s.739 - Dispute resolution

Dispute about any matters arising under an enterprise agreement - annual leave entitlements - dispute as to when an employee is entitled to 6 weeks annual leave per annum - dispute as to when payment of annual leave loading required - meaning of phrase "employees required to work on a seven (7) day basis"

• [1] Healthscope Operations Pty Ltd operates a number of hospitals in New South Wales. The Healthscope - NSWNMA/ANMF - NSW Nurses' and Midwives' - Enterprise Agreement 2020-2024 ("Agreement") applies to the nursing and midwifery employees that Healthscope employs in those hospitals.

• [2] Under the terms of the Agreement,[1] employees "required to work on a seven (7) day basis" are entitled to accrue six weeks annual leave each year. Other employees are entitled to accrue four weeks annual leave. A dispute has arisen between the Australian Nursing and Midwifery Federation ("ANMF") and Healthscope, which is broadly in two parts.

• [3] The first and most significant area of dispute between the parties is the meaning of the phrase "required to work on a seven (7) day basis". The term is not defined in the Agreement.

• [4] The employees who are the subject of this dispute are engaged under employment agreements which include the following term:[2]

Your hours of work will be 76 per fortnight or as allowed for under the Industrial Instrument. You may be rostered at varying shifts, days or time in accordance with the needs of the business including, over 7 days of the week for all shifts."

• [5] Distilled to their essence, the cases advanced by the parties in respect of this first area of dispute may be summarised in this way:

1. The ANMF contends that employees whose employment contracts include the Hours of Work Term are contractually required to work on a seven day basis. The fact that they may be rostered on varying shifts and on different days and times in accordance with the needs of Healthscope's business, including over seven days of the week, qualifies them as being required to work on a seven day basis within the meaning of the Agreement. They are therefore entitled to accrue annual leave at the rate of six weeks per annum.

1. Healthscope disputes that the Hours of Work Term of itself renders an employee as one who is required to work on a seven day basis. Rather, it contends that it is necessary that the employee be regularly engaged to and actually work on all seven days of the week. Further, to be regarded as working on a seven day basis, the employee must work a minimum of 34 Sunday shifts and six public holidays in a year. Only then will they qualify for six weeks annual leave. Until the employee has achieved those minima, annual leave accrues at the rate of four weeks per annum.

• [6] The second area of dispute is whether an employee "required to work on a seven (7) day basis" is entitled to receive payment of annual leave loading. This controversy centres on the language of the relevant provisions of the Agreement.

• [7] The ANMF has applied to the Commission to resolve the dispute, under section 739 of the Fair Work Act 2009. There is no issue between the parties as to the Commission's jurisdiction to arbitrate the dispute.[3]

• [8] This dispute centres on the meaning and effect of certain provisions in those clauses of the Agreement that deal specifically with annual leave and annual leave loading. However, in their submissions as to the way in which those clauses are to be construed, the parties drew my attention to a number of other terms of the Agreement. For convenience and reference, I set out below the provisions of the Agreement which are of particular relevance:

"Day Worker" means a worker who works their ordinary hours from Monday to Friday inclusive and who commences work on such days at or after 6.00 am and before 10.00 am otherwise than as part of the shift system.

"Shift Worker" means a worker who is not a day worker as defined.

7. 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 am and before 10.00 am.

(ii) The ordinary hours of work for shift workers (including those working 12 hour shift pattern), other than Directors of Nursing, exclusive of meal times, shall not exceed an average of 38 hours per week in each roster cycle.

(iii) Upon engagement as a full-time employee, the employee will be advised, in writing, whether they are engaged to work either Monday to Friday or up to seven days per week. Engagement pattern is relevant for determining the annual leave entitlement in accordance with subclause 25(i).

(i) The ordinary hours of work for each employee (including the start and finish times for each rostered shift), other than the Director of Nursing and casual employees, shall be displayed on a roster in a place conveniently accessible to employees.

(ii) A roster giving not less than two weeks' notice will be provided to full-time and part-time employees.

(iii) Notwithstanding the foregoing provisions of this clause, a roster may be altered at any time to enable the nursing service of the hospital to be carried on where another employee is absent from duty on account of illness or in an emergency, provided that where any such alteration involves an employee working on a day which would otherwise have been such employee's day off, the day off in lieu thereof shall be as mutually arranged.

(iv) Prior to the date of the changed shift, such change of roster shall be notified verbally or in writing to the employee concerned.

(v) An employee may change their roster at short notice, with the agreement of their nurse/midwifery unit manager or Director of Nursing for any reasonable ground.

(vi) An employer may change an employee's roster at short notice, with the agreement of the employee, for any reasonable ground including unexpected situations and unforeseen fluctuations in patient dependency.

16. Penalty Rates for Shift Work and Weekend Work

(i) Employees working afternoon or night shift shall be paid the following percentages in addition to the ordinary rate for such shift provided that employees who work less than 38 hours per week shall only be entitled to the additional rates where their shifts commence prior to 6.00 am or finish subsequent to 6.00 pm.

Afternoon shift commencing at 10.00 am and before 1.00 pm - 10%

Afternoon shift commencing at 1.00 pm and before 4.00 pm - 12.5%

Night shift commencing at 4.00 pm and before 4.00 am - 15%

Night shift commencing at 4.00 am and before 6.00 am - 10%

(iv) Employees other than a casual employee whose ordinary working hours include work on a Saturday and/or Sunday shall be paid for ordinary hours worked between midnight on Friday and midnight on Saturday at the rate of time and one half and for ordinary hours worked between midnight on Saturday and midnight on Sunday at the rate of time and three quarters. These extra rates shall be in substitution for and not cumulative upon the shift premiums prescribed in the subclause (i) of this clause.

(v) The additional payments prescribed by this clause shall not form part of the employee's ordinary pay for the purposes of this Agreement, except as provided in Clause 25, Annual Leave and Public Holidays, of this Agreement.

PART I - Permanent Part-time Employees

(iii) Four weeks' Annual Leave on ordinary pay is to be granted per annum, except for shift workers who shall receive five weeks of annual leave. The provisions of subclauses (v) to (xi) of Clause 25, Annual Leave and Public Holidays, and Clause 26, Annual Leave Loading, of this Agreement shall apply to employees engaged under Part I of this clause. The remaining provisions of Clause 25, Annual Leave and Public Holidays shall not apply.

(i) Annual leave will accrue on a pro rata basis and be credited to the employee progressively in accordance with the provisions of the NES contained in the FW Act.

(a) Employees required to work on a seven (7) day basis - six (6) weeks annual leave per annum.

(b) All other employees - four (4) weeks annual leave per annum.

(ii) (a) An employee to whom paragraph (a) of subclause (i) applies and who is required to and does work on a public holiday shall be paid, in addition to the appropriate ordinary weekly rate of pay, at the rate of one half time extra for the time actually worked on such holiday. Such payment shall be in lieu of any additional rate for shift work or weekend work which would otherwise be payable had the day not been a public holiday.

(c) A public holiday occurring on an ordinary working day shall be allowed to employees covered by paragraph (b) of subclause (i) on full pay; provided that an employee who is required to and does work on a public holiday shall have one day or one half day, as appropriate, added to their period of annual leave and be paid at the rate of one half time extra for the time actually worked. ...

(v) (a) Taking of Annual Leave - An employee is entitled to take an amount of annual leave during a particular period if:

(1) at least that amount if annual leave is credited to the employee; and

(2) the employer has authorised the employee to take the annual leave during that period

(viii) (a) Each employee before going on leave shall be paid for the period of the leave at the ordinary rate of salary to which the employee is entitled under this Agreement. Where an employee has any period of permanent part-time employment payment for such annual leave shall be calculated on the basis of the proportion that the average number of hours worked each week bears to 38 hours.

