or specific project). 7.2. For the purposes of this Framework Agreement such long term temporary staff shall be treated as, and classified appropriately as, either full-time or permanent part-time employees in accordance with the provisions in the relevant public health system industrial instrument. 7.3. The relevant unions will be advised of the numbers, length of service, location and proposed classification of such employees through the locally established joint consultative committees. 7.4. The Framework Agreement shall not apply to casual employees. 8.1. Maintenance of Salary for Staff electing to transfer to a Non Government Organisation (NGO): Where staff accept a transfer to a lower graded position they will retain their current classification and individual salary, ie indefinite or 3 years salary maintenance in accordance with the provisions of Circular 96/16 as amended from time to time. 8.2. Where staff agree to accept a transfer to a similarly classified position there will be no salary maintenance available although all other public health system conditions would be maintained as per clause 3, Intent, of this Framework Agreement. A similarly classified position is one where the salary/weekly wage of the offered NGO employment equals or exceeds the employee's current substantive salary or weekly wage (inclusive of allowances in the nature of salary but exclusive of overtime and shift penalty payments) and where the skills/competencies required for the new position are similar to those of the employee's current or most recent position. 8.3. Salary maintenance and maintenance of public health system conditions would discontinue when the employee leaves the employment of the NGO (ie employment is lawfully terminated by either the NGO or the employee), unless the employee in question is leaving the employment of the NGO to resume employment in the public health system without a break in service. 8.4. For the purposes of this Framework Agreement, "without a break in service" means service where, other than through the absence of the worker on approved leave, there is no interruption or break in service of a SGNH worker who transfers to a NGO and who subsequently leaves the NGO to resume employment in the public health system. No account however, shall be taken of any interval between when a worker ceases his/her employment with a NGO and then resumes his/her employment in the public health system provided such an interval does not exceed 2 months and the worker had, before ceasing his/her employment with the NGO, been accepted for employment in the public health system. 9.1. Management of Surplus SGNH Staff: SGNH Staff who agree to transfer their employment to a NGO which has assumed responsibility for a SGNH and who maintain continuous employment and who subsequently become displaced will continue to be managed in terms of Departmental Circular 96/16 (as amended from time to time). No staff will be compulsorily retrenched. The original AHS shall co-operate fully with the NGO in the implementation of 9.2 and 9.3. 9.2. Provision will be made for: · standard salary maintenance · a redeployment focus, · priority of employment and redeployment, including where practical, retraining 9.3. Finally, and as a last resort, staff may be offered a voluntary redundancy option where it is not possible to redeploy them. 10. Employment/Redeployment Options: 10.1. Election to continue employment with either an AHS or a NGO. As bed numbers are reduced and/or beds are transferred SGNH staffing levels and structures will be subject to a process of ongoing review. As new structures are developed and as positions are identified as surplus, SGNH staff will be asked whether or not they want to be considered for placement in the new NGO structure, and if not. whether they are interested in being redeployed or offered voluntary redundancy. 10.2. The processes to be followed should be the subject of detailed consultation at the local level with the relevant joint consultative committee to deal with any local implementation/interpretation and transitional arrangements issues that may arise, including the establishment and operation of grievance handling procedures. Areas will not proceed with any arrangements which change the working arrangements of SGNH employees prior to or during the transitional process without consultation with the relevant union/s. 10.3. Where more than one person has expressed interest in being considered for a particular position in the new NGO structure a merit assessment will occur. 10.4. Where SGNH staff secure a position in, and agree to transfer to a NGO, the NGO shall provide employment for a period of at least 12 months on the same basis as currently employed, unless otherwise agreed in writing. 10.5. Election to not continue employment - options available for SGNH staff unable to secure a position in the new NGO structure or, not wishing to transfer to the NGO are: a) redeployment action : i) to similar health position in hospital or AHS. Priority of Employment in terms of Departmental Circular 96/16; ii) to other public sector agency (through the WMC - Workforce Management Centre); b) retraining to facilitate redeployment; c) consideration may also be given on an individual case by case basis to a contribution being made towards relocation and removal assistance if the circumstances warrant such assistance; d) voluntary redundancy in accordance with Departmental circular 96/16 as amended from time to time. 11.1. Recognition of leave Entitlements and Prior Service: Staff who agree to have their employment transferred to a NGO will have all accrued leave entitlements (eg annual holidays, long service leave and sick leave) and unclaimed annual leave loading payments transferred to the NGO on the date of transfer of the SGNH. 11.2. Prior service in the SGNH will be recognised and will be used for the purposes of determining future leave, resignation and redundancy entitlements. All leave will continue to accrue at the same rate as for employees in the public health system. Staff who agree to accept transfers to a NGO have no entitlement to payment in lieu of accrued leave. 12. Return to Public Health System Employment: Staff who transfer to a NGO and who subsequently leave the NGO and return to employment in the public health system without a break in service, will have all prior service with the public health system and the NGO recognised and used for the purposes of determining leave, resignation and redundancy entitlements. In such cases, unused accrued leave entitlements (eg annual holidays, long service leave and sick leave), and unclaimed annual leave loading payments, will be transferred from the NGO to the relevant public health system employer. 13. Superannuation: Under existing Government policy employees transferred out of the public sector generally do not continue to have access to contributory membership of public sector superannuation schemes. However, as an exceptional case, it is agreed that SGNH staff who agree to accept a transfer to a NGO will be permitted to retain their existing public sector superannuation scheme membership. 14. Promotions: Staff seeking and accepting promotions will accept the relevant non-Government industrial instrument provisions and the conditions applied by the NGO to such promotional positions at the time an appointment is made. Maintenance of salary and public health system conditions will discontinue if the employee accepts promotion to a position where the salary or weekly wage equals or exceeds the employee's maintained position, although staff accepting promotions will be able to retain their existing public sector superannuation scheme membership. 15.1. Use of Framework Agreement: This Framework Agreement shall be able to be evidenced in any proceedings before any industrial tribunal with respect to questions, difficulties or disputes concerning the implementation of any of the matters contained herein. 15.2. The parties agree that this Framework Agreement shall not be used as a precedent in any negotiations or industrial tribunal proceedings (including conciliation and/or arbitration), concerning employment conditions that are to apply to any non-SGNH employees whose employment is to be transferred from the public sector to a NGO. 16. Date of Transfer: In this document the Date of Transfer is expected to be that date on which the institution is removed from Third Schedule of the Public Hospitals Act 1929 (NSW) and is licenced in its own right. 