Australian Medical Association (NSW) Limited v The Director-General, NSW Department of Health, in respect of the Hunter New England Area Health Service

Health Services Act 1997 LEGISLATION CITED: Industrial Arbitration Act 1940 s 74(2)(b) Industrial Relations Act 1991 ss 108(1)(c), 181 Industrial Relations Act 1996 ss 3(d), 3(g), 6, 6(2), 11(4), 130, 130(2), 135, 136, 136(2), 222

Burwood Cinema Limited and Others v The Australian Theatrical and Amusement Employees' Association (1925) 35 CLR 528 Employers' Federation of New South Wales v New South Wales Nurses' Association and Others (1995) 64 IR 194 In Re Iron and Steel Works Employees (Australian Iron & Steel Ltd - Port Kembla) and Steel Works Employees (Broken Hill Proprietary Company Limited) Awards [1956] AR (NSW) 566 Nagle (T/as WD & JL Nagle & Sons) v Tilburg & Anor (1993) 51 IR 8 Public Service Board (NSW) v Public Service Assn (NSW) (1986) 14 IR 445 CASES CITED: Re Laundry Employees (State) Award (No 2) (1993) 49 IR 91 Re Solicitors (State) Award (No 3) (1996) 72 IR 225 The Jumbunna Coal Mine, No Liability and another v The Victorian Coal Miners' Association (1908) 6 CLR 309 The Queen v Aird; Ex parte The Australian Workers' Union (1973) 129 CLR 654 The Queen v Portus and Another; Ex parte McNeil (1961) 105 CLR 537 Virtue v New South Wales Department of Education and Training (1999) 92 IR 428

APPLICANT/ RESPONDENT ON THE MOTION Ms F J Hancock of counsel Industrial Officer: Ms S Bennett Australian Medical Association (NSW) Limited LEGAL REPRESENTATIVES: RESPONDENT/APPLICANT ON THE MOTION Mr I Taylor of counsel Solicitor: Ms E Wilson Maddocks Lawyers

Australian Medical Association (NSW) Limited v The Director-General, NSW Department of Health, in respect of the Hunter New England Area Health Service

Notification under s 130 of the Industrial Relations Act 1996 by the Australian Medical Association (NSW) Limited of a dispute with the Hunter New England Area Health Service re introduction of new policy for staff specialists

1 On 23 July 2007, the Australian Medical Association (NSW) Limited ('AMA') notified the existence of an industrial dispute pursuant to s 130 of the Industrial Relations Act 1996. The notification advised that the "question, dispute or difficulty concerns the following industrial matters":

1. The Hunter New England Area Health Service and New South Wales Health have unilaterally introduced a new policy whereby doctors employed as Staff Specialists in a given hospital cannot also be engaged as Visiting Medical Practitioners (VMP's/VMO's) in another hospital if those two hospitals are within the one Area Health Service.
2. This is causing difficulty to our members who are employed as Staff Specialists in one hospital and hold VMP contracts in another hospital within the one Area Health Service.
3. This is a unilateral change to the conditions on which the doctors can be engaged and affects the ability of the doctors to offer services to hospitals within the one Area Health Service.
4. The change seems to have come about as a result of the merging of a larger number of smaller Area Health Services into a smaller number of larger ones in recent times.
5. The notifier does not see why the merging of Area Health Services should allow the Area Heath Service and NSW Heath to unilaterally alter the conditions on which the doctors can be engaged.
6. The notifier is concerned that this change to the way the doctors can be engaged may result on [sic] a risk to the public in that medical services will not be provided to as broad a range of hospitals as they once were, due to the restrictions placed on doctors as a result of this new 'policy'.
7. The Area Health Service has further informed Dr Thambar that in order to remain providing services to Tamworth Hospital, he will be engaged as a staff specialist at Tamworth Hospital, where he previously held a VMO contract. The Area has indicated that they are able to do this in accordance with the Work Location Clause contained in the Staff Specialists' Award. The Notifier believes that the Work Location clause does not cover this situation, as the travel distance between the two hospitals (from John Hunter in Newcastle to Tamworth) is unreasonable.
8. Dr Thambar has a VMP/VMO contract that has expired. The notifier seeks that a temporary VMP contract be offered until this dispute is resolved.
9. The notifier seeks an Order from the Commission that this new policy be abandoned by the Respondent, and that the doctors continue to be able to hold Staff Specialist and VMP/VMO contracts in different hospitals within the one Area Health Service.
10. Any other orders that the Commission sees as appropriate.

