Cole v Director-General of Department of Youth and Community Services

Industrial Relations Act 1996 LEGISLATION CITED: Health Administration Act 1982 Public Hospitals Act 1929

CASES CITED: Cole v Director-General of Department of Youth and Community Services (1987) 7 NSWLR543 State Rail Authority Firefighters Award 2001[2002] NSWIRComm 159

27 April 2009 HEARING DATES: 14 July 2009 24 July 2009

APPLICANT Mr N Dawson Federation Law LEGAL REPRESENTATIVES: RESPONDENT Counsel Mr P Newall

DECISION: - 63 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM : STANTON C Friday, 6 November 2009

Notification under section 130 by New South Wales Nurses' Association of a dispute with Hunter New England Area Health Service and another regarding withdrawal of the half hour paid meal break

1 The issues subject to this dispute notification are both complex and broad ranging. In essence, they relate to a decision of the then Department of Health to transfer the administration of Fifth Schedule psychiatric hospitals to Area Health Services and public hospitals pursuant to Schedule 3 of the Health Administration Act 1982, by Order of the Governor, effective on and from 1 July 1991. 2 Nurses employed by the relevant Fifth Schedule psychiatric hospitals subject to transfer were public servants. As such, those employees were afforded different employment conditions when compared to employees of Area Health Services and public hospitals. One such condition, a paid meal break, is at the centre of this dispute and has been the subject of robust discussions between the parties for a number of years. 3 The parties have been involved in extensive conciliation and as a result, the issues concerning the ongoing entitlement to the paid meal break for the majority of affected employees have narrowed considerably. 4 At issue and subject to arbitration in these proceedings is whether the paid meal break benefit afforded to three nursing employees and more recently withdrawn by the Hunter New England Area Health Service (the Area Health Service) following a review of employee rosters, should be reinstated retrospectively. 5 This matter was first subject to compulsory conference proceedings in Newcastle on 16 October 2008. Mr J O'Brien appeared for the notifier, the New South Wales Nurses' Association (the Association). Mr K O'Malley appeared for the Area Health Service. In arbitration Mr N Dawson appeared for the Association and Mr P Newall appeared for the Area Health Service. 6 The dispute notification sought the assistance of the Commission to resolve the following industrial matter: The decision of Hunter New England Area Health Service to withdraw the half hour paid meal break for a number of nurses employed by the Area Health Service. This is a direct breach of the Memorandum of Understanding entered into when the former public servants were transferred to the Area Health Services in 1991. 7 At the time, the Area Health Service's decision to withdraw the paid meal break impacted on five members of the Association. 8 Shortly stated, the Union sought the Commission to determine: Whether the decision to withdraw the half hour paid meal break for a number of Nurses is a direct breach of the Memorandum of Understanding entered into when the former public servants were transferred to the Area Health Services in 1991. 9 Applicable legislation and New South Wales Department of Health policy documents relevant to the Commission's deliberations include: (i). the Health Administration Act; (ii). Orders made by the Governor of New South Wales pursuant to clause 2 of Schedule 3 under the Health Administration Act concerning the transfer of positions from the Department of Health;

(iii). open letter to staff from the Department of Health Secretary, Mr M Rosser, dated 27 June 1989 and annexure titled "Preserved Conditions of Employment of Transferred Staff"; and (iv). Department of Health Circular 91/75: Transfer of Existing Public Servants of the Mental Health Services to Area Health Services and Public Hospitals and Policy Directive PD2005-454. 10 Directions for arbitration were issued on 16 October 2008. Those directions were subsequently amended, by consent, to allow the Area Health Service to file additional materials. The matter was scheduled for arbitration 27-30 April 2009. The Association's evidence was completed on 27 April and proceedings were adjourned to 14 July to suit the availability of the parties. Final submissions were completed on 24 July. Relevant Background

11 Prior to 1 July 1989, Mental Health and Aged Care Services were administered by the Department of Health (the Department), regulated by the Public Hospitals Act. Psychiatric hospitals were listed at Schedule 5 of the statute (commonly known as Fifth Schedule hospitals). 12 Following a Government review and recommendation the administration of Fifth Schedule psychiatric hospitals was transferred to Base Hospitals/Area Health Services under Schedule 3 of the Health Administration Act 1982, effective 1 July 1989. The Department subsequently approved a transitional period where staff working at the relevant psychiatric hospitals retained their public service status until 30 June 1991, at which time their employment was transferred by Order pursuant to Schedule 3 to the relevant Base Hospital or Area Health Service. Accordingly, transfer took effect on and from 1 July 1991.

13 Ms Shean, an Industrial Officer of the Association, filed a statement on 16 January 2009. She was not required for examination. 14 Ms Shean deposed she was familiar with the industrial instruments applicable to public sector nurses in 1989 and, particularly, the provisions relevant for transfer "between public health sectors". Subsequent to the transfer, she had been required to advise Association officers concerning the application of certain transfer provisions. 15 Ms Shean confirmed nurses engaged in Fifth Schedule hospitals were employed by the Department under the provisions of the then Public Service Act and as public servants, some conditions of employment differed from those applicable to nurses employed by public hospitals or Area Health Services under the Public Hospital Nurses' and Midwives (State) Award (the Award). 16 Ms Shean also confirmed a decision was made in 1989 to transfer the Department's mental health and aged care services to Area Health Services pursuant to the provisions of the Health Administration Act. Ms Shean stated Schedule 3 of the statute conferred protection of certain conditions, namely salary and wages, superannuation and leave entitlements for transferred employees. Additionally, negotiations at the time between the Department and relevant unions had resulted "in a guarantee...that some additional entitlements would be maintained by administrative action." Those entitlements included "the preservation of hours of work while the employee remained in the transferred position". The agreed preserved conditions of employment for transferred staff were set out in Department Circular 91/75 and the Policy Directive. 17 Ms Shean deposed that prior to the transfer on 1 July 1991, the Association sought clarification whether employees who transferred employment to another Fifth Schedule hospital retained their preserved conditions. In response, the Department advised the Association that an employee transferring between Fifth Schedule hospitals would retain all conditions set out in Schedule 3. A copy of the Association's correspondence relevant to those representations was annexed to her statement. 18 In a further statement filed on 12 March 2009, Ms Shean referred to the statement of Mr Kevin O'Malley filed on 24 February 2009 and contended neither Mr Len Newman, Industrial Relations Advisor nor Mr Trevor Craft, Deputy Director, Workplace Relations and Management Branch of the Department were asked for advice as to whether any of the employees who are subject to these proceedings still remain in their transferred position. 19 Ms Shean deposed Schedule 3 contains details of the process whereby the Governor may transfer positions. In that regard, she stated the transfer order must specify the person to whom the positions are transferred, the positions which are transferred and the date on which the transfer takes effect. Moreover, positions may be specified by reference to the functions or activities which a person employed in that position performs, or the location at which those functions or activities are performed (or both) or in any other manner. 20 Ms Shean contended that in the case of the transfer of public servants of mental health services to Area Health Services and public hospitals, the positions were specified by the location at which the functions or activities were performed. She further contended: The Association's view of defining the transferred position is that it is determined by the functions and activities being performed by the employee. It is the Association's view that a registered nurse transferred under the provisions of Schedule 3 of the Health Administration Act remains in the transferred position while undertaking the functions and activities consistent with the functions and activities undertaken prior to the transfer i.e. the functions and activities consistent with the classification of registered nurse. 21 Ms Shean maintained a registered nurse does not move out of the transferred position by applying to transfer to a different location where they perform the functions and activities of a registered nurse for the same employer: This view is supported by the interpretation of the conditions of employment by Area Health Services. Registered nurses are not employed into a registered nurse position tied to a particular location or to a particular set of activities and function. The position of Area Health Services is that a registered nurse may be moved from one location to another and as a consequence be required to perform different functions and activities so long as they are consistent with the classification of registered nurse without the agreement of the employee. This is not characterised as a transferring of position when it is instigated by the employer. 22 Ms Shean contended Ms Tracy Gordon was transferred as a registered nurse under public servant conditions within the Hunter Region Mental Health Service to employment by the Area Health Service and continues to perform the functions and activities of a registered nurse in the role of Clozapine Co-Ordinator. Ms Gordon continues to be paid as a registered nurse and "Clozapine Co-Ordinator" is simply a role description. Moreover, there is no classification of "Clozapine Co-Ordinator" under the Award nor is additional remuneration required to be paid. Accordingly, Ms Gordon remains in the transferred position. 23 In relation to Ms Rhonda Smith, she transferred as a public servant enrolled nurse located at Allandale Hospital to the Area Health Service. She was later successful in applying for a vacant enrolled nurse position at Maitland Mental Health Unit where she continued to perform functions and activities consistent with the classification of enrolled nurse. Similar to Ms Gordon, she received no additional remuneration following the move and accordingly, remains in the transferred position. Mr James Dow

24 In a statement filed on 16 January 2009, Mr Dow deposed he had worked for the Area Health Service as a registered nurse since September 1990. He attained registration in or about 1981. Between 1984 and 1985 he worked at Morisset Hospital. He resigned in or about November 1985 and some two months later commenced work at Peat Island. He joined Gladesville Hospital in December 1987. 25 In 1990 Mr Dow was successful in an application for a position at James Fletcher Hospital, Newcastle. At the time he was told words to the effect, "If you want the job at James Fletcher Hospital you have to resign from Gladesville Hospital." Mr Dow disputed that contention on the grounds that he was able to transfer between hospitals. However, anxious to secure the position and return to Newcastle, he subsequently resigned the position at Gladesville. 26 Mr Dow maintained a half hour paid meal break was a condition of employment at a number of public hospitals including Gladesville and James Fletcher at the time. He retained that condition of employment when then public servant nursing staff were transferred to Area Health Services and Public Hospitals on and from 1 July 1991. 27 In March 1991, the James Fletcher personnel officer advised Mr Dow that certain former public servant conditions of employment were no longer applicable at James Fletcher. 28 In correspondence dated 27 March 1991, the Association made representation to James Fletcher quoting the advice of the Department's Mr Chris Brown to the following effect: ...an employee transferring between Fifth Schedule hospitals will retain all conditions as set out in Schedule 3 of the Health Administration Act. 29 By memorandum from the Director of Nursing, Hunter Area Mental Health Services, dated 22 April 1991, Mr Dow was advised: Please be advised that as from Monday 22nd April 1991, your hours of work have changed. You are now required to work an eight (8) hour shift with a paid meal break. 30 By memorandum from the Human Resources Manager, Mr Kevin O'Malley dated 27 June 2005, Mr Dow was advised his paid meal break benefit had been an error: You may be aware...some employees (employed as permanent employees prior to 1 July 1989) were classed as Public Servants in Fifth Schedule Hospitals prior to the transfer of the administration of Fifth Schedule Psychiatric Hospitals/Area Health Services. The changes were pursuant to Schedule 3 of the Health Administration Act and staff maintained certain conditions of employment for a transitional period, however, some conditions remain till the employment contract ceases. In short where Health Department Public Servants were transferred to an Area Health Service or Public Hospital they cease to be Public Servants and become employees of the Area Health Service or Public Hospital concerned. The Preserved Benefits or conditions that applied to transferred Health Department Public Servants included hours of work ie a "paid meal break". This benefit was preserved indefinitely, while the person remains in the transferred position at 1 July 1989. Following a recent review within Hunter New England Mental Health of staff that are in receipt of the "paid meal break", it was identified that you are in receipt of this benefit in error. As such effective 24 July 2005 the benefit will cease. You will be expected to work the contracted hours in accordance with the hours clause of the Public Hospital Nurses' (State) Award. 31 Other than removal of the paid meal break, Mr Dow deposed there was no alteration to other preserved benefits retained following his transfer to the Area Health Service on 1 July 1991. 32 In correspondence dated 14 October 2005, Mr O'Malley further advised: You may be aware that discussions with the NSW Nurses' Association have taken place and agreement has been reached on which employees are still entitled to the paid meal break. From the information at hand you commenced employment with the former Area Health Service after 1 July 1989. On this basis you are not entitled to receive the paid meal paid break. As such the benefit of a paid meal break will cease effective 6 November 2005. You will be expected to work the contracted hours in accordance with the hours clause of the Public Hospital Nurses (State) Award. 33 The policy position of the Area Health Service taken on 14 October 2005 was reinforced in further correspondence from Mr O'Malley dated 21 March 2006: You may be aware that discussions with the NSW Nurses' Association have taken place and agreement has been reached on which employees are still entitled to the paid meal break. From the information at hand you received the Fifth Schedule entitlement whilst under the employ of Gladesville Hospital. You made application and were successful for a vacancy in Newcastle in September 1990. There should have been no transfer of this benefit between Area Health Services. On this basis you are not entitled to receive the paid meal paid break. As such the benefit of a paid meal break will cease effective 3 April 2006. You will be expected to work the contracted hours in accordance with the hours clause of the Public Hospital Nurses (State) Award. 34 Mr Dow contends he is entitled to the paid meal break and that benefit should be restored to him retrospective to 3 April 2006. 35 In cross examination, Mr Dow confirmed he applied for the James Fletcher position in September 1990, partly for family reasons. He was shown a copy of his relevant Employment Application for the position, "permanent registered nurse", which stated employment would be in accordance with the appropriate industrial award or agreement. He understood he was in a transferred position following discussions with the Association and the Area Health Service. Mr Dow agreed that on 1 July 1991 he was working in the position of registered nurse at James Fletcher, which he successfully obtained during September 1990. 36 In re-examination, Mr Dow stated he had challenged the advice that he would need to resign from Gladesville Hospital to take up the position at James Fletcher. Mr Dow had also raised the matter with Association representatives at the time who suggested that he should follow the matter up at a later date, which he did some four months later. In that regard, he cited the Association's correspondence forwarded to the Area Health Service dated 27 March 1991 and correspondence from the Hunter Area Mental Health Service dated 22 April 1991 which restored the paid meal break. Mr Dow also confirmed his sick leave was also restored to 21 days per year compared to 14 days when he was in receipt of an unpaid meal break.