32 The Framework Agreement applied State wide to the transfer of a number of facilities from the public hospital system to non-government organisations (NGO's). The application of the Framework Agreement to CRCC was subject to discussion between the Area Health Service and LCM, set out in the evidence of Mr Vlad Aleksandric, Mr David Dixon, and Ms Tracy McCosker. The evidence of Mr Glenn Murray and Mr Holmes provides some background to the negotiation and establishment of the Framework Agreement. 33 Ms McCosker's evidence is that she was directly involved in the transfer of Allandale to LCM. Ms McCosker's evidence establishes that the planned transfer of assets and staff took longer then initially intended. 34 Mr Coupe's evidence is that on acquisition of the facility staff were transferred to meet the needs of existing clients on the anticipation that the facility would be reduced from 296 residents, comprising 216 high care and 80 low care placements, to 216 high care placements pending the construction of a new 80 bed hostel for low care residents. The reduction to 216 high care placements was achieved by May 2005, the majority being category 1 or 2 at the upper end of the 8 level scale of dependency. 35 Staff moving to CRCC at the time of sale were identified in two categories: transferred staff, being those needed to service the 216 residents; and seconded staff, being a number in excess of those required for 216 residents until the number was reduced. 36 It was understood that seconded staff would return to the Area Health Service as resident numbers were reduced, and that transferred staff would remain with CRCC at Allandale unless exercising an option to return to the Area Health Service in accordance with the Framework Agreement. 37 There is no issue in these proceedings that CRCC would recruit staff as required to replace transferred staff leaving for any reason or to increase staff on completion of the new 80 bed low care hostel. 38 Mr Coupe deposed that the elimination of rostered days off (RDO's) was an integral component in a new model of care developed in response to cost provisions and the conclusion of transitional funding by the Area Health Service on 31 December 2005. 39 Mr Coupe put that management took a positive decision to exercise rights under the Framework Agreement to achieve the preferred staffing model. 40 Mr Coupe acknowledged that the overwhelming majority of employees concerned are women, in their mid to late fifties, who have worked at the Calvary site for many years, live close by, and do not have a drivers licence. 41 Mr Coupe deposed that the only criteria considered was full time transferred staff. Mr Coupe's evidence (TR pp 67, 68, 69, 70 of 20/7/06) is set out below: DAWSON: In fact the choice that you put them was either you leave the facility where you have worked for many years which is close to home and go back to the Hunter or you reduce your hours. That was the choice really, wasn't it? A. We weren't forcing anybody to reduce their hours, that was an option that some people could have considered, but the option we had was that we could use our - I guess our rights under the framework agreement and our agreement we've had to do to meet our staffing levels. If that was through some staff going back to Hunter. … … Q. And that's it, the framework agreement that counts. Is that right? A. Well when you're talking about business viability you use whatever mechanisms that you have at your disposal to achieve the expected levels of care that you have to provide. … … Q. You didn't? So you didn't think about the fact that you might have a husband and wife on, staff who might travel together or drive each other to work and you had only nominated one of them? Is that right? A. We nominated those full time staff regardless of their own particular circumstances. … … A. As I've explained previously, the only criteria for us in identifying these staff was the fact that they were full time transferred staff. Q. Full time transferred staff and now it's down to full time transferred staff who won't give up their rostered day off. That's right, isn't it? A. Yes. Q. And there's 13 of them? A. Yes. 42 Initially identified at 33 employees, this number was reduced by four registered nurses, whom Mr Coupe deposed were subject to a change of attitude by management and were required for operational needs. Mr Coupe's evidence was that these nurses had not been told of this change at the time of proceedings as it was considered inappropriate to do so whilst this matter proceeded. 43 A direction issued requiring the four registered nurses to be informed by management in formal terms that management no longer sought a change in their hours of work or considered them surplus in the terms of the Framework Agreement. 44 The remaining 29 are all assistants in nursing (AIN's), 16 of whom have accepted the reduction in hours proposed and forfeited their RDO. 45 The present dispute thus concerns 13 AIN's who decline to accept a reduction in hours and forfeit their RDO. 46 In cross examination by Mr Kennedy Mr Coupe deposed that the subject employees met the definition of displaced employees found in a New South Wales Department of Health Circular dated 5 October 2000 (Ex 13) which states: Displaced Employees are permanent employees or temporary employees to whom this Circular applies, whose positions have been deleted. 47 Mr Coupe did not accept Mr Kennedy's proposition that only hours had been changed. Mr Coupe deposed that, while replacement part time positions were offered, the full time positions had been deleted 48 Mr Coupe described the restructure in the following terms (TR pp 75, 76 of 20/7/06): Q. Sir, can I suggest to you that in relation to the positions of the nominated staff that it wasn't their positions that you considered to be surplus but rather their hours or to be precise 54 minutes per shift as being surplus, is that correct? A. There was a reduction in the full time shift for those people. Q. The proposal was it not to reduce the shift from 8.5 hours to 7.6? A. That's correct.? Q. So a reduction in the shift by 54 minutes? A. It's my understanding that the reduction is actually minutes from eight hours to -- Q. Can I take you to page 4 of that document under the heading "Proposed Changes". Do you have that? A. Mmm Q. Under the heading "Proposed Changes" No 1 shift blank. Apparently staff work in 8.5 hour shift with a hand over time of 30 minutes which may not effectively be utilised and is double the industry benchmarks for both age and acute care services. It is proposed to reduce the hand over by the introduction of 7.6 hour shifts. So 7 hours 36 minutes. Is that not a reduction by 54 minutes? A. No, what we're talking about there is the hand over which is a half hour, that was to be reduced to 15 minutes. Q. So it was going to be reduced by 20 minutes? A. In total? Q. In total. A. Yes. Q. So the surplus was 20 minutes per shift? A. Correct. Q. So it wasn't the position that was surplus, it was it 20 minutes per shift is what you consider to be surplus? A. Well, the full time position was surplus. Q. The proposal was it not was to delete that 20 minutes per shift? A. Correct. Q. Not to delete the position but to delete that 20 minutes per shift, that was the proposal? A. That's the proposal. 49 Mr Coupe accepted that staff continued to work a 38 hour week but did not accrue an RDO by working extra time each day. 50 Mr Coupe described a displaced employee as one occupying a position that is surplus to requirements. 51 Mr Coupe's evidence is that the positions will remain, with variation only to hours of work and entitlement to an RDO. The positions will continue on a 38 hour per week "full time" basis and the work will not alter. 52 Mr Coupe's evidence is that if the employees are declared displaced CRCC will recruit to fill the vacant positions. 53 Standards of care and compliance with Commonwealth accreditation standards have been subject to review and controversy over the period of this matter. 