Dr Michael Kennedy v Northern Sydney Area Health Service

APPLICANT: Mr P Newall of counsel SOLICITORS: Phillips Fox Mr D Morris LEGAL REPRESENTATIVES: RESPONDENT: Mr R Dubler of counsel SOLICITORS: Corrs Chambers Westgarth Mr S Price

JUDGMENT: - 30 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: GLYNN J 9 AUGUST 2002

DR MICHAEL KENNEDY v NORTHERN SYDNEY AREA HEALTH SERVICE Application under section 106 of the Industrial Relations Act 1996

1 Dr Michael Kennedy (the applicant) on 2 August 2000 filed a Summons for Relief under s 106 of the Industrial Relations Act 1996 (the Act) against the Northern Sydney Area Health Service (the respondent/NSAHS). He alleges that the contract, arrangements, conditions or collateral arrangement (the contract) under which he performs work for the respondent is unfair, harsh or unconscionable and contrary to the public interest. 2 The applicant has provided services to the respondent since 1978 at Manly Hospital, in the first place as an Honorary Medical Officer and, later, as a Visiting Medical Officer (VMO). The impugned contract relates to his latest quinquennial reappointment as a VMO, that being the applicant's Visiting Medical Officer (VMO) Sessional Service Contract dated 20 August 1997 and expiring on 30 June 2002 (the contract). The parties to that contract of appointment to the position of VMO Internal Medicine at Manly Hospital and Community Health Services, are the applicant and the Northern Sydney Area Health Service. The terms and conditions of the appointment are in accordance with the Public Hospitals (Visiting Medical Officers - Sessional Contracts) Determination 1994. 3 The applicant is one of five VMOs engaged as physicians in the Department of Internal Medicine (DIM) at Manly Hospital (the Hospital). For the period 1978 to November 1999 there were four such VMOs in the DIM. In November 1999 a fifth physician was appointed to that Department. 4 An on-call roster has been in existence in one form or another since at least 1978. From about the early to mid 80s (there is some dispute as to the exact date), the four specialists within the DIM participated in a 1:4 on-call roster. The 1:4 roster operated on the basis that each VMO worked on one day of the week, between Monday and Thursday, and was rostered to work on-call between Friday, Saturday and Sunday once in every four weeks. On the occasion of a VMO's absence, the work would be shared between the remaining 3 (that is, a 1:3 roster). A 1:3 roster operated on one occasion for a period of 12 months during the leave of one of the VMOs. Changes to the on-call roster [from 1:4 to 1:5] had been agitated by some of the specialists since 1990, changes which were opposed by the applicant. Following the appointment of a fifth physician on the general medical roster on 17 November 1999, the on-call roster was changed to 1:5. 5 The applicant alleged that that was a unilateral change which had adversely affected the viability of his practice and, subsequently, his income. He activated dispute procedures available to him at the Hospital but the matter was not resolved to his satisfaction. These proceedings pursuant to s 106 were then initiated. 6 The orders he seeks to remedy the claimed unfairness are that certain terms as to on-call roster arrangements and payments in relation to such arrangements be inserted into the contract, either ab initio or at some other time. He claims the sum of $206,866.00, that sum calculated on the basis of changes from the 1:4 to the 1:5 on-call roster and to locum work, together with a sum, yet to be calculated, as to costs incurred as a result of initiating other activities to maintain practice viability. Interest and costs are also sought. 7 The opposing positions of the parties have been encapsulated in the Summons for Relief and the Respondent's Reply to that Summons. 8 Paragraph B 22 of the Summons contends: 22. The contract, arrangement, condition or collateral arrangement whereby the Applicant performs work in the health industry is unfair, harsh and unconscionable and/or contrary to the public interest in that: (a) it operated to mislead the Applicant about the remuneration he would receive; (b) it permitted the Respondent to unilaterally vary long established work arrangements on one month's notice and without the consent of the Applicant; (c) it permitted the Respondent to unilaterally vary existing work arrangements without providing sufficient notice or compensation to the Applicant; (d) it permitted the Respondent to unilaterally vary existing work arrangements when there was no operational requirement do do so; and (e) for such other reasons as this Honourable Court considers appropriate. 9 In its Reply, at par 6, the respondent denied the allegations contained in paragraph B 22 of the Summons and further said that: (a) at no time did it make any contract with or representations to the Applicant about the remuneration he would receive; [not admitted in Response by Applicant] (b) the purpose of the Respondent seeking to appoint another doctor to the relevant roster was to benefit the patients of Manly Hospital. In doing this, or, in any event, the Respondent is not bound to ensure that the Applicant's then level of work and/or income is maintained; [not admitted in Response by Applicant] (c) the 1:5 on-call roster was introduced as a result of the repeated requests of the other doctors (apart from the Applicant) on the 1:4 roster. It was done to relieve the onerous burden imposed by the 1:4 roster; [denied in Response by Applicant] (d) it is not a term of any contract, arrangement, understanding or collateral arrangement that the Applicant was to participate at all times in a 1:4 on-call roster; [not admitted in Response by Applicant] (e) the Applicant was an independent contractor who was to be remunerated by the Respondent for the services actually performed by him during the period of the Sessional Service Contract dated 20 August 1997; [not admitted in Response by Applicant] (f) as an independent contractor, the Applicant was, and is, entitled to provide his services to other hospitals or persons; [not admitted in Response by Applicant] and (g) the contract between the parties is fair and reasonable. [denied in Response by Applicant] 10 The basic positions advanced by the parties in the initiating process were maintained in the proceedings and were elaborated upon in final written submissions and set out in more detail later in this judgment. Some brief supplementary submissions were also filed. 11 The applicant gave evidence on his own behalf. An affidavit deposed to by his wife, Judith Kennedy, was tendered into evidence. She was not required for cross-examination. Mrs Kennedy is a registered nurse and registered psychologist holding a Masters Degree in Ethics in Health Care. She is employed as the Practice Manager of the applicant's medical practice. She described the support system of the practice (staff and technology) and confirmed the applicant's evidence as to its location and operations. She also stated that the applicant's sessional Service Contract and the viability of Manly Hospital were major factors in their calculations in keeping a full consultancy service available for patients. She also dealt with the applicant's work load and roster, and his work as a locum vice Dr Shanahan in January 2000 on a 2:5 roster. 12 Two other witnesses were called on behalf of the applicant. 13 Murray Raymond Hamer, paralegal formerly in the employ of Phillips Fox, solicitors, deposed in an affidavit to his examination of two appointment books and a diary covering the period 1 July 1997 to 31 May 2001. The purpose of the inspection of the appointment books was to tally the number of patients who had seen Dr Kennedy in his rooms after having been his patients in Manly Hospital and also to tally the number of appointments to see Dr Kennedy for all purposes at his rooms. The diary which was examined recorded the number of calls on patients in Manly Hospital. The results of the tallies were attached in graph form to his affidavit. 14 Yvette Elizabeth Pietsch, chartered accountant, deposed to an affidavit to which was attached a report of an examination of the medical practice of the applicant in order to ascertain what financial effect the variation to the roster arrangements had had on Dr Kennedy's medical practice. She was cross-examined on the report. 15 The respondent called a number of witnesses, all of whom had also provided sworn affidavits: John Mark Worthington, Visiting Medical Officer (VMO) physician since 1995 in the Department of Internal Medicine (DIM) at Manly Hospital; Consultant Physician in General Internal Medicine, FRACP (1990); Fellow International College of Chest Physicians (USA); trained in thoracic medicine, neurology and sleep medicine; con-joint lecturer at UNSW; part time staff specialist neurologist at Liverpool Hospital; on on-call roster for Liverpool last 18 months; private practice rooms at Dee Why attended about three days per week; probably 25% to 33 1/3% of his hour commitments is at Manly Hospital. Karl William Baumgart, VMO physician in the DIM at Manly Hospital since October 1993; Consultant Physician in Clinical Immunology and Allergy and General Medicine. Director of Immunology with the pathology firm of Douglass Hanly Moir; private rooms principally at St Leonards, but also at Dee Why (once or twice a fortnight); from 1993 to 1999 about 30 to 40% of his medical practice would have been at Manly Hospital; in 2000/2001 that proportion was 15 to 20%; resides at Lindfield. Michael Reginald Shanahan, VMO physician in the DIM at Manly Hospital since December 1979; Consultant Physician in General Internal Medicine. Until the mid-1980s he had rooms at Mona Vale and Dee Why but later until January 2000, ran a full time private practice from rooms at Dee Why. Since his return from leave in March 2001, that has been more a part-time private practice; perhaps 80% of his practice is now actually at Manly Hospital, with follow up at his private rooms of patients from the Hospital who need to be followed up. Prior to January 2000, 50% of his work came from the Hospital and 50% from referrals from general practitioners. Frank Bazik, Executive Director of Northern Sydney Area Health Service (NSAHS) since 17 November 1997. Grahame John Robards, since September 1981 and until 30 June 2001 engaged as a VMO at Manly Hospital; engaged as an affiliate of Manly Hospital from June 1976 to September 1981; holds temporary VMO appointment at the Hospital until November 2001, in order to conduct an antenatal clinic for the Hospital's Maternity Unit. Was a specialist Obstetrician and Gynaecologist in the Department of Obstetrics and Gynaecology at the Hospital for the entire period he was engaged there as a VMO. Janette Hunter Leonard, employed by NSAHS for about 16 years at Manly Hospital, for 14 years of that time as Administrative Assistant to the Executive Director (currently Frank Bazik) and to the Director of Medical Services at the Hospital. Submissions - Applicant 16 The contract as it was varied by the respondent in relation to the roster arrangements is unfair in its terms and in its operation, and further the conduct of the respondent in so varying the contract was unfair, infecting the contract with unfairness for that reason also. 17 The contract proceeded in an essentially unchanged form between 1981 and 1999, when it was unilaterally varied by the respondent, in the face of Dr Kennedy's strenuous objection, in such a manner as to substantially and significantly disadvantage Dr Kennedy at the time of the change, at present and in the future. The changes effected by the respondent were in two areas, first to the on-call roster, by changing it from 1:4 to 1:5, and second to the arrangements concerning distribution of work when a doctor on the roster is absent, and in that context to whether the work is performed by a doctor who is on the VMO roster or by a locum. 