37 In a statement filed on 16 January 2008, Ms Gordon deposed she had been "employed continuously" at James Fletcher Hospital since 1984 in a number of registered nurse capacities. It was Ms Gordon's evidence that she was entitled to receive a paid meal break "as a preserved benefit and a condition of employment" on the grounds that she was a public servant as at 30 June 1991 who was formally transferred under Schedule 3 effective from 1 July 1991. She sought that benefit be restored with retrospective effect. 38 Ms Gordon had been afforded the benefit of a paid meal break when undertaking additional roles such as relieving nurse unit manager and clinical nurse specialist. 39 In or about 2005, Ms Gordon acted in the registered nurse position of Clozapine Co-ordinator. This position was later advertised as an internal vacancy and in June 2006 Ms Gordon was the successful applicant. She refused to sign an acceptance letter from the Human Resources Department on the grounds "the position was that of registered nurse and not a promotion". 40 Meanwhile, Mr O'Malley wrote to Ms Gordon on 14 October 2005 in the following terms: Further to my memorandum dated 27 June 2005 regarding the above matter, I wish to advise the following. You may be aware that discussions with the NSW Nurses' Association have taken place and agreement has been reached on which employees are still entitled to the paid meal break. From the information at hand it has been agreed that you will continue to receive the benefit whilst you remain in your current position. It was also agreed with the Association that staff would continue to receive the paid meal break if you transfer between units or units are closed within a particular site for example Morisset Hospital. However, if you gain a promotional position on a permanent basis, the benefit will cease. In addition should you act in higher duties there is no entitlement of a paid meal break for that time. 41 Mr O'Malley wrote to Ms Gordon on 16 November 2006 to advise the paid meal break would cease shortly thereafter: I refer to my letter to you dated 14 October 2005 advising that you would continue to receive the paid meal break entitlement following a review conducted by Human Resources in mid 2005. It has since come to the Health Services attention that you commenced in a permanent full time position as Clinical Coordinator, Clinic Services effective from July 2006 and have been receiving the paid meal break entitlement in error since this time. Based on this information you have in effect moved from your original transferred position and on this basis you are no longer entitled to receive the paid meal break. As such the benefit of a paid meal break will cease effective 19 November 2006. You will be expected to work the contracted hours in accordance with the hours clause of the Public Hospital Nurses (State) Award. 42 Ms Gordon subsequently telephoned Mr O'Malley to inform him that her position was Clozapine Co-ordinator, not Clinical Co-ordinator as set out in his correspondence. She also disputed that the position of Clozapine Co-ordinator was a promotion. 43 Ms Gordon deposed she was aware that Mr David McLeod, Acting Manager, Nursing Services, Hunter New England Mental Health Services, had written to the Association on 13 October 2008 and advised she was no longer entitled to the paid break on the grounds she no longer remained in the "transferred position" because she had been successful in her application (voluntary) for the internally advertised Clozapine Co-ordinator position. 44 In cross examination Ms Gordon confirmed she subsequently began to undertake some different duties and reported to the clinical services nurse manager. She also co-ordinated patient care to ensure Clozapine procedures and protocols were maintained. Ms Gordon also confirmed the Clozapine Co-ordinator's roster operates over five days, Monday to Friday, whereas the registered nurse roster normally operates over seven days. 45 In re-examination Ms Gordon stated she continued to receive the paid meal break when she had acted in the Clozapine Co-ordinator position.

46 In a statement filed on 16 January 2009, Ms Smith deposed she had worked at the Maitland Psychiatric Unit in the capacity of enrolled nurse since March 1998. After obtaining her registration in or about August 1988, Ms Smith accepted a position at Allandale Hospital and became a public servant. 47 Ms Smith deposed her employment was transferred to the Area Health Service on 1 July 1991. During 1995, she accepted a secondment to James Fletcher Hospital where she was able to access the Mental Health Certificate course that would enhance her career prospects, particularly in the event Allandale Hospital was privatised. 48 Ms Smith was successful in an application for an enrolled nurse position at the Maitland Mental Health Unit in March 1998. This position was advertised as an internal vacancy. 49 In correspondence dated 28 March 2006, Mr O'Malley wrote to her and advised that effective 17 April 2006, her paid meal break benefit would cease as she no longer remained in her transferred position as at 1 July 1989. The Association subsequently made a number representations to the Area Health Service on her behalf, to no avail. 50 In cross examination, Ms Smith confirmed she sought the Maitland position to expand her knowledge and skills. She also agreed she had "signed off" the Application for Employment which committed her agreement and understanding that the position was governed by "...the terms and conditions...(of) the appropriate industrial award." She was also shown her employment contract correspondence dated 13 March 1998 which stated: You will be employed under the provisions of the Public Hospital Nurses (State) Award and the 1994 Hunter Area Health Service Nurses Wages Agreement.

Hours of work were specified as 38 hours per week, conditions 8 hours per day for 19 days in 20 day, 4 week cycle. 51 In re-examination, Ms Smith stated the term "internal vacancy" was a vacancy where only persons employed by the Area Health Service could apply and confirmed she chose to leave Allandale Hospital because there was speculation it was to be privatised and, at the time, staff were encouraged to seek employment elsewhere. Mr Kevin O'Malley

52 Mr O'Malley's statement, filed on 24 February 2009, relevantly set out the following factual matrix: (i). Prior to July 1989, Mental Health and Aged Care Services were administered by the Department of Health. Mental Health and Aged Care facilities were regulated by the Public Hospitals Act 1929 - Schedule 5. (ii). Following an Inquiry, the Government decided to transfer the administration of Fifth Schedule Psychiatric Hospitals to Base Hospitals/Area Health Services effective 1 July 1989. (iii). The Department of Health approved a transitional period where staff retained their Public Service status until 30 June 1991, when they would be transferred pursuant to Schedule 3 of the Health Administration Act, unless the staff member elected to take up a position with an Area Health Service/Public Hospital, (including vacant positions in the Psychiatric Hospitals). Employment conditions changed from the date of taking up the new position. (iv). Effective 1 July 1989, all vacant positions in Psychiatric Hospitals were advertised as Area Health Service/Public Hospital positions. Successful applicants were appointed to the relevant position under the Area Health Service Act or Public Hospitals Act, as appropriate. 53 In correspondence dated 27 June 1989, the then Secretary of the Department of Health, Mr M Rosser, confirmed the position outlined in paragraph (iv) above. In addition, he also stated: At the time of your appointment...you will relinquish your public service status but action will be taken simultaneously to ensure that those conditions of employment as set out in Schedule 3 of the Health Administration Act are preserved by a determination under that Act. 54 A copy of Mr Rosser's correspondence, together with a document titled "Preserved Conditions of Employment of Transferred Staff", was provided to transferred staff. Conditions such as salary, superannuation and sick leave were preserved indefinitely. However, other conditions such as hours of work (including the application of a paid meal break) were preserved on a personal basis while the staff member concerned remained in the transferred position. The paid meal break afforded to previous Fifth Schedule employees was a preserved condition under the hours of work provisions. The transferred position for former Fifth Schedule public servant employees was the substantive position occupied as at 1 July 1989. 55 Following the introduction of a new computer based staff rostering system in late 2004, a range of award related entitlement issues were identified. In addition, the Area Health Service identified a number of instances where the paid meal break continued to be paid to staff who no longer worked in "the transferred position at 1 July 1989". Relevant correspondence to the Association dated 15 June 2005 was attached to Mr O'Malley's statement. 56 Mr O'Malley said some 77 staff were initially identified as being in receipt of a paid meal break, with 24 receiving the benefit in error. However, following negotiations with the Association, it was agreed that 63 staff would continue to receive the benefit. 57 In his written evidence, Mr O'Malley outlined the Area Health Service's position in the following terms: The Health Service maintains that the benefit of a paid meal break continues while the staff member remains in the transferred position, ie the substantive position as at 1 July 1989. The benefit will cease should the staff member gain a promotion on a permanent basis, make application and secure another position on merit either with the Health Service or with another Area Health Service. The benefit of a paid meal break is not transferable between Health Services. 58 Mr O'Malley also deposed the Area Health Service had sought certain advice from Departmental officers who supported the Area Health Service's view that the paid meal break was conditional upon the relevant staff member remaining in the transferred position and does not transfer where a member of staff voluntarily applies for and accepts an alternate position. 59 In cross examination, Mr O'Malley stated Ms Gordon's transferred position was registered nurse in admissions at James Fletcher Hospital, a position she had occupied since March 1984. He also stated the paid meal break should have ceased when Ms Gordon was successful in her application for an alternate position. 60 Mr O'Malley distinguished Ms Gordon's situation from that where whole wards and buildings had closed as was the case at Morisset: …if they were moved because a building closed or shut down - similar to ... Morisset where a great number of wards closed - agreement was that the people would retain that benefit.

61 Mr O'Malley stated it was the Area Health Service's position that when Ms Gordon moved from the Blue Gum Ward to the position of Community Mental Health Nurse (Cardiff) at the beginning of 2004 and later, the Clozapine Co-ordinator position at James Fletcher Hospital, she had retained her paid meal break because it appeared "the manager allowed it to occur in error". Similarly, if staff transferred within units at James Fletcher Hospital, other than for short periods of relief, from say a recent heavy workload, such staff would also lose their paid meal break. 62 Mr O'Malley agreed information set out in his correspondence to Ms Gordon dated 14 October 2005 was limited to "promotional positions": ...if you gain a promotional position on a permanent basis, the benefit will cease. In addition, if you act in higher duties there is no entitlement of a paid meal break for that time.

