Industrial Relations Commission of New South Wales CITATION: Australian Medical Association (NSW) Limited (on behalf of Sarah Louise Esslemont and others) and Sydney South West Area Health Service, and other matters [2009] NSWIRComm 1093 APPLICANTS Australian Medical Association (NSW) Limited (IRC 813 and 841 of 2009) Richard Charles Fitzpatrick (IRC 1180 of 2009) PARTIES: Sarah Louise Esslemont (IRC 1181 of 2009) Peter Michael Nickolls (IRC 1182 of 2009) RESPONDENT Director-General, NSW Health in respect of Sydney South West Area Health Service FILE NUMBER(S): IRC 813, 841, 1180, 1181 and 1182 of 2009 CORAM: McKenna C CATCHWORDS: Unfair dismissal applications - threat of dismissal - industrial dispute re alterations to casual doctors' pay, conditions and rostering - evidence of threatened dismissal not established - alterations to rosters would not, in any event, amount to dismissals that were harsh, unreasonable or unjust - otherwise, established remuneration to be maintained - unfair dismissal applications dismissed - leave to relist for formalisation of any relief concerning remuneration LEGISLATION CITED: Industrial Relations Act 1996 s 84, 130 CASES CITED: The Director-General, NSW Department of Health, in respect of the Hunter New England Area Health Service and Australian Medical Association (NSW) Limited [2008] NSWIRComm 112 HEARING DATES: 17, 19, 21 August; 9 September; 16 October; 4, 11 November 2009 DATE OF JUDGMENT: 3 December 2009 APPLICANTS Ms F Hancock of counsel LEGAL REPRESENTATIVES: RESPONDENT Mr K Bennett of counsel DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES McKENNA C 3 December 2009 Matter No IRC 813 of 2009 AUSTRALIAN MEDICAL ASSOCIATION (NSW) LIMITED (ON BEHALF OF SARAH LOUISE ESSLEMONT AND OTHERS) AND SYDNEY SOUTH WEST AREA HEALTH SERVICE Application by the Australian Medical Association (NSW) Limited on behalf of its member Sarah Louise Esslemont and others re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 Matter No IRC 841 of 2009 COMMISSION OF ITS OWN INITIATIVE PURSUANT TO SECTION 130(2) AND SECTION 136(2) OF THE INDUSTRIAL RELATIONS ACT 1996 CONCERNING A MATTER TITLED: "NOTIFICATION UNDER SECTION 130 BY AUSTRALIAN MEDICAL ASSOCIATION (NSW) LIMITED OF A DISPUTE WITH SYDNEY SOUTH WEST AREA HEALTH SERVICE RE REDUCTION IN HOURLY RATE OF PAY" Matter No 1180 of 2009 RICHARD CHARLES FITZPARTICK AND DIRECTOR-GENERAL NSW HEALTH IN RESPECT OF SYDNEY SOUTH WEST AREA HEALTH SERVICE Application by Richard Charles Fitzpatrick re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 Matter No 1181 of 2009 SARAH LOUISE ESSLEMONT AND DIRECTOR-GENERAL NSW HEALTH IN RESPECT OF SYDNEY SOUTH WEST AREA HEALTH SERVICE Application by Sarah Louise Esslemont re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 Matter No 1182 of 2009 PETER MICHAEL NICKOLLS AND DIRECTOR-GENERAL NSW HEALTH IN RESPECT OF SYDNEY SOUTH WEST AREA HEALTH SERVICE Application by Peter Michael Nickolls re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2009] NSWIRComm 1093 1 Reduced to their basic elements, these matters concern a dispute about the conditions of employment of three doctors who are employed by the Director-General of the Department of Health in respect Sydney South West Area Health Service ("the respondent"). 2 The doctors in question, namely Richard Fitzpatrick, Sarah Esslemont and Peter Nickolls ("the applicants"), are presently employed by the respondent at Bowral Hospital's ("the hospital") Emergency Department as casual employees. It is common ground the applicants' employment is not the subject of any form of regulation by way of an industrial instrument and there are no formal, written contracts of employment between the respondent and the applicants. 3 The applicants' hours of work, remuneration and other conditions were, in the main, determined at a local level within the hospital. That is, the conditions under which the applicants had been working were determined by the former Director of the Emergency Department, Dr Peter Noonan. The evidence indicated the applicants were, until comparatively recent months, generally satisfied with the working arrangements that applied at the hospital. The dynamics of the employment relationship suffered some level of deterioration, at least so far as the applicants were concerned, as a result of changes the hospital effected unilaterally, or proposed to effect unilaterally, in relation to the applicants' settled terms and conditions of employment. In response to those concerns, the Australian Medical Association (NSW) Limited ("the AMA") filed an application, pursuant to s 84(3) of the Industrial Relations Act 1996 ("the Act") in relation to threatened unfair dismissal of the applicants (IRC09/813). The AMA also filed a related dispute notification under s 130 of the Act (IRC09/841). Given the decision of the Full Bench in The Director-General, NSW Department of Health, in respect of the Hunter New England Area Health Service and Australian Medical Association (NSW) Limited [2008] NSWIRComm 112 concerning the AMA's standing to bring proceedings before the Commission on behalf of its members who are employees (as opposed to proceedings on behalf of its members who are employers), the applicants individually filed unfair dismissal applications under s 84(1) of the Act (IRC09/1180, IRC09/1181 and IRC09/1182). Moreover, I determined, over the objections of the respondent, to act on my own initiative pursuant to s 130(2) of the Act in relation to the dispute the AMA had notified in IRC09/841. The principal objective of the relief sought by the applicants and the AMA is to preserve the applicants' established pay, conditions and rosters. 