(b) An employee to whom paragraph (a) of subclause (i) applies shall be paid during the first twenty eight (28) consecutive days whilst on annual leave the employee's ordinary rate of salary plus shift allowances and weekend penalties relating to ordinary time the employee would have worked if they had not been on annual leave; additional annual leave accrued under subclause (xi) attracts shift allowances and weekend penalties relating to ordinary time the employee would have worked if they had not been on annual leave; provided that the provisions of the preceding paragraphs of this subclause shall not apply to public holidays which occur during a period of annual leave or days which have been added to annual leave in accordance with paragraph (b) of subclause (ii) and subclause (iv) of this clause.

(x) Where the employment of an employee is terminated the employee shall be entitled to receive, in addition to all other amounts due, in respect of service of less than one year an amount equal to one-twelfth (6/46ths in respect of employees rostered to work on a seven (7) day basis) of the employee's ordinary pay for that period of employment...

(xi) (a) In addition to the leave prescribed by subclause (i) employees who work their ordinary hours on Sundays and/or public holidays are entitled to receive additional annual leave as follows:

Number of ordinary shifts worked on Sundays and/or public holidays during a qualifying period of employment for annual leave purposes

(i) Before an employee is given and takes an annual holiday, or whereby [sic] agreement between the employer and the employee the annual holiday is given and taken in more than one separate period, then before each of such separate periods the employer shall pay the employee a loading determined in accordance with this clause.

(ii) The loading is payable in addition to the pay for the period of holiday given and taken due to the employee under subclauses (i)(b) and (ii)(c) of Clause 25, Annual Leave and Public Holidays, of this Agreement, or in the case of part-time employees for the period of holiday given and taken and due to the employee.

(iv) The loading is the amount payable for the period or the separate periods, as the case may be, stated in subclause (iii) of the rate per week of 17½% of the appropriate ordinary weekly time rate of pay prescribed by this Agreement for the classification in which the employee was employed immediately before commencing by the employee's annual holiday together with any allowances prescribed by subclause (iii) of Clause 13, Special Allowances, of this Agreement.

(vii) This clause extends to an employee who is given and takes an annual holiday and who would have worked as a shift worker if the employee had not been on holidays; provided that, if the amount to which the employee would have been entitled by way of shift work allowances and weekend penalty rates to the ordinary time (not including time on a public or special holiday) which the employee would have worked during the period of the holiday exceeds the loading calculated in accordance with this clause, then that amount shall be paid to the employee in lieu of the loading.

• [9] The ANMF and Healthscope were not able to agree on the questions that the Commission must answer to determine the dispute. They each provided their own formulation of the questions.

• [10] The ANMF's proposed questions for determination were as follows:

"1. Is a full-time employee who is engaged to work over 7 days of the week across all shifts 'required to work on a seven (7) day basis' within the meaning of clause 25(i)(a) of the Agreement and therefore entitled to progressively accrue 6 weeks annual leave per annum?

2. Does the payment of annual leave loading under clause 26(vii) of the Agreement apply to all shift workers, inclusive of those who accrue 6 weeks annual leave per annum in accordance with clause 25(i)(a)?

3. Where the shift allowances and penalties that would otherwise be payable for ordinary time an employee would have worked if not on annual leave exceed the loading in clause 26(vii), do employees who accrue annual leave in accordance with clause 25(i)(a) of the Agreement receive payment of these shift allowances and penalties for each period of annual leave up to a maximum period of 28 consecutive days duration?"

• [11] Healthscope proposed the following questions:

"1. Is an employee who is not required to and does not work on a 7 day basis entitled to six weeks annual leave per annum pursuant to clause 25(i)(a) of the Healthscope - NSWNMA/ANMF - NSW Nurses' and Midwives' - Enterprise Agreement 2020-2024 (Agreement)?

2. If the answer to question 1 is no, on how many occasions must an employee be required to and work on a Sunday and a public holiday before they are an employee required to work on a 7 day basis for the purposes of clause 25(i)(a) of the Agreement?

3. Does clause 25(viii)(b) or, alternatively, clause 26(vii) of the Agreement govern the amounts paid to an employee whilst on annual leave who accrues annual leave in accordance with clause 25(i)(a) of the Agreement?"

• [12] Having regard to the totality of the parties' cases, I am not entirely comfortable with the questions posed by either of them. In particular, the ANMF's question 1 raises the potential for conflict as to the meaning of the phrase "engaged to work". Equally, Healthscope's question 1 assumes a meaning of "required", when that is a matter in contention.

• [13] To my mind, the questions that arise for determination are these:

1. Does the presence of the Hours of Work Term in an employee's employment contract of itself render that employee one who is "required to work on a seven (7) day basis" within the meaning of clause 25(i)(a) of the Agreement?

1. If the answer to (1) is no, is there a requirement that the employee work a minimum number of Sundays and public holidays to qualify as being "required to work on a seven (7) day basis" (and if so, what are those minima)?

1. Does clause 26 of the Agreement apply to employees "required to work on a seven (7) day basis"?

The principles to apply in construing the Agreement

• [14] To state the obvious, the dispute before me concerns the proper construction of the Agreement, and in particular clauses 25(i)(a), 25(viii)(b) and 26(vii). The principles to be applied in relation to the construction of enterprise agreements are well established.[4] In Svitzer Australia Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union, The Australian Institute of Marine and Power Engineers and Another the Full Bench observed:[5]

"[109] The approach and the principles relevant to the task of construing the terms of enterprise agreements were set out in a Decision of a Full Bench of the Commission in 'Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union' known as the Australian Manufacturing Workers' Union (AMWU) v Berri Pty Ltd (Berri). The relevant passage setting out the principles is well known, and it is not necessary to repeat it. More recently, in AMA (Victoria) Ltd and Australian Salaried Medical Officers Federation v The Royal Women's Hospital, a Full Bench of the Commission distilled principles from the majority judgment of the Full Court of the Federal Court in James Cook University v Ridd as follows:

'The starting point is the ordinary meaning of the words, read as a whole and in context.

A purposive approach is preferred to a narrow or pedantic approach - the framers of such documents were likely to be of a practical bent of mind. The interpretation turns upon the language of the particular agreement, understood in the light of its industrial context and purpose.

Context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to the entire document of which it is a part, or to other documents with which there is an association.

Context may include ideas that gave rise to an expression in a document from which it has been taken.

Recourse may be had to the history of a particular clause where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form.

A generous construction is preferred over a strictly literal approach but agreements should make sense according to the basic conventions of the English language.

Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.'"

• [15] In construing an enterprise agreement in its industrial context and purpose, the Commission should adopt an approach that contributes to a sensible industrial outcome.[6] Put differently, construction of ambiguous terms should, where possible, favour a sensible and practical industrial result.[7] Meanings which avoid inconvenience or injustice may reasonably be strained for.[8]

When is an employee "required to work on a seven day basis"?

• [16] The ANMF's case may be summarised as follows:

a) In the phrase "required to work on a seven (7) day basis", the word "required" is used adjectivally rather than as a verb. As an adjective, it describes the basis on which employees are employed. The phrase does not refer to days actually worked, but to the manner in which an employee is engaged or obliged to work.

b) Clause 25(i)(a) determines that an employee is required to work on a particular basis in the event they are contracted or otherwise are obliged to work on that basis by an industrial instrument.

1. Employees whose employment contracts include the Hours of Work Term are contractually required to work on a seven day basis. That is, because they "may be rostered at varying shifts, days or time in accordance with the needs of the business including, over 7 days of the week for all shifts", the employees are contractually obliged - or required - to work seven days a week for all shifts, if Healthscope demands it of them. It follows that those employees fall under clause 25(i)(a).