54 Mr Coupe accepted that an audit by the Aged Care Standards and Accreditation Agency on 27 March 2006 (Ex 17) found CRCC deficit in 22 of 44 criteria; this was subsequently reduced to deficiency in 10 items within one week. Mr Coupe deposed that an audit conducted on Friday, 14 July 2007 found compliance in all criteria. 55 Mr Coupe accepted that a significant amount of overtime was being worked, including a number of staff regularly working double shifts. 56 A contentious issue arising in the course of this matter is the operation of cl 10 of the Framework Agreement which forms part of the commercial arrangement between LCM and the Area Health Service. Clause 10 provides: 10. Employment/Redeployment Options: 10.1. Election to continue employment with either an AHS or a NGO. As bed numbers are reduced and/or beds are transferred SGNH staffing levels and structures will be subject to a process of ongoing review. As new structures are developed and as positions are identified as surplus, SGNH staff will be asked whether or not they want to be considered for placement in the new NGO structure, and if not. whether they are interested in being redeployed or offered voluntary redundancy. 10.2. The processes to be followed should be the subject of detailed consultation at the local level with the relevant joint consultative committee to deal with any local implementation/interpretation and transitional arrangements issues that may arise, including the establishment and operation of grievance handling procedures. Areas will not proceed with any arrangements which change the working arrangements of SGNH employees prior to or during the transitional process without consultation with the relevant union/s. 10.3. Where more than one person has expressed interest in being considered for a particular position in the new NGO structure a merit assessment will occur. 10.4. Where SGNH staff secure a position in, and agree to transfer to a NGO, the NGO shall provide employment for a period of at least 12 months on the same basis as currently employed, unless otherwise agreed in writing. 10.5. Election to not continue employment - options available for SGNH staff unable to secure a position in the new NGO structure or, not wishing to transfer to the NGO are: a) redeployment action : i) to similar health position in hospital or AHS. Priority of Employment in terms of Departmental Circular 96/16; ii) to other public sector agency (through the WMC - Workforce Management Centre); b) retraining to facilitate redeployment; c) consideration may also be given on an individual case by case basis to a contribution being made towards relocation and removal assistance if the circumstances warrant such assistance; d) voluntary redundancy in accordance with Departmental circular 96/16 as amended from time to time. 57 Mr Coupe deposed that this provision allows CRCC to make a unilateral decision declaring staff surplus, subsequent to which the Area Health Service is notified and is then obliged to accept the employees and discharges its obligation to manage them as displaced employees. 58 The Association and the Area Health Service contend that the identification of surplus staff pursuant to 10.1 is limited in the first instance to the transition phase in which employees were categorized as seconded or transferred. 59 Mr Coupe's evidence is that the contract for sale of Allandale to LCM required that during the transitional period CRCC "should determine its operational requirements" and as such review staff and determine its operational structure. 60 Mr Coupe put that the contract provided that where staff are identified as surplus LCM/CRCC will liaise with the Area Health Service in management of surplus staff. 61 Mr Coupe deposed that he has followed and applied the terms of the Framework Agreement. Attached to Mr Coupe's affidavit of 31 March 2006 (Ex 15, att. EC7) is a series of correspondence advising the Area Health Service of surplus employees which is put as example and precedent for operation of the Framework Agreement. The correspondence in EC 7 is: · 5 February 2004 - re seconded staff · 9 September 2004 - re two RNs identified as surplus · 12 October 2004 - re four AINs and one EN identified as surplus · 16 March 2005 - re one administrative/clerical employee identified as surplus · 19 April 2005 - re 13 cleaning and catering employees identified as surplus · 29 June 2005 - re recap of staff identified as surplus · 9 November 2005 - re surplus staff subject of current dispute 62 The correspondence of 5 February 2004 states: Re: Seconded Staff We hereby give you notice that Ms … RN and Ms … RN, following operational restructure at Calvary Retirement Community Cessnock, have expressed their intention to return to their employment with Hunter Health. Due to operational requirements, CRCC seeks to return Ms … RN and Ms … AIN to their employment with Hunter Health. These employees have not been offered full-time or part-time employment and due to operational requirements are no longer required by CRCC. In accordance with the State Government Framework Agreement would you kindly advise us of your requirements in relation to the return of these employees and notification to them of our agreed timetable and arrangements. E J Coupe Chief Executive Officer 63 The form and structure of correspondence is similar. It is appropriate to note that Mr Coupe has used the term "operational requirements" from February 2004, which supports his denial that he took the term from current Federal legislation. 64 Attachment EC 8 to exhibit 15 is a series of correspondence in reply to those found in EC 7, which reveals that each event, other than the current circumstances of dispute, was subject to successful consultation and outcome. 65 Attachment 8 to exhibit 15 includes an email reply to Mr Coupe's correspondence of 24 February 2005 from Mr Turner of the Area Health Service in the following terms: Peter R Devine has forwarded to me your letter of 24th February 2005 regarding the above. I will be handling this matter certain aspects of this matter on behalf of Hunter New England Health as my organisation (Patient Support Service) manages the great bulk of hospital assistants employed by the Health Service, and certainly those employed in the coalfields region of our Hunter Valley. As such I will co-ordinate the Health Service's reception and management of any 'surplus employees' who are Hospital Assistants - by reference to Schedule 11 - Transition Arrangements, clause 5.4 (c) of our contract with you. As such I would be grateful if you could provide me with: 1. a detailed progress report of the Working Party of the Staff Consultation Committee (which - I understand from your letter - will determine the final number of positions to be deleted, and therefore the seconded staff to return to Hunter New England). 2. Your best estimate of the time frame and key milestones for this process. 3. The names of the employees likely to be effected. The above information will assist me in preparing for the return of staff and minimization of costs and difficulty to all the parties. In any case I would expect a minimum of 30 days written notice of any employees seconded to Calvary who are no longer required due to operational reasons (as per Schedule 11 - Transition Arrangements, clause 5.4 (c) of the contract). and a response to the correspondence of Mr Coupe in respect to the present matters from Mr David Dixon, Director Workforce Development of the Area Health Service in the following terms: I have become aware of correspondence from yourself to Messrs Devine and Gordon concerning the potential displacement of 33 nursing staff from the Calvary Retirement Community Cessnock. In particular, your correspondence dated 9 November 2005 to Mr Peter Devine, advises that you are proceeding with plans to restructure the nursing service at Calvary. It is considered that this advice does not satisfactorily constitute the intent of the 30 days notice required by Schedule 11 Section 5, Clause 5.4 (c) of the "Transfer Agreement". Further, it is considered that the provision of such notice, in any event, does not obviate the need to genuinely consult with the Area Health Service in respect to issues associated with the proposed restructure and its subsequent effects on staff. Such consultation is, of course. necessary so that both parties may satisfy the ongoing diligence necessary to ensure that appropriate contractual provisions continue. Notwithstanding that CCRC has responsibility for determining its requirements, Hunter New England Health has not been advised of the nature of a restructure that would require displacement of 33 nursing staff at a time of nursing shortage, nor the circumstances that would lead to such action. As you point out in your correspondence, the staff affected are Hunter New England staff and as such the Area Health Service is obliged to satisfy itself that all its staff are provided equal opportunity. To that end, it would be appreciated if, as a matter of urgency, you would provide the Area Health Service with: 1) A detailed progress report of the consultative measures undertaken with the NSWNA in accordance with the State Government Nursing Home Framework Agreement. (SGNHFA) (refer Paragraph 10.2) 2) Advice as to the anticipated milestones of the restructure as negotiation with the NSWNA. 