4 The various matters were heard concurrently. Ms F Hancock of counsel represented the applicants and the AMA. Mr K Bennett of counsel represented the respondent. Draft orders 5 Ms Hancock submitted it was appropriate that the following orders be made concerning the various matters before the Commission: 1. The Commission orders the employer not to dismiss Dr Sarah Esslemont, Dr Peter Nickolls and Dr Richard Fitzpatrick, pursuant to s 89(7) of the Industrial Relations Act 1996. 2. The Commission orders the reinstatement of Dr Sarah Esslemont, Dr Peter Nickolls and Dr Richard Fitzpatrick to the roster conditions and rates of pay (including public holiday rates of pay) that applied prior to the threat of dismissal being made, pursuant to s 89(8) or s 137(1) of the Industrial Relations Act 1996. 3. The Commission determines [pursuant to s 175 of the Industrial Relations Act 1996] that Policy Directive 2009_001 does not apply to Dr Sarah Esslemont, Dr Peter Nickolls and Dr Richard Fitzpatrick … 6 Serious efforts were made throughout the course of the proceedings to attempt to settle the differences between the parties. While some issues were resolved over the course of the arbitration by way, for example, of concessions by the respondent, agreement ultimately could not be reached on matters of sharp dispute related, principally, to guarantees of hours of work and remuneration. The policy directive 7 Shortly stated, the evidence indicated the applicants had worked at the hospital under settled working arrangements as long-term, casual employees. The settled nature of these arrangements was disturbed by two developments. First, following the resignation of Dr Noonan, the hospital's General Manager, Denis Thomas, adopted an approach to the applicants' conditions of employment which differed from the approach that previously had been adopted by Dr Noonan – and in ways the applicants considered unsatisfactory to them. Second, on 12 January 2009, the respondent issued a new policy directive titled Special Remuneration Rates Payable to Non-Specialist Staff – Short Term/Casual (Locum) – PE30/6/2012) ('the policy directive"). The hospital's management or the respondent, or both, initially took the view that the policy directive was applicable to the applicants. That was a highly contentious issue for the applicants given the fact the policy directive would have involved a significant reduction in remuneration if applied to the applicants. The applicants effectively were given the choice, Hobson's choice admittedly, of working under the terms of the policy directive or, in the alternative, applying for permanent positions within the hospital. The applicants were not given any option of remaining under their prevailing remuneration as casual employees. 8 The respondent conceded during the latter stages of the arbitration that the policy directive will not be applied to the applicants. That concession was, in my view, appropriately made. Nonetheless, to the extent that Ms Hancock pressed for a formal finding, notwithstanding the respondent's concession, that the policy directive does not apply to the applicants, I conclude that the directive does not apply to the applicants apropos their current positions – given the applicants' employment pre-dated January 2009 and they otherwise, clearly, were neither short-term casuals nor locums. Rosters 9 As casual employees, the applicants have worked regular and systematic rosters over their respective periods of employment at the hospital, relevantly since Dr Noonan settled a roster in January 2008. The applicants consider that, in the absence of their consent, the roster developed by Dr Noonan cannot unilaterally be altered by the respondent. Reliance was placed by the applicants on the content of that roster schedule in seeking the preservation of their existing roster patterns. It relevantly reads: Long-term medical roster preferences for Bowral [Emergency Department] The table shows core shifts which will be allocated each month until these preferences are changed by mutual agreement . This version is issued 1 January 2008. … [My underlining] 10 Mr Bennett submitted, by reference to emails Dr Noonan had sent to the various doctors concerning the roster he settled, that the meaning of "mutual agreement" was not agreement between the applicants and the respondent. He submitted the words appropriately should be characterised as mutual agreement with other doctors on the roster and that "changes could be made in the spirit of cooperation with respect to other doctors" as a sort of "team effort" in filling the rosters; and that there was nothing in the evidence to suggest the applicants had a contractual entitlement to guaranteed hours. In my opinion, this is a reasonably available construction, having considered the text of the communications. 