1. Support for the ANMF's construction of clause 25(i)(a) is to be found in the context of other provisions of the Agreement. In particular:

• a) Clause 7(iii) requires Healthscope to advise full-time employees of the nature of their engagement. That "may be one of two things", either Monday to Friday or up to seven days per week.[9] The clause contemplates only those two possibilities. The nurses and midwives the subject of the dispute are employed under contracts that provide that they may be rostered at varying shifts, days or time in accordance with the needs of the business including, over 7 days of the week for all shifts. In other words, they may be rostered to work 7 days a week. The basis of their engagement is 7 days a week rather than Monday to Friday. This is a matter that clause 7(iii) says is relevant to determining the annual leave entitlement.

b) Clause 25(x), which deals with payment of annual leave on termination, provides for a higher multiplier to be applied to service of less than one year where an employee is "rostered to work on a seven (7) day basis". This additional entitlement is not dependent on an employee actually working seven days a week but being rostered on a particular basis.

1. Clause 25(xi) allows for all employees to accrue additional annual leave for ordinary hours worked on Sundays and/or public holidays. That demonstrates that where the Agreement contemplates an employee actually performing work on a Sunday or a public holiday, it does so expressly and explicitly.

d) Similarly, clauses 25(ii)(a) and (c) confer entitlements on an employee "who is required to and does work on a public holiday" (my emphasis). The entitlement is expressly subject to the actual performance of work. No such language appears in clause 25(i)(a).

e) Clause 24(iii) provides that part-time shift workers are entitled to five weeks annual leave. It would be incongruent for a full-time employee to receive less.

1. The purpose of clause 25(i)(a) is to afford employees required to work on a seven day basis an additional two weeks of annual leave to compensate for the difficulties inherent in the potential for them to be required to work shift work and on any day of the week. It is offered in return for the employee being subjected to the capacity to have their roster made seven days a week. Such employees may not work every weekend but can be required to work weekends. It is congruent with industrial common sense that if Healthscope determines to engage an employee on the basis that they may, at any point, be rostered to work on any day of the week and/or perform shift work, that they be compensated for the dislocation associated with such employment. Employees are compensated for that dislocation and uncertainty by being afforded an extra fortnight of annual leave.

1. Section 87(1)(b)(ii) of the Fair Work Act provides that an employee who is defined as a shiftworker for the purposes of the National Employment Standards will receive a five weeks of annual leave, rather than the four to which other employees are entitled. The construction for which the ANMF contends is consistent with the legislative scheme which allows for shift workers to receive a greater annual leave entitlement.

1. Healthscope's proposed construction of clause 25(i)(a) requires a retrospective assessment as to whether an employee is entitled to the additional annual leave. This is not only productive of significant uncertainty, but cannot be reconciled with the requirement in the opening words of the clause that annual leave "will accrue on a pro rata basis and be credited to the employee progressively".

1. As the entitlement to take annual leave under clause 25(v)(a) is subject to the annual leave being credited to the employee at the relevant time, the requirement for the pro rata accrual and progressive crediting of annual leave cannot simply be swept aside.

1. There is no proper basis for Healthscope's contention that to be required to work on a seven day basis an employee must work a minimum of 34 Sunday shifts and six public holidays in a year. The cases on which Healthscope relies in this regard do not form part of the relevant industrial context, and can have no bearing on the text-based constructional task in which the Commission is engaged.

• 8. Healthscope's position "requires the reading in of arbitrary limitations and arbitrary preconditions".[10] In effect, Healthscope's proposed construction requires a "violent and radical recasting of the unadorned text of clause 25(i) to read 'employees required to be and who are regularly rostered over seven days of the week and who work a minimum of 34 Sunday shifts and six public holidays per annum'" (emphasis in original).[11]

• [17] Healthscope's submissions may be summarised in this way:

1. The ANMF's position is premised on the basis that if an employee's contract contains the Hours of Work Term, they are entitled from day one to six weeks of annual leave each year. This is irrespective of whether they ever work on a Sunday. That is not an industrially sensible outcome. Moreover, it is inequitable - employees who do regularly work on Sundays and public holidays receive no greater entitlements.

a) The word "required" is used as a verb. An employee must in fact be called upon to work on a seven day basis. The fact that there is a contractual possibility that an employee will be required to work over seven days of the week is fundamentally different to requiring the employee to do so.

1. The ANMF's proposed construction requires the addition of words to the clause - that is, "Employees who may be required to work on a seven (7) day basis".

d) The use of the word "basis" is significant. It suggests that the underlying feature of the pattern of work is that the employee is required to work over all seven days.

1. As to the textual and industrial context of the provision:

a) Rather than supporting the ANMF's position, the language of clause 7(iii) of the Agreement is in fact supportive of Healthscope's construction. The use of the words "engaged to work" as opposed to "required to work" provides a textual indicator that clause 25(i)(a) is not concerned with the days that an employee is engaged to work under their contract but those that the employee is in fact required to work. Further, there is no question that engagement pattern will be "relevant" to determining an employee's annual leave entitlement, but that is not to say that it will be determinative. Even from the employment contracts, it is not possible to know what the engagement pattern in going to be.

b) Similarly, rather than supporting the ANMF's position, clauses 25(ii)(a) and (c) are consistent with Healthscope's construction. They reflect an expectation in the Agreement that an employee must actually perform work to qualify for an entitlement. This is seen in the phrase "who is required to and does work" in those clauses 25(ii)(a) and (c). It is also reflected in the words "rostered to work" in clause 25(x).

1. "Day Worker" (and by extension, "Shift Worker") is defined in clause 6 of the Agreement by reference to the hours the employee works, not by reference to those they may possibly work.

d) The requirement for progressive accrual and crediting of annual leave in the opening words of clause 25(i) is not significant in light of the history of the provision. In previous iterations of the Agreement, the opening words of the clause were altered to reflect changes in the prevailing legislation. The phrase "required to work on a seven (7) day basis" existed prior to the inclusion of progressive accrual. Any anomaly is the remnant of the historical development of the annual leave entitlement under the legislation that existed at the time.

e) In any event, Healthscope's construction does not render the clause unworkable. At the beginning of the year, the entitlement is four weeks annual leave. Leave accrues progressively and is credited on that basis, until the employee qualifies for the additional entitlement. From that time, the higher amount is credited to the employee and continues to accrue at the higher rate. Such a retrospective assessment and adjustment of leave accruals is consistent with what clause 25(xi) requires.

f) The entitlement to accrue additional annual leave under clause 25(xi) favours Healthscope's construction. It offers protection for employees who are not required to work on a seven day basis, but who may from time to time work on Sundays or public holidays.

a) The additional two weeks of annual leave is to compensate employees who are required to actually work on a seven day basis.

b) The potential to be required to work perform shift work on any day of the week does not cause uncertainty or "dislocation" for an employee requiring separate compensation through the accrual of additional annual leave. The terms of the Agreement regarding the development and publication of rosters, as well as Healthscope's rostering practices, allow for employees' preferences and personal circumstances to be taken into account and for the employees to have notice of the shifts they will be required to work.

1. In the event that an employee is rostered against their preferences, they are compensated through shift, weekend and/or public holiday penalties, and through the accrual of additional annual leave under clause 25(xi).

• 5. Clause 25(i)(a) requires an employee works on a seven day basis. The jurisprudence associated with the meaning of the terms "seven day shiftworker"[12] and "regularly works on Sundays and public holidays"[13] is a sensible mechanism for determining whether the relevant "basis" is present. That jurisprudence supports a conclusion that to be "required to work on a seven day basis", an employee must work a minimum of 34 Sunday shifts and six public holidays in a year.

• [18] The ANMF submitted, and I accept, that the phrase "required to work on a seven day basis" must be considered in its entirety. Attributing meanings to particular words out of context may not assist in the proper construction of the phrase. At the same time, both parties took me to dictionary definitions of "required" and there was significant focus in the parties' submissions as to the effect of the word. The differences between the parties as to what is meant by "required" is at the heart of this dispute.