3) The criteria relied upon to determine the staff to be displaced. Note, that no formal displacement of staff has occurred by Hunter New England Health in the absence of formal discussion between CRCC and the Area Health Service. 4) Advice as to whether all Award provisions have been and will continue to be adhered to - in particular, in terms of hours of work - as a result of implementation of the proposed restructure. Hunter New England Health remains committed to working in cooperation with CRCC to satisfy existing transitional arrangements. To ensure a mutual understanding of the circumstances pertaining to the proposed nursing restructure an urgent meeting of appropriate representatives of CRCC and HNEH is considered essential. With that in mind, a meeting has been scheduled for 4 pm Wednesday 23 November 2005. The meeting will be held at Area Administration New Lambton in meeting Room 3. Could you please advise by close of business today 21 November 2005 whether you and your representatives will be in attendance. 66 Ms Danae Jenkins was employed as Director of Care at CRCC from 14 December 2004 and from October 2005 as Executive Director of Care with added responsibility for the LCM's Ryde facility. 67 In cross examination it was established that Ms Jenkins employment is subject to an agreement which affords her a wage in excess of the award rate, however, she received no additional remuneration when given responsibility for the Ryde facility. 68 Ms Jenkins' evidence is that she was the author of a discussion paper put to the Association and staff in August 2005 (Ex 18, attach. DJ 1) which she put set the background to restructure of CRCC and proposals for further restructure contemplated in late 2005. 69 Ms Jenkins deposed that the restructure contemplated for late 2005 arose from the cessation of transitional funding from the Area Health Service ceasing on or about 31 December 2005. Ms Jenkins deposed that the situation was exacerbated by delay in construction of a new hostel for 80 low care residents by approximately 18 months, which she put had a significant impact on the budget. 70 Ms Jenkins confirmed that Calvary operated as a 216 high care bed facility from 27 April 2005. 71 Ms Jenkins described consultation with officers from the Association from August to October 2005 which failed to find consensus, resulting in the instant proceedings. 72 Ms Jenkins' evidence is that is has never been the intention of CRCC to breach cl 2(iii)(b) of the Award, which provides: (iii) (b) Notwithstanding the provision of paragraph (a) of this subclause, employees may, with the agreement of the employer, work shifts of less than eight hours each over 20 days in each cycle of 28 days. 73 Ms Jenkins deposed that at all relevant times she sought to negotiate with the Nurses' Association and staff within the terms of the Award. 74 Ms Jenkins put that is was never the intention of CRCC to return staff to the Area Health Service. 75 In cross examination Ms Jenkins confirmed that ongoing high agency and casual employment had been a feature of the first two years of operation by LCM due to a shortage of staff. 76 Ms Jenkins deposed that the facility is not well placed geographically for people to travel from other places and some were reluctant to remain due to what Ms Jenkins described as a "troubled history" at Allandale. Ms Jenkins evidence is (TR pp 27, 28 of 24/7/06): A. It was never my intention to return staff to the Area Health Service and throughout all the discussions that we've held with both the Union and the Area Health Service, we made it clear that it wasn't our option to return staff, that's not what we wanted. What we wound up with was an extremely difficult position where financially we had great difficulty trying to get to an operational position financially. Q. Ms Jenkins, what you wanted was staff who worked under the conditions that you wanted, that is 38 hours spread over 20 days? A. That's right. Q. Or they were going back to the Hunter, that was the bottom line, wasn't it? A. Mr Dawson, what I wanted was to have a facility that could survive into the future, I've already shut a nursing home, I don't want to shut another one. Q. So you say that the cost of the nurses having an additional day off each twentieth day was important to the financial viability of the facility, is that correct? A. Yes, that's correct. 77 Ms Jenkins deposed that the Framework Agreement was not the subject matter of the discussion paper, putting that it arose during the course of discussion and negotiations. 78 Ms Jenkins deposed that when negotiation with the Association and staff failed to get agreement on reduction of hours from 8 to 7.6 per shift, the subject staff were identified as surplus which Ms Jenkins considered the only available option. 79 Ms Jenkins' evidence is that Mr Coupe advised the Area Health Service of surplus staff consequent upon her advice that the ongoing review of the nursing structure had been completed, the new structure developed, and it was appropriate to identify nursing positions as surplus. 80 This position is entirely inconsistent with that put by Ms Jenkins and Mr Coupe to a meeting of the Association on 8 September 2005. The minutes of that meeting, convened to discuss the nursing restructure, records the following question and response (Ex 19): (18) Will the staff members who are deemed surplus to requirements be redeployed in HNEHS? There will be no forced redeployments to HNEH. 81 Ms Jenkins deposed that procedures were initiated pursuant to the Framework Agreement, however, were not pursued by the Area Health Service. 82 Ms Jenkins deposed that following the filing of the notification in Matter No IRC 5780 of 2005 on 10 November 2005, CRCC has maintained the status quo insofar as employees identified as surplus continue to work at CRCC. Ms Jenkins put that CRCC reserves its right of recovery of the cost of these employees at CRCC from 9 December 2005. 83 Ms Jenkins deposed that on 12 January 2006 the Nurses' Association agreed that a reduced shift length for anyone who approached management for new contracts was acceptable. 84 Ms Jenkins deposed that a number of staff had sought new contracts to assist the financial viability of CRCC. 85 Ms Jenkins deposed that of the 33 employees initially identified as surplus, four registered nurses are now required for operational purposes and will remain on the 19 day month arrangement; two have resigned; seven have accepted the reduction in hours and given up their RDO pursuant to the award; two have agreed to new contracts and are now full time employees; leaving a total of 13. 86 In cross-examination by Mr Dawson, Ms Jenkins confirmed that the cost provisions, particularly losses incurred, was the impetus for change. 87 Ms Jenkins first deposed that the cost of 13 AINs having an RDO once per month was $50,000 per annum. Ms Jenkins ultimately accepted that the cost of the 13 remaining employees retaining their present arrangement, inclusive of an RDO unless they agreed otherwise, was less than $30,000 per annum; putting that every available reduction in cost should be achieved. 88 Dispute remained over the actual cost effect and no evidentiary material was provided to support the calculations advanced. 