11 One of the outcomes the applicants and the AMA seeks to achieve through these proceedings is, in effect, a finding by the Commission the shifts/hours the applicants hitherto have worked should remain unaltered, unless the applicants agree to any variation that may be proposed by the respondent; and, indeed, that the hours properly cannot be altered without the consent of the applicants. Ms Hancock referred to a number of cases, the principles of which I have considered but do not reproduce in this decision, to support the proposition that the respondent cannot legitimately unilaterally change the applicants' rosters or, otherwise, should be restrained by orders of the Commission from doing so. A central feature of the case advanced by the applicants and the AMA is that any proposed changes to the rosters would, in the particular circumstances of the applicants' employment, amount to threatened dismissals which would be harsh, unreasonable or unjust. 12 Ms Hancock submitted the evidence showed the respondent had threatened to dismiss the applicants by way of unilaterally varying their conditions of employment in terms of their roster conditions and their rates of pay, and no option was given to the applicants other than to apply for an award-cover ed position or to be employed under the policy directive. If the respondent had pressed the implementation of the policy directive in relation to the applicants, the applicants would have been entitled, in my view, to treat the proposed unilateral reduction of remuneration as a repudiation of the contract of employment - and elect to treat the respondent's conduct as terminating the employment relationship. However, as the respondent is no longer seeking to apply the policy directive to the applicants, the principal outstanding issue is the question of the rosters and remuneration issues other than the ordinary hourly rate of pay. 13 Having considered the evidence and the submissions, I doubt the jurisdiction of the Commission has been enlivened in relation to the unfair dismissal applications made under s 84(1) of the Act in IRC09/1180, IRC09/1181 and IRC09/1182 (and IRC09/813, covering the same issues, was probably defective in as much as it was filed by the AMA on behalf of employee members). That is, the evidence would not lead me to conclude dismissals or threats of dismissal have crystallised, at least at this time. As Mr Bennett submitted, no decision has been made to remove the applicants from their rosters; indeed, the evidence indicated the respondent had been prevailing upon the applicants to undertake additional work rather than less work. 14 Of their nature, applications concerning threatened dismissal typically are pre-emptive. It is, at this stage, nonetheless speculative as to what changes, if any, the respondent may propose in relation to the applicants' rostering arrangements in response to the restructuring and recruitments that are underway; and whether, for example, any changes that may be proposed by the respondent in the future would, in any event, be regarded as contentious by applicants, individually or collectively. As such, I doubt whether it properly would be open to me to purport to make any orders in the applicants' favour under s 89(7) or s 89(8) of the Act of the type proposed by Ms Hancock in relation to, for example, payment for overtime and public holidays. Those sections provide as follows: 89 Orders for reinstatement, re-employment, remuneration, compensation … (7) Threat of dismissal In determining a claim relating to a threat of dismissal, the Commission may order the employer not to dismiss the employee in accordance with that threat. (8) An order under this section may be made on such terms and conditions as the Commission determines. 15 If, however, I am wrong in my view that the evidence does not support a conclusion that the applicants have been (constructively) dismissed or are currently under any threat of dismissal such as to enliven the Commission's order-making jurisdiction under Ch 2 Pt 6 of the Act, I turn to consider whether a proposal by the respondent to disturb the present shift arrangements, in the absence consent by the applicants, would amount to dismissals or threats of dismissal that relevantly could be characterised as being harsh, unreasonable or unjust. 16 The evidence indicated Mr Thomas, and Dr Noonan before him, has encountered difficulties in properly filling all shifts at the hospital's Emergency Department. These difficulties cannot be attributed, on any reasonable view of it, to the applicants. The evidence indicated the applicants (in conjunction with their colleagues) have adopted a flexible and collegiate approach to attempting to ensure rostering needs at the hospital are met, subject to matters such as being given adequate notice and having reasonable regard also to their own pre-existing personal and professional commitments when called upon to perform additional work. Despite the goodwill of the applicants in attempting to assist in meeting additional rostering needs at the hospital and working overtime, there have been problems in maintaining the roster requirements with the existing staffing arrangements. Put simply, there is a short-staffing problem at the hospital concerning doctors and there have been difficulties in filling the rosters even through the engagement of locums. Attempts by the respondent over the years to attract additional doctors to apply for positions at the hospital have not been particularly fruitful. The short-staffing problem was exacerbated by the resignation of Dr Noonan, who used to work considerable overtime in the Emergency Department to address staffing shortfalls on the roster. 