63 It was Mr O'Malley's evidence the Area Health Service had formed its opinion on the entitlement to a paid meal break following consideration of Mr Rosser's correspondence dated 27 June 1989, together with the Preserved Conditions of Employment of Transferred Staff document circulated at the time. 64 With respect to Ms Smith's situation, Mr O'Malley stated she had no entitlement to a paid meal break as a transferred employee because she had successfully applied for a vacant position at the Maitland Health Unit. He refused to be drawn on a suggestion that there was some connection between Ms Smith's application for the vacant Maitland Mental Health position and speculation at the time that Allendale Hospital was to be privatised. 65 Mr O'Malley was unaware whether in or about 1997 Allandale staff were encouraged to look for alternative employment pending privatisation. However, it was clear to him Ms Smith would have continued to receive the paid meal break benefit if she had remained at Allandale Hospital. 66 In relation to Mr Dow, Mr O'Malley stated the memorandum dated 22 April 1991 sent to him by the Director of Nursing, Hunter Area Mental Health Services concerning restoration of the paid meal break was sent in error. 67 It was Mr O'Malley's evidence that the Association's representations on behalf of Mr Dow seeking restoration of the paid meal break, set out in correspondence to James Fletcher Hospital dated 27 March 1991, referred to by Mr Dow in his written evidence, had no connection with the restoration of his paid meal break. Mr O'Malley contended the representations dealt with Schedule 3 of the Health Administration Act which made no reference to the paid meal break condition. 68 Mr O'Malley stated Mr Dow had worked at Gladesville Hospital between December 1987 and September 1990 and accordingly he would have received a letter from Mr Rosser concerning the preservation of his public service entitlements. 69 Mr O'Malley stated he had taken advice from senior managers and human resource staff concerning Ms Shean's statement that persons who successfully applied for vacant positions between 1 July 1989 and 30 June 1991, the transitional period, would retain their Schedule 3 conditions and the paid meal break. He said that advice was contrary to the evidence of Ms Shean. 70 In re-examination, Mr O'Malley was referred to his correspondence to Ms Gordon dated 14 October 2005 concerning the agreement reached between the Area Health Service and the Association in relation to continuing entitlement to the paid meal break. He confirmed the "agreement" referred to was based on discussions and negotiations between the parties as a means of moving the dispute forward. Mr David McLeod

71 Mr McLeod deposed he had worked for the Area Health Service in a number of capacities since February 2002 and was currently Acting Manager, Nursing Services, Mental Health Services. 72 He stated he was familiar with the relevant industrial instruments governing nursing in the public health system. He was familiar with Policy Directive PD2005_454 dealing with the transfer of then existing public servant nursing staff of Mental Health Services to Area Health Services from 1 July 1991. 73 Following the introduction of the "Roster On" computerised rostering system in late 2004, a range of inconsistencies concerning the application of award entitlements and the payment of allowances were identified. Following a review of award entitlements paid, some 77 staff were identified as receiving the paid meal break, with 24 receiving the benefit in error. Subsequent negotiations with the Association confirmed 63 staff would continue to receive the paid meal break. 74 It was Mr McLeod's evidence that "a proactive and rather generous approach" to negotiations with the Association led to an agreement whereby 63 staff would continue to receive the benefit of the paid meal break. In that regard, Mr O'Malley had written to the Association on 13 August 2007. 75 Mr McLeod deposed the matter had been subject to discussions between Mental Health management and Association officers on 22 March 2007. In correspondence dated 13 August 2007, Mr O'Malley wrote to the Association setting out what he understood was the "in principle agreement on the issue of paid meal breaks, with the exception of one employee, Ms Rhonda Smith." That correspondence stated: An agreed position had been reached with regard to staff entitled to the benefit to the paid meal break with the exception of Ms Rhonda Smith. At the meeting on 22 March 2007 the Association advised that it would provide correspondence that would support Ms Smith's claim for retaining the benefit of the paid meal break. The Association provided a letter dated 3 April 2007, together with minutes of a Joint Staff Consultative Meeting at Allandale Aged Care Facility on 25 November 1998. The minutes advise, "Expressions of interest for redeployment, voluntary redundancy and reduction in hours for enrolled nurses have closed". Ms Smith made application for an internally advertised, permanent full time enrolled nurse position at Maitland Mental Health Unit, was the successful applicant and commenced in this role on 23 March 1998. Clearly the minutes from a meeting in November 1998 is not evidence that Ms Smith and others were advised to consider alternative positions away from Allandale facility in early 1998. On 26 April 2007, Ms Rynne was requested in an email from Nathan White of my office to provide any other information regarding the proposed sale of the Allandale facility and any requests for staff to consider alternative employment. To date no further information has been provided and based on the information at hand, the Health Service maintains that Ms Smith no longer remains in the transferred position and is not entitled to the benefit of the paid meal break. Attached for your information is an updated list of those staff that retains the benefit of the paid meal break. You will note that Mr Maybury is included on the list following agreement on 22 March 2007. 76 Mr McLeod stated a further meeting with the Association was convened on 17 March 2008 where he understood the Area Health Service had conveyed its position on why Messrs Carroll and Dow and Ms Frazer were not entitled to the paid meal break benefit. Those views were conveyed to the Association in correspondence from Mr Nathan White, Senior Human Resources Consultant dated 24 April 2008 as follows: I refer to the ongoing discussions between the Health Service and the NSW Nurses Association regarding certain mental health employee's entitlement to a paid meal break. Most recently a meeting was held on 17 March 2008 between the Health Service and the NSW Nurses Association on the matter, to particularly discuss Mr Tim Carroll, Mr James Dow and Ms Leanne Frazer's entitlement to a paid meal break. As you are aware it has been the Health Service's position that the three employees mentioned are not entitled to a paid meal break. Notwithstanding this and following the meeting on 17 March 2008 the Health Service again reviewed the appropriate files as agreed at this meeting. I can confirm the Health Service identified no documentation to support or to suggest an entitlement to a paid meal break for these three employees. In fact the Health Service identified further documentation supporting the fact that the above employees applied for vacant Area Health Service positions. This information was communicated to Mr Jim O'Brien, Industrial Officer NSW Nurses Association in my email of 4 April 2008. The Health Service position remains the same in that Mr Carroll, Mr Dow and Ms Frazer are not entitled to a paid meal break and views that this matter as now being finalised. 77 In correspondence to Mr Peter Reay, then Acting Director Human Resources, dated 4 September 2008, the Association sought restoration of the "preserved" benefits, including the paid meal break on behalf of four former Fifth Schedule employees, namely Ms Smith, Ms Frazer and Messrs Dow and Carroll. The Association set out the relevant facts concerning each employee in some detail for consideration by the Area Health Service. 78 Mr McLeod stated Mr White subsequently met with the Association on 18 September 2008 to further discuss a number of issues. Mr White also wrote to the Association on 18 September to advise the Area Health Service's position remained unchanged and, in its opinion, negotiations with the Association that occurred in 2004 that confirmed 63 staff would continue to receive the benefit and, his correspondence to the Association dated 24 April 2008 had largely resolved all matters. However, notwithstanding those views, Mr White also advised the Association the matters raised had been forwarded to Mental Health Service Management for further consideration: I advised Mr Maratheftis in late 2004, Mental Health Services undertook a review regarding staff's entitlement to a 'paid meal break'. The review identified a number of staff were receiving this entitlement in error. Since this point in time, the matter has been subject to lengthy discussion and communications with the Association, namely Mr Jim O'Brien, Industrial Officer and Ms Katherine Rynne, Organiser. As such the Health Service was of the view there were no outstanding matters as they had long been resolved, following my letter of 24 April 2008 to the Association. Notwithstanding this, given the Association's above-mentioned letter the matter has again been referred to management of the Mental Health Service to review further. A full response will be provided by Mental Health Service's following their consideration of same. 79 Mr McLeod stated the Association subsequently notified a dispute on 22 September 2008 seeking restoration of the paid meal break benefit to Ms Smith, Ms Frazer, Ms Gordon and Messrs Dow and Carroll. Mr McLeod deposed Ms Gordon's circumstances had not been subject to any previous discussions between the Area Health Service and the Association. More recently, he understood Mr Carroll had accepted he was no longer entitled to the benefit, as he was the successful applicant for a vacant Area Health Service position in December 2005. 80 In response to Mr Dow's statement, Mr McLeod contended Mr Dow was not entitled to the paid meal break because he had "not remained in the 'transferred position', which was registered nurse, Gladesville Hospital", the position he held between 7 December 1987 and 23 September 1990. Mr McLeod also stated the memorandum from the Director of Nursing to Mr Dow dated 22 April 1991 was an error because Policy Directive PD 2005 _ 454 stated hours of work were "preserved on a personal basis while the person remains in the transferred position". 81 In relation to Ms Gordon's statement, Mr McLeod said her substantive position was at James Fletcher Hospital, Blue Gum Ward (Lake Macquarie Mental Health Inpatient Service). Her application for the Clozapine Co-ordinator position during 2006 was voluntary and upon accepting that position, Ms Gordon was no longer working in her "transferred position". 82 It was Mr McLeod's evidence that correspondence forwarded to Ms Smith dated 18 January 1996 concerning her secondment to James Fletcher Hospital contained no reference to an entitlement to a paid meal break. He said Ms Smith had terminated her secondment effective 12 May 1997 and subsequently returned to Allandale Hospital. She was later successful in an application for a vacant, internally advertised permanent position at the Maitland Mental Health Unit and commenced in that position on 23 March 1998. 83 Further, Ms Smith's letter of appointment stated she would be employed under the terms of the Public Hospital Nurses (State) Award and the 1994 HAHS Nurses Wages Agreement. There was no reference to a paid meal break. In correspondence dated 28 March 2006, Mr O'Malley advised Ms Smith she was receiving the paid meal break in error. 84 In cross examination, Mr McLeod explained a secondment occurred when an employee was required to spend time in a position other than his or her substantive or normal position. Mr McLeod also acknowledged the Blue Gum Ward was not built until 1993. He agreed that information supplied by the human resources department showed Mr Dow was appointed to the position of registered nurse, James Fletcher Hospital, in September 1990.

85 In re-examination Mr McLeod confirmed Mr Dow's appointment form signed off by his supervisor on 19 September 1990 had listed his present employment status as "permanent" and a "new employee". He noted the form enabled the relevant supervisor to record an employee's present status as permanent, casual or transferring appointment.

86 Mr Dawson addressed written submissions tendered in support of the Association's position and at the outset he stated the following dates encapsulated the relevant history related to the matter:

From 1 July 1989, all new employees engaged by Fifth Schedule hospitals were employed as employees of the applicable Area Health Service. Between 1 July 1989 and 30 June 1991, two groups of employees existed. Those engaged prior to 1 July 1989 who remained public servants and those engaged after that date that became Area Health Service employees. From 1 July 1991, the positions of those public servant employees engaged prior to 1 July 1989 (excluding Allandale Hospital) were transferred to the Area Health Service. The transfer date for positions at Allandale was 1 October 1991.

87 Mr Dawson referred to the relevant provisions set out in Schedule 3 of the Health Administration Act that dealt with the transfer of public servant employees to certain designated positions. He noted that unlike conditions such as superannuation and leave arrangements, hours of work were not preserved. However, he contended hours of work were preserved by way of Departmental Circular 91/75 dated 7 August 1991 (currently forming part of Policy Directive PD2005_454) concerning the transfer of existing public servants to Area Health Services and other public hospitals: Hours of Work - Where award hours of work prior to transfer are less than Public Hospital award hours to apply after transfer, the lesser hours will be preserved on a personal basis, while the person remains in the transferred position.