89 Ms Jenkins expressed some dismay that the Association took the position it did, deposing that she had expected their support in Calvary's efforts to have the Area Health Service extend funding to maintain the arrangements for employees, or accept cost reduction in the interest of viability of CRCC. 90 In cross examination Ms Jenkins deposed that filling the shifts vacated by staff taking an RDO incurred both cost and difficulty. Ms Jenkins' evidence is that shifts filled by casual employees incur the additional cost of the casual loading, and that agency staff, which are not always available, could cost up to twice that of direct employees. Ms Jenkins' evidence is that the RDO also poses difficulty in finding available staff which she deposed detracts from continuity of care, putting that the ideal is for residents to receive care from the same person. 91 Ms Jenkins' evidence is that the shift length of 8.0 hours worked to accrue one RDO per month includes a 30 minute handover time which she deposed, based on information from the LCM National Council Services Advisor, is double the private industry benchmark for acute care. 92 Ms Jenkins' evidence is that the majority of AINs are part time employees and that the 13 now subject to these proceedings are the only full time AINs remaining. 93 Ms Jenkins acknowledged that she was aware that nurses had foregone a wage increase to achieve the present 38 hour week arrangements inclusive of a 19 day month. 94 Ms Jenkins accepted that the employment rights of those people were protected by the Award and they would continue to work a 19 day month until or unless they agreed to change or they left and replacement employees were engaged on the basis preferred by CRCC. 95 Ms Jenkins rejected a suggestion from Mr Dawson that the 19 day month for remaining employees be phased out in a similar manner. 96 In cross examination by Mr Dawson Ms Jenkins confirmed that the central issue was one of cost and funding. Ms Jenkins deposed that following unsuccessful consultation with staff through the Association and failure to receive additional or continuation of funding from the Area Health Service the issues were brought to a head by declaring 33 staff displaced on 9 November 2005. 97 Ms Jenkins confirmed that she did not consider personal circumstances and did not further confer with staff through apprehension of allegations of bullying staff. 98 Ms Jenkins accepted that staff with long service, and consequently a skill base specific to Allandale, had no labour market mobility; and for those who had no capacity to travel to other locations, the demand of the employer to change hours was compelling. 99 Ms Jenkins confirmed that she did not make clear to those staff she encouraged to take up new contracts of employment with CRCC to work 38 hours per week over 28 days that being employed under the Nursing Homes, &c, Nurses' (State) Award they would not get a pay rise until the rates caught up with their rate of pay prior to undertaking the new contract as prescribed by the Public Hospital Nurses (State) Interim Award. 100 Ms Jenkins deposed that she gave no consideration to the effect on the superannuation status of these employees. In cross-examination Ms Jenkins put that she was unaware of where superannuation payments were going for these staff. Ms Jenkins put that she did not require these staff to resign their status as transferred employees, just work 7.6 hours per shift over 20 days in a 28 day period. 101 Ms Jenkins' evidence is that the consequent structure of staff at CRCC is that there are approximately 150 staff members; 50 percent, or approximately 75, are part time employees working 81/2 hour shifts; 13 AINs (subject to these proceedings) work a 38 hour week over 19 days; four RNs (formerly subject to these proceedings) work 38 hours per week over 19 days; approximately 20 staff who had accepted new contracts of employment working 7.6 hours per shift to total 38 hours per week over 20 days per month. 102 Mr Dawson questioned Ms Jenkins closely on the staff arrangement (TR pp 63, 64 of 24/7/06): DAWSON: Ma'am, having heard your evidence now about the fact that 123 or thereabouts of your 150 staff work an eight and a half hour shift, I come back to some of the previous questions I asked you and put it to you that it's really not about the shift length Ma'am is it, it's about the additional day off? That's what its about isn't it? A. It's about both. Q. It's about both, and if you can't implement one you can't implement the other then? A. That's right. Q. That's right? A. Yes, that's correct. No, that's not quite correct, because with new staff you can implement the shorter shift length because if they are part-time, they don't have an entitlement to an ADO anyway. Q. That's right and if they're part-time there are a number of other things they don't have entitlements to, that's correct as well isn't it? A. Yes. Q. Yes. So if these 13 agree, you'll have 110 staff working eight hour shifts and 30 working 7.6 hour shifts, that's right on your numbers isn't it? A. Yes, that's correct. Q. Won't you still have this terrible structural problem you talk about in paragraph 20? A. Yes. Q. Yes. You see, they're not surplus, Ma'am, are they? You'll have to replace them with other 38 a week workers won't you? A. Yes, if they return. Q. You'll replace them with 38 hour a week workers who will work that over 20 days, that's right isn't it? A. Yes, that's correct. Q. They're not really surplus to your operational requirements, because operationally at the moment, you're working with the overwhelming majority of your staff working eight and a half hour shifts, that's right isn't it? A. They are working eight and a half hour shifts at the moment. The full-time status is operationally surplus to what we can afford. Q. They will still be full-time, Ma'am. They won't be part-time if they work 38 hours over 20 days will they? A. No. Q. No. A. Their entitlement to an ADO is what's surplus. Q. Is that the plan long term though, Ma'am? To actually not have full-time staff? A. It's my understanding that an awful lot of aged care facilities have a difficult position in terms of trying to meet their budget, particularly those that are high care and only high care and it is a long term plan to not have staff entitled to a 19 day month. Q. It's also a long term plan to have part-time rather than full-time staff is that right? A. No, there's no plan to have part-time rather than full-time staff. The availability of hours is as a staff request. 103 In cross examination by Mr Kennedy Ms Jenkins accepted that the appropriate definition of displaced employee is that found in the Department of Health Circular (exhibit 13, supra). 104 Ms Jenkins deposed that the employees subject to this matter were displaced within the terms of the definition in that their full time positions are no longer required and that employees engaged to perform the duties in the positions vacated would be on shifts of a shorter duration. SUBMISSIONS 105 Mr Dawson submitted that the language of the Framework Agreement and the evidence of intent of the parties to it from Mr Holmes, Ms St Clair, Mr Murray, Mr Dixon and Ms McCosker lead to a conclusion that the purported restructure by CRCC does not invoke the terms of cl 9.1 of the Framework Agreement. 106 Mr Dawson put that the Framework Agreement was an agreement between the New South Wales Government and the relevant unions, including the Association, to provide protections and benefits to employees transferring to NGOs. The evidence is that NGOs were not party to the negotiations, however, did accept it as part of the conditions under which an NGO acquires State Government assets, property and employees to take over the operation of nursing homes. 107 Mr Dawson submitted that approached correctly in this manner the meaning of displaced employee is as defined in exhibit 13 which gives the following definition: Displaced employees are permanent employees or temporary employees to whom this circular applies, whose positions have been deleted. 108 There is acceptance that exhibit 13 is the current edition of Circular 96/16 referred to in cl 9.1 of the Framework Agreement. 109 Mr Dawson relied upon the evidence of Mr Coupe and Ms Jenkins to support his submission that the positions were not deleted by the purported restructure. 110 Mr Dawson referred to the evidence of Mr Coupe to the effect that the Framework Agreement provides no time frame for restructure. 