18 The decisions to effect both changes were made, in practical terms, by Mr Bazik. 19 Dr Kennedy's remuneration under and associated with the contract was governed in substantial part by the volume of work made available to him under the 1:4 roster. Dr Kennedy's workload has been reduced by the changes: to the VMO roster and by the change to the locum arrangements. 20 The change made to the VMO roster, and therefore to Dr Kennedy's contract, by the Hospital was to alter it from 1:4 to 1:5. That is, the on-call work and the remuneration flowing from it is now to be shared between 5 doctors rather than, as for the previous 19 years, between 4, and thus a reduction in the order of 20% in the number of patients each VMO sees. That has had a quantifiable effect on Dr Kennedy's practice. 21 Unsurprisingly, given that that roster had operated unchanged for essentially 20 years, Dr Kennedy has arranged his private practice around that roster. Dr Kennedy had an expectation that workloads under the contract would remain essentially the same throughout its life. That was a reasonable and legitimate expectation after its operation for 18 years. 22 The VMO's workflow was also subject to a further arrangement operated by the Hospital since 1981. That is, that when a doctor was to be absent for any reason the additional on-call work was first to be offered to the other VMOs on the roster. The significance of that arrangement is that, together with the performance of that on-call work, came the remuneration for performing the work and again the flow-on effect to the VMO's private practice for the performance of that work. That locum arrangement had operated to cover absences of up to twelve months. There is no evidence of any complaint about that particular arrangement. That arrangement formed part of Dr Kennedy's contract. Only if the work could not be covered by one or more of the other VMOs was it to be offered to a temporary locum. 23 This system operated from 1982 until December 1999 when it was unilaterally varied by the Hospital, to the applicant's detriment. 24 The change effected by the Hospital was to offer locum work to a doctor not on the VMO roster rather than, as the previous system operated, offer that work first to the doctors on the on-call roster. In 2000, when Dr Shanahan was absent, Dr Kennedy was ready, willing and able to carry out the work created by that absence and expressed himself so to be to the Hospital, but the work was nevertheless given to a locum. The decision was apparently taken by Mr Bazik; it is unclear whether that was done in consultation with Dr Baumgart or not. 25 Also unsurprisingly, Dr Kennedy had arranged his medical practice around the very long-standing contractual arrangement as to other members of the DIM being first offered the work of absent colleagues. 26 Further, a protocol was expressly developed by the respondent in March 1999, in consultation with the AMA, concerning this arrangement and concerning the circumstances in which, if at all, a locum doctor will be asked to take up work caused by the absence of a doctor on the roster. The protocol was circulated by Dr Westwood to all physicians. The protocol only set out formally what had already been understood by the doctors on the roster to be the operative system. The protocol formed part of Dr Kennedy's contract. 27 The protocol was developed in order to settle a dispute over the matter arising for the appointment of a Dr Harris as a locum for 3 months. Dr Kennedy was involved in that dispute but expressed himself satisfied with the protocol as a resolution of it. The terms of the protocol are perfectly clear. Other doctors on the roster are to be invited to perform work caused by an absence before any locum appointment is considered. No distinction is drawn in the protocol between short and long-term absences. 28 The respondent has not observed the protocol, particularly and relevantly with respect to the appointment of Dr Lucas to take over Dr Shanahan's roster during that doctor's absence in 2000. Of itself, and also insofar as that is a breach by the respondent of the contract with Dr Kennedy, that is unfairness: Beahan v Bush Boake Allen (1999) 93 IR 1. Failure to observe its own established and written protocol, on which it expressly invited Dr Kennedy to rely, is simply unfair and infects the contract with unfairness. 29 It is also relevant that Dr Baumgart was, it appears, the initiator of the first breach of the established practice, in early 1999, when Dr Harris was appointed as a locum for three months. 30 Why, then, was Dr Kennedy not offered the work in accordance with the protocol? 31 The evidence of Dr Shanahan shows that to permit Dr Kennedy to do that work, in accordance with the protocol, would have shown that a doctor committed to the local area could not only perform the 1:4 roster with ease, but could perform a 2:4 roster with ease and, most importantly, without any possible detrimental effect on patient care. It would have shown that the change to 1:5, which the other doctors wanted to accommodate their commitments outside Manly, was not necessary. 32 Fundamentally, these changes to the contract unilaterally effected by the respondent have had the necessary and foreseeable effect of reducing Dr Kennedy's workload and as an immediate consequence his remuneration under and associated with the contract. Further, the detrimental effects of the changes upon Dr Kennedy were foreseeable and were foreseen by the Respondent. 33 Such unilateral variations of themselves to the detriment of a party render the contract unfair. When the manner in which the variations were effected, and the reasons for which they were effected, are examined, the unfairness becomes more egregious. 34 The changes to the contract had and have a specific and disproportionate effect on Dr Kennedy. That is because Dr Kennedy alone of the doctors on the VMO roster has established a properly set up local practice with full cardiology services, nursing staff and backup in Manly. Dr Kennedy has devoted his private practice to the Manly area. Unlike the other doctors his remuneration is drawn essentially from his practice in Manly and at Manly Hospital. They may have rooms in the area or near the area, but not a practice dedicated and constructed in the way that Dr Kennedy's is. 35 Such disproportionate or unequal treatment is a proper basis in which unfairness can be found: Baker v National Distribution Services (1993) 50 IR 254. That disproportionate and unfair effect on Dr Kennedy is a second and discrete aspect of unfairness, over and above the unfairness caused by the unilateral changes to the working arrangements which have operated for essentially 20 years. 36 Quite apart from that unfairness, the respondent conducted itself unfairly in the means by which it effected the changes, that unfair conduct infecting the contract. That has occurred in four ways. First, the reasons given by the respondent for the alterations are not sustainable. They bear no relationship to the actual position at the Hospital. Secondly, the reasons for which the contract appears in fact to have been altered, as opposed to the reasons given for its alteration, were not proper reasons and so render the contract unfair. Thirdly, the procedure by which the contract was altered, both as to the roster and as to the locum arrangements, were unfair in practice, so rendering the contract unfair. Fourth, Dr Kennedy was misled about the changes to the contract as they affected him and the steps the respondent would take to alleviate that effect. 37 The reasons given as to the onerous requirements of the roster, doctor workload, improving patient care etc by the witnesses for the respondent, and those of Mr Bazik in particular, do not stand up to scrutiny. 38 Mr Bazik in making his decision did not inquire into the fact of other doctors' commitments outside Manly, let alone whether that might have been an influencing factor. He expressly recognized that the roster change had the potential, at least, to financially disadvantage Dr Kennedy. 39 It is properly available on the evidence that Mr Bazik, as a new executive officer, was unduly influenced by the professional clout carried by, particularly, Dr Baumgart. It should be noted that Dr Baumgart, who was a prime mover, spends only 15-20% of his time at Manly Hospital. 40 What has really happened is that the respondent, in the person of its decision maker Mr Bazik, a new executive officer, has bowed to pressure from doctors who wanted a fifth physician, firstly, to permit them to carry out their other duties at other hospitals or to reduce their overall workload, and perhaps secondly, to permit Dr Chen, who happens to be Dr Baumgart's brother in law, to take up an appointment as a VMO. 41 Dr Kennedy, who has devoted his private practice to the Manly area, should not be penalized in order that other doctors can maintain practices and consultancies in other areas. The fact that other doctors have taken on other responsibilities outside Manly, and want to cut back on their Manly work as a consequence, should not be a reason for Dr Kennedy, who remains willing and able to carry on the work as he always did, to be financially penalized, yet that is precisely what has occurred. 42 There is also the fact that Dr Kennedy appears to have been the subject of some substantial antipathy on the part of at least, Drs Burgess and Braude. Despite this history, Dr Burgess is permitted to be a mover in the push for a fifth VMO, at a time when the respondent and those participating in the decision were aware of Dr Kennedy's opposition to that change. Insofar as persons known to be personally antipathetic, if not downright hostile, to Dr Kennedy were permitted by the Respondent to have a part in the process which affected Dr Kennedy adversely, the contract was unfair. 43 A fundamental unfairness is not, of course, cured by consulting with the victim of the unfairness before perpetrating it. The respondent certainly knew at all relevant times of Dr Kennedy's opposition to the change. That Dr Kennedy did or did not attend meetings of the Department or other bodies within the Hospital over the period of the contract is not to the point. What is critical is the circumstances surrounding the meeting at which the Medical Council of the Hospital voted to change the roster arrangement. 