88 Mr Dawson stated the term, "designated position" in Schedule 3 was defined as a position transferred pursuant to clause 2 of the Schedule which empowers the Governor to transfer "positions".

89 Mr Dawson contended the meaning of "designated position" was at the very foundation of an employee's rights to certain conditions: Whilst this language is not the same as the language used in the Circular, which refers to hours of work, the interpretation of this phrase has clearly influenced the interpretation of similar language in the Circular. The Circular uses the phrase "transferred position"; it appears that the Respondent has the same definitions of the two phrases. 90 Mr Dawson urged the Commission to decide the meaning of the term, "designated position" within Schedule 3: … the crux of the dispute arises from the meaning of the label "designated position" in Schedule 3. Even though it is clear that hours of work are not protected by Schedule 3, we say that this has to be decided because similar meaning is then given to other similar words in the Policy Directive. It is a matter we invite the tribunal to make a decision about. This matter has a very long history and there are numerous other nurses who remain entitled, it seems at this point, to the protection of their hours of work and perhaps in order to ensure for both parties that this dispute does not re-emerge, a final solution to the label "designated position" may well assist both parties from an industrial point of view. 91 Mr Dawson submitted there was no doubt that Schedule 3 was part of beneficial legislation and it was accepted such legislation should be construed generously "so as to give the fullest relief which the fair meaning of its language will allow". In that regard, he referred to the observations of DC Pearce in Statutory Interpretation in Australia (Second Edition, 1984): A remedial or beneficial provision is one that gives some benefit to a person and thereby remedies some injustice … The orthodox view of the approach to be adopted in relation to the interpretation of this type of legislation is provided by Isaacs J (dissenting) in Bull v Attorney-General (NSW) (1913) 17 CLR 370 at 384: In the first place, this is a remedial Act, and therefore, if any ambiguity existed, like all such Acts should be construed beneficially…This means, of course, not that the true signification of the provision should be strained or exceeded, but that it should be construed so as to give the fullest relief which the fair meaning of its language will allow. … The approach is appropriate as there is no reason to build any artificial limitations into the scope of Acts intended to benefit certain members of the community. If the court is satisfied that a person falls within the general spirit of the legislation, it is undesirable, where two possible interpretations are open, to construe the Act in such a way as to exclude the person

92 Mr Dawson contended both Schedule 3 and the Circular, which grants, inter alia, the benefit of hours of work and thereby the paid meal break should be read beneficially.

93 Mr Dawson stated the evidence of Mr O'Malley was that the "transferred position" was "the substantive position as at 1 July 1989". It was also clear this phrase had been adopted for the purposes of assessing eligibility for the benefit. 94 Mr McLeod had used the phrase, "substantive position" and in the case of Ms Gordon, he stated her substantive position was "at James Fletcher Hospital, Bluegum Ward". With reference to Mr Dow, Mr McLeod alleged he "was formally appointed to his substantive position at James Fletcher Hospital, Bluegum Ward" in 1980. However, it was clear from the evidence this was not the case as Bluegum Ward was only built in 1993.

95 Mr Dawson strongly submitted that given the nature of the legislation and the range and number of positions transferred, the appropriate meaning of the phrases "designated position" and "transferred position" was "registered nurse". He contended this view was consistent with the fact that few records were kept at the time, as put in evidence by Mr O'Malley. In that regard, he contended records that support the interpretation proposed by the Association included Mr Dow's appointment form, which refers to the position of "registered nurse" and any attempt to read this down in some narrower form, for example, "registered nurse, Bluegum Ward", is not in keeping with the spirit of the legislation nor supported by records.

96 Mr Dawson denied any agreement existed between the Association and the Area Health Service as suggested by Mr O'Malley in his evidence: Mr O'Malley gave considerable evidence about what he alleged was an agreement with the Association. He claimed that, although his letter to Ms Gordon stated otherwise, the agreement was that if nurses " applied for vacant positions " and were successful, they would lose their paid meal break. The documents produced suggest otherwise and support the position put by the Association.

97 Mr Dawson referred to an email dated 20 October 2004 where Mr O'Malley advised managers: The only employees that should still be receiving the paid meal break are individuals that remain in the transferred position. Staff that have applied for positions of transfer to Community Health or another site do not maintain the entitlement nor do staff that have been promoted"

98 In a further email dated 29 July 2005, Mr O'Malley informed managers there had been some discussions with the Association regarding the issue of the paid meal break and the parties had agreed to discuss the matter further. Shortly thereafter, Mr O'Malley wrote to the Association stating: It would appear that the remaining staff have commenced employment with this Area Health Service after 1 July 1989, gained a promotion or requested a transfer in position. On this basis these staff should not be receiving the paid meal break. (emphasis added) 99 In a reply dated 12 September 2005, the Association wrote to Mr O'Malley stating: Nurses who have changed wards in the same hospital or service and who retain their substantive position of Registered Nurse, should also retain their paid meal break. The Association also sought to arrange a further meeting between Mr O'Malley and Ms Katherine Rynne, Organiser, on 22 September 2005 to further discuss the issue.

100 Mr Dawson contended the Association's "agreement" with the Area Health Service related to correspondence dated 14 October 2005 where Mr O'Malley wrote to Ms Gordon stating: It was agreed with the Association that staff would continue to receive the paid meal break if you transfer between units or units are closed with a particular site for example Morisset Hospital. However, if you gain a promotional position on a permanent basis, the benefit will cease… 101 Contrary to Mr O'Malley's evidence that the "agreement" was not set out in his correspondence to Ms Gordon, Mr Dawson asserted this view was not supported by the email advice he sent to managers on 21 October 2005 confirming the agreement reached with the Association in relation to the paid meal break. Mr Dawson subsequently referred to the following paragraphs of Mr O'Malley's email advice: We recently completed discussions with the NSW Nurses' Association in relation to the paid meal break and have reached agreement on which employees are still entitled to the benefit. … In short we agreed that if staff commenced with the former Area Health Service after 1 July 1989 or gained a promotional position within the service the benefit of the paid meal break would cease. … Discussion was had in relation to transfers between units and the gaining of CNS status and we agreed that staff would retain the benefit. However, should a person act in higher duties there is no benefit of a paid meal break for that period only.

102 Mr Dawson referred to a further email from Mr O'Malley dated 14 November 2006 concerning the application of the paid meal break policy. He said the email referred to "lengthy discussions with staff and the Association" and claimed "agreement was reached" on who would retain the entitlement. A list of staff who would retain the benefit while they remained in their current position was attached. It further stated: This condition is preserved whilst the employee remains in this position which was as a transferred Health Department Public Servant as at July 1 July 1989. Should an employee apply for a vacant position or request a permanent transfer to a different position/location they will cease to receive the paid meal break entitlement… 103 He maintained there was no evidence this "agreement" was confirmed in writing, either to or by the Association, nor was it communicated to the nurses named in an attached list. Ms Tracey Gordon

104 In the case of Ms Gordon, Mr Dawson submitted there was no dispute between the parties that she was a transferred employee and therefore entitled, as at 1 July 1991, to retain those conditions protected by Schedule 3 and the hours of work protected by the Policy Directive. 105 Mr Dawson submitted Ms Gordon had worked in a range of positions since 1991 and it was clear from the documents attached to Mr McLeod's statement that the Area Health Service had no idea, prior to the hearing of this matter, about the history and detail of her different placements or how they evolved. Prior to formally applying for the Clozapine Co-ordinator position, she continued to receive a paid meal break. However, in correspondence dated 16 November 2006, Mr O'Malley wrote to Ms Gordon to advise she was not entitled to her paid meal break because she had "in effect moved from her original transferred position." Notwithstanding that advice, Mr Dawson referred the Commission to the list attached to Mr O'Malley's email dated 14 November 2006 where she was named as a person entitled to the paid meal break, although her location was given as "Clinical Services", rather than Clozapine Co-ordinator attached to the clinical services division.

106 Mr Dawson contended Ms Gordon's "designated position" and "transferred position" was that of registered nurse and she remained a registered nurse. In urging the Commission to adopt the view that Ms Gordon was entitled to the paid meal break, Mr Dawson submitted: To attempt to somehow distinguish between "lateral transfers" which are at the direction of the employer, or agreed between the parties which, in Mr O'Malley's view, would entitle a nurse to retain the paid meal break and transfers at the request of the employee which would cause a nurse to lose the paid meal break, is not in keeping with the beneficial interpretation which should apply and is simply impossible to track over time - as the AHS records show. Further, it is not supported by the AHS records, as outlined above in relation to Mr Dow's Appointment Notice as attached to Mr McLeod's statement.

107 In the alternative, Mr Dawson said Ms Gordon was entitled to rely upon correspondence from Mr O'Malley dated 14 October 2005. In that regard, he contended the Area Health Service was stopped from removing her paid meal break. Ms Rhonda Smith

108 At the outset, Mr Dawson submitted Ms Smith, like Ms Gordon, was indisputably a transferred employee at 1 July 1991 for the purposes of both Schedule 3 and the Policy Directive. Had Ms Smith remained at Allandale Hospital, she would have retained her paid meal break. However, she accepted the advice of the Area Health Service prior to the sale of Allandale Hospital and sought other positions. She was subsequently successful in her application for an internally advertised enrolled nurse position at Maitland.

109 Ms Smith was listed as one of 53 staff named in the spreadsheet attached to Mr O'Malley's correspondence to the Association dated 30 August 2005 as being entitled to the paid meal break: Following an extensive review of the files the Mental Health Service is of the view that 53 staff should continue to receive the paid meal break.

110 Moreover, in correspondence dated 28 March 2006, Mr O'Malley advised Ms Smith: Following a recent review within Hunter New England Mental Health of staff that are in receipt of the "paid meal break", it was identified that you are in receipt of this benefit in error - effective 17 April 2006 the benefit will cease. However, Mr Dawson asserted the Area Health Service failed to identify any "error" and merely put forward "differing interpretations of the basis for qualification for the benefit". He further submitted Mr O'Malley also named Ms Smith in the list of some 63 staff referred to in his statement that would continue to receive the benefit.

111 It was Mr Dawson's submission that Ms Smith was entitled to the meal break on the proper construction of the Schedule and the Policy Directive. The relevant order by the Governor transferred "each position" in Column 1 to the "person in Column 2". Put alternatively, the order transferred the enrolled nurse position held by Ms Smith to the Area Health Service: To apply some different definition to the Policy Directive, again, would not be in keeping with the spirit of beneficial interpretation.

112 Ms Smith has remained an enrolled nurse employed by the Area Health Service. Mr Dawson stated Ms Smith was entitled to rely upon Mr O'Malley's correspondence dated 30 August 2005 that confirmed her entitlement following an "extensive review of the files". Similarly, she was entitled to rely on the evidence of Mr O'Malley that it was agreed she would continue to receive the benefit. He contended Ms Smith was also entitled to rely on the doctrine of estoppel. Mr James Dow

113 Mr Dawson submitted the critical issue in Mr Dow's case was whether he was granted some benefit following the representations made by the Association in correspondence dated 27 March 1991, following his successful application for a position at James Fletcher Hospital in August 1990. 114 Mr Dow's evidence was that he "transferred" during the transition period post 1 July 1989. He was forced to resign and subsequently commenced work with the Area Health Service as a new employee. As such, his entitlement to sick leave, protected indefinitely by Schedule 3, was not preserved. 115 The Association later made representations to James Fletcher Hospital. Mr Dow subsequently received a memorandum from the Director of Nursing informing him that he was to work an eight hour shift with a paid meal break. Mr Dawson submitted the Area Health Service had failed to establish any error. However, it sought to rely on the provisions of Schedule 3 to deny Mr Dow the benefit.