2 The matter notified came before the Commission on 31 July 2007 and again on 7 August 2007 for the purpose of attempting to resolve the matter by conciliation (see ss 133 and 134 of the Act). Those attempts were unsuccessful and a timetable was established for the filing and service of material to enable the Commission to resolve the matter by arbitration (see ss 135 and 136 of the Act). 3 On 12 October 2007, the Director General, New South Wales Department of Health, in respect of the Hunter New England Health Service ('the respondent'), filed a notice of motion seeking an order that the proceedings in this matter be dismissed. The grounds and reasons in support of the motion were as follows: 1. The Applicant, a registered organisation of employers: 1.1 has no right to represent the industrial interests of doctors employed by the Respondent;

1.2 has no standing to notify an industrial dispute in respect of conditions of employment of doctors employed by the Respondent;

1.3 cannot be a party to any industrial dispute in respect of conditions of employment of doctors employed by the Respondent; and

1.4 has no standing to seek any Orders in respect of conditions of employment of doctors employed by the Respondent. 2. To the extent that the alleged dispute is as to conditions or preconditions in respect of the engagement of a doctor or doctors as independent contractors, that is not an industrial dispute within the meaning of the Act.

3. The Commission has no jurisdiction to deal with a dispute concerning the conditions upon which a doctor is engaged as an independent contractor nor a dispute as to the failure to renew a non-employment contract.

4. The Commission does not have the power to grant the relief sought by the Applicant.

5. Further or in the alternative, the Applicant has not identified any relief that the Commission has the power to grant. The issues

4 The respondent identified, and the Commission accepts that, the issues to be determined are: a. Whether the Applicant, the Australian Medical Association (NSW) Limited, an organisation of employers, can notify an industrial dispute in respect of persons, namely employed doctors, who are not eligible to be its members in their capacity as employees;

b. Whether there can be an industrial dispute as to conditions of work for independent contractors;

c. Whether the Commission has power to determine proceedings by issuing a "direction" pursuant to s 136(1)(a); and

d. Whether s 136(1)(d) is an independent source of power. 5 In relation to these issues the respondent contended: · There can be no industrial dispute with the applicant as a party in respect of employed doctors. · A dispute as to conditions afforded to independent contractor doctors is not an 'industrial dispute'. · There is no relief that could be granted by the Commission. 6 In support of its case the respondent tendered an affidavit of Ms Erin Rebecca Wilson, solicitor, annexed to which was a copy of the AMA's Certificate of Registration, a copy of the AMA's Constitution and correspondence from the respondent's solicitor to the AMA. Additionally, the respondent tendered a folder that contained various correspondence between the parties. 7 The AMA vigorously contested the respondent's contentions. The nature of the proceedings

8 The Commission is here dealing with a strike out motion. The principles to be applied are set out in Nagle (T/as WD & JL Nagle & Sons) v Tilburg & Anor (1993) 51 IR 8 and Virtue v NSW Department of Education and Training (1999) 92 IR 428. One of those principles is that all issues arising should be dealt with in the substantive proceedings unless the basis for a challenge, either on jurisdictional grounds, or for lack of a reasonable cause of action, be clearly demonstrated. A further principle is that refusal of relief at the threshold will not finally determine that jurisdiction exists for any order that the Commission might make between the parties. This is because, to secure relief, the claimants must demonstrate that no order could be made which would be within jurisdiction. The resulting burden is a heavy one: see Virtue at 447-448. Consideration