44 It is a consistent pattern of the respondent's behaviour that Dr Kennedy is misled by it about the changes it proposed and their effect. Dr Kennedy was not only not told that that matter would be canvassed at the meeting of April 1999 but was actively misled by Dr Baumgart about the fact that it would be determined at that meeting. First, Dr Kennedy is misled about the critical meeting of 18 April 1998 at which it was recommended that there be a fifth VMO appointed. Secondly, Dr Kennedy was informed by Mr Bazik in or about May 1998 that Mr Bazik would not be approving a fifth VMO position. It is accepted that Mr Bazik denies this conversation. 45 The respondent claimed that at the meeting of the Medical Staff Council of 6 April 1999 the fifth VMO position was endorsed by the AMA. Dr Baumgart, as chairman of the MSC, says that he always intended that the fifth VMO would be discussed in the presence of AMA officials at that meeting, but he did not tell the AMA. He did not tell Dr Kennedy. 46 The minutes of the meeting which are said by the respondent to give the authority of AMA approval to the roster change are in fact disputed by the AMA officer present at the meeting. Had Dr Kennedy known that that issue was to be discussed, he would have attended the meeting. Further, it is transparently clear that Dr Kennedy did not know that this meeting was to be used for that purpose or that the fifth VMO was to be discussed at all. Neither the agenda nor the reminder notice sent out mentioned this. 47 Mr Bazik represented to the Commission that it would 'obviously add to the costs of the hospital' to appoint the fifth VMO. However, Mr Bazik had represented to the senior bureaucracy of the respondent that the appointment of the fifth VMO would be 'cost neutral' his support for that proposition coming from Dr Westwood's report, which says that the introduction of the fifth VMO would cost an additional $30,000-$50,000. 48 Then, and tellingly, there is the representation actively made by Mr Bazik to Dr Kennedy on 21 January 1999 that Dr Kennedy can remain on the 1:4 roster for the duration of his quinquennium contract. Equally important is the fact that Mr Bazik said in evidence he told Dr Kennedy that the respondent would, in permitting him to remain on a 1:4 roster, 'honour the spirit of the contract', which words Mr Bazik tries to deny having said a minute or two later. Mr Bazik is demonstrably correct in characterizing the offer to Dr Kennedy recorded in Ex 17 as maintaining 'the spirit of the contract'. For Dr Kennedy to have been permitted to maintain, for his own part, a 1:4 roster for the life of the contractual quinquennium begun in 1997 would certainly have been in the spiriti of the contract, and would have been fair. It was not done (despite the conversation in Ex 17) and the orders sought in these proceedings seek to have that 'spirit of the contract' restored, or in its absence redressed, in the interests of fairness. Submissions - Respondent 49 The primary function of the Hospital is to provide hospital and medical services to patients. To do this, the Hospital engages VMOs to be "on-call". The Hospital does not guarantee any level of patients or workload. This will vary over any period of time. The Hospital merely sets the roster. In return the VMO is paid an hourly fee for work performed pursuant to that roster. 50 By its very nature, a clinical department's on-call roster is an operational matter of some complexity. It involves competing and conflicting interests. First, there are the interests of patient care. The Hospital may quite legitimately decide that it is in the interests of patient care that an additional speciality or sub-speciality be created, which may have the consequence of reducing the on-call hours for the remaining doctors. 51 Secondly, there are the interests of the individual doctor. Thirdly, any individual doctor's desires will frequently compete with those of the other doctors in the department. Further, a doctor's desires may change over time. The on-call roster in any one department necessarily will represent a compromise between the different interests of the doctors concerned. Because not everyone can be satisfied, in the rare instance where consensus cannot be reached, prima facie, fairness dictates that the decision by the majority should prevail, subject to the Hospital having the final say to prevent victimisation of any minority position. 52 Fourthly, demographic and operational considerations may emerge over time. Patient numbers may increase, requiring an additional doctor. The respondent says that this occurred at the Hospital in the period 1997 to 1999. Conversely, patient numbers may drop. This may have the result that a VMO may not be replaced when he or she leaves the hospital. The remaining doctors may then be required to increase their hours under the on-call roster. 53 Fifthly, a hospital may decide to alter an on-call roster for budgetary reasons. A hospital may legitimately decide that in order to reduce climbing sessional payments to VMOs, it will expand the role of salaried staff specialists. 54 In conclusion, the notion that every doctor in the department ought to have a power of veto over any change to an on-call roster is absurd. 55 The applicant's sessional service contract was made on 20 August 1997. By Clause 3/Schedule 1, the applicant is to participate in the Medical on-call roster. "On-call roster" is defined in the Determination. It is the roster set by the Hospital in consultation with the relevant department. The application has no contractual entitlement to remain on a 1:4 roster for the life of his contract. The applicant could not have a legitimate reasonable expectation that the roster will never change without his consent. 56 At the close of the applicant's oral submissions, Mr Dubler noted that the applicant, at that time, now seemed to accept that the issue was not a change to the roster per se, but whether that change was done unfairly for insufficient reasons. 57 So the applicant has to demonstrate to the Court that the change in the roster, which they say is permissible, was for wrong reasons, perverse or mala fides or in some way was unfair. The applicant does not really challenge the issue of a change in roster as a matter of principle. The applicant accepts, for example, the principle that if there are operating changes such as patient numbers or workload, it would indeed be unreasonable for a hospital not to respond to that by changes in the roster. 58 The correct principle to apply in the case of the applicant is that a change in the DIM's roster will only be unfair to the applicant if: (a) the decision is taken mala fide and with actual malice towards the applicant; (b) the applicant was not consulted and did not have the opportunity to put his views; and (c) the Commission is satisfied and left without doubt that the operational decision to appoint an additional VMO was clearly wrong. 59 In relation to the last point, the Commission ought to be slow to intrude its own view upon clinical decisions. 60 The decision was sound, firstly, because it would have been unfair to the three of the four doctors in the department to maintain the roster. Their evidence was that the roster had become, if it had not been in the past, onerous, and that it was detrimental to them from the workload perspective and from a fatigue perspective. Secondly, the introduction of the fifth physician would improve patient care. That can be seen at a number of levels. Just mentioning a few: affording greater time to spend with patients; affording greater time to consult with fellow physicians; affording greater time to do things such as develop clinical pathways, peer review, and general best practices for the hospital. Thirdly, the introduction of the fifth physician would be in the public interest as it would improve Manly Hospital's ability to teach graduates and thereby ensure very high standards of medical care into the future. 61 Against those many reasons, and the weight of four doctors who gave evidence before the Court, the endorsement of the AMA, the endorsement of Mr Bazik as a hospital administrator, the applicant puts virtually nothing. For example, the applicant puts forward no counter statistics. The applicant does not put forward anything to doubt the statistics collected by the hospital and the doctors in the department that patient numbers increased from the financial year 1997 through to financial year 1999. The evidence is that patient numbers increased by in excess of 20 per cent. Three of the doctors in the department have given evidence on oath that that led to an increase in their workload. There is not one single counter statistic or indeed evidence against that. 62 Secondly, the applicant puts forward no counter evidence to the evidence of what is happening in comparable hospitals. The applicant puts forward not a single hospital anywhere in the world that currently operates a 1:4 roster with these types of patient numbers and is unable to demonstrate that it works anywhere else. 63 The applicant puts forward no independent evidence beyond his assertion that the 1:4 is preferable to a 1:5 roster in this hospital. There is not one piece of independent expert evidence or opinion evidence that would say that 1:4 in the current conditions in the year 2000 with the current workload and current patient numbers is clinically safe or satisfactory. The applicant bears the onus for the Court to find in these proceedings that all of those doctors, and the AMA president who looked at the statistics, were somehow all wrong. 64 To grant Dr Kennedy's wishes and not appoint a fifth physician would have necessarily resulted in an unfair work contract for three of his fellow colleagues at the department. It would have condemned them to an onerous workload. The department would have condemned them to continuing to work unreasonable hours and that was what the hospital was responding to. The majority of opinion, backed up by statistics, was that there was a need for a fifth physician. There are some submissions in the forefront of the applicant's case that the hospital was seeking to victimise Dr Kennedy. The three doctors were cross-examined, and it is plain that they were only activated by a desire to have a fair roster, and that there was no intention, whatever Dr Kennedy may have felt at the time, to victimise him. There is no reason to doubt the bona fides of those three doctors who know how the roster works and have told the Court in cogent ways why a fifth physician was needed and that it had been agitated for since 1990. The respondent says that it would have been unfair for the hospital to have ignored that body of view. 65 The applicant's reply to the respondent's case at its highest is 1, his personal perception of things; and, 2, the proposition that his personal perception ought be given greater evidentiary weight than, not only the statistics, but the cogent evidence of the three doctors there and others who have looked at the situation such as the AMA, Dr Robards, Mr Bazik and Dr Westwood. 