• [19] I do not accept the ANMF's submission that "required" is used in clause 25(i)(a) "as an adjective that describes the basis on which employees are employed" as opposed to a verb.[14] For the following reasons, I prefer Healthscope's submission that the clause "is concerned with a sense of the actual and obligatory rather than the possible or permissive".[15]

• [20] Clause 25(x) of the Agreement provides that on termination of their employment, "the employee shall be entitled to receive, in addition to all other amounts due, in respect of service of less than one year an amount equal to one-twelfth (6/46ths in respect of employees rostered to work on a seven (7) day basis) of the employee's ordinary pay for that period of employment".[16] Contrary to the ANMF's submission, I consider that the use of the word "rostered" suggests that to qualify for the higher payment, the employee must have worked according to a seven day roster. There is no reason to suggest that the drafters of the Agreement intended that "employees rostered to work on a seven (7) day basis" referred to in clause 25(x) were a different cohort to "employees required to work on a seven (7) day basis" referred to in clause 25(i)(a). If "rostered to work" is to be seen as equivalent to "required to work", that supports Healthscope's construction of clause 25(i)(a).

• [21] I also accept Healthscope's submissions that the Agreement is drafted in terms that define categories of employment, or confer entitlements, by reference to the work actually performed by employees and not by reference to the mere possibility of that work being performed. Clause 25(x) is an example of that. Other examples include:

1. "Day Worker" being defined in clause 6 of the Agreement by reference to the hours worked by an employee. By extension, the same must be true of a "Shift Worker" - a worker "who is not a day worker";

1. clauses 25(ii)(a) and (c) conferring entitlements on an employee "who is required to and does work on a public holiday" and referring to "time actually worked" on the holiday; and

1. the additional annual leave for which clause 25(xi) provides being premised on an employee working their ordinary hours on Sundays and/or public holidays.

• [22] In other provisions of the Agreement (albeit in an admittedly different context), the word "required" is used as a verb. For example:

1. clause 7(x)(b) provides that an employee "shall not be required to work more than five hours";

1. clause 21(i) provides that Healthscope "may require an employee to work reasonable overtime". Succeeding provisions refer to employees "required to work overtime" (clause 21(vii)), "required to work for more than four hours" (clause 21(viii)) and "required to work an entire shift" (clause 21(x)); and

1. clause 39(i) refers to an employee who is "required to work outside the ordinary hours of work in satisfaction of the requirements for compulsory fire safety practices".

• [23] I acknowledge that there is an argument, as the ANMF submitted, that the existence of words expressly requiring the performance of words such as those that appear in clauses 25(ii)(a) and (c) might suggest, in the absence of such words appearing in clause 25(i)(a), that there is no such requirement in the latter. However, in the context of the Agreement as a whole, I am not persuaded by the ANMF's submissions in this regard.

• [24] Support for the use of "required" being used in the sense of obliging the employee to have worked on a particular basis can also be found in the historical context of the Agreement.

• [25] Cameron Smith is an Industrial Officer employed by the ANMF. He gave uncontested evidence for the ANMF that "prior to the advent of agreement-making between the Applicant and Respondent",[17] the terms and conditions of employment for nurses and midwives employed by Healthscope were set out in the Private Hospital Employees (State) Award,[18] an award of the Industrial Relations Commission of New South Wales ("IRCNSW"). Mr Cameron stated that that Award was preserved as a Notional Agreement Preserving State Award from 27 March 2006 to 1 January 2010.

• [26] Clause 16 of the Private Hospital Employees (State) Award was titled "Annual Leave". Clause 16(i) provided that all employees would be "entitled to the provisions of the Annual Holidays Act 1944". However, clause 16(iii) provided as follows:

"(iii) Employees, other than part-time workers and those referred to in subclause (ii) above, who are rostered to work their ordinary hours on Sundays and/or public holidays shall be entitled to receive additional annual leave on the following basis:

(a) 1 week for 35 ordinary shifts on Sundays and/or public holidays;

(b) if they have worked less than 35 ordinary shifts on Sundays and/or public holidays, the following shall apply:

• [27] The Annual Holidays Act 1944 (NSW) provided as follows:

(1) Except as otherwise provided in this Act, every worker shall at the end of each year of the worker's employment by an employer become entitled to an annual holiday on ordinary pay.

(a) where any such year of employment ends upon or before 30 November 1974, be of three weeks,

(b) where any such year of employment ends after 30 November 1974, be of four weeks.

• [28] The effect of the Private Hospital Employees (State) Award, when read with the Annual Holidays Act, was that an employee's "base" entitlement to annual leave was four weeks per annum. Any additional annual leave was subject to a requirement that the employee have worked their ordinary hours on Sundays and/or public holidays. To the extent that clause 16 of the Private Hospital Employees (State) Award was the genesis of clause 25(i) of the Agreement, it is consistent with the latter calling for a similar requirement.

• [29] The ANMF placed significant reliance on clause 7(iii) in its proposed construction of clause 25(i)(a). I am not persuaded by the ANMF's submissions in this regard, for two reasons.

• [30] First, the ANMF appeared to read the clause as allowing for only two types of engagement: an employee is either engaged Monday to Friday or is engaged on a seven day basis. I recognise that the definition of "Day Worker" in clause 6 requires work to be carried out Monday to Friday. Further, it was common ground between the parties that a Shift Worker might also work Monday to Friday, where their shift did not commence between 6.00am and 10.00am. However, there was no evidence that Healthscope's rosters are limited to two forms, being either Monday to Friday rosters (for either day workers or shift workers) or seven day rosters.

• [31] In this context, the ANMF's construction of clause 7(iii) does not recognise the words "up to" in the phrase "up to 7 days per week". In construing the Agreement, all words in an enterprise agreement must prima facie be given some work to do.[19]

• [32] Second, there is no contest that an employee's engagement pattern "is relevant for determining the annual leave entitlement" under clause 25(i). But as Healthscope submitted, it is not determinative. The entitlement will be determined by whether the engagement pattern requires the employee to work on a seven day basis. In this regard, as Healthscope further submitted, it is noteworthy that the Hours of Work Term says nothing about the hours that the employee will in fact work. It is not possible to determine from the employee's contract what their annual leave entitlement will be.

• [33] The ANMF also drew my attention to clause 24(iii) of the Agreement. That clause provides that part-time shift workers will receive five weeks of annual leave each year. The ANMF submitted:[20]

"It would be in our submission incongruent and industrially nonsensical if a part-time employee who meets the definition of a shift worker is afforded by the agreement five weeks of annual leave, but a full-time employee captured by clause 25(i) who is required to work on a seven-day basis and is a shift worker who is required to work Sundays and

Sundays in accordance with the agreement is only afforded four weeks. That is not, in our respectful submission, harmonious with the idea that a part-time employee who is a shift worker gets five weeks of annual leave."

• [34] The short answer to this submission is that a full-time shift worker who is required to work on a seven day basis would be entitled to accrue annual leave at the rate of six weeks per annum under clause 25(i)(a). There was no suggestion otherwise. In that respect, no incongruity arises. The ANMF's argument does not advance the question of what is meant by "required".

• [35] I acknowledge that there may be a question as to why full-time shift workers who are not required to work on seven day basis ought not receive the same annual leave entitlement as their part-time counterparts. However, I do not see that this has a bearing on the meaning of clause 25(i)(a).

• [36] It is convenient to deal at this point with an oral submission raised by the ANMF in reply at the hearing, namely:[21]

"Briefly in reply, Commissioner. Mr O'Grady acknowledged appropriately, with respect, that employees required to work on a seven-day basis are shift workers. That exposes a fundamental problem with Healthscope's argument, given the terms of section 87(1)(b)(ii) of the Fair Work Act, the National Employment Standard in relation to employees who are described as shift workers is five weeks of paid annual leave.