111 Mr Dawson submitted that three main issues arise in this matter. The first he put derives from the language of the Framework Agreement, the second from the intent of the parties to it; and the third from the purported restructure of CRCC. 112 Mr Dawson emphasised that cl 9.1 of the Framework Agreement addressed "surplus state government nursing home staff" submitting that there is no difficulty in applying the ordinary meaning of "surplus" being that in addition to requirements. 113 Mr Dawson put that the language of cl 10.1 of the Framework Agreement provides an election for employees to continue employment with either an area health service or the NGO. 114 Mr Dawson submitted that the employees concerned in this matter are not SGNH employees who have an election to continue with an area health service or be placed in a new NGO structure as they have been employees of CRCC for some time and as such are currently placed within an NGO structure. 115 Mr Dawson relied upon the evidence of Mr Holmes and Ms St Clair to support his submission that the intention of the parties in establishing the Framework Agreement was to provide rights and safeguards to employees in the circumstances of reducing bed numbers necessary to comply with Commonwealth funding requirements, which required a reduction of 200 placements across NSW. 116 Mr Dawson submitted that the evidence of Mr Holmes (TR p26 of 10/07/06) established that a once only choice was available to employees to remain with an area health service or elect to take employment with an NGO, adding that the circumstance of continual restructure and subsequent elections to return to the Area Health Service was not contemplated. 117 Mr Dawson submitted that this is supported by the evidence of Mr Murray who deposed (TR p 44 of 10/07/06) that an unfettered return of staff to an area health service was never contemplated. 118 Mr Dawson submitted that the restructure purported by CRCC to activate the Framework Agreement was in fact an attempt to alter conditions of employment and not a change to the organisation structure of the business. 119 Mr Dawson supported this submission by reference to the evidence of Mr Coupe and Ms Jenkins to the effect that there were sufficient staff provided those staff agreed to work overtime, including double shifts, and could be supplemented with casual employees and agency staff. 120 Mr Dawson further relied upon the evidence of Ms Jenkins and the mention of a consultative meeting between CRCC and the Association (exhibit 18) which confirmed that under a new model of (resident) care there would be no forced redeployment to the Area Health Service. 121 Mr Dawson submitted that the evidence of Ms Jenkins in respect to shift length revealed that the desired model of care did not rely on a reduction in hours from 8.5 per shift to 7.6 per shift as the overwhelming majority of staff continue to work the 8.5 hour shift, albeit as part time employees. 122 Mr Dawson submitted that the changes proposed by CRCC, affecting only 27 of some 150 staff, could not be regarded as a "restructure". 123 Mr Dawson submitted that the evidence of Mr Coupe and Ms Jenkins concerning the conclusion of transitional funding from the Area Health Service and the hope by CRCC that the return of staff would provide additional funding further demonstrated that the proposals by CRCC could not be considered a bona fide restructure or as a genuine alteration of a model of care. 124 Mr Dawson submitted that the three year transitional phase from January 2003 to January 2006 advanced by CRCC did not allow for restructure during that period so as to activate cl 10 of the Framework Agreement. 125 Mr Dawson put that the evidence in respect to transition arrangements confirmed that the Framework Agreement was concerned only with the effect on staff of the reduction in bed numbers which was completed by April 2005 by reduction from 360 to 216. 126 Mr Dawson relied upon the evidence of Mr Coupe (TR pp45, 46 of 20/7/06) where he accepts a link between the operation of cl 10 and reducing the number of residents as that affects operation requirements of CRCC. 127 Mr Dawson referred to the evidence of Ms Jenkins that the final model (of care) emerged during 2006 to support his submission that on any analysis the changes sought by CRCC fell outside the three year transition period and most certainly came after completion of stage one, transfer of staff. 128 Mr Dawson submitted that the matters of seeking more funding from the Area Health Service and to "bring the matter to a head", as deposed by Mr Coupe and Ms Jenkins, were proof positive that what CRCC proposed was not a genuine or bona fide restructure of the organisation. 129 Mr Kennedy submitted that the Area Health Service did not resile from obligation to certain employees of CRCC in accordance with the Framework Agreement. 130 Mr Kennedy put that the obligation of the Area Health Service arose only when employees of CRCC are displaced in accordance with cl 9.1 of the Framework Agreement, adding that should the Commission determine that employees were so displaced, the Area Health Service would then manage those persons in accordance with cl 9.2 and 9.3 of the Framework Agreement. 131 Mr Kennedy submitted that the dispute may be distilled to the relatively simple and narrow question of whether the employees have been displaced or not. 132 Mr Kennedy submitted that the term displaced must be given the meaning defined in exhibit 13. 133 Mr Kennedy conceded that the Framework Agreement does not prescribe a specific time frame for operation, having on examination of the agreement and its practical affect, limits its duration. 134 Mr Kennedy put the same submission as Mr Dawson that cl 10 of the Framework Agreement has no application in the present circumstances, as the employees concerned have accepted positions with CRCC during phase one of the transition arrangements. 135 Mr Kennedy relied upon the evidence of Mr Murray (TR p 51, 10/7/06) to the effect that on signing the agreement the Department of Health did not expect it to have utility beyond two to three years; and the terms of cl 10 of the Agreement to support his submission that this aspect applies only prior to or immediately at the time of transfer of the facility from the State Government to the NGO. Mr Kennedy put that cl 10 does not apply to subsequent restructure of the NGO staff. 136 Mr Kennedy submitted that applied correctly and read in the context of intent and purpose, cl 9 is activated only in circumstances where the NGO ceases to operate, such as in the event of bankruptcy or loss of accreditation by failure to meet Commonwealth standards. 137 Mr Kennedy submitted that in addressing the question of whether an employee is displaced, it is necessary to first establish whether the position occupied has become redundant. Mr Kennedy put that in the event the position is redundant, the employee would be surplus to operational requirements. 138 Mr Kennedy submitted that the positions at CRCC have not become redundant, noting that 38 hours of work remain to be carried out in a different arrangement of hours by either the existing staff or alternate staff engaged to fill the positions should they be vacated by existing staff. 139 Mr Kennedy put that the term "displaced" as applied in the public sector had been subject to consideration by the Administrative Decisions Tribunal in Nesci v TAFE Commission of NSW (No 2) [2005] NSWADT 183; and by his Honour Justice Haylen in Jozef Banas v State of New South Wales [2003] NSWIRComm 317. 140 In Nesci the ADT applied the definition of a displaced person contained in a TAFE memorandum as "a person where position/job no longer exists due to a restructure or other administrative decision". 141 In Banas Haylen J proceeded on the basis that the applicant in that matter had become a displaced person when the centre in which he worked was closed, resulting in a number of positions being made redundant. 142 Mr Kennedy submitted that both Nesci and Banas are authority for the proposition that the term "displaced employee" is particular to the public sector and should be given its contextual meaning within the relevant government department, which in this matter is as defined in exhibit 13. 143 Mr Kennedy put that in this context the meaning applied to the phrase "displaced employee" is similar to that in Nesci and Banas in that the position of the employee must no longer exist for that employee to be displaced. 