17 The respondent has determined to restructure its staffing establishment at the hospital to attempt to address the problem of shortfalls on the roster. Among other matters, the respondent had sought to recruit doctors as permanent employees at the hospital. The applicants were invited to apply for positions as permanent employees, but, for the variety of reasons described in their evidence, have declined to do so. 18 The applicants hold not unreasonably-based expectations that one of the outcomes of changing the mix of casual and permanently-employed doctors may involve proposals by the hospital to vary the existing rosters. Indeed, Mr Bennett submitted the position of the hospital is that in the event permanent doctors can be employed, it may be anticipated there would be a reduction in the amount of casual hours available to the applicants – but, on the other hand, it is equally possible there may be no impact at all. Ms Hancock squarely submitted that if the general rosters are to be changed as a result of the appointment of permanent doctors, the applicants' existing rosters should be treated as entrenched, and should not be varied other than by mutual agreement. Ms Hancock submitted any rostering/re-rostering of other doctors employed at the hospital should, in effect, back-fill around the applicants' existing rosters; and that the applicants should not be "punished" by changes to their rosters because of the administrative difficulties the hospital has encountered with vacant shifts on the roster. 19 I have not been persuaded that a proposal (should any such proposal occur) by the hospital's management to change the applicants' rosters or to vary or reduce the hours or number of shifts offered to the applicants as a direct corollary of restructuring the number of permanently-employed and casually-employed doctors to ensure the roster is adequately staffed ought, without more, be characterised as dismissals or threatened dismissal that would be harsh, unreasonable or unjust. The reasons for recruiting permanently-employed doctors and changing the rostering (if it transpires that changes adversely affecting the applicants are, in fact, proposed by the hospital in the future) seem, on the evidence, to be legitimately-based managerial responses to the difficulties in staffing the roster. It is understandable the applicants wish to maintain the existing rostering and why they consider they are entitled to maintain the status quo. However, the evidence indicated the hospital has been taking steps to attempt to address a genuine problem in adequately staffing the rosters. If the shifts the applicants customarily have worked are affected adversely following the appointment of additional, permanent staff, I consider any loss of hours or shifts appropriately might be characterised as something akin to a bona fide redundancy so far as the performance of those shifts/hours by casual doctors is concerned, rather than amounting to dismissals/threats of dismissal by the respondent that are requisitely harsh, unreasonable or unjust. 20 I do not consider the applicants' existing casual rosters reasonably could be treated as immutable in circumstances where the respondent may propose changes designed to address difficulties with the roster. Nor do I consider it would be reasonable to expect that offers of employment the hospital may make to permanent employees as to their days and hours of work effectively should be subject to the constraints of preserving the applicants' existing casual rosters, long-standing though those arrangements may be. The proposition that casual employees' rosters might be altered or lost in response to legitimately-based changes in staff establishment involving the recruitment of additional permanent employees does not seem to me to be a remarkable industrial proposition. In short, I have not been satisfied roster changes that may be proposed by the respondent concerning the applicants' existing rosters in response to the need, established on the evidence, to adequately staff the roster would amount to threats of dismissal that are harsh, unreasonable or unjust. 21 Obviously, if the respondent proposes to effect any changes to the roster, any proposals that may affect the applicants should be canvassed thoroughly with them. Moreover, if roster changes are proposed, it would be only fair and reasonable to give the applicants reasonable notice. Other conditions of employment 22 Conditions of employment other than hours were in dispute, including the payment for public holidays and the authorisation arrangements to apply to payment for overtime. Ms Hancock advanced a case which persuasively contended that the applicants' conditions of employment, considered in the context of common law principles applicable to the contract of employment, were those which had applied as a result of the agreements reached with Dr Noonan – notwithstanding the propositions in the respondent's case the agreements brokered with Dr Noonan were made by him without proper authority or delegation. In circumstances where there was no industrial instrument or contract specifying the applicants' pay and conditions, it would seem to have been within Dr Noonan's authority to strike rates which were competitive, and which would attract and retain casual doctors. One way or the other, I consider, as matters of fairness and equity, the settled terms of the arrangements put in place by Dr Noonan should be those properly to be applied to the applicants' pay and conditions. The applicants should not be expected to suffer any cuts in remuneration. In so concluding, I am also cognisant of the submissions by Ms Hancock advocating a case that the preservation of rosters and rates of pay needed to go hand-in-hand, because the applicants may be disadvantaged by way of being "priced out of the market" because of the differentials in rates applicable to locums and short-term casuals under the policy directive, and permanent, award-covered employees, as opposed to the rates that apply to the applicants. 