66 There is a point of principle that divides the applicant and the respondent in terms of how the Court ought assess the issue of doctor workload, and it is this: the applicant says that the Court ought reject all of the evidence marshalled by the respondent, because the applicant says that in the early 1980s bed numbers, on his recollection of things, support what he says. Now, firstly, that is only speculative. The Court does not have a single document comparing bed numbers of the 1980s with bed numbers of today. 67 Even if the Court is satisfied about what the applicant says about bed numbers, the respondents say the issue for the Court today is the role of a VMO, not in the early 1980s, but the role of a VMO in a public hospital in the year 2000. 68 The actual obligations that the applicant contracts to provide include: to consult with his fellow specialists, obviously on an as-needs basis; to meet at the departmental meetings, in relation to which the applicant has been in breach for a long time. The respondents say that it is more than just passing and ironic that he says he has time to work a 1:2 roster at Manly, but he has no time to meet his contractual obligation and attend departmental meetings. Another contractual obligation is to teach, to engage in quality assurance and peer review activities. 69 Physicians are required by the medical board to engage in ongoing continuing education. Three of the doctors say that for them to participate in that and improve as doctors from year to year, it would assist if there was a fifth physician. There is a need for patients and the medical team underneath the VMO not to be overburdened, and that is relevant if Dr Kennedy is left on the increased hours. There may be a need to have a range of subspecialties. 70 All the applicant has in his favour as an argument is an assertion about what the bed numbers were in 1982. 71 None of those matters were made out, in the light of the statistical evidence as to patient numbers, comparison with comparable hospitals, the views expressed by other members of the Department of Internal Medicine (DIM) and other doctors at Manly, the evidence of Mr Bazik and the endorsement of the AMA and of the Medical Staff Council (MSC) as to the appointment of a fifth VMO physician. 72 The cases say that a contract in its operation can become unfair. A 1:4 roster had become unfair by 1999, was demonstrated to be so and that there was the need for the fifth physician. 73 Dr Kennedy's desire that there only be four doctors in the department can only be met if the other three doctors' desires to have a less burdensome workload is not met. At the end of the day it is a question of assessing the reasonableness of the decision and the evidence in support of it. Dr Kennedy, at the end of the day, is a lone voice. He is unable to put anything before the Court to support the invalidity of the appointment of a fifth physician, other than his assertion. 74 The applicant in his evidence has a history of, trying to put it as neutrally as possible, overstating things, recalling things that are slightly more favourable to his case than perhaps is the event. Other witnesses are likely to be more reliable where they do not have the direct personal interest that the applicant has in these proceedings. 75 The Court is entitled to infer that a deal of the rationale behind this case is a perception of victimisation by the applicant and that there has been, as a result, a failure to actually consider the true motives and the true objective reasoning behind his fellow doctors' decision. 76 Obviously, firstly, if it can be demonstrated that the reasons of the respondent's forums were a mask, so that it was victimisation of the applicant, that would be unfair. And whilst perhaps the evidence certainly allows the inference that that was Dr Kennedy's concern at first, that he thought there was victimisation that would ground an intervention by the Commission, that hasn't been made out. The three doctors in the department gave evidence. 77 They were cross-examined and all of them adhered to their evidence, and there was no evidence for saying that they were actuated by anything other than the desire to have a proper roster based on their view of all of the factors they mentioned - doctor workload, patient needs, clinical desirability. 78 The real decision makers were the doctors in the DIM and Mr Bazik. It has not been demonstrated that they were actuated by any malice towards the applicant. There is no substance to the submission that the decision to appoint a fifth VMO was actuated by mala fides or malice towards the applicant. 79 The evidence does not demonstrate that the impact of a 1:5 roster will be disproportionate on the applicant in comparison with the other members of the DIM. 80 The evidence makes plain that introducing a fifth doctor, whilst keeping the applicant's hours i.e. a hybrid 1:4 and 1:5 roster is impossible for two reasons. First, it is logistically impossible because the roster would become extraordinarily complicated and there will be a need for the other 4 doctors to work part days which is clearly impracticable. Secondly, because each VMO has a medical team of Registrars, Residents and other support staff, a hybrid roster cannot work. A hospital cannot require equally placed junior medical staff to work different workloads. To continually rotate them would be impracticable. It would also be logistically impossible to roster the support medical team in the complicated hybrid system that would be required. Dr Baumgart considered this option but rejected it for the above reasons. He was not challenged on this in cross examination. 81 The evidence makes it plain that the applicant was given every opportunity to put whatever views he wished in opposition to the decision to appoint a fifth VMO. The applicant was aware by 11 May 1998 that the DIM had agreed to appoint a fifth VMO. Over the following 18 months the applicant had every opportunity to put forward his case at future DIM meetings and Medical Staff Council meetings. The applicant chose, rather than going through the recognised procedures for agitating his concerns, to raise them directly with Manly administration and Mr Bazik. He was given the opportunity to put his views as he admitted in evidence. 82 Further, the applicant invoked the dispute resolution process contained in the Determination in relation to the appointment of the fifth VMO. The dispute resolution process commenced on 5 November 1999 and was abandoned by the applicant by way of letter dated 5 June 2000. The dispute resolution process included consideration of written submissions by the applicant and face to face meetings with him. 83 Accordingly, full consultation was provided to him. 84 In terms of notice the applicant received almost 6 months' notice from the date of the decision (May 1999) until the actual appointment which took effect on 17 November 1999. The applicant led no evidence that this was too short a time within which re re-arrange his practice. His evidence was that he was able to increase his workload at the Mater Hospital. It is also significant that the applicant had informal notice of the DIM's decision to appoint a fifth physician from May 1998, that is 18 months prior to the implementation of the decision. 85 In relation to locum arrangements, once a doctor has agreed to participate in a hospital's on-call roster, prima facie that doctor is responsible for ensuring that a suitable alternative doctor is able to cover his work during any period of absence. Ordinarily, for short term absences for holidays and the like, this is a matter to be resolved within the DIM. Contractually the other doctors in the DIM have no legal obligation to provide any cover for a doctor who cannot participate in the roster as required by the contract. 86 Alternatively, the doctor may seek to have a locum cover the doctor's intended period of absence. As the intended period of the locum's replacement of the doctor on the roster becomes greater, public interest factors intrude. Problems with respect to locum work become the more acute when the proposed absence of the doctor is for a long term as opposed to a short term. 87 This is reflected in the legislation. In 1998 the Health Services Regulation 1998 was promulgated under the Health Services Act 1997 (Ex 20). Clause 5 of the Regulation requires that in any case of appointment of a VMO that is to be held by a person for a period of more than three months it must be advertised. This is in order to ensure that all proper available candidates can be considered and that no system of patronage occurs at public hospitals. 88 Dr Shanahan's position as a VMO in the DIM became available for 12 months from approximately January 2000. The Hospital, rightly, took the view that the Regulation applied and the position was advertised. The applicant was aware of the advertisement but chose not to put his name forward for the position. He did this because he preferred to rely upon his alleged right to be given the position without having to compete with any outside person. This is clearly against the public interest. 89 Pursuant to the principle in Huskisson RSL v Sullivan (1990) 20 NSWLR 332 at 345, it is not available to the Commission to hold that the operation of the Health Services Regulation 1998 is unfair. 90 The applicant is wrong when he says the memorandum of 5 March 1999 was a protocol, which was issued and was applicable to future locums. All the other doctors in the Department have correctly given evidence that the document of 5 March 1999 and the earlier AMA agreement was only in relation to short term locums. It was wholly inapplicable to long term locums. 91 The applicant never enjoyed a contractual entitlement to be offered all 12 month locum work that may arise for the life of his contract. There is no express term to that effect in his contract. No other written or oral communication to him from the Hospital was to that effect. The effect of the memorandum of 5 March 1999 has been explained above. In any event that memorandum post dates his contract. 92 The applicant did not have a legitimate or reasonable expectation to be offered the 12 month locum work of Dr Shanahan. One instance many years ago involved the Department as a whole agreeing to cover a doctor's absence in wholly different circumstances. This one instance cannot ground a legitimate expectation that the applicant enjoys an automatic right to take over Dr Shanahan's work for 12 months. 93 The Regulation applies and it is a complete answer to the applicant's case in this regard. 