116 Mr Dawson referred to the arrangements set out in Circular 91/7 and contended they were more beneficial than Schedule 3. They also conferred the entitlement: It is proposed that existing staff of the Mental Health Services will remain as Public Servants until 30 June 1991 following which they will be formally transferred under Schedule 3 of the Health Administration Act unless an employee elects to take up a position with an Area Health Service/Public Hospital, (including vacant positions in the Psychiatric Hospitals) in which case the conditions set out hereunder would apply from the date of taking up the position by way of Determination pursuant to the Health Administration Act .

In that regard, Mr Dawson stated: … it is clear and unquestionable that Mr Dow fits squarely within the above provision; he elected to take up a vacant position in the Hunter Area Health Service and the conditions set out in the Circular applied to him from the date of him taking up that position. There can be no other interpretation of these very plain words. One of the conditions is the paid meal break.

117 In conclusion, Mr Dawson submitted Mr Dow remains in the position that he obtained with the Area Health Service in 1990. As such, he is entitled to the paid break and satisfies the Area Health Service's definition of "substantive position".

118 At the outset, Mr Newall submitted it was common ground no entitlement to a paid meal break existed under any instrument governing the employment of relevant Area Health Service employees. Rather, the question for determination is whether, and if so to what extent, persons who transferred from the public service, where they had an entitlement to a paid meal break, to the Area Health Service, where they would not, prima facie, have had that entitlement, have retained the paid meal break?

119 Second, so far as there were persons who retained an entitlement to a paid meal break, were those employees, the subject of this dispute, employees who retained that entitlement?

120 Mr Newall stated the Area Health Service accepted there were circumstances where some employees retained the entitlement to a paid meal break in their employment with the Area Health Service as at 1 July 1991. Currently, some still retain that entitlement and some have lost it. Insofar as those employees subject to this dispute are concerned, it has been determined they are not entitled to the paid meal break. Transferred employees and transfer date

121 Mr Newall submitted the entitlement to a paid meal "attached" only to those employees "transferred" to the Area Health Service. Accordingly, it was important to address the nature of that "transfer". He contended the terms "transferred employee" and "transfer date" were defined determinatively in Schedule 3 to the Health Administration Act:

"transferred employee" means a person who, on the transfer date, was employed in a designated position and who, in accordance with clause 3, becomes employed in that position as an employee of the person to whom the position is transferred; "transfer date", in relation to a designated position, means the date upon which the transfer of the position pursuant to clause 2 takes effect.

122 Mr Newall noted Schedule 3 provides that particular entitlements, namely salary, wages and allowances, are to be retained by transferred employees at levels no less than those that would have applied had they not been transferred. The entitlements addressed in the Schedule do not include reference to, or anything that could be construed as a reference to, a paid meal break. 123 Mr Newall submitted the circumstances in which an employee can be a transferred employee are further set out in Clause 3 of Schedule 3: 3. (1) A person who, immediately before the transfer date in relation to a designated position, was employed in an Instrumentality in the designated position and who - (a) presents himself for work, on the transfer date, in that position; or (b) has, in the opinion of the Minister, a reasonable excuse for not presenting himself for work, on the transfer date, in that position but presents himself for work in that position as soon as practicable after that date, shall, upon presenting himself for work - (c) under paragraph (a), become, on the transfer date, an employee of the person to whom the position is transferred; or

(d) under paragraph(b), be deemed to have become, on the transfer date, an employee of the person to whom the position is transferred.

(2) A person who, immediately before the transfer date in relation to a designated position, is employed in an Instrumentality in the designated position ceases, on that date, to be employed under the Public Service Act, 1979, or otherwise in an Instrumentality.

(3) This clause has effect notwithstanding anything in Schedule 2.

124 Mr Newall subsequently drew the Commission's attention to subclause 4(1) of the Schedule which relevantly provides that the retained entitlements apply only to employees who are transferred employees as defined at Clause 1 of the Schedule and, who have satisfied the requirements of Clause 3 of Schedule 3: (4) (1) A transferred employee (other than a transferred employee who, immediately before the transfer of the designated position in which he was employed on the transfer date, was employed under section 80 of the Public Service Act, 1979) shall, in respect of his service with person by whom, by virtue of clause 3, he is employed, be paid salary or wages, and allowances, at a rate not less than that at which he would be paid salary or wages, and allowances, if the designated position in which he was employed on the transfer date had not been transferred and he had continued to be employed in the relevant Instrumentality until - (a) the expiration of the transition period; or (b) his salary is, or his wages or allowances are, varied or altered by an award of a competent tribunal, an industrial agreement, the person by whom he is employed or otherwise in accordance with law, whichever is the later. 125 Mr Newall stated subclause 4(3) of the Schedule provided that the retention of the entitlements pursuant to subclause 4(1) ceased when a person who was a transferred employee: has applied for and been appointed to another position in the service of the person by whom, by virtue of clause 3, the transferred employee is employed.

126 The relevant transfer date was 1 July 1991. Mr Newall submitted in order to be classed a 'transferred employee', an employee had to be a public service employee as at 1 July 1989 and remain in the same position they held on 1 July 1989 at 30 June 1991 for two directly connected reasons. First, the Orders made pursuant to Schedule 3 gazetted on 28 June 1991 (Attachment 2 to Exhibit 1) relevant to Hunter Mental Health Service and Gladesville Hospital orders that: … each position in the instrumentalities identified in Column 1 of the Schedule hereto occupied by an employee of the Department of Health as at 1 July 1989, and which continues to be occupied by that employee as at 30 June 1991, shall be transferred … 127 Accordingly, each position within the then Hunter Region Mental Health Service was transferred to the Hunter Area Health Service. Similarly, positions within that part of the Southern Metropolitan Mental Health known as "Gladesville Hospital" were transferred to the Northern Sydney Area Health Service.

128 The second reason advanced by Mr Newall was that on and from 1 July 1989, each position in a Fifth Schedule hospital that became vacant became an Area Health Service position. Therefore, any employee taking up a new position between 1 July 1989 and 30 June 1991 necessarily ceased to be a public servant and became an Area Health Service employee. Such employees were not "transferred employees" and accordingly could not meet the criteria for retention of a paid meal break set out in the Policy Directive. 129 Mr Newall contended correspondence to employees dated 27 June and 14 December 1989 from the then Secretary of the Department, Mr Rosser, made it clear that an employee who, after 1 July 1989, applied for a vacant position in an Area Health Service would relinquish their public servant status. Accordingly, such employees necessarily could not become 'transferred employees' and therefore could never have any entitlement to a paid meal break. That is why only those positions which had been occupied by the same employee from 1 July 1989 to 30 June 1991 needed to be transferred and any position which had become vacant in those two years had ceased to be a public service position.

130 Mr Newall submitted those positions which had been occupied by the same employee from 1 July 1989 to 30 June 1991 were subsequently transferred on 1 July 1991. Each of the transferred positions was on the day of the transfer a public service position identified as part of the Departmental establishment and with an identifiable position number. The Policy Directive

131 The Policy Directive was issued by the Department on 7 August 1991 and refers to certain entitlements of transferred employees. In that regard, Mr Newall submitted the Policy Directive proceeds on the basis of the definition of "transferred employees" in Schedule 3. That is, a "transferred employee" for the purpose of the Policy Directive is a "transferred employee" within the meaning of Schedule 3. That is the only application of Schedule 3 to these facts.

132 Mr Newall claimed the Policy Directive addressed a wider range of entitlements than Schedule 3. While it does not specifically refer to a paid meal break, the Area Health Service accepts and has advised the Association it accepts the reference to 'Hours of Work' on page 3 of the Circular that forms part of the Policy Directive includes the paid meal break.

133 The Area Health Service's position was that the Policy Directive expressly addresses the preservation of certain terms and conditions. Mr Newall referred to the last dot point on page 2 of the Circular covering the Policy Directive which states: Employees who are appointed to other positions in public hospitals after 1 July 1991 continue to maintained [sic, read maintain] those indefinite preserved benefits detailed in the appended document .

The relevant appended document was headed, " Preserved Conditions of Employment of Transferred Staff". 134 Mr Newall argued it was clear from both the terms of the Circular and the Policy Directive there was no intention to maintain "all conditions willy-nilly", but only those "indefinite preserved benefits" detailed in the Policy Directive. He observed the Policy Directive expressly identified some benefits, but not others, as indefinite preserved benefits. "Hours of work" is expressly not an indefinite preserved benefit.

135 Mr Newall explained the Policy Directive was divided into two parts, under two discreet headings: Preserved conditions of employment of transferred staff' In this part, the Policy Directive deals with preserved entitlements as to superannuation, leave of different kinds, salary and wages, return to the public service and redundancy. It also makes prescriptions about some of those, preserving them indefinitely. Under the heading "Salary and Wages", the Policy Directive, sets out in the last paragraph of page 2 a provision which negates the effect of Schedule 3 as to salary and wages, and provides a benefit to employees not available under Schedule 3. That is, it provides that relevant transferred employees shall have their salary and wages as at the transfer date preserved indefinitely. It goes on to provide that a transferred employee in receipt of this "salary maintenance" as it is called, will preserve their salary or wages indefinitely even if they apply for and are appointed to a lower-paid position with the new employer. Under Schedule 3, and particularly Clause 4(3), such persons would not have retained their salary and wages. The salary maintenance afforded was a benefit, which is expressly indefinitely preserved as referred to in the last dot point on Page 2 of the Circular. Other conditions to apply to transferred staff' Under this heading, the Policy Directive deals with a range of other conditions to apply to transferred staff. These are different terms; they are not said to be indefinite and are not those "indefinite" terms referred to in the last dot point of the Circular. For example, hours of work, which the parties agree includes the issue of paid meal breaks, is addressed differently in terms to the issue of salary and wages, is afforded the following protection: Where award hours of work prior to transfer are less than Public Hospital award hours to apply after transfer, the lesser hours will be preserved on a personal basis, while the person remains in the transferred position. Otherwise hours of work as prescribed in the relevant Public Hospital awards.

136 Mr Newall submitted it was common ground that the relevant public hospital awards did not provide for a paid meal break. He further asserted the paid meal break was not an indefinite preserved benefit contemplated by the Policy Directive. Retention of the paid meal break would only apply while "the person remains in the transferred position".

Employees who elected to take up a non-public service position between 1989 and 1991

137 Mr Newall challenged the Association's viewpoint that the conditions set out in the Policy Directive documents applied to Mr Dow from the date he accepted the vacant nursing position with the Area Health Service. He argued that circumstances where an employee "elected" to take up a new position between 1989 and 1991 did not give rise to an entitlement. In support of that proposition, Mr Newall referred to the correspondence to employees dated 27 June 1989, which later became the Policy Directive, where the Secretary of the Department made it clear that an employee who, after 1 July 1989, applied for a vacant position in an Area Health Service would relinquish their Public Service status: At the time of your appointment to the Area Health Service / Public Hospital position, you will relinquish your Public Service status but action will be taken simultaneously to ensure that 'those conditions of employment as set out in Schedule 3 of the Health Administration Act are preserved by way of Determination under that Act. In that regard, the position of the Area Health Service was that Schedule 3 does not preserve the paid meal break and the Secretary's correspondence gives no undertaking about its preservation. 138 Mr Newall submitted the Policy Directive and the attachment to the Secretary's correspondence to staff dated 27 June 1989 headed, "Preserved Conditions of Employment of Transferred Staff," stated existing staff would remain public servants until 30 June 1991 and would transfer under Schedule 3 to the relevant Area Health Service on 1 July 1991 unless: … an employee elects to take up a position with an Area Health Service/Public Hospital (including vacant positions in psychiatric hospitals) in which case the conditions set out hereunder would apply from the date of taking up the position by way of Determination pursuant to the Health Administration Act. In that regard, Mr Newall argued: This does not deem employees of that kind to be "transferred employees" within the meaning of Schedule 3 or the Policy. It does not deem any position to be transferred. Where a position has been vacated in the period 1989 -1991, it necessarily could not be and was not transferred; only a position consistently filled by the same person from 1989-1991 could be and was transferred.