144 Mr Kennedy further submitted that it was not open to CRCC to make a unilateral decision to displace an employee or employees then notify The Area Health Service to invoke the Framework Agreement. 145 Mr Kennedy submitted that this is supported by the evidence of Mr Coupe (Ex 14, att. 7 and 8) and that of Mr Turner (Ex 10 at para 24) which demonstrate a considered consultative process to application of the Framework Agreement as opposed to the unilateral actions of one participant. 146 Mr Kennedy put that this position was reinforced by the evidence of Ms McCosker (TR p 6 of 20/7/06): Q. … …you wrote, "Agreement should be reached around the circumstances in which this would apply". What were you referring to? A. It says here, "Staff who have entitlement to the framework agreement who are subsequently displaced would revert to being Hunter Health employees". When I said that, there needed to agreement around the circumstances. There needed to be agreement that the positions were deleted and that the people that were returning to Hunter Health were actually surplus. 147 Mr Kennedy submitted that the Commission could not conclude that the employees of CRCC subject to these proceedings are surplus as the positions occupied had not ceased to exist or been deleted, nor had there been any agreement between the Area Health Service, CRCC, the Association and the employees to that effect, as was the case in other circumstances. 148 Ms Wearne submitted that the Framework Agreement must be considered in the context of the contractual arrangements between the employees who transferred from the Area Health Service to CRCC on or about 2 April 2003. 149 Ms Wearne referred to the letters of offer included in the s 84 applications which she submitted made employment with CRCC conditional upon the Framework Agreement in its entirety. 150 Ms Wearne also put that the Framework Agreement must be considered in the context of the transfer agreement between the Area Health Service and LCM, which she acknowledged is not itself in evidence. Ms Wearne submitted that there is sufficient unchallenged oral evidence from Mr Coupe and Mr Aleksandric of the transfer agreement for the Commission to be able to make the necessary determinations. 151 Ms Wearne encouraged acceptance of the evidence of Mr Murray who deposed was one of two people to draft the Framework Agreement. Ms Wearne directed me to Mr Murray's evidence (TR pp 47, 48 of 10/7/06) where she put Mr Murray properly put cl 9 in context with cl 10. Mr Murray's evidence is: Q. Right. We'll just continue with paragraph 10.1 "As new structures are developed", are you talking about - are you suggesting to the Commission that you're talking about buildings being developed? A. Effectively that was the main sense of that. Q. "And as positions are identified as surplus, SGNH staff will be asked whether or not they want to be considered for placement in the new NGO structure." Are you talking about the new building, do you want to be placed in that new building? Or do you think it was going to the actual structure of the NGO's requirements? A. In this sort of work, the basis of the staffing is based on the physical structure and we had some significant places that were staffed additionally to manage the poor quality of the structure. Q. So are there two concepts of structure referred to in 10.1? (No verbal reply) Q. I put it to you that it includes both the structural requirements of the business, as well as the physical structures that operate over time. A. I'd agree with you that the second last line in that paragraph is referring in a broader sense to the organisational structure, as well as the physical structure. … … Q. The options available to each of those employees. What do you say? A. Yes, 10.1 makes the general referral to the sort of things that are mentioned in 9.2. Q. Yes. So the reference in 10.1, you've agreed is referred back to 9.2 and the role of the Area Health Service in respect of the implementation was to fulfil the obligations that you articulated at 15(1), 2, 3 and 4 of your affidavit, wasn't it? A. For a limited period of time, yes. 152 Ms Wearne submitted that this evidence removed any doubt that cl 9 and 10 of the Framework Agreement should be read together. 153 Ms Wearne submitted that the operation of the Framework Agreement was not limited in time to preclude the present events. 154 Ms Wearne noted the evidence of Mr Murray that specific timeframes were intentionally omitted from the Agreement on the basis that different locations across the State would transfer in different circumstances and time frames. Ms Wearne put that the evidence of Mr Murray that the Department expected the Agreement to operate for no more than two to three years (from 2 April 2003) put the present events at CRCC, commencing 9 November 2005, well within the period of contemplated application of the Framework Agreement. 155 Ms Wearne submitted that there was support for this conclusion in the evidence of Mr Holmes and Ms St Clair who deposed that time frame or limit was put into the Framework Agreement or conveyed to or discussed with members of the Association as a relevant feature of the Framework Agreement. 156 Ms Wearne submitted that the evidence of Ms McCosker further confirmed that there is no time limit to the operation of the Framework Agreement and that, if employees are displaced the Area Health Service would apply the terms of the Framework Agreement. 157 Ms Wearne relied upon the evidence of Mr Aleksandric, Ms Jenkins and Ms McCosker in respect to an 18 month delay in construction of a new hostel at Allendale, which she put must be considered in determination of the relevant transitional period. Ms Wearne submitted that in all the circumstances it could not be held that the transitional period for operation of the Framework Agreement concluded in July 2005 as contended by Mr Kennedy. 158 Ms Wearne submitted that the evidence of Mr Coupe that the Framework Agreement allowed continuous restructure and consequential displacement represents the current interpretation of the Framework Agreement, which she put was a considered view by CRCC and its legal advisers. 159 Ms Wearne accepts that there is a transitional period for application of the Framework Agreement, which she put is fixed by reference to facts, budgets and revenues, and is presently ongoing. 160 Ms Wearne contended that CRCC properly offered employees a position in a new structure, albeit an unpopular one, thus affording employees the choice to accept or return to the Area Health Service. 161 Ms Wearne contended that a determination limiting operation of the Framework Agreement could be disadvantageous to employees in the future. 162 Ms Wearne relied upon the evidence of Ms McCosker whom, she put, did not constrain the application of the Framework Agreement in time, and had sent correspondence to the Association confirming that employees who transferred to LCM and maintained continuous employment would, if displaced, be managed in terms of the relevant Department of Health policy, meaning that re-deployment and salary maintenance would remain the responsibility of the Area Health Service. 163 Ms Wearne defended the approach taken by Ms Jenkins in pursuing continued contribution from the Area Health Service in the form of additional funding and/or redeployment pursuant to the Framework Agreement. 164 Ms Wearne submitted that Ms Jenkins was properly entitled to take this approach, having regard to correspondence from the Area Health Service on 3 November 2003 (Ex 15, att. 5) in which Mr Devine of the Area Health Service wrote: I write to clarify the status, pay and employment conditions of ex-Hunter Health staff who have taken up employment with Calvary Retirement Community Cessnock (CRCC). We agree with the spreadsheet attached to this letter being the spreadsheet you forwarded to me on 20th October 2003 and headed Calvarydetailsat15September2003.xls. This spread sheet is the prime document as we see it that all adjustments shall be made from. We have examined this spreadsheet and confirm that it reflects what we understand to be the employee's entitlements and the basis of the back payment. Specifically you have raised the following and we agree:- 1. Any employees who transferred effective 2 April 2003 from Hunter Area Heath Service (HAHS) to Calvary Retirement Community Cessnock (CRCC) and who were given temporary work by CRCC are considered by the parties as permanent employees. These employees will be attributed the appropriate classification as and from 2 April 2003. 