And this agreement, in my respectful submission, can and should be construed in a manner consistent with section 87(1)(b), and the way to achieve consistency is to read clause [25](i)(a) which affords more than four weeks of annual leave to employees, who Mr O'Grady accepts are shift workers, in the manner that we contend for. ..."

• [37] Again, a short answer can be made to this submission. There is no controversy that an employee is entitled to receive "more than four weeks of annual leave" under clause 25(i)(a) if they qualify for it. The dispute concerns the point at which the employee so qualifies. Section 87 of the Fair Work Act does not shed light on that question.

• [38] The ANMF submitted that clause 25(i)(a) is to be construed by reference to its purpose. That is, "to compensate for the difficulties inherent in the potential for [the affected employees] to be required to work shift work and on any day of the week".[22]

• [39] The ANMF relied on a statement of Sheridan Brady, a Registered Nurse employed by Healthscope at the Northern Beaches Hospital. She gave the following evidence:[23]

"9. Over approximately 28 years of my total 30 years' experience as a Registered Nurse, I have been classified as an employee who is 'required to work on a seven (7) day basis'. The uncertainty and interruption inherent in this requirement has had significant impacts my on work-life balance and my ability to forward plan or commit to any family, social or educational events beyond a 2 to 4-week period - which is the general notice period for a published roster. For example, as the mother of 4 children, childcare days are set days and cannot often be changed without months of notice. Being available to work across all 7 days of the week (and on a 24-hour rotating roster) meant my childcare days did not always align with my roster. I would often be left with no childcare available when I was rostered to work or conversely have paid for childcare in advance on days that I would be rostered off and home and able to care for my children. I have not been able to guarantee my attendance until 2 to 4 weeks' notice at important family events such as Christmas, birthdays, or weddings. I have not been able to commit to events that occur on the same day each week, such as team sports, and have been often reliant upon support from friends and family to get my children to school, sporting or social events. Even simple things such as parent teacher interviews, school concerts or information sessions (usually held on weekday evenings) would often be missed as my roster simply would not allow for my attendance.

10. I am required to work on any day of the week, including weekends and public holidays. For many workers, weekends and public holidays are days on which they would ordinarily expect (and be entitled) to be not working. For me, being 'required to work on a seven (7) day basis' means that any day can be a work day, and the rest normally taken for granted by other workers on weekends and public holidays is not something that I can access."

• [40] In cross-examination, Healthscope led evidence from Ms Brady to the following effect:

1. while she could not speak for all of the employees covered by the Agreement, at least some of them would have input to their roster before it was finalised, and would have the ability to request changes to the roster;

• 2. in her ward she is able to ask not to be rostered to accommodate a future event. While there is no guarantee that any request will be granted, there is "a good attempt" to do so;[24]

1. there is some capacity for employees to arrange shift swaps, subject to the employees being at the same level;

1. changes of roster require the consent of affected employees;

1. there is scope for fluctuation in the number of Sundays and public holidays that she would work in any year; and

1. the Agreement contains penalty rates that compensate employees for the inconvenience of working on a Saturday, Sunday or public holiday.

• [41] Consistent with its cross-examination of Ms Brady, Healthscope relied on evidence from Claire Walker, the Director of Nursing at the Prince of Wales Private Hospital. She gave evidence as to the rostering practices at that hospital and of Healthscope's "Rostering Guidelines".[25] For reasons I will come to explain, it is not necessary to traverse that evidence in detail. Suffice it to say, the effect of Ms Walker's evidence was that Healthscope attempts to: seek feedback from employees prior to finalising rosters; develop rosters that accommodate an employee's circumstances; publish rosters at least two weeks in advance of them commencing; and, provide flexibility to allow for unexpected changes in an employee's circumstances.

• [42] Healthscope submitted that the potential to be required to work shift work on any day of the week does not result in any uncertainty or "dislocation" requiring separate compensation through the accrual of additional annual leave. It relied on Ms Walker's evidence, and the terms of the Agreement (noting in particular clauses 10(ii) and (iii), 7(vi) and 7(xxi)(k)), to submit that "employees are provided sufficient certainty in their rostered hours to enable proper planning of personal commitments".[26] It further relied on the shift penalties in clause 16(i), the loadings for work on Saturday and Sundays in clause 16(iv), the ability to accrue additional annual leave (or a payment in lieu) under clauses 25(ii)(b) and (c) and the additional annual leave provided for in clause 25(xi) as providing appropriate compensation to employees.

• [43] I recognise that these clauses apply to all employees, including those required to work on a seven day basis. But that is significant. If those terms apply to all employees, what is the rationale for reading clause 25(i)(a) as extending to certain employees on the basis only of a contractual possibility of being required to work on a seven day basis? This goes to the purpose of the clause for which the ANMF contended.

• [44] It is well accepted that certain shift workers should be entitled to more annual leave than employees who do not do shift work. This is reflected in clause 25(i)(a).[27] This recognises, amongst other things, the need to compensate such workers for matters of the kind described by Ms Brady in her statement.

• [45] However, there was no controversy that not all employees whose employment contracts include the Hours of Work Term would in fact be rostered to or work on a seven day basis. Under cross-examination, Ms Brady gave the following evidence:[28]

"Yes. Now, in paragraph 7 of your statement you say being in employment at Northern Beach as an employee of Healthscope, you have continued to be required to work on a seven-day basis. Now, when you say 'required to work on a seven-day basis', I take it you're referring to you need to be available to be rostered?---I am available to work. Yes.

Yes. Yes. But it says nothing, I put to you, about whether you actually do work, given the fluctuations you have already told the Commission about in your own experience?---It depends on the need of the unit and what my manager rosters me on. I'm available on all those days."

• [46] In considering the ANMF's submissions, I cannot see what difficulties are "inherent" in the mere potential for an employee to be required to work shift work on any day of the week. I also struggle to comprehend the ANMF's contention that the extra two weeks leave is offered as compensation for the employees being "subjected to the capacity to have [their] roster made seven days a week" (my emphasis).[29]

• [47] To my mind, it would not be a sensible industrial outcome that such additional annual leave would be available to an employee who may never be required to work on a Sunday or public holiday.

• [48] Further, there is an inherent unfairness in the ANMF's construction. For instance, on the ANMF's case, an employee who in fact works on a seven day basis would receive no greater benefits or compensation than one whose contract includes the Hours of Work Term but who works exclusively Monday to Friday. As I have already observed, meanings which avoid inconvenience or injustice may reasonably be strained for.[30]

Is there a need to work a minimum number of Sundays and public holidays?

• [49] I turn now to consider Healthscope's submissions as to the significance of the word "basis" in clause 25(i)(a). It contended that it is a reference to the pattern of work in which an employee engages, and that the question which arises is "where do you draw the line?".[31]

• [50] As I have already stated, Healthscope submitted that guidance could be derived from cases in which the Commission has considered the terms "regularly works on Sundays and public holidays" (O'Neill v Roy Holdings Pty Ltd[32] ("O'Neill")) and "seven day shiftworker" (Bega Dairy and Drinks Pty Ltd formerly known as National Foods (Dairy Foods) Limited v United Workers' Union[33] ("Bega Dairy")). It contended that those cases supports a conclusion that to be "required to work on a seven day basis", an employee must work a minimum of 34 Sunday shifts and six public holidays in a year.

• [51] In O'Neill, Commissioner Williams had to consider whether the applicant qualified for the shiftworker annual leave entitlement under section 87(3) of the Fair Work Act. The disagreement between the parties in that case was whether the applicant "regularly works on Sundays and public holidays", as required by section 87(3)(a)(iii). Following a review of cases of the Commission and its predecessors going back to 1965, the Commissioner determined that for an employee to be one who "regularly works on Sundays and public holidays" they must work at least 34 Sundays and six public holidays in a year.