94 The applicant's case for a monetary order in his favour falls away for two fundamental reasons. First, the applicant has failed to bring into account his work at other hospitals. He says he has taken up more work at private hospitals to compensate him for working less hours at Manly. He says his working day is longer by two or three hours because increased work at the Mater requires additional trips to that hospital. He does not reveal to what extent he has benefited by that work. The Commission does not know whether in fact the applicant is worse off or indeed better off. By deliberately failing to bring into account this income, the Commission does not know whether the applicant has suffered any loss. 95 Secondly, the report as to damages from Ms Pietsch is flawed for a number of reasons. 96 First, a comparison is undertaken between patient consultations in year end 1998 and 1999 compared with 2001. No analysis is made of the patient numbers for the year end 1997 being just before the contract was entered into. Accordingly, the Commission does not know whether or not, consistently with the statistics dealing with patient numbers, the years 1998 and 1999 reflected an increased workload due to an increase in patient numbers since 1997. As submitted the applicant cannot claim that it is unfair for the Hospital to seek to maintain the 1997 workload numbers in the face of complaints about increased workload from other members in the Department since the contract commenced. 97 Secondly, the calculation of patient consultations at Manly is flawed. The author of the report has wrongly assumed that each patient visited, whether public or private, pays the doctor on a fee for service basis. 98 Moving onto the claim of loss from a decline in flow on patient consultations from MDH, there are three flaws in the analysis. First, the figures are influenced by the fact that the applicant has markedly since the introduction of the fifth VMO transferred more of his patients to private hospitals in the area. When those patients present for follow up consultation at his rooms, they are no longer marked as Manly patients. This distorts the figures. 99 Secondly, the applicant gave evidence that his practice has changed with respect to bulk billing patients. The applicant no longer does this and as a result he admits this has led to a sharp decrease in numbers from the public hospital coming to his rooms. 100 Nextly is the claimed reduction in sessional and on-call payments. The comparison needs to be not with what was actually earned in 1998 and 1999 but with the budgeted hours which would be his reasonable expectation of work at the start of the contract. If one focuses on those figures the current VMO trend reports show no overall loss. There is no loss in sessional hours worked and only a very minor loss in on-call hours worked. Overall his remuneration is above that budgeted for at the time. 101 Finally, none of the assumed fees for services to patients have been the subject of any evidence by the applicant. Submissions - Reply 102 The applicant rejected the respondent's contention as to correct principle to be applied in determining the unfairness or otherwise of the change in the DIM's roster (mala fides, lack of consultation, the decision to appoint the fifth physician being clearly wrong). 103 The test is in fact a great deal broader and comprehends the overall conduct of the parties which the Act makes clear in s 106(2) and the decision in Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) (Reich) [2000] NSWIRComm 143; [2000] 99 IR 69 makes expressly clear that that is the position; that is, the terms of the contract, the effect of the contract on one party or the other, the overall effect of the contract in its operation, the terms of the contract itself and surrounding circumstances, the manner in which it works out between the parties are the parameters which the Court will look to see what has been done under this contract. 104 Further, the respondent seeks to place both an onus and a standard of proof on the applicant which it does not bear; that is, a proposition that the Commission must be left by the applicant presumably without doubt that the operation of the decision was wrong. That is not the position. The Court was urged to find only that the contract was unfair in one aspect of its operation on the conduct of the parties. 105 Dr Kennedy does not say, as is claimed by the respondents, that he ought have a power of veto over any change in the roster. That is, a straw man argument. What Dr Kennedy says is that whatever arrangements the respondent wishes to make, and however the hospital proposes to affect VMO's contracts or remuneration, he ought not, in fairness, have his contractual position, of over 20-years' standing, unilaterally and unfairly changed to his detriment. The more so, of course, as these changes were made in the middle of a quinquennial arrangement. That is his case, not that there cannot be a change of any sort whatsoever. 106 A good deal is made by the respondent to the proposition that a doctor on-call can be called out at a time unsuitable and could be deprived of sleep and could become inefficient and so on, but then when one sees that Dr Kennedy is asked how often it has happened to him in the last six months, he says only once. He does not say it happens once every six months. 107 Very importantly, Dr Kennedy's express evidence was that he is completely satisfied in a professional sense that there would be no adverse effect on patient care from him participating in the 2:4 roster, and there is no evidence to the contrary before the Commission. When one looks at the figures which have been advanced by the respondent to support the change they made to the roster on the workload basis, they do not stand up. There are only two things upon which the respondent relies and that is the figures provided by Ms Blaxland and Dr Westwood's report. Now, Ms Blaxland's figures, as the evidence of Dr Shanahan and Mr Bazik shows, are not comparing like with like and they are generally unreliable, apart from the fact that they only cover a very short period of time. 108 The applicant does not have to show the Court that the respondent, moving to a 1:5 roster, was wrong. It says it was not done for the reasons said and that it was not necessary, but does not have to make that out that the fifth physician appointment was wrong. It does not bear an onus to show three doctors wrong in their view or their evidence on this. 109 The Court might be satisfied on the evidence of the other three doctors that the appointment was made for a reason and it was necessary and it was to benefit the hospital. But, notwithstanding that, the Court might also be satisfied that its effect and the way in which it was carried out were both unfair, and for that reason the contract is unfair. The only onus the applicant bears is to show the Court that the contract as it operated, as contracts are described in the authorities, Reich being the best of them, was unfair in its terms or its operation. The onus which the respondent ascribes to the applicant is not the test of whether this contract of Dr Kennedy's was fair or unfair. 110 It is not the case that in order to be fair to Dr Kennedy the respondent must operate unfairly to other doctors. That proposition of the respondent proceeds upon the basis that the only way in which Dr Kennedy could be fairly treated under the contract was, for instance, for a 1:4 contract or a 1:5 contract for everybody all of the time. That is putting it in its simplest form. That is not so. Dr Baumgart does not at any point say that a hybrid roster or another kind of roster arrangement would be impossible. It is not on the evidence beyond the wit of the respondent to come up with an arrangement that would not operate unfairly to Dr Kennedy. In particular, he says "I ought not in the middle of my quinquennial contract and have it changed unilaterally to my detriment." 111 Mr Bazik said that Dr Westwood's report supports the appointment of the fifth VMO. In fact, if one looks at Dr Westwood's report it does nothing of the sort. Rather, Dr Westwood's report poses two options, one of which is not to appoint a fifth VMO, and expresses no preference to either option as Mr Bazik has to in the end concede. 112 In relation to the nature of the relief sought, there has been demonstrated unfairness of the contract both as to the change to the VMO roster as it has impacted on Dr Kennedy. It is not his case that the appointment of a fifth physician was not permissible and could not have been done without Dr Kennedy's consent. The applicant does not invite the Commission to in some way overturn the appointment of a fifth physician. The applicant's case is the respondent has chosen, for reasons which are said to be not sound and not made out, and in the face of a very long standing contractual arrangement, to change Dr Kennedy's contract. Now, it matters not in one way whether that is by the appointment of a fifth physician or a sixth or a seventh or by some other means. The Court is not being asked to judge whether on medical grounds, or whatever grounds, the appointment of a fifth physician was correct. The applicant says the impact of that decision did not have to be unfair on Dr Kennedy but it was allowed to be unfair on Dr Kennedy and it is that fact that warrants relief and redress. 113 The same thing applies to the locum position. That is even clearer in this sense, in that the respondent advanced a written arrangement which became part of, if it was not before, Dr Kennedy's contract, and then proceeded to ignore it. It was not open to the respondent in fairness to ignore the protocol it had established. It was not open to the respondent in fairness to deny Dr Kennedy the opportunity to do that additional work which it had held out to him should be and would be available to him. 114 The applicant does not say the Court must, in order to resolve this case, order the hospital to observe its own protocol. In respect of the appointment of Dr Lucas and the failure to allow Dr Kennedy to do the work which he expressed himself ready, willing and able to do, that can simply be dealt with by a financial remedy given that situation has now gone by. The Court is at large as to relief. The principles set out in Westfield Holdings v Adams ([2001] NSWIRComm 293), the decision of the Full Bench as of 21 December last year make it clear that the redress will be related to the contract as it is seen to be varied or as it is seen to be found to be unfair. Legislation PART 9 UNFAIR CONTRACTS Division 1 Definitions 105 Definitions In this Part: contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument. unfair contract means a contract: (a) that is unfair, harsh or unconscionable, or (b) that is against the public interest, or (c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or (d) that is designed to, or does, avoid the provisions of an industrial instrument. Note. The jurisdiction of the Commission under this Part is exercisable only by the Commission in Court Session. Division 2 Unfair contracts may be declared void or varied 106 Power of the Commission to declare contracts void or varied (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. (2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. Consideration VMO Contracts 115 Mr Frank Bazik described the VMO Contracts: 3 The VMOs are appointed for 5 year terms, called quinquenniums. At the commencement of each quinquennium, the VMOs are offered contracts in accordance with the Public Hospitals (Visiting Medical Officers Sessional Contracts) Determination 1994 ("VMO Determination 1994"). In accordance with this determination, each VMO contract must specify the VMOs duties, remuneration and budgeted hours of sessional work. There is no requirement that VMO contracts specify budgeted hours of on-call work. However, it was the practice of the previous Director of Medical Services, Dr Andrew Johnson, to include a figure for budgeted on-call hours in the VMO contracts. 