139 Mr Newall observed "electing" employees were told in the attachment to the Secretary's correspondence that the "conditions set out hereunder" that is, those related to superannuation, annual, long service and sick leave, salary and wages, would apply to them. Superannuation and sick leave were attached to the "person" and preserved indefinitely. Moreover, a number of terms and conditions were subsequently attributed to employees and not "positions". 140 However, the Policy Directive and the attachment to the Secretary's correspondence also set out a range of matters applicable under the heading "Other Conditions to Apply to Transferred Staff", including "Hours of Work" and therefore paid meal breaks, which were all "attached" to a person. Accordingly, the entitlement to a paid meal break is attached to a person in a transferred position, subject to the particular condition that the employee "remains in the transferred position." Accordingly, he contended a position within a Base Hospital/Area Health Service that was voluntarily taken up by an "electing" employee between 1 July 1989 and 1 July 1991 was not a "transferred position". Such positions could not have been "transferred" pursuant to Schedule 3 on the following grounds: … first, it was not a 'designated position' - a position the Governor has, on the recommendation of the Minister, ordered by publication in the Gazette, be transferred; and second, it was not a position held by a "transferred employee" - a person who, on the transfer date , was employed in a designated position.

141 Accordingly, Mr Newall submitted an "electing" employee such as Mr Dow, who was not the occupant of a transferred position, could not therefore "remain" in a transferred position and "had no entitlement to the paid meal break in the first place". He referred to the Association's representations concerning Mr Dow to James Fletcher dated 27 March 1991, quoting advice of the Department's Mr Chris Brown to the following effect: ...an employee transferring between Fifth Schedule hospitals will retain all conditions as set out in Schedule 3 of the Health Administration Act.

Despite the fact that Mr Dow did not transfer, Mr Newall stated the paid meal break was not an entitlement preserved by Schedule 3. Moreover, the correspondence does not assist Mr Dow because it makes no reference to paid meal breaks. Entitlement to paid meal break

142 Mr Newall submitted the entitlement to retain a paid meal break required the relevant Area Health Service employee to be a "transferred employee" that satisfied both the definition set out in Clause 1 of Schedule 3 and the terms of Clause 3 of the Schedule and following that transfer, they must remain "in the transferred position". Accordingly, an "electing" employee such as Mr Dow would not qualify, as "electing" employees were never in a transferred position to begin with.

Transferred position Mr Newall contended it was "positions" which were transferred pursuant to Schedule 3 and employees became transferred employees by virtue of occupying transferred positions, that is, identified public service positions on the date of transfer. The term "position" has specific meaning in the context of employment with the Area Health Service and in the context of the Policy Directive: It is not the case that the term "position" means merely employment with the Respondent doing similar or related duties to those performed before the transfer. That is the meaning of the term "classification". The positions that were transferred positions were in each case on 30 June 1991 an identifiable public service position with a position number as a public service position and an identified place in the public service establishment. That is in each case the position that was transferred to the Area Health Service. "Position" then and subsequently means a specific position in the Respondent's establishment. That is clear from the gazetted orders which address the criteria relevant to each individual position, that it must have been consistently filled by the same person from 1989 to 30 June 1991.

143 Mr Newall asserted the evidence of Mr McLeod was that Mr Dow had applied for a vacant position advertised as "position number 90/38". The relevant appointment form attached to his statement also identified Mr Dow's position as position number 90/38 and not "just an RN at large". Mr Newall opposed the Association's view that an employee's "position" within the Area Health Service was his or her classification and noted the Policy Directive of the term "position" meant "a single identifiable designated position which forms part of the establishment". In support of that proposition, he submitted: If it were held that an employee's "position" is in fact that of an RN employed by the Area Health Service and that is all, and that the term 'position' means nothing more closely defined than that, the necessary consequence is that an employee in the "position" of an RN can be directed by the Area Health Service to work in different parts of the area at will; not only between wards as might on a given day be required but also, for example, between Maitland and John Hunter Hospitals given their relative geographic closeness. That would be a surprising but necessary outcome of the proposition apparently advanced by the Association.

144 Mr Newall argued an employee who had an entitlement to a paid meal break by virtue of being in a transferred position had to remain in that transferred position to retain the entitlement. With reference to correspondence to Ms Gordon from Mr O'Malley dated 14 October 2005, which set out the results of negotiations between the Area Health Service and the Association about the persons who were still receiving the paid meal break at that time, Mr Newall denied the letter sought to represent a position that departed from the intent of the Policy Directive: … the letter refers to persons losing the entitlement to a paid meal break if they were promoted into a position. So it does. But before that, it says in its first paragraph that an employee will retain the entitlement to the paid meal break only so long as they remain in their current position.

145 Mr Newall referred to Mr O'Malley's evidence in response to a question from the Commission, as presently constituted, concerning the nature of the agreement reached with the Association and stated the agreement was in the following terms: … if people remained in the same site in the same position they would continue to be paid the meal break. If they applied for any vacant positions across the organisation they would lose the paid meal break. He subsequently submitted both the Association and Mr O'Malley had understood the Policy Directive deemed a lateral transfer would trigger loss of the paid meal break.

Factual circumstances of individual employees Mr JamesDow

146 Mr Newall confirmed Mr Dow was a public servant employed at Gladesville Hospital from December 1987 to 23 September 1990 when he resigned to commence employment with the Area Health Service on 24 September 1990 as a registered nurse at James Fletcher Hospital. He applied for a vacant Area Health Service position for personal and family reasons and it was subsequently offered to him on merit. He commenced as a new employee and, of course, Area Health Service employees had no entitlement to a paid meal break. The fact that Mr Dow was given his sick leave entitlement as if he had sick leave preserved as an "electing employee" was an error as he had no entitlement at any time.

147 Mr Newall explained the public servant position Mr Dow had occupied became, on his resignation, an Area Health Service position and was not a transferred position on 1 July 1991. Mr Dow was not, at the transfer date of 1 July 1991, a public servant employee, nor was he the occupier of a designated position within the meaning of Schedule 3. Moreover, Mr Dow was not a transferred employee within the meaning of Schedule 3 and the Policy Directive. Accordingly, he has no entitlement to a paid meal break or any preserved benefits under Schedule 3 and the Policy Directive as a transferred employee. Moreover, the Association had conceded Mr Dow was not a transferred employee and although the Area Health Service had treated him as such in error, he had no entitlement to the paid meal break in the first place.

148 Mr Newall stated a position within a Base Hospital/Area Health Service that was voluntarily taken up by an "electing" employee between 1 July 1989 and 1 July 1991 was not a "transferred position" as it was not "transferred" pursuant to Schedule 3 of the Act.

149 With reference to the Association's representations concerning Mr Dow to James Fletcher dated 27 March 1991, where a Departmental officer is quoted as stating "employees transferring between Fifth Schedule hospitals will retain all conditions as set out in Schedule 3", Mr Newall submitted: The paid meal break is simply not an entitlement preserved by Schedule 3. The letter does not touch on paid meal breaks at all and does not assist Mr Dow.

150 Ms Gordon initially accepted public service employment in March 1984 as a registered nurse at James Fletcher Hospital, a Fifth Schedule hospital at that time. On 1 July 1991, she became a transferred employee in a transferred position where she worked until 2004. From 2004 to 2005 Ms Gordon worked as a Community Mental Health Nurse at Cardiff and she returned to James Fletcher as a registered nurse from 2005 to 2006.

151 In 2006, Ms Gordon was successful on merit for a vacant, internally advertised Area Health Service position within Hunter New England Mental Health Services based at James Fletcher Hospital. She commenced in that position on 3 July 2006. 152 Mr Newall stated this position involved a completely different job description to her former employment as a registered nurse within the inpatient unit, a matter conceded by Ms Gordon in evidence and a different line of reporting. She was also required to work in a different location within the Hospital and conceded the new position required her to exercise "some different duties to those she carried out before she began work in that position". Accordingly, when Ms Gordon ceased to occupy a transferred position on 3 July 2006, she also ceased to have any entitlement to a paid meal break. She did however retain her entitlement to preserved sick leave and superannuation benefits in accordance with the Policy Directive. 153 The facts according to Mr Newall were that Ms Gordon's employment circumstances changed on and from 3 July 2006. She was subsequently paid for the meal break in error until advised by Mr O'Malley in correspondence dated 16 November 2006 that the practice would cease on 19 November 2006. Ms Leanne Frazer

154 While the Association did not seek to press Ms Frazer's case, Mr Newall contended it was necessary for the Area Health Service to investigate her circumstances and any subsequent findings made by the Commission concerning her entitlement to a paid meal break would be "both helpful in the assessment of the other cases which are pressed, and useful in the case of any other persons in a similar situation". He contended Ms Frazer was never a "transferred" employee nor an "electing" employee and had not occupied a transferred position. In support of that contention, he said Ms Frazer did not appear on the Area Health Service's central payroll system with the relevant code that applied to persons with a paid meal break.

155 Mr Newall stated Ms Frazer had worked at Prince Henry Hospital between 10 January 1989 and 7 September 1989 when she resigned. Prince Henry Hospital was not a Fifth Schedule hospital. Indeed, between 7 September 1989 and 31 October 1989, Ms Frazer did not work for any Area Health Service, public hospital or Fifth Schedule hospital. She had ceased to be a public servant and was not an "electing" employee. Ms Frazer later commenced employment as a new employee in an Area Health Service position at Stockton Hospital on 31 October 1989, some four months after the transfer of Fifth Schedule psychiatric hospitals to Area Health Services effective 1 July 1989. Accordingly, Ms Frazer had no public service conditions to preserve nor any capacity to be classed as a transferred or an electing employee.

156 On 7 May 1990, Ms Frazer commenced employment in a postgraduate psychiatric nursing programme at Rozelle Hospital that was also an Area Health Service position. In or about 23 October 1990, Ms Frazer formally applied for and was the successful candidate for a vacant Area Health Service position at James Fletcher Hospital. She commenced in that position on 26 November 1990. That position was not a transferred position as at 1 July 1991. Again, she could not be classed as a "transferred" or "electing" employee. Accordingly, as an Area Health Service employee, no entitlement to a paid meal break had ever existed. In that regard, Mr Newall submitted: And nor would anyone who started employment after 1 July 1989 - that is the relevant point and a point that the Commission ought, with respect, rule on.

157 Ms Smith commenced employment at Allandale Hospital in 1987. As an employee of Allandale, she was a transferred employee in a transferred position as at 1 July 1991. Ms Smith worked on secondment at James Fletcher Hospital from 22 January 1996 to 20 December 1998 and returned to work at Allandale on 12 May 1997. It was her evidence that she knew at the time Allandale would be sold in the near future and she wished to gain work elsewhere. On 2 February 1998, Ms Smith applied for a vacant Area Health Service enrolled nurse position at Maitland Hospital, a position she won on merit and commenced on 23 March 1998. 158 In cross examination, Ms Smith agreed she had signed an employment contract relevant to the Maitland Hospital position which set out the terms and conditions of her employment in accordance with the relevant award. She also stated she had "considered the conditions applicable to my appointment …and wish to advise that I will be pleased to accept your letter of offer in accordance with those conditions".