9 The allegation in the AMA's dispute notification was that there had been a unilateral introduction by the Hunter New England Area Health Service and NSW Health of a new policy whereby doctors employed as staff specialists in a given hospital cannot also be engaged as Visiting Medical Practitioners (VMPs) in another hospital if those two hospitals are within the same Area Health Service. The AMA seeks an order that this new policy be abandoned and that doctors continue to be able to hold staff specialist and VMP contracts in different hospitals within the one Area Health Service. 10 The respondent's argument was that the AMA is registered as an organisation of employers and as such it can have no interest in representing employee interests. It was submitted that the Commission would not find that there is any industrial dispute in respect of employment conditions of employed doctors because, notwithstanding the purported notification of a dispute, there was no evidence of such an industrial dispute before the Commission. Counsel for the respondent contended that an industrial dispute required there to be parties in dispute; whilst the AMA may have concerns, those concerns must only be concerns in respect of its members who are employers. It cannot be in dispute with the respondent in respect of employment conditions of doctors, as it did not represent doctors in their capacity as employees. In other words, the AMA was not capable of notifying an industrial dispute in respect of employment conditions of doctors employed by the respondent. 11 The AMA is undoubtedly registered as an industrial organisation of employers under Ch 5 of the Industrial Relations Act. Clause 4 - Objects of the AMA's Constitution, provides that the objects of the Association include: … (i) To act as an association of employers and to represent the interests of the Members before any court, tribunal, committee or other body dealing with industrial relations or other industrial matters affecting its Members and to obtain registration under any Commonwealth Act or State Act, or under any law in force in a Territory being part of Australia relating to the settlement of industrial disputes. … (n) To consider any subject connected with appointments of medical persons to public institutions positions and services.

(m) To consider any question of medical policy. … 12 Clause 10 of the AMA's Constitution provides that the following individual is eligible to be an Ordinary Member of the Association: (a) Any individual resident within the Area of the Association who is a Registered Medical Practitioner and who in his or her capacity as a Registered Medical Practitioner, is an employer or has the potential to be an employer.

The "Area of the Association" is defined in cl 9 of the Constitution as New South Wales. 13 The respondent's contention that no industrial dispute exists because the AMA cannot represent doctors in their capacity as employees is to take too narrow a view of the standing of an organisation registered under the Act and of the Commission's powers. 14 Industrial organisations are central to the operation of the Act. One of the Act's objects is to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies (s 3(d)). Industrial organisations also have a key role in the resolution of industrial disputes. 15 An industrial organisation of employers or employees registered under the Act is not a mere agent of its members but rather a party principal: Public Service Board (NSW) v Public Service Assn (NSW) [1986] 14 IR 445 at 450-451. See also Employers' Federation of New South Wales v New South Wales Nurses' Association and Others (1995) 64 IR 194 at 198 where it was held that the industrial interests of industrial organisations may extend beyond the particular rights and obligations impacting directly on members. These precepts have not changed under the 1996 Act. Importantly, s 222 of the Act provides that upon registration under Ch 5, a State organisation is a body corporate, has perpetual succession, has power to have dealing with any real or personal property, is required to have a corporate seal, and may sue or be sued in its corporate name. 16 Moreover, the policy considerations enunciated by Starke J in Burwood Cinema Limited and Others v The Australian Theatrical and Amusement Employees' Association (1925) 35 CLR 528 at 549-551 to the effect that industrial organisations to be effective must have the right and authority to act on their own account, still hold good.

17 That is not to say industrial organisations are not subject to limits in acting in their own right. Cases decided under the Industrial Arbitration Act 1940 and the Industrial Relations Act 1991 have generally taken the view that in order to participate in proceedings under the Act an industrial organisation has to be able to demonstrate a sufficient interest in the proceedings and their outcome (see Re Laundry Employees (State) Award (No 2) (1993) 49 IR 91 at 99-101, which was a decision made in the context of statutory provisions which, for example, required that an industrial organisation had to have members bound by an award in order to notify a dispute: see s 181 of the 1991 Act) or, in the case of applications for awards, the relevant statute required that an award could be made only on the application of an industrial organisation where that organisation had one or more members in the industry concerned (see s 108(1)(c) of the Industrial Relations Act 1991 and Re Solicitors (State) Award (No 3) (1996) 72 IR 225 at 240; s 74(2)(b) of the Industrial Arbitration Act 1940 and In Re Iron and Steel Works Employees (Australian Iron & Steel Ltd - Port Kembla) and Steel Works Employees (Broken Hill Proprietary Company Limited) Awards [1956] AR (NSW) 566 at 569-570).

18 That an industrial organisation must show a sufficient interest in order to apply for an award continues to be a requirement under s 11(4) of the 1996 Act, which provides: (4) An applicant for an award, or to become a party to the making of an award, is required to satisfy the Commission that it or any one or more of its members has a sufficient interest in the proposed award.