4 The number of budgeted hours in a VMO's contract is based largely on the number of hours worked by the VMO in the previous year. 5 There is no formal review of budgeted hours in a VMO's contract against the number of hours actually worked. Accordingly, one figure, generally, will not reflect the other. Moreover, the number of budgeted hours in a VMO contract does not determine the number of hours a VMO works. It is intended as a guide only. 6 A VMO's hours of work are necessarily clinical requirements. For instance, on some occasions, a VMO's ward round may take four hours due to the acuity of the patient load. At other times, a ward round may take one hour only. 7 The following variables will also affect the number of hours worked: (a) the number of meetings that a VMO is required to attend, for which payment may be received; and (b) the necessity to call-back a VMO to the hospital, when on-call, to attend to patients. The first of these variables depends largely on the VMO, that is, his or her availability and interest. The second variable is entirely beyond the control of the VMO. Consideration Roster/Remuneration Link 116 The link between the roster and the applicant's remuneration is that patients admitted during his on-call periods, and requiring the attention of the DIM, are noted as his patients, whether or not he has actually been consulted about them. In any event consultation does not always require him to return to the hospital. 117 The volume of work performed by a VMO on-call had and has a flow-on effect to the doctor's private practice and the remuneration to be derived from that practice. (That claim was supported by the evidence of all witnesses.) 118 Dr Kennedy's remuneration related to his work at Manly Hospital is in two streams, one from the respondent and one from patients themselves. 119 Dr Kennedy sees two types of patients at Manly Hospital, public and private patients. Essentially, if Dr Kennedy sees a public patient he charges the hospital for his time in seeing that patient. If he sees a private patient admitted to the Hospital under his care he normally (though not on every occasion) charges the patient. The Hospital is not charged for that time. 120 If patients seen by Dr Kennedy at Manly Hospital then see Dr Kennedy in his rooms as private patients they are normally (though not always) charged. The Hospital is not charged for those services by Dr Kennedy. 121 Dr Kennedy has maintained throughout the contract and still maintains a private practice in the Manly area, one kilometre from the Hospital. Appointment of Fifth Physician/Change to On-call Roster 122 The issues of the appointment of a fifth VMO physician, ie an additional VMO, and the change of the on-call roster from 1:4 to 1:5 are intertwined in that the appointment of a fifth physician who, on past practice, may have been either a VMO or a staff specialist, was a necessary pre-condition to the change in the roster. 123 The Public Hospital (Visiting Medical Officers Sessional Contracts) Determination 1994 provides as follows: "On-call" means rostered to be available to attend to public patients pursuant to an on-call roster prepared by a hospital or an area health service, as the case may be in consultation with the relevant clinical department;" (cl 3, Definitions) … (8) A visiting medical officer shall participate in an on-call roster for the provision of services as may reasonably be required by the relevant hospital or area health service, and when so rostered the officer shall be readily contactable at all times and be able and prepared to attend the hospital concerned within a reasonable period of time. (cl 4(8) Contract for Services) 124 Undoubtedly the on-call roster was, and is, a necessary feature of the relationship between the Hospital and the VMOs. Rosters are a common incident of work arrangements. They are not immutable and it would be very few of them that would not need to be adjusted from time to time to take account of changing circumstances. It was accepted by all involved that it was for the Hospital, taking into account the DIM's views, to set the roster that provided the best results for patient care. That object, on some occasions, may involve changes to the roster. 125 There had been at least one previous change to the roster in the period that Dr Kennedy had appointments at the Hospital. 126 When Dr Shanahan started work at the Hospital in 1979, the on-call roster for VMO physicians in the DIM operated at 1:11. The eleven doctors on the roster comprised three specialist physicians (who included Drs Kennedy and Shanahan) and eight local general practitioners. He said that in about 1984 or 1985, the Department was restructured, so that only specialist physicians were allowed to be on-call for acute admissions through the hospital's emergency department. This resulted in a roster of 1:4, by virtue of the simple fact that there happened to be four specialist physicians at Manly Hospital at that time (namely the 3 VMOs and Dr Edison, a staff specialist already employed at the hospital). The general practitioners were not happy, but nevertheless accepted the decision. None of the specialist physicians had then complained about the changed roster. All four, including the applicant, had stood to benefit very substantially from that change. (In relation to the conflict in evidence between Dr Kennedy and Dr Shanahan as to whether that earlier change in the roster occurred in 1982 or 1984/1985, I do not consider it necessary to make a determination as to the exact date. What is of importance in the context of this matter is that such a change in the roster did occur.) 127 It was Dr Shanahan who had first raised the move to a 1:5 roster in 1990. He had been involved in informal discussions in relation to the issue after that date. He formally raised the appointment of a fifth VMO physician in the DIM at the Medical Staff Council (MSC) meeting, not attended by Dr Kennedy, on 7 April 1998. It was Dr Shanahan who, at the DIM meeting on Saturday, 18 April 1998, a meeting at which neither Dr Kennedy nor Dr Worthington was present, moved a motion, unanimously accepted by those present, being Drs Baumgart, Macnamara, Burgess and Braude, that an extra VMO physician was required in the DIM to cover the workload and roster commitments. (The fact is was held on Saturday had some significance in that the applicant said he had difficulty being present on Saturday meetings. Apologies were noted from eight other doctors, including Dr Worthington.) 128 On 21 August 1998, Dr Kennedy wrote to Dr Worthington as Secretary, Section of Internal Medicine and sent a copy of the latter to Mr Bazik. That letter which, in effect, set out the applicant's reasons for opposing the appointment of the fifth physician, was headed: re: agenda item - current drive for 5th Physician 129 It continued: A formal note as my views and position with respect to the above have not been canvassed by any member of the Section and I received notice of tomorrow's meeting four days ago. I would be pleased if you would convey the following to the meeting tomorrow and also my apologies: I provide a complete consultant service to the hospital and local community and have been doing this for over twenty years. This requires full-time rooms, expensive technology and permanent secretarial back-up. To provide these services requires practice planning and a VMO load specified under contract. The VMO sessional contracts have been designed with this type of practice in mind: indeed my practice was presented by the AMA to Justice Hungerford as the classic model of a Consultant Physician in a District Hospital on which sessional fees and contracts should be based and is currently being used in the relative values study. VMO contractual arrangements are supposed to be an intrinsic part of local practices and obviously one group of doctors are not and can not be empowered to reduce the contractual arrangements of another against their wishes. With regard to the current clinical load , I hold the position that the Consultant load if anything has been lifted over the past few years by increased Registrar support and the creation of various staff specialist and subspeciality VMO positions. There has also been a significant decrease in real beds. I also hold the position that while the Section may vote on whatever it likes, we should refrain from pursuing courses of action that are outside our purview and suggest a disregard for the local infrastructure. If any members have a personal need to decrease the load they have undertaken and do not wish to resign, I suggest a review of resident, registrar and nursing support and perhaps a [sic] some revised relieving arrangements. I oppose any reduction in my hospital work-load. 130 Dr Shanahan said that a fundamental reason in 1998 to introduce the 1:5 roster was to reduce doctor workload carried out under the on-call roster. The change to the roster from 1:4 to 1:5 reduces the weekend on-call roster from Friday, Saturday and Sunday to Saturday and Sunday. 131 Reasons that Dr Shanahan and other doctors advanced to support their claim that the roster should be changed from 1:4 to 1:5 included the following: the number of admissions per physician was greater than at peer hospitals; the frequency of on-call work was too high; it was difficult for physicians to maintain their teaching commitments in light of their workload, and this was detrimental to the hospital at large; there was a lack of participation by some clinicians in non-medical activities, such as medical student teaching and community work; there was a substantial growth in the number of in-patients at the Hospital, which created a risk to the clinical safety of patients, and had a detrimental effect on the development and education of physicians and junior medical staff; patient care would be enhanced by physicians being able to give more time to the patients under their care, and by the availability in the hospital of another physician whose speciality would complement those already present; there was difficulty in arranging cover for leave periods when only 4 physicians were available; relatively recently, it became a feature of the Staff Specialist Award that doctors take 5 weeks study leave per year reflecting an industry standard for on-going education. This greatly increased the amount of leave that the doctors on the VMO roster were required to cover; and the appointment of an additional physician would enhance the intellectual capital of the hospital. 