159 Mr Newall submitted Ms Smith's enrolled nurse position at Maitland Hospital "could not be described as the same position as the transferred position", that is, a position at Allandale Hospital on the following grounds: It is a position for which Ms Smith had to make application and be accepted. It has a different job description, a different location, different duties, a different reporting structure and is a different position in the Area Health Service's establishment.

160 Mr Newall also submitted Ms Smith had in evidence and in re-examination confirmed she had freely agreed and understood herself to be applying for a "new" position at Maitland Hospital. Ms Smith also agreed in evidence she knew Allandale would be closed and had decided she needed to obtain a new position. Accordingly, she undertook the training required to be certificated for a new role. There were no grounds to support the proposition that she "remained in the transferred position" as Ms Smith ceased working in that position on 23 March 1998, when she commenced in the vacant Area Health Service enrolled nurse position at Maitland Hospital. Her entitlement to a paid meal break also ceased on 23 March 1998.

Paid meal breaks did not become contractual entitlements 161 Insofar as the Association had contended the paid meal break had become a contractual entitlement, Mr Newall submitted the following rebuttal: A payment, entitlement, or any other contractual element, which is paid or provided by mistake, in error, is never part of the contract. It can be brought to an end at will by the party discovering that it is mistakenly giving the benefit. No assertion of "custom and practice " or "usage" could assist in this matter, as "custom and practice" depends on the conduct being carried out intentionally by both parties, not by a party in error as to the true state of entitlement of the other party.

162 Mr Newall submitted express terms govern whether or not an employee of the Area Health Service may have a paid meal break. Employees either qualify under the Policy Directive or they do not. An error does not give rise to any implied contractual term, more so where there is an express provision which would override it and that is the case. If a person was permitted for a time to enjoy that entitlement, when in fact they fell outside the rule, that does not of itself give them an entitlement to continue to enjoy the benefit contrary to the correct rule. In conclusion, he contended none of the four employees whose circumstances were agitated in this dispute had any entitlement to a paid meal break. The Area Health Service had acted lawfully and correctly.

163 Mr Dawson submitted if the Commission was to find the Area Health Service had applied the Policy Directive in error, it would be required to provide the basis for that finding and "find what error occurred and how that error occurred" in the light of the scant history that exists. He argued there is no evidence to suggest an error occurred: There's been no evidence going to the heart of the error or what the particular error is, but rather it's advanced that because the Area Health Service now says these people shouldn't have got the entitlement or shouldn't continue to get the entitlement, then there must have been an error. 164 Mr Dawson contended the Commission could not make any orders concerning Ms Frazer on the grounds that she was not called to give evidence and the only material before the Commission was attached to Mr McLeod's statement and concerned her alleged employment history. Nor can the Commission rely on the Area Health Service's records: The Commission clearly can't rely on the employer's records and for the record, we make it clear and say that they are wrong, as are the others, in that they suggest that Stockton Hospital is an Area Health Service hospital. It never has been, it has always been run by the Department of Ageing and Disability and its predecessors. Just so that error, we say is clear, but we accept there is no evidence about it. 165 Mr Dawson contended the Area Health Service's position disregarded the intent of the Policy Directive: The letter ... from Mr Rosser is of course not the Policy Directive ... the implementation of that policy directive ... is mandatory, not some summary of it - and that's all it is - written by the Secretary to the Department of Health in 1989. Even if it were, you would of course look to the document itself, not someone else's interpretation of it. 166 Mr Dawson submitted any suggestion that persons employed after 1 July 1989 do not have an entitlement to a paid meal break because they are not a transferred employee and not in a transferred position was blatantly incorrect in terms of the Policy Directive. Moreover, simply because a person signs a letter of appointment does not disentitle them to an entitlement arising from the legislation or the Policy Directive. Consideration 167 At the outset, it is clear from the material before the Commission that the parties agree the following chronology summarises the relevant background history specific to this matter: (i). On and from 1 July 1989, all new employees engaged by Fifth Schedule hospitals were employed as employees of the applicable Area Health Service or public hospital.

(ii). Two quite separate groups of employees existed between 1 July 1989 and 30 June 1991. Employees engaged prior to 1 July 1989 remained public servants until their transfer. All employees engaged after 1 July 1989 became Area Health Service employees.

(iii). On and from 1 July 1991, the positions of those public servant employees engaged prior to 1 July 1989 (excluding Allandale Hospital) were transferred to the Area Health Service by Order of the Governor

(iv). Public servant positions at Allandale Hospital were transferred by order on and from 1 October 1991. 168 Mr Dawson submitted Schedule 3 was part of beneficial legislation and in accordance with the observations of DC Pearce in Statutory Interpretation in Australia (Second Edition, 1984) such legislation should be construed generously. Accordingly, both Schedule 3 and the Policy Directive should be read beneficially. He further contended that given the nature of the legislation and the range and number of positions transferred, the appropriate meaning of the phrases "designated position" and "transferred position" was "registered nurse". It was his submission the Area Health Service kept few records at the time of the transfer.. 169 Mr Dawson argued the records available support the interpretation proposed by the Association and in that regard he drew the Commission's attention to Mr Dow's appointment form, which refers to the position of "registered nurse". An attempt to read this down in some narrower form, for example, "registered nurse, Bluegum Ward", was not in keeping with the spirit of the legislation nor supported by the available records. 170 Generally, in the case of ambiguity, the provisions should be interpreted liberally in a manner favourable to the intended beneficiaries subject to the proviso that the interpretation does not strain the legislative words used. In State Rail Authority Firefighters Award 2001, Re [2002] NSWIRComm 159, the Full Bench made the following observation: We also note that Pearce and Geddes refer to the principles as to beneficial or remedial construction in this way (at [9.2]): A remedial or beneficial provision is one that gives some benefit to a person and thereby remedies some injustice. The most commonly cited examples are social welfare and pensions legislation, workers' compensation Acts, safety legislation and so on. However, any legislation that is taken to make a change in existing law or adopt new provisions that are advantageous to an individual or to the public is likely to be regarded as falling within the description of remedial or beneficial…. The orthodox view of the approach to be adopted in relation to the interpretation of this type of legislation is provided by Isaacs J (dissenting) in Bull v Attorney-General (NSW) (1913) 17 CLR 370. The case concerned the interpretation of a section of the Crown Lands Act of 1895 validating certain transactions. It was held by the majority of the court not to validate all transactions under Crown lands legislation but only those that independently of the operation of the legislation were defective. Isaacs J took the view that the section was intended to validate all transactions concerning Crown lands. At 384, he said: In the first place, this is a remedial Act, and therefore, if any ambiguity existed, like all such Acts should be construed beneficially…This means, of course, not that the true signification of the provision should be strained or exceeded, but that it should be construed so as to give the fullest relief which the fair meaning of its language will allow.

It should not be thought from the reference to ambiguity in this extract that Isaacs J was suggesting that the beneficial interpretation approach only applied where there was an ambiguity in the legislation. It is apparent from his endorsement of the view of Lord Shaw in Butler (or Black) v Fife Coal Co [1912] AC 149 that the reference to ambiguity is intended as an example of the general approach to remedial provisions - ambiguous provisions are to be interpreted in a manner favourable to those who are to benefit from the legislation: see R v Kearney; Ex parte Jurlama (1894) 52 ALR 24 at 28; Zangzinchai v Milanta (1994) 125 ALR 265 at 272.

The approach to interpretation of beneficial provisions enunciated here is subject to the rider that the interpretation adopted 'must be restrained within the confines of the actual language employed and what is fairly open on the words used': Khoury (M&S v Government Insurance Office of NSW (1984) 54 ALR 639 at 650; Accident Insurance Mutual Ltd v Sullivan (1986) 7 NSWLR 65 at 68; Secretary, Department of Social Security v Knight (1996) 44 ALD 283 at 289.

171 The Full Bench also made reference to the decision in Cole v Director-General of Department of Youth and Community Services (1987) 7 NSWLR 543 where McHugh JA emphasised the importance of interpreting legislation with the general purpose of that legislation in mind. 172 In my view, there is no ambiguity in the plain and actual words used in Health Administration Act, Schedule 3 therein and for that matter, the subsequent Policy Directive. The intention of the legislation is both clear and certain. In that regard, the Health Administration Act was enacted in 1982 to facilitate a number of reforms to the public health and hospital sectors. Schedule 3 of the Act contains provisions relating to the transfer of health employees and certain measures to preserve the rights and entitlements of all employees affected by a decision to transfer public servant employees to other employers such as public hospitals and area health services. The Schedule afforded protection to both then current employees (1982) and any future employees also subject to transfer. 173 The Schedule empowers the Governor to transfer staff from the Department of Health to public hospitals and area health services. It further provides that on and from the transfer date, the transferred employees shall cease to be employed under the then Public Service Act. Employees retained salary and allowances, and some specific conditions of employment were preserved indefinitely as if they had remained public servants. The paid meal break was excluded from those specific concessions provided by the Schedule. 174 Schedule 3 relevantly provides the following interpretation in relation to the transfer of health employees: "designated position", means a position transferred pursuant to clause2; "transfer date", in relation to a designated position, means the date upon which the transfer of the position pursuant to clause 2 takes effect; "transferred employee" means a person who, on the transfer date, was employed in a designated position and who, in accordance with clause 3, becomes employed in that position as an employee of the person, that is, defined to include a public hospitals or area health service, to whom the position is transferred.

175 Clause 2 of Schedule 3 empowers the Governor, by order, to transfer a designated position in the staff establishment of an Instrumentality, defined to include a public sector Health Department or Commission, to a specified designated person, defined to include a public hospital or area health service. 176 By separate orders gazetted on 28 June 1991 and operative on and from 1 July 1991: each position within the Hunter Region Mental Health Service occupied by an employee of the Department of Health as at 1 July 1989, and which continued to be occupied by that employee as at 30 June 1991, was transferred to the then Hunter Area Health Service;

and each position within Allandale Hospital occupied by an employee of the Department of Health as at 1 October 1989, and which continued to be occupied by that employee as at 30 June 1991, was transferred to the then Hunter Area Health Service.

177 Clause 3 of the Schedule sets out the manner by which the transfer of a designated position from an Instrumentality to a designated person is effected. Clause 3 also provides that on and from the transfer date, a transferred employee shall cease to be employed under the Public Service Act or otherwise by the Instrumentality concerned.

178 Superannuation rights were also fully protected. Clause 5 provides that a transferred employee shall retain the superannuation rights enjoyed immediately prior to transfer provided the employee continues to be employed by the designated person. Clause 5 also allows a transferred employee to change employment from one designated person to another designated person without losing any superannuation entitlements. Within Schedule 3 there is no mention whatsoever of preserving the applicable paid meal break.

179 The Policy Directive specifically concerns the transfer of then existing public servant nursing staff of mental health services to area health services and public hospitals from 1 July 1991. It was issued by the Director General NSW Health on 7 August 1991. Compliance with the Policy Directive is mandatory. An attachment also titled "Preserved Conditions of Employment of Transferred Staff" mirrors a similar attachment to Mr Rosser's correspondence dated 27 June 1989. 180 In correspondence dated 27 June 1989, the then Secretary of the Department of Health, Mr Rosser wrote to employees to advise that following discussions with the then Labor Council of New South Wales and Health Unions, the Department had approved a transitional period where staff would retain their public service status until 30 June 1991, when they would be transferred to public hospitals and area health services pursuant to Schedule 3. 181 Mr Rosser also advised employees that from 1 July 1989, vacant positions in psychiatric hospitals would, when advertised, be area health service or public hospital positions. Successful applicants would therefore be appointed to the relevant position under the prevailing Area Health Service or Public Hospitals Act, as appropriate. Accordingly, where a public servant employee was successful in an application for an advertised vacant psychiatric hospital position, that is, an area health service or public hospital position, the employee's public service status would be relinquished on appointment. However, those conditions of employment as set out in Schedule 3 of the Health Administration Act would be preserved.