• [52] In Bega Dairy, Deputy President Boyce had to consider the meaning of the term "7 day shiftworker" as it appeared in an enterprise agreement. The Deputy President determined that the term was one of "general application" to both full-time and part-time employees across all industries.[34] He found that it applied to an employee who works their shifts "regularly" over seven days of the week, including Sundays and public holidays in each relevant year of employment.[35] The Deputy President held that the focus is on the individual employee concerned, and the shifts that the employee actually works, not simply the employer's operations or its rosters. The fact that an employee might be able to be rostered over seven days of the week was not the test. Rather, the test was (retrospectively) what shifts the employee has worked over the relevant period.[36]

• [53] The ANMF contended that Healthscope's reliance on O'Neill and Bega Dairy is inapt. It submitted that construction is text-based, and the conclusion about the construction of the term of another instrument cannot supplant the need to properly construe the provision in question. It argued, and I accept, that it would be an error to treat what was said in construing one instrument as necessarily controlling the construction of another.[37]

• [54] In any event, I am not persuaded that there is an equivalence between the term "regularly works on Sundays and public holidays" as considered in O'Neill and "required to work on a seven day basis" in clause 25(i)(a). I have also had regard to the cases to which the ANMF referred me that called into question the application of Commissioner Williams' approach in other industrial contexts.[38] For reasons which I will come to, I also have reservations as to how comfortably the Commissioner's analysis sits with the requirement in section 87(2) of the Fair Work Act that an employee's entitlement to paid annual leave "accrues progressively during a year of service...according to the employee's ordinary hours of work".

• [55] As to Bega Dairy, I again do not accept that there is a necessary equivalence between "seven day shiftworker" and "required to work on a seven day basis". The first requires the designation of the employee to a particular category of worker. For reasons which I will come to, that is not necessarily the same thing as the basis on which an employee might work from time to time.

• [56] The need to establish the "basis" referred to in clause 25(i)(a) - or to "draw the line" as Healthscope submitted - stems in part from its contention that the clause uses "required" in the past tense. That is, a determination as to whether an employee qualifies for six weeks of annual leave can only be done retrospectively, once they have worked 34 Sundays and six public holidays.

• [57] The ANMF submitted that the opening words of clause 25(i), which require that annual leave accrue on a pro rata basis and be credited to the employee progressively, is fatal to such a construction.

• [58] Healthscope submitted that in the historical context of the Agreement, the requirement for progressive accrual is not significant. To understand this submission, it is necessary to outline some of the history of Agreement.

• [59] In 2006 Healthscope and the ANMF entered into an enterprise agreement titled Healthscope Group and New South Wales Nurses' Association Nurses' and Midwives' (State) Enterprise Agreement 2006-2008.[39] That agreement was approved by the IRCNSW on 21 March 2006 and commenced operation the same day. Clause 23 of the agreement bears a striking resemblance to the current clause 25. However, clause 23(i) was in these terms:

(i) Annual leave on full pay is to be granted on completion of each twelve months service as follows:

(a) Employees required to work on a seven (7) day basis - six (6) weeks annual leave.

(b) All other employees - four (4) weeks annual leave.

• [60] The enterprise agreement referred to the Annual Holidays Act as the source of any annual leave entitlements for casual and temporary employees.[40]

• [61] Clause 48(i) of the agreement was in these terms:

(i) The parties agree that the existing terms and conditions of the Private Hospital Industry Nurses' (State) Award, Private Hospital and Nursing Home Nurses' Superannuation (State) Award, and the Nurses' (Private Sector) Redundancy (State) Award will continue to apply until the commencement date of this Enterprise Agreement. The Nurses' (Private Sector) Training Wage (State) Award will continue to operate in conjunction with this Enterprise Agreement.

• [62] As at 21 March 2006, the terms of the Private Hospital Industry Nurses' (State) Award relating to annual leave were relevantly the same as those in the 2006 enterprise agreement.[41]

• [63] In or about 2008, the parties entered into an enterprise agreement titled Healthscope Group and NSWNA/ANF Union Collective Agreement 2008-2010.[42] Clause 25(i) of that agreement was in these terms:

(i) Annual leave will accrue on a pro rata basis and be credited to the employee monthly in accordance with the provisions of the Standard (refer to Division 4 - Annual Leave of Part 7 The Australian Fair Pay and Conditions Standard of the Workplace Relations Act, 1996).

(a) Employees required to work on a seven (7) day basis - six (6) weeks annual leave per annum

(b) All other employees - four (4) weeks annual leave per annum.

• [64] The parties entered into a further agreement in about 2013, titled Healthscope Limited and NSWNMA/ANF Enterprise Agreement 2013-2015.[43] Clause 24(i) of that agreement provided that annual leave "will accrue on a pro rata basis and be credited to the employee monthly in accordance with the provisions of the National Employment Standards (NES) contained in the Fair Work Act 2009" (my emphasis).

• [65] In 2015 the parties entered into the Healthscope - NSWNMA/ANMF - NSW Nurses and Midwives' - Enterprise Agreement 2015-2019. Clause 24(i) of that agreement provided that annual leave "will accrue on a pro rata basis and be credited to the employee progressively in accordance with the provisions of the National Employment Standards (NES) contained in the Fair Work Act 2009" (my emphasis). Apart from some minor drafting changes, this requirement is reflected in the current clause 25(i).

• [66] In light of the history of the Agreement (and of the relevant New South Wales awards referred to above), Healthscope submitted that the New South Wales awards on which subsequent enterprise agreements were based allowed for the grant of annual leave at the end of each 12 months service.[44] It followed that any assessment of an employee's entitlement to annual leave could only be made at the end of each year of service. This was the position under the 2006 enterprise agreement. Any subsequent changes to the opening words of the clause with the result of changes to the legislation governing the employees' entitlement to annual leave. Healthscope submitted that any anomaly in the clause was "a remnant of the historical development of the annual leave in title meant under the FW Act and the Workplace Relations Act 1996" and could not displace the natural and ordinary meeting of the text of the clause.[45]

• [67] I accept that the language of what is now clause 25(i) has been adapted over time to reflect changes in the legislation governing annual leave. I also accept that the phrase "required to work on a seven day basis" existed in enterprise agreements between the parties prior to the requirement for progressive accrual and crediting appearing in the 2015 enterprise agreement.

• [68] However, I do not accept Healthscope's argument that it followed that the opening words of the clause are not a useful aid in determining the proper construction of clause 25(i)(a). They are relevant to consider Healthscope's submission that the word "required" is used in the past tense.

Healthscope's contention as to the operation of the clause

• [69] Healthscope submitted that clause 25(i) operates in this way: Annual leave accrues on a pro rata basis and is credited to the employee progressively, initially on the basis that the employee is entitled to four weeks annual leave per annum. Once it is apparent that the employee is required to work on a seven day basis, they become entitled to six weeks annual leave. An adjusting credit will be made to their annual leave balance and they will thereafter accrue leave at the higher rate

• [70] I observe at the outset that there is no evidence that Healthscope applies this construction in practice.

• [71] In any event, I cannot see how Healthscope's construction flows from the natural and ordinary meaning of the text of the clause. At the very least, it would require clause 25(i)(a) to be read as "employees who have been required to work on a seven day basis". (I note that Healthscope took issue with the ANMF's construction of the clause, as it would require the words "who may be" inserted before "required".)

• [72] I also accept the ANMF's submission that such a construction, potentially requiring a retrospective adjustment to an employee's annual leave entitlements, does not sit comfortably with clause 25(v). As the ANMF submitted, the terms of clause 25(v) suggest that the requirement for progressive accrual and crediting of annual cannot lightly be discounted.