23 Having expressed my views concerning the maintenance of the applicants' pay and conditions under the arrangements reached with Dr Noonan, I grant leave to seek a relisting for further submissions as to the form of recommendation, direction, order, etc, pursuant to s136(1) of the Act – should any further formalisation be considered necessary. General 24 A concern advanced by the applicants was that if the rosters were changed, any changes may have the potential to conflict with other personal and professional commitments, such as positions at other hospitals. There was evidence the applicants perceived there was an expectation from the hospital that all other commitments would have to give way to the priority of meeting the hospital's staffing needs, irrespective of the applicants' other personal and professional commitments. Indeed, there was evidence of the applicants being given inadequate notice of requests to perform work additional to their usual rosters. I did not accept the characterisation in parts of the respondent's case suggesting there was unreasonable unwillingness on the part of the applicants to assist in filling the roster. The evidence could lead to a contrary conclusion, namely, that the applicants were feeling "harassed" by requests to perform additional work on unreasonably short notice or under conditions which were inferior to those that had applied previously. As noted earlier, the applicants have demonstrated a flexible and collegiate approach to performing work in the Emergency Department – more particularly when considered in the context of an industrial environment where they were being told they would be expected, for example, to accept pay cuts. 25 There is a clear mutuality of interest, based on the evidence and submissions, between the parties in preserving the employment relationships. The local management at the hospital will, self-evidently, need to act reasonably and responsibly in relation to any proposed roster changes should there be a wish, as the respondent's submissions forcefully contended, to preserve an ongoing employment relationship with the applicants. For example, a reasonable approach would be to attempt to roster in accordance with the applicants' stated preferences and otherwise responsibly around the applicants' known commitments. 26 It clearly would be unreasonable for the respondent to expect the applicants to be available for rostered work at the hospital on days of the week when the applicants are known already to have established professional commitments beyond their employment at the hospital; or where any rostering would, for example, involve working unreasonably long hours, such as back-to-back shifts, whether at the hospital or elsewhere; or where, for example, rostering would unreasonably impact on the applicants' private commitments or family responsibilities. I note the submissions of Mr Bennett that the respondent is not about to embark on a process which is destructive of the working relationship. The evidence indicated that, until comparatively recent times, rostering and the performance of additional work was approached consensually by the parties, as reasonably should be expected. I would trust that reasonableness will resume following the deterioration that has unfolded in the hitherto good working relationships, accepting Mr Bennett's submissions as to a genuine commitment from his client to preserving constructive working relationships with the applicants. 27 In conclusion, I recommend the parties enter discussions with a view to documenting the applicants' core pay and conditions of employment, to attempt to give some greater certainty to such matters in the interests of the applicants and the respondent alike. I also recommend further discussions be held concerning the status of the applicants' long service leave entitlements, in the event they elect to apply for permanent positions at the hospital (that possibility was not discounted). Last, should the applicants elect to apply for permanent positions at the hospital as award-covered employees, the parties may wish to consider the provisions of Ch 2 Pt 5 of the Act concerning permanent part-time work agreements. Orders 28 I make the following orders: 1. The unfair dismissal applications brought by the AMA in IRC09/813, and the applications brought by the applicants individually in IRC09/1180, IRC 09/1181 and IRC09/1182 are dismissed. 2. Leave is granted to apply for a re-listing for the formalisation of any orders etc., in IRC09/841. Any such application should be made by 9 December 2009. If no application is made by 9 December 2009, I propose to close the file in chambers in 10 December 2009. ___________________ 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.