132 Those and other reasons were advanced by other members of the DIM to support the appointment of a fifth physician, though not all were embraced to the same extent. Dr Baumgart and Dr Shanahan for instance, did not so much emphasise doctor fatigue as did Dr Worthington. 133 Dr Shanahan said that both doctor workload and doctor fatigue were relevant. It had been his documented position for at least a decade that the number of physicians on the VMO internal medicine roster at Manly Hospital was lower than it should be for a hospital of that size and a workload of that size. 134 A number of the reasons advanced to support the appointment of a fifth physician were contested by the applicant, such as that there had been an increase in the number of patients, that the 1:4 roster resulted in fatigue and that absences of DIM members could not be covered by the remainder. 135 I found the evidence of Dr Worthington, the then most junior DIM member, who covered many of the absences and who made strenuous efforts not to get embroiled with either faction in the DIM, compelling. He said that: A. In fact, I would say that for a number of years I picked up the majority of that work, [to cover leave of other doctors] as the most junior member of the roster, and our problems only became problems, really, when ill-health in one of my family members made that impossible and it shifted the burden to other people. Q. Do you say that that was a stimulus for a perception on the part of other doctors that they were being overworked? A. It would undoubtedly not only have changed their workload, but would have reduced their opportunities to take leave in a timely fashion, particularly given that there are conference seasons throughout the year where multiple conferences may be held simultaneously at certain times of the year, placing some burden on people to try and cover that leave. 136 Dr Worthington said he had had two car accidents over the last 2 years which he attributed to fatigue in relation to being on-call. He accepted that the on-call work was in addition to his work as a staff specialist at Liverpool Hospital. It had been his intention for the past year to resign from there but Liverpool had not been able to get anyone to replace him. In any event it was his intention to resign within the next six months (ie around May/June 2002). Because of the travel involved in travelling from Liverpool he had shortened his room hours for the time being to allow himself adequate rest. He said that even before he was aware that an on-call roster would be formed at Liverpool, and thus it was only the 1:4 roster at Manly that he was part of, he had favoured the 1:5 roster for VMOs at Manly. 137 In evidence on 20 November 2001, Dr Worthington said: I have at various times whilst at Manly worked rosters from one-in-two through to one-in-four and, indeed, have worked one-in-two rosters at Manly even during the most recent period, owing to the ill-health of Dr Roger Chen and the absence of Dr Michael Kennedy at a conference and the fact that Dr Shanahan's locum had not yet appeared. … My concern is that a one-in-four roster, particularly one with the expanding amount of conference leave likely to be taken, would have led to a roster something more akin to one-in-three while you were working, as opposed, to when you were on leave. … I would like to have had the roster as a one-in-five, given that a one-in-five roster while you are working, as opposed to when you are on leave, is not really a one-in-five roster when you have to cover five weeks annual leave for each of the other members of the department and also potentially up to several weeks of study leave during the course of the year. … With a 24 hour on-call and the potential to be always called back the following night while patients are still sick, there are I think a lot of people would not [sic] be concerned about the fatigue issues involved in that. All the more so because at a hospital like Manly Hospital, the registrars that we supervise are for the most part quite junior. They are not senior registrars and therefore often have to be in direct contact with you before decisions are made. So, for the long term I thought that a one-in-four roster which really breaks down to something somewhat tighter than that, was really not a good idea for the next 20 years of my life and expose me to some risk, and indeed the AMA safe hours applying to resident medical officers unfortunately don't apply to us, and I think frequently we exceed those so called safe hours. 138 It was contended by the applicant that Dr Baumgart and the respondent could have devised some arrangement other than an increase in the roster to overcome the problems other DIM members advanced to support the change, but which would at the same time not be unfair to the applicant. 139 Mr Bazik said that Dr Baumgart had advised him that there would be logistical problems involved in the continuation of the 1:4 roster for Dr Kennedy. The roster is set out in terms of particular days of the week. If four physicians were working a 1:5 roster and Dr Kennedy was working a 1:4 roster, the four physicians would have to give up some days in the year to enable the 1:4 roster to operate. It was also said that there would be difficulties over time with leave coverage and in the construction of medical teams working 1:4 versus 1:5 for particular physicians. 140 Dr Baumgart also gave evidence as to the difficulties of the applicant remaining on a 1:4 roster, while the other VMOs worked a 1:5 roster. In the edited extract from transcript set out below, he explained what a team is in the DIM at Manly and how that team could be affected by a hybrid roster: A. At present, the teams consist of one or more visiting medical officers, some of whom are sub-specialists and some of whom are on the acute general medical roster. They have attached to them a registrar or a senior resident medical officer and an intern or a junior medical resident officer, plus or minus a range of medical students. The registrars and residents are all employed under the State Award for resident medical officers. … the effect of Dr Kennedy remaining on a one-in-four on-call roster whilst the other doctors in the department have less on-call, would be that the teams might have a disproportionate number of patients and there might be issues of equity in respect of their workloads at various times during their rotation to the hospital, which is for a period of between 10 and 12 weeks. Depending on the number of admitting weekends and the other days of the week at which that team is admitting patients, they could have anywhere between 3 and 40 in-patients. … The effect of Dr Kennedy remaining on a one-to-four roster would not be that Dr Kennedy's team would simply continue to work on in the same way in respect of the same number of patients over time as they had in the past, when they do work a one-in-four. That was because the implication of one individual remaining on a one-in-four roster might mean that they might do an additional weekday on-call in addition to the weekend on-call, so there will be a variation within the rotation through weekends that would place an additional burden on that team. 141 When the VMOs are on-call to take admissions the VMOs expect the registrar also to be on-call and the VMOs also expect their resident to be on-call for both weekdays and the weekend in order to have continuity of patient care. (The effects on registrars and residents had not been a factor in seeking a 1:5 roster.) 142 On the evidence adduced it does seem that the existence of a hybrid 1:4/1:5 roster would result in a logistical and administrative nightmare, that would outweigh the benefits, if any, to the applicant. 143 I accept that it would not have been feasible to introduce such a roster. 144 No matter what the views of the members of the DIM as individuals were, the decision to appoint a fifth physician, and thus change the roster, was not theirs. 145 Although it was alleged by the applicant that the decision to appoint the fifth VMO physician was made by Mr Bazik, that is a simplification of the actual procedure. Mr Bazik succinctly summed up the procedures discussed later, in the statement in his affidavit that "an additional appointment cannot be made unless reasons are established to justify the appointment, and those reasons are accepted by the MSC, me, the NSAHS executive, the Manly MACAC, the Area MACAC and the NSAHS Board". It does seem, however, that unless Mr Bazik could be persuaded that an appointment was justified, it would be more difficult for proponents of change to progress the change sought by them. 146 Mr Bazik also had the benefit of the opinion of representatives of the AMA. Although at the time and in the course of these proceedings, criticism was made of the statistics presented by other VMOs to those representatives, the fact remains that Mr Bazik, at the time of making his decision, could be comforted in doing so by the positive reaction of Professor Peter Thursby, the then President of the AMA(NSW). Although Mr Degan of the AMA had raised concerns as to the accuracy of remarks attributed to the AMA representatives, Professor Thursby, in a letter dated 27 May 1999, advised Mr Bazik as follows: At a meeting of the Medical Staff Council of Manly District Hospital which I attended on 6 April with Mr Jim Degan of the Association I agreed with the hospital's argument that they should employ a fifth physician at the hospital, aimed at better handling the hospital's increasing medical workload. My agreement is based on statistical information with which we were presented at the Medical Staff Council meeting, which stated that current loads were excessive compared with similar district hospitals. 147 I should say, that even without that expression of opinion from Professor Thursby, I have formed the view that there had been more than adequate reasons presented to Mr Bazik, and thus to the respondent, to justify the appointment of the fifth physician. Procedure for Appointment of Fifth Physician 148 It is said that the applicant does not invite the Commission to in some way overturn the appointment of a fifth physician. However, it was plain from the applicant's evidence and from the submissions made that it was being put forward that Dr Baumgart's involvement both in the decision of the DIM that a fifth physician should be appointed and in the process for the appointment of that physician was not benign: Dr Baumgart was a man of substantial influence in the creation of the fifth VMO position. As Dr Shanahan concedes Dr Baumgart's position as chairman of the two important bodies or councils are positions of some importance and significance within the hospital. Dr Chen who was appointed to the roster is Dr Baumgart's brother-in-law. Dr Baumgart, while he was not the decision-maker of the appointment, made the fact of his brother-in-law's existence and his desire to work in Manly known to other doctors. 