19 This may be contrasted with s 130 of the Act, which provides, inter alia, that an industrial organisation of employees or employers may notify the Commission of an industrial dispute for the purpose of resolving the dispute. No qualification is placed on the standing of such an organisation to notify a dispute, unlike its predecessor provision in s 181 of the 1991 Act. It is not, for instance, a requirement that the organisation has members or persons eligible to be members, involved in the dispute or even that it has a sufficient interest in the dispute. This may be explicable by the central role of industrial organisations in the scheme of the Act and the public policy considerations in facilitating the notification of industrial disputes to the Commission, regardless of who the parties are to the dispute, in order that they may be resolved "in a prompt and fair manner and with a minimum of legal technicality": s 3(g). 20 However, even if it is a requirement for an industrial organisation to demonstrate a sufficient interest in a dispute in order to have standing to notify it to the Commission, it seems to me that the AMA has done so in this case. There does not appear to be any issue that the AMA notified the dispute out of a concern that the implementation of a new policy by the relevant Area Health Service was having a detrimental impact on its members who are employed as staff specialists in one hospital and hold VMP contracts in another hospital within the one Area Health Service. That is to say, the AMA has members who are involved in a dispute with the respondent. 21 An industrial dispute is defined in the Dictionary to the Act as follows: industrial dispute means a dispute (including a question or difficulty) about an industrial matter, and includes the following: (a) a demarcation dispute,

(c) a situation that is likely to give rise to an industrial dispute if preventative action is not taken. 22 "Industrial matter" is defined in s 6 of the Act and means "matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry." Examples of industrial matters are provided in s 6(2) of the Act and include: (h) the established customs in any industry.

The AMA contended that it was an established custom that doctors who are employed as staff specialists in one hospital may hold VMP contracts in another hospital within the one Area Health Service. If it be the case that such a custom exists, the respondent is seeking to terminate it. 23 On the face of it, there exists an industrial dispute within the meaning of the Act and, in my opinion, the AMA, as an industrial organisation, had standing to notify the Commission of that industrial dispute for the purpose of resolving the dispute. 24 The respondent, nevertheless, contended that the AMA was not a party to the dispute because it could not be in dispute with the respondent in respect of employment conditions of doctors, as it could not, under its Constitution, represent doctors in their capacity as employees. As it could not represent the doctors, it was contended the AMA could not obtain any relief for those doctors that might otherwise have been available under the Act. 25 That the AMA is an industrial organisation of employers seeking to represent the interests of doctor/members who are employees of the Area Health Service gives rise to an unusual situation. It is brought about by the fact that doctors who are the subject of the dispute may be VMPs and in that capacity are employers or have the potential to be employers, but at the same time the Area Health Service employs them as staff specialists. 26 Whilst this is an unusual situation in the context of the representational role of industrial organisations it is, nevertheless, one of longstanding and, as far as the Commission is aware has not been the source of any difficulty in the past. However, if one were now to accept the respondent's contentions, it would mean that the AMA could represent the doctors if the dispute concerned the terms and conditions of work in respect of medical services provided by the doctors in the capacity as VMPs (but only pursuant to the terms of the Health Services Act 1997), but the Association could not represent its members before this Commission in their capacity as employed staff specialists.