• [73] But more particularly, Healthscope's construction is premised on a binary outcome. That is, at the end of the year an employee will have accrued either six weeks or four weeks of annual leave. No other outcome is possible.

• [74] However, I make the following observations. First, the opening words to clause 25(i) expressly invoke the National Employment Standards ("NES") contained in Part 2-2 of the Fair Work Act. This echoes clause 5(ii) of the Agreement, which provides that the "NES applies [sic] to Employees covered by the Agreement except where the Agreement provides a greater condition or entitlement".

• [75] Second, section 87 of the Fair Work Act, which forms part of the NES, prescribes an employee's entitlement to annual leave. In broad terms, section 87(1) confers an entitlement to four weeks of paid annual leave for each year of service, but five weeks in the case of a shiftworker. In so far as it is relevant to the present case, an employee will be entitled to five weeks if an enterprise agreement applies which defines or describes the employee as a shiftworker for the purposes of the NES.[46]

• [76] Section 87(2) provides:

(2) An employee's entitlement to paid annual leave accrues progressively during a year of service (other than periods of employment as a casual employee of the employer) according to the employee's ordinary hours of work, and accumulates from year to year.

• [77] I do not read the legislation as allowing an employer to wait until the end of the year to determine whether the employee will be entitled to four or five weeks of annual leave. Leave will accrue at the rate necessary to match the annual leave entitlement.[47] (It is in this context that I have some reservations as to the outcome in O'Neill.)

• [78] Third, clause 25(i)(a) is properly to be read as applying in the same way. It sets a rate at which annual leave will accrue and be credited to the employee progressively, depending on the basis on which they work. It does not mandate that an employee must receive either six weeks of annual leave or 4 weeks of annual leave at the end of each year. The accrual may be something in the middle.

• [79] That is, when an employee works on a seven day basis, leave will accrue pro rata at a rate assuming an annual entitlement to six weeks leave. If the basis on which they work changes, such that they no longer work on a seven day basis, they will accrue annual leave at a rate assuming a four week annual entitlement. To my mind, this is the consequence of the requirements that annual leave accrue pro rata and be credited progressively.

• [80] The Hours of Work Term provides that the employee "may be rostered at varying shifts, days or time in accordance with the needs of the business including, over 7 days of the week for all shifts". The ANMF contends that the existence of the Hours of Work Term in an employee's employment contract of itself qualifies an employee as one who is required to work on a seven day basis. Based on the discussion above, I do not accept that contention.

• [81] On its terms, the Hours of Work Term does not mandate a particular form of engagement. It is a permissive or enabling provision. I recognise that it reposes significant discretion in Healthscope. But that does not render the employee as being one who is required to work on a seven day basis. That will only be the case when the employee is called upon by Healthscope to in fact work on a seven day basis.

• [82] However, I see no warrant for imposing a requirement that an employee work a particular number of Sunday or public holidays before they can be regarded as working "on a seven day basis". Healthscope's arguments, and the way it suggested that the clause would be applied in practice, are premised on an employee's entitlements being determined retrospectively. That is inconsistent with the requirement in clause 25(i) that annual leave accrue pro rata and be credited to the employee progressively.

• [83] Clause 25(i) does not call for a binary outcome at the end of each year of an employee's service. Nothing in the language of the clause precludes leave accruing at different rates, depending on the "basis" of the employee's work from time to time.

• [84] I accept that such an outcome may cause some administrative inconvenience to Healthscope, but in this regard I make three observations. First, there is some complexity in Healthscope's suggestion of mid-year adjustments once an employee has worked the requisite number of Sundays and public holidays. Second, any inconvenience may, at least in some cases, be the consequence of Healthscope availing itself of the flexibility afforded by the Hours of Work Term. Third, any inconvenience to Healthscope is outweighed in my opinion by an employee's entitlement under clause 25(v) to take leave that is credited to them at a point in time.

• [85] I turn now to deal with the dispute as to whether an employee who is required to work on a seven day basis is entitled to the annual leave loading under clause 26 of the Agreement.

• [86] The ANMF's position may be simply put: Clause 26 provides for the payment of annual leave loading. Clause 26(vii) states that clause 26 "extends to an employee who is given and takes an annual holiday and who would have worked as a shift worker if the employee had not been on holidays". If a worker meets the definition of "shift worker", they are entitled to the benefits of clause 26. An employee who is required to work on a seven day basis is a shift worker.

• [87] Healthscope's arguments may be summarised in this way:

1. Clause 25(viii)(b) provides that "[a]n employee to whom paragraph (a) of subclause (i) applies shall be paid during the first twenty eight (28) consecutive days whilst on annual leave the employee's ordinary rate of salary plus shift allowances and weekend penalties relating to ordinary time the employee would have worked if they had not been on annual leave".

1. Clause 26(ii) provides that annual leave loading "is payable in addition to the pay for the period of holiday given and taken due to the employee under subclauses (i)(b) and (ii)(c) of Clause 25".

1. The absence of any reference in clause 26 to clause 25(i)(a), coupled with the express reference to clause 25(i)(a) in clause 25(viii)(b), makes clear that it is clause 25(viii)(b) which stipulates the payments that an employee who is required to work on a seven day basis is entitled to receive when on annual leave.

1. The reference to "shift workers" in clause 26(vii) does not extend an entitlement to leave loading to an employee required to work on a seven day basis. It applies only to those shift workers who accrue leave under clause 25(i)(b). It is designed to ensure that those employees do not receive less through payment of the loading than they would have received through shift allowances and weekend penalties.

• 5. In short, for employees required to work on a seven day basis, clause 25(viii)(b) operates to the exclusion of clause 26.[48]

• [88] The starting point is to look at clause 25(viii) in its entirety. Clause 25(viii)(a) provides that "[e]ach employee before going on leave shall be paid for the period of the leave at the ordinary rate of salary to which the employee is entitled under this Agreement". On its terms, that provision is one of general application to all employees.

• [89] Clause 25(viii)(b) then adds a qualification for employees to whom clause 25(i)(a) applies. That is, for the first 28 consecutive days, such an employee will also receive payment of shift allowances and weekend penalties for ordinary time that they would have worked had they not been on leave. That is, the clause ensures that as a result of going on annual leave, the employee will not suffer a reduction in their pay - at least for the first 28 consecutive days.

• [90] As the ANMF submitted, clause 25(viii)(b) is not expressed to be exhaustive of the payment that an employee might receive whilst on annual leave. To my mind, this is because in the context of clause 25(viii) as a whole, it is limited to establishing an employee's rate of pay whilst on annual leave.

• [91] I also note (although I do not place significant weight on) clauses 25(ii)(a)(and (c). Those clauses provide for an additional payment for work on a public holiday, which is expressly stated to be "in lieu of any additional rate for shift work or weekend work which would otherwise be payable". This might suggest that had the drafters of the Agreement intended clause 25(viii) to be exhaustive, they would have said so.

• [92] Other questions arise from the language of clause 25(viii)(b): What happens when an employee to whom clause 25(i)(a) applies takes periods of non-consecutive leave? Is each period subject to the same "cap" of 28 days? Does it make a difference if the separate periods cumulatively total more than 28 days? What is an employee to be paid for the 29th and subsequent days of a period of annual leave?

I am unable to answer those questions. However, it is useful to consider Healthscope's argument in the context of the last question. As I comprehend Healthscope's position, for the 29th and subsequent days the employee would receive payment only of their ordinary rate of salary under clause 25(viii)(a). They would have no entitlement to leave loading. However, I see no reason why employees required to work on a seven day basis should suffer an effective reduction in their take home pay when on annual leave that other shift workers will not (by virtue of clause 26(vii)).