2. Terms and conditions of employment in relation to employees referred to in point 1 herein will be maintained in accordance with the relevant public sector award. HAHS will pay CRCC the difference between the public sector rates of pay, all allowances, all entitlements, any other benefits as contained in the relevant public sector instruments as varied or amended from time to time. 3. The displaced employees referred to in paragraphs 9.1, 9.2 and 9.3 of the State Government Nursing Homes Framework Agreement (' SGNHFA' ) will be treated in accordance with the departmental circular 96/16 as amended from time to time. The cost of any redeployment or any redundancy in relation to any employee who is displaced pursuant to paragraphs 9.1, 9.2 and 9.3 of the SGNHFA is to be borne by HAHS. 4. The employees listed in the table below shall as and from 2 April 2003 have their entitlements maintained in accordance with paragraph 2 herein. 5. Please note: where 80 hours is indicated this is with an Accumulated Day Off and does not reflect paid hours. 165 Then followed a spreadsheet setting out the name of employees and the fortnightly hours worked. It is appropriate to note at this point that the entire arrangement preserved the accumulated day off not mentioned in Ms Wearne's submissions. 166 Ms Wearne submitted that in answering the question posed by the Association it is necessary and reasonable to take the operational requirements of CRCC into account. 167 Ms Wearne put that Allandale is the second largest aged care facility in the country, the restructure of staff and operations have been a continuous process from April 2003 to present, affected by a delay of 18 months to construction of a new low care hostel which has created financial difficulty and diseconomies of operation requiring further operational restructure exacerbated by the conclusion of financial support from the Area Health Service on 30 December 2005. 168 Ms Wearne submitted that the employees subject to these proceedings are not the only staff to be affected, putting that, apart from this dispute, the restructure in response to operational requirements has been a gradual and largely consensual process. 169 Ms Wearne reaffirmed that the structural change subject to consideration in this matter is the replacement of full time employment with part time employment. 170 Ms Wearne submitted that in all of the circumstances the employees subject to these proceedings are properly regarded as "displaced" employees as their refusal to move from full time employment to part time employment on cessation of full time employment removes them from the CRCC organisational structure, thus invoking the Framework Agreement. 171 In reply Mr Dawson put that there is no evidence to support the notion that the restructure was about abolition of full time positions in favour of part time employment. 172 Mr Dawson submitted that the exchange between Management, employees and the Association concerned only the election available under the Award to give the RDO. Mr Dawson relied upon the evidence of Mr Coupe and Ms Jenkins that if employees agreed to give up the RDO they would continue to work a 38 hour week. 173 Mr Dawson acknowledged that there is no time limit on the Framework Agreement, noting that employees continue to be members of the State Government Superannuation Scheme and come under public sector long service leave conditions until they leave the employment of CRCC or the relevant Area Health Service. 174 Mr Dawson reiterated that the provisions of cl 10 of the Framework Agreement are limited to the phasing in of the NGO. Mr Dawson relied upon the evidence of Mr Aleksandric to the effect that the three year transitional phase ended in December 2005, submitting that there is no evidence of an approach by LCM to extend the transitional phase due to delay or changed circumstances. 175 Mr Dawson submitted that the delay in construction and staffing of the hostel is irrelevant to the present proceedings as it will not be staffed by AINs pursuant to the awards subject to this matter. On the evidence the hostel will be staffed by other classifications pursuant to a different award. CONSIDERATION 176 In approaching the question put by the Association it is necessary to make certain determinations. 177 I find that the Framework Agreement continues to apply to the former employees of the Area Health Service employed by CRCC. The terms of the Framework Agreement do not impose a time limit in which the Framework Agreement will cease to apply. 178 I note the submission of Ms Wearne that the transition period is a matter of both time and circumstance. To the extent that this is affected by the delay in construction of the hostel, or whether it continues throughout the term of the employment of all former Area Health Service employees as advanced by Mr Dawson, is not material to these proceedings. 179 A central issue is whether the employees subject to these proceedings are displaced within the meaning of that term used in the Framework Agreement. 180 It is not disputed that if they are displaced they become the responsibility of the Area Health Service as surplus employees to be managed in accordance with the relevant terms. 181 Mr Dawson, supported by Mr Kennedy, submitted that the term "displaced" has a specific meaning in the public sector, as set out in exhibit 13. 182 Ms Wearne submitted that the ordinary meaning of the word should be applied and that refusal by employees to accept a position in a new structure as part time employees rendered their former position as full time employees redundant, and accordingly displaced. 183 This submission by Ms Wearne is not supported by the evidence of Mr Coupe or Ms Jenkins. 184 The evidence of Mr Coupe and Ms Jenkins supports a conclusion that identification of staff as surplus pursuant to the Framework Agreement was a strategy to force the Area Health Service and staff to a decision. The strategic purpose was to bring the issue of additional funding from the Area Health Service to a head and to force staff to a choice between agreeing to change hours pursuant to the Award or lose their position at CRCC. 185 It is not open to CRCC to use the Framework Agreement in this manner. The evidence of prior operation of the Framework Agreement does not support such an approach, nor does the language of the Framework Agreement. 186 I conclude that the term "displaced" as used in the Framework Agreement should be given the meaning defined in Department of Health Circular No 2000/78 of 5 October 2000 (Ex 13) referred to in the Framework Agreement. 187 It is clear upon the evidence that the work remains to be done and the employees could not be regarded as redundant. 188 The notion that the full time positions are redundant in a new employment structure contemplating only part time positions is no more than a device of convenience in an attempt to create a legal fiction designed to avoid the rights held by the employees pursuant to their award to work a 19 day month. 189 The right to a 19 day month or other arrangement by agreement is a material right, particularly having regard that the Award represents a consent arrangement arising from negotiations in which a wage increase was "traded" for the hours arrangement. 190 The intention of CRCC to achieve a 20 day month without agreement of the employees concerned, whether they are employed pursuant to the Public Hospital Nurses (State) Interim Award or the Nursing Homes, &c, Nurses' (State) Award, is an attempt to subvert operation of the industrial instruments and remove entitlements of employees by duress. 191 The question posed by the Association is decided in the manner contended by it. 192 The circumstances presented here do not invoke the Framework Agreement, which is not on any reading an avenue to avoid rights conferred by the Award or contract of employment. 193 I so determine. 194 These matters are listed for further proceedings at 10.00 am, Monday 6 November 2006 to determine final disposition. oo0oo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.