27 It seems to me that if the respondent contends that the AMA may not represent doctors employed as staff specialists, the respondent has to show that such doctors are ineligible for membership of the AMA. Conversely, if such doctors are eligible for membership of the AMA, I am unable to see any obstacle to that Association representing its members in dispute proceedings under the Act. 28 What the AMA may do under its Constitution, consistent with the objects of the Association, is "represent the interests of the Members before any court, tribunal, committee or other body dealing with industrial relations or other industrial matters affecting its Members…" Eligibility for ordinary membership of the Association is open to registered medical practitioners who are employers or who have the potential to be an employer. There has been no challenge by the respondent to the eligibility of the doctors to be, or to become, members of the AMA and no challenge to the validity of the AMA's Constitution. Significantly, it was not put by the respondent that the doctors who are the subject of the dispute notification did not have the potential to be an employer. It is probably the case that at least some of them are employers. 29 The AMA is, of course, registered as an organisation of employers. It may, therefore, be argued that its Constitution is to be interpreted so as to exclude the possibility that it may enrol employees as members. But I have not been asked to decide whether or not the subject doctors are, or are not, eligible for membership of the Association. For example, there is no evidence about the meaning or the intended meaning of the phrase "has the potential to be an employer" in cl 10.1(a) of the AMA's Constitution. Is it to be taken to cover only that situation of a VMP whose status is one of independent contractor who may take on employees and thus become an employer or was it envisaged at the time the rule was framed that it is to be taken as dealing with the very problem the Commission is now faced with, namely, doctors operating in a dual capacity of employee and employer? In other words, in circumstances where those who framed the eligibility rule were confronted with the problem of deciding what type of organisation they wished to have registered - employee or employer - and having decided on employer, how were they to deal with the problem of members who might be at once an employee and an employer if that was a relevant consideration at the time? 30 These are legitimate considerations. As Barwick CJ stated in The Queen v Aird; Ex parte The Australian Workers' Union (1973) 129 CLR 654 at 659: I now turn to consider the meaning of the eligibility clause in relation to the manufacture in the batching plants of ready-mixed concrete. This is a legal question to be solved by legal considerations. But those considerations will, in relation to the present question, include any industrial meaning or usage of the words of the clause to be construed. As with all construction, the nature of the instrument in which the words appear and the purposes the instrument is evidently intended to serve or effect must be kept in mind. In this respect, it is proper, in my opinion, in the present case to acknowledge that the eligibility clause will have been drawn, more likely than not, by union officials more familiar with the practical affairs of industry than with the niceties or subtle nuances of language. The purpose of the clause is to define, in brief terms, industries or callings relevant to the representative character of the union. But, granted this generosity of approach, the question of the meaning of the words used remains a legal question. 31 The respondent's contention that an association registered as an industrial organisation of employers cannot represent employees is an attractive one because of its simple logic. But I do not consider the respondent has discharged the onus upon it to show, as it must, I believe, in order to succeed on its motion, that the doctors who are the subject of the dispute notification are ineligible to be members of the AMA. It is not open, in my view, for the respondent to implicitly accept, as it seems to do, that the doctors are eligible for membership of the AMA and that the AMA's eligibility rule is a valid rule, yet contend that the AMA cannot represent those doctors on the grounds that they are employees. 32 The Commission, therefore, is entitled to proceed on the basis that the doctors who are the subject of the dispute notification are properly members, or are eligible to be members, of the AMA and that the AMA is entitled to represent their interests in proceedings before the Commission to resolve the dispute. 33 If I am wrong about this and the AMA does not have standing, as an industrial organisation, to represent the doctors at the centre of this dispute, I note the provisions of s 130(2) of the Act: (2) The Commission may act on its own initiative to resolve an industrial dispute. 34 If one puts aside the role of the AMA because of the controversy over its right to represent the doctors in its capacity as an industrial organisation, the Commission is presently seized of a dispute involving doctors employed at hospitals within the Hunter New England Area Health Service and their employer, the respondent. At this stage, with the exception of one of the doctors, Dr Thambar, it is not known with any precision who the individual doctors are. 35 It is apparent that there is a grievance of a collective nature. The doctors, through the conduit of the AMA, complain that the Area Health Service has unilaterally terminated an arrangement whereby doctors who are employed as staff specialists in one hospital may hold VMP contracts in another hospital within the same Area Health Service. The doctors want that position reversed. In the light of s 130(2) of the Act, it is not essential for an industrial organisation to be involved in the resolution of the dispute. See also The Jumbunna Coal Mine, No Liability and Another v The Victorian Coal Miners' Association (1908) 6 CLR 309 at 373 per Isaacs J; The Queen v Portus and Another; Ex parte McNeil (1961) 105 CLR 537. 36 In any event, there is no barrier to the doctors in this dispute being represented by the AMA as an agent and if, for instance, the AMA wished to avoid any prospect of a challenge to its Constitution that is an option it may wish to consider in relation to these proceedings. I say this because consistent with the relevant principle in Virtue, there is nothing to prevent the respondent in the substantive proceedings renewing any challenge to jurisdiction, on whatever grounds it considers appropriate. What the AMA chooses to do is, of course, entirely a matter for it. 37 Given the conclusions I have reached it is unnecessary for me to consider the respondent's other contentions regarding the Commission's power to deal with VMPs as independent contractors. In so far as relief is concerned, if it be accepted that the doctors are employees, then subject to the issue of a certificate of attempted conciliation pursuant to s 135, there would not appear to be any obstacle in arbitration proceedings, to exercising any of the powers in s 136 of the Act. I note, in particular, s 136(2), which provides: 2) Any such action may be taken by the Commission on its own initiative or on application by any person authorised to notify the Commission of the industrial dispute. Orders

38 The notice of motion filed by the respondent in these proceedings on 12 October 2007 is dismissed.

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