182 An attachment to Mr Rosser's correspondence titled, "Preserved Conditions of Employment of Transferred Staff", stated that on and from 1 July 1991, transferred staff would cease to be public servants and such employees would become employees of the relevant public hospital or area health service. Transferred staff would "become subject to all of the award conditions" covering the relevant public hospital or area health service classification, except to the extent that Schedule 3 would preserve existing entitlements. 183 While superannuation and sick leave were preserved indefinitely, other conditions such as hours of work, including the application of a paid meal break, were preserved on a personal basis while the employee concerned remained in the transferred position. It follows therefore, that the transferred position or, more correctly to use the actual words set out in the Schedule, the designated position, for say former Allandale Hospital and Hunter Region Mental Health Service public servant employees, was the substantive position they occupied as at 1 July and 1 October 1989.

184 The term "designated position" is clearly defined within the Schedule and in the context of this matter, it means the position(s) transferred pursuant to clause 2, that is, by the respective orders of the Governor operative on and from 1 July 1991, which transferred positions within Allandale Hospital (occupied by employees on 1 October 1989 through to 30 June 1991) to the then Hunter Area Health Service. Similarly, designated positions within the Hunter Region Mental Health Service (occupied on 1 July 1989 through to 30 June 1991) were transferred to the then Hunter Area Health Service.

185 The "Preserved Conditions" attachment to the Policy Directive expressly protects certain entitlements, including superannuation, leave arrangements and, the maintenance of a transferred employee's salary and wages where, for example, an employee in receipt of salary maintenance applies for and is subsequently appointed to, a different position to that first transferred and, the salary of that second position was less than the first position being salary maintained. 186 Salary maintenance is not afforded protection under Schedule 3. The attachment also sets out a range of other conditions that expressly apply to transferred staff, including study time, various forms of leave such as maternity, military and compassionate leave and hours of work. 187 The provisions governing the preservation of a transferred employee's hours of work, including the paid meal break afforded to public servant employees, are set out in the attachment to the Policy Directive in the following terms: Hours of Work - Where award hours of work prior to transfer are less than Public Hospital award hours to apply after transfer, the lesser hours will be preserved on a personal basis, while the person remains in the transferred position. Otherwise hours of work as prescribed in the relevant Public Hospital awards.

188 It was Mr Dow's evidence that he was forced to resign his public servant position at Gladesville Hospital during the transition period 1 July 1989 to 30 June 1991, in order to accept the Area Health Service position at James Fletcher Hospital. While he disputed the requirement that he could not transfer to the James Fletcher position, he ultimately resigned his position at Gladesville in September 1990 as he was anxious to secure the James Fletcher position and return to Newcastle where he had family. 189 Mr Dow maintained his paid meal break at James Fletcher until March 1991 when he was informed certain public servant conditions were no longer applicable. In that regard, the Association subsequently made representations to James Fletcher Hospital on 27 March 1991, quoting a departmental officer's advice that employees who transfer from Fifth Schedule hospitals "will retain all conditions set out in Schedule 3...". Shortly thereafter, the Director of Nursing wrote to Mr Dow on 22 April 1991 stating, effective from that date, his hours of work would include a paid meal break. 190 Clearly, the paid meal break is not a condition of employment preserved under Schedule 3. It is equally clear Mr Dow was not a public servant when he accepted the James Fletcher position in September 1990. In support of that proposition, Mr Rosser's correspondence dated 27 June 1989, and the subsequent Policy Directive, states plainly that employees who apply for vacant Area Health Service positions relinquish their public service status. 191 By definition Mr Dow is not a transferred employee nor was his position at Gladesville Hospital transferred by the order dated 28 June 1991 to the then Hunter Area Health Service. Accordingly, the plain and ordinary meaning of the words set out in Schedule 3 and the Policy Directive, including Mr Rosser's correspondence dated 27 June 1989, do not confer the benefit of a paid meal break upon Mr Dow. 192 Further, it is also clear from Mr Rosser's correspondence that vacant psychiatric hospital positions, when advertised after 1 July 1989, would become Area Health Service/public hospital positions and public servant status would be relinquished, subject to the preservation of certain conditions under Schedule 3.

193 Ms Gordon became a transferred employee on 1 July 1991. As such, she was afforded the benefit of the paid meal break in accordance with Mr Rosser's correspondence dated 27 June 1989 and the Policy Directive. The benefit was preserved on a personal basis while she remained in the transferred position. By definition, Ms Gordon's transferred position was registered nurse, James Fletcher Hospital. The Area Health Service contends Ms Gordon's entitlement to the paid meal break ceased when she was successful in obtaining the vacant and internally advertised position of Clozapine Co-ordinator at James Fletcher Hospital, commencing on 3 July 2006. 194 In her written evidence, Ms Gordon stated: I believe that I am entitled to continue to receive a paid meal break as a preserved benefit and a condition of my employment ... since I was a public servant until 30 June 1991 who formally transferred under Schedule 3 of the Health Administration (Act) effective 1 July 1991 and I ask that it be restored to me with retrospective effect." 195 In essence, the position of the Association was that Ms Gordon simply transferred to the Area Health Service as a registered nurse and in her most recent position of Clozapine Co-ordinator, she continued to exercise the functions and responsibilities of a registered nurse. Further, the Association noted there was no award classification to cover the Clozapine Co-ordinator position nor was additional remuneration payable. 196 Ms Gordon's current position was advertised as an internal vacancy. She made a voluntary application and was subsequently successful on merit. When offered the position, Ms Gordon was told the position was subject to the Public Health System Nurses and Midwives (State) Award. She ultimately refused to sign the letter of acceptance on the grounds the position was not, in her opinion, a promotion. 197 Ms Gordon's evidence in cross examination was that as Clozapine Co-ordinator she now reported to the Clinical Services Nurse Manager. She was also required to exercise some different duties including the co-ordination of patient care so as to ensure the maintenance of Clozapine procedures and protocols. In addition, Ms Gordon noted her current roster was Monday to Friday, compared to seven days as a registered nurse. Accordingly, on any assessment, the position of Clozapine Co-ordinator is a different position to Ms Gordon's previous position of registered nurse. It also follows that on and from 3 July 2006, Ms Gordon ceased to be a transferred employee working in the designated position transferred by order on and from 1 July 1991. Consistent with the Policy Directive, it follows Ms Gordon's right to a paid meal break also ceased on and from 3 July 2006 on the grounds she no longer occupied her transferred position. Ms Rhonda Smith 198 Ms Smith, an enrolled nurse, was transferred to the Area Health Service by order on and from 1 July 1991. It was Ms Smith's evidence that prior to her successful application for a vacant, internally advertised enrolled nurse position at the Maitland Mental Health Unit in or about March 1998, she was aware that Allandale Hospital would be privatised at some point in the future. At the time, she was keen to maintain her employment within the Area Health Service. 199 Ms Smith's contention that she was advised to consider positions away from Allandale Hospital during 1998 is not supported by evidence brought in these proceedings. It is also clear that her letter of appointment stated the Maitland position was subject to the conditions of employment set out under the Public Hospital Nurses and Midwives (State) Award and the Area Health Service Nurses Wages Agreement. Neither instruments provide for a paid meal break. 200 The Association contends Ms Smith was entitled to the paid meal break in accordance with the provisions of Schedule 3 and the Policy Directive. However, Ms Smith's position at Maitland was quite different in terms of location, job description and job number, duties and reporting functions. She had also completed an enrolled nurse mental health exchange education program which was relevant to undertaking enrolled nurse work within the mental health sector. 201 In the light of all the circumstances surrounding Ms Smith's position when viewed against the provisions of both Schedule 3 and the Policy Directive, Ms Smith entitlement to a paid meal break ceased on the 28 March 1998 when she left her transferred position to take up the mental health enrolled nurse position at Maitland.

202 The Association did not press Ms Frazer's case and in that regard, Mr Dawson urged the Commission not to accede to Mr Newall's request that consideration of her particular circumstances would be "both useful in the assessment of the other cases which are pressed, and useful in the case of any other persons in a similar situation". 203 Ms Frazer was not called to give evidence and accordingly the Commission is unable to rule decisively on the matter as sought by Mr Newall. However, based on a careful review of all the material currently before the Commission, it is abundantly clear Prince Henry Hospital was not a Fifth Schedule hospital at the time of Ms Frazer's resignation on 7 September 1989. At that point, Ms Frazer had lost her public servant status. 204 In her written statement filed on 16 January 2009, Ms Frazer states that following her resignation from Prince Henry Hospital on 7 September 1989, she subsequently commenced employment at Stockton Hospital on 31 October 1989. There is nothing contained in the materials before the Commission to suggest the Stockton position was advertised prior to 1 July 1989 and, if that is the casa, then it follows that Ms Frazer's position at Stockton Hospital was clearly an Area Health Service position.

205 Ms Frazer's employment at Rozelle Hospital from 7 May to 23 November 1990 and later at James Fletcher from on or about 26 November 1990 were, on the material before the Commission, not designated positions, that is, a position transferred on 1 July 1991 under the Schedule by order. Moreover, Rozelle Hospital transferred to the Central Sydney Area Health Service. Accordingly, as Ms Frazer was not a "transferred employee" pursuant to Schedule 3, she therefore has no entitlement to a paid meal break. Neither Schedule 3 nor the Policy Directive afford her preserved conditions. Conclusion 206 Following publication of the Barclay Report into Mental Health and Developmental Disability Services in NSW in 1988, the State Government embarked upon a number of reforms to the public health and hospital sector. 207 The purpose of the Health Administration Act and later, Mr Rosser's correspondence and the mandatory Policy Directive, was to provide a sustainable framework to underpin the change sought by government. 208 The Policy Directive seeks to apply a degree of mandatory protection of the paid meal break benefit while the employee remains in the transferred position. Mr Rosser's correspondence dated 27 June 1989 acknowledges some consultation took place at the time with the Labor Council and Health Unions. While the precise nature of that consultation was not raised in these proceedings, the facts remain that the Policy Directive did not provide protection indefinitely and Schedule 3 is silent on the matter. 209 In my view, removal of public service status in circumstances where it was proposed employees would be transferred to public hospitals and area health services was obviously sought at the time to ensure there was a degree of harmony between the working conditions of those former public servants working alongside like classified employees of public hospitals and area health services. 210 Transferred employees relinquished their public servant status, including award coverage, subject to the quite specific preserved conditions set out in Schedule 3 and the Policy Directive. That view also supports the proposition that for reasons of industrial harmony and industrial fairness, the Policy Directive mandated a transferred employee's hours of work would "be preserved on a personal basis, while the person remains in the transferred position".

211 Employees were on notice concerning their future status and conditions of employment upon transfer to the then Hunter Area Health Service from at least the time of Mr Rosser's correspondence dated 27 June 1989 and in the event there was any doubt, the Policy Directive issued on 7 August 1991. Neither Schedule 3 nor the Policy Directive can be read down and interpreted to meet the claims pressed so vigorously by the Association in matter. The precise source of error in the payment of the paid meal break cannot be determined on the material before the Commission. Notwithstanding that impediment, what is important in my view is that the provisions of Schedule 3 and the Policy Directive are applied as intended. Those express provisions override the error identified in these proceedings.

212 Having considered all of the material put before the Commission in this matter, it is my finding that the Commission should not intervene in Matter Number IRC 1814 of 2008. The orders sought by the Association are refused and this matter is now concluded.

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