• [93] I also do not accept Healthscope's contention that clause 26(vii) should be read as applying only to those shift workers who accrue leave under clause 25(i)(b). As I have stated, not all shift workers may be required to work on a seven day basis. On that basis, it is common ground that clause 25(i)(b) would apply to both day workers and some shift workers. Clause 26 would apply to the shift workers covered by clause 25(i)(b) by virtue of clause 26(ii). Why, then, would it be necessary in clause 26(vii) to refer to clause 26 "extending to" shift workers?

• [94] Further in this regard, Healthscope submitted that clause 26(vii) was limited to ensuring that shift workers who are not required to work on a seven day basis do not receive less through payment of the loading than they would have received through shift allowances and weekend penalties. If that were the case, and clause 26 were to be read as including only those shift workers covered by clause 25(i)(b), the opening words of clause 26(vii) - "This clause extends to an employee who is given and takes an annual holiday and who would have worked as a shift worker if the employee had not been on holidays; provided that" - are otiose.

• [95] Having regard to these matters, I do not accept Healthscope's contention that clause 25(viii)(b) operates to the exclusion of clause 26. The clear and unambiguous words of clause 26(vii) extend the operation of clause 26 to all shift workers. This creates no inconsistency: clause 25(viii)(b) provides for the payment of ordinary rates plus shift allowances and weekend penalties; clause 26(vii) ensures that those amounts will be paid if they exceed the amount of the loading.

• [96] Importantly, clause 26(vii) has particular work to do where clause 25(viii)(b) may not apply. That is, it provides for the payment of annual leave loading, or the payment of shift allowances and weekend penalty rates, for periods of annual leave falling outside of the first 28 consecutive days of annual leave.

• [97] For clarity, I do not suggest that an employee required to work on a seven day basis is entitled to receive annual leave loading on the amounts payable under clause 25(viii)(b). The Agreement clearly anticipates that a shift worker will receive the higher of the annual leave loading or the shift allowances and weekend penalties that they would have received had they not been on leave. I did not understand the ANMF to contend otherwise.

• [98] Having regard to the matters I have canvassed, I return to the questions for determination that I set out above. I answer those questions as follows:

1. Does the presence of the Hours of Work Term in an employee's employment contract of itself render that employee one who is "required to work on a seven (7) day basis" within the meaning of clause 25(i)(a) of the Agreement?

Answer: No. An employee must in fact be called on to, and work, on a seven day basis.

1. If the answer to (1) is no, is there a requirement that the employee work a minimum number of Sundays and public holidays to qualify as being "required to work on a seven (7) day basis" (and if so, what are those minima)?

1. Does clause 26 of the Agreement apply to employees "required to work on a seven (7) day basis"?

Answer: Yes, by virtue of and subject to the terms of clause 26(vii).

[2] Statement of Cameron Smith, 20 December 2024, Annexure C

[3] See clauses 40(iv) and (vii) of the Agreement; Transcript, 1 April 2025 PN12

[4] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union' known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005 at [114]. See also Linfox Armaguard Pty Ltd T/A Linfox Armaguard v Transport Workers' Union of Australia [2024] FWCFB 373 at [38]- [43]; WorkPac Pty Ltd v Skene (2018) 264 FCR 536; [2018] FCAFC 131 at [197]

[5] [2023] FWCFB 259, see also [110]-[115]

[6] Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; [2005] HCA 10 at [2] (Gleeson CJ and McHugh J); [96] (Kirby J)

[7] Linfox Armaguard Pty Ltd T/A Linfox Armaguard v Transport Workers' Union of Australia [2024] FWCFB 373 at [39]

[8] Kucks v CSR Ltd (1996) 66 IR 182 at 184, quoted with approval in Svitzer Australia Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union, The Australian Institute of Marine and Power Engineers and Another [2023] FWCFB 259 at [114]

[9] Outline of Submissions for the Applicant, par 40

[11] Reply Submissions for the Applicant, paragraph 6(a)

[12] Bega Dairy and Drinks Pty Ltd formerly known as National Foods (Dairy Foods) Limited v United Workers' Union [2024] FWC 171

[13] O'Neill v Roy Holdings Pty Ltd [2015] FWC 2461

[14] Outline of Submissions for the Applicant, par 34

[15] Respondent's Outline of Submissions, par 19

[16] I observe parenthetically that the existence of this clause is curious in light of the requirement in clause 25(i)(a) that annual leave "accrue on a pro rata basis and be credited to the employee progressively".

[17] Statement of Cameron Smith, par 19

[18] Statement of Cameron Smith, Annexure K

[19] Svitzer Australia Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union, The Australian Institute of Marine and Power Engineers and Another [2023] FWCFB 259 at [115] citing Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union' known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005 (see [44])

[21] Transcript, 1 April 2025, PN310-PN311

[22] Outline of Submissions for the Applicant, par 44

[23] Statement of Sheridan Brady, 20 December 2024

[25] Statement of Claire Walker, 7 March 2025, Annexure CW-01

[26] Respondent's Outline of Submissions, par 36

[27] See also section 87(1)(b) of the Fair Work Act.

[28] Transcript, 1 April 2025, PN70-PN71

[30] Kucks v CSR Ltd (1996) 66 IR 182 at 184, quoted with approval in Svitzer Australia Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union, The Australian Institute of Marine and Power Engineers and Another [2023] FWCFB 259 at [114]

[32] [2015] FWC 2461

[33] [2024] FWC 171

[34] [2024] FWC 171 at [50]

[35] [2024] FWC 171 at [52(a)]

[36] [2024] FWC 171 at [53(a)]

[37] McNamara (McGrath) v Consumer Trader and Tenancy Tribunal (2005) 221 CLR 646; [2005] HCA 55 at [40]

[38] HSU v DPG Services Pty Ltd [2023] FWCFB 81 at [21] and Four yearly review of modern award - Registered and Licensed Clubs Award 2010 [2020] FWCFB 4762 at [17]

[39] This enterprise agreement was referred to in Healthscope's written submissions at par 32 footnote 17, but was not in evidence. I have found it through the website of the Industrial Relations Commission of New South Wales: https:// irc.nsw.gov.au/documents/enterprise-agreements/EA06-277.pdf

[40] Clauses 22 Part II(iv) and 22 Part III(iii)

[41] www.ircgazette.justice.nsw.gov.au/irc/ircgazette.nsf/(PublicationsByTitle)/EE43EDE2E5B0D8CACA256B8200186345?OpenDocument as amended in www.ircgazette.justice.nsw.gov.au/irc/ircgazette.nsf/(PublicationsByTitle)/792ACDCB94C5804CCA256EFC00171285?OpenDocument

[42] Once again, this enterprise agreement was referred to in Healthscope's written submissions (par 32 footnote 18), but was not in evidence. I have found it through the Fair Work Commission's website: https://www.fwc.gov.au/document-search/view/3/aHR0cHM6Ly9zYXNyY2RhdGFwcmRhdWVhYS5ibG9iLmNvcmUud2luZG93cy5uZXQvZW50ZXJwcmlzZWFncmVlbWVudHMvSGlzdG9yaWNhbC8yMDA5LzIwMDkvMTEvY2F1bjA5NTkzODk3Mi5wZGY1?sid=&q=Healthscope

[43] Statement of Cameron Smith, Annexure J

[44] In support of its submissions, Healthscope relied on a provision of the Public Health System Nurses' and Midwives' (State) Award 2023. There is no evidence that that award, particularly in its current incarnation, was in any way relevant to the industrial dealings between the parties. Consequently, I have considered Healthscope submissions having regard to the New South Wales awards to which I have referred.

[45] Respondent's Outline of Submissions, par 32

[46] Section 87(1)(b)(ii)

[47] See for example 4 yearly review of modern awards - Alleged NES Inconsistencies [2015] FWCFB 3023 at [12]

[48] Healthscope cited in support of its submissions the approach taken in Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1 at 7

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