149 The procedure for the appointment of additional doctors to a department encompasses the following steps: (a) majority departmental support; (b) MSC support; (c) Executive Director support to the Area Health Board; (d) advertisement and appointment by the Manly Medical Appointments and Credentials Advisory Committee (the Manly MACAC); (e) approval of the Manly MACAC candidate by the Area MACAC; and (f) approval by the Board of the Area Health Service. 150 Dr Shanahan was on the Medical Appointments and Credentials Advisory Committee and attended the meeting that considered the appointment of a fifth physician. He was aware that Dr Chen was Dr Baumgart's brother in law and that Dr Chen wished to work at Manly Hospital. Dr Baumgart had absented himself from the MACAC's deliberations as to that matter. 151 Members of the MACAC include doctors from Manly Hospital, plus representatives of the College of Physicians, plus a university representative. One of the criteria for appointment has always been whether applicants worked in the area. 152 There is no evidence to show, or even to suggest, that proper procedure, whether or not it was a "notorious protocol", and whether or not Dr Kennedy was aware of it, was not followed in the appointment of the fifth physician,. 153 I find that the appointment of the fifth VMO was not per se unfair to the applicant. I also find that the procedures for the appointment of that fifth VMO were not tainted so as to cause unfairness to the applicant. Consultation 154 It was submitted for the applicant that a fundamental unfairness is not cured by consulting with the victim of the unfairness before perpetrating it. 155 An examination of the history of the appointment of a fifth physician and a consequent change to the on-call roster for those doctors then on it, shows that the issue of such an appointment and change, while dormant for some periods never really went away after 1990. 156 Dr Kennedy may not have attended Manly Hospital meetings but his stance opposing the appointment of a fifth physician was one well known to all those persons both medical and administrative, involved in the consideration of such an appointment. Even such a recent appointee to the staff as Mr Bazik was aware of that stance through written communications from Dr Kennedy and from his perusal of earlier minutes and notes. (Mr Bazik said that when he started in November 1997, the matter of the fifth physician was one of the first issues brought to his attention.) 157 At a meeting of the DIM on 9 January 1995, Dr Shanahan had raised the question of adding a fifth physician to the general roster, but it was decided that any decision in that regard would be deferred to await the appointment of a new physician to replace one who had resigned. 158 The applicant complains that he was misadvised as to meetings, and, in particular, to the meeting of 18 April 1998, but on 28 January 2000, the applicant, in response to a letter from Dr Baumgart, answered one apparent criticism by saying: "Regarding meetings:- Participation does not require attendance". 159 Dr Kennedy accepted that from the time of the DIM's meetings in April 1998 through until 22 May 1999 he had plenty of opportunity, if he had so wished, to attend at least one meeting of either the MSC or the DIM or to write to the Hospital in order to put forward his views about the fifth physician. The avenue he adopted was to write formally to his colleagues and to the Hospital on 21 August 1998 setting out objectively his views and opinions. (Letter set out earlier in this decision.) 160 He also accepted in cross-examination that prior to the 18 April 1998 meeting, there would have been informal discussions between himself and other members of the DIM about whether or not there should now be a fifth physician. He also accepted that some doctors, eg Dr Baumgart, had prior to that meeting, told him that they supported the idea of a fifth physician. 161 It was claimed by the applicant that Mr Bazik, as a new executive officer, had bowed to the pressure from the doctors who wanted a fifth physician and had been unduly influenced by the professional clout of those doctors, particularly Dr Baumgart. 162 Earlier I have deliberately set out for each of the respondent's doctor witnesses some details of his qualifications and current commitments. I now set out similar details in relation to the applicant: MBBS (1968), MD (1981), MRACP (1971), FRACP (1975); in full time private practice as a consultant physician in general medicine with a large cardiological component since 1978; Consultant Physician with a sub-speciality interest in cardiology and clinical pharmacology, inaugural Board Member of the Manly Warringah AHS; member at one time or another at Manly Hospital of the MSC, the Management Committee, and almost every review committee; still Chair of the Drug Committee at the Hospital; positions on the executives of a number of professional bodies: Australian Association of Consultant Physicians; Section of Specialists of Internal Medicine, AMA NSW Branch; Therapeutics Committee, RACP; Internal Medicine Society of ANZ; presently co-ordinator of the Specialists Advisory Committee in General Medicine RACP; involved in working parties with the Government, the most recent being the Working Party on Angioplasty. 163 In my view, Dr Kennedy presented a formidable bloc in his own right. 164 I think a more correct view of events was that Mr Bazik was presented, on different occasions, with coherent and logical arguments for and against the appointment of a fifth physician by articulate, decisive, forceful and persuasive advocates used to having their opinions greeted with considerable respect. Because Dr Kennedy did not attend DIM meetings, Mr Bazik was not in a position to have the to and fro of the respective arguments advanced at the same time. He could acknowledge the validity of the arguments put to him by one proponent or the other, at the time he was given them, but until he spoke to the other proponent he would not be aware of contra views. Unfairness - Conduct 165 The applicant advanced allegations of unfair conduct to support his claims that his contract was unfair and that he should be paid moneys to compensate for that unfairness. 166 The conduct to be looked at is that of the respondent. Natural persons mentioned as being responsible for carrying out the respondent's functions, included not only Mr Bazik, but also Dr G Westwood, Medical Administrator at the Hospital, Dr Kim Hill, Director of Clinical Strategy for NSAHS, and Dr Stephen Christley, CEO, Northern Sydney Health. 167 The allegedly unfair conduct of the respondent would encompass, at the broader level both the appointment of the fifth physician and the appointment of a locum for twelve months to cover the absence of Dr Shanahan instead of offering that work to the applicant. Mr Bazik said Dr Westwood had actually handled the terms of the 12 months period for a locum as a medical administration matter. 168 I have found that the respondent was justified in its decisions to make both appointments. 169 The claim of unfair conduct at a personal level was directed particularly at Mr Bazik. I have already dealt with the applicant's claim that Mr Bazik, as a new executive officer had bowed to pressure from other doctors in the DIM who wanted a fifth physician appointed. 170 It was also claimed that Mr Bazik had misled the applicant by telling him in May 1998 that Mr Bazik would not be approving a fifth VMO position. An annexure to Mr Bazik's affidavit set out a letter dated 10 July 1998 from the applicant to Mr Bazik which commenced "Thank-you for advising the administration will not be approving an additional VMO Physician at Manly". The conversation was denied by Mr Bazik, and though he took issue with the statement in the letter, he had not so advised the applicant at the time. 171 In the light of my overall conclusions, I see no point in taking this matter further. 172 In a facsimile sent to Dr Hill on 8 June 1999, Mr Bazik outlined the recent history of "5th Physician Manly Hospital" commencing with the DIM meeting on 18 April 1998 and concluding with an MSC meeting on 7 June 1999. In the course of that document, Mr Bazik described a meeting on 21 May 1999 with Dr Kennedy in the course of which description Mr Bazik noted that "in respect to on-call, Dr Kennedy may continue to work a 1 in 4 roster until end of quinquennium, so he will not be financially disadvantaged and remain in accordance with his contract". 173 In his evidence on 19 November 2001, Mr Bazik, his memory having been jogged by seeing the facsimile to Dr Hill, recalled "presumably having a discussion around 21 May" as to the on-call roster. Mr Bazik had certainly said to the applicant that it may have been an option and may have been possible for the applicant to work the 1:4 roster until the end of the quinquennium. Mr Bazik denied telling the applicant that he would work the 1:4 roster for that period. Mr Bazik distinguished between his statement "can retain" sessional hours and "may continue to work a 1 in 4 roster etc". The first was certain, the second may be possible but subject to consultation with the DIM. In relation to the applicant's sessional hours, there had been a commitment by the respondent to honour his sessional hours in terms of payment and, in order not to financially disadvantage him, the respondent "would work in the spirit of co-operation to work through it with him". 174 I find that the applicant was not promised that he could work a 1:4 roster to the end of the quinquennium. The discussions were part of the respondent's consideration as to how it might take the applicant's opposition into account and alleviate adverse affects on the applicant's financial situation by the change of the on-call roster from 1:4 to 1:5. 175 Some time was also spent in cross-examination of Mr Bazik concerning his advice to Dr Hill that the cost of the appointment of a fifth VMO would be cost neutral but his evidence to the Commission was that the cost of $30,000 to $50,000 would be beyond the cost neutral range. Even without having the size of the respondent's budget before me, I am prepared to accept that the difference in description by Mr Bazik as to the cost being or not being cost neutral does not advance this matter any further. 176 It was submitted for the applicant that the applicant appeared to have been the subject of some substantial antipathy on the part of some doctors. Indeed, Dr Kennedy said that malice against him was a factor with some of the doctors who voted for the fifth physician. Attached to a number of the affidavits tendered in evidence were letters that formed part of the correspondence between the applicant, the respondent and other doctors. 177 On 15 April 1999 the applicant sent a letter marked "confidential" to Mr Bazik, the impetus for the letter being that "unfortunately Drs Worthington, Baumgart and Shanahan continue to canvass support for the appointment of a 5th VMO Physician". The applicant said "there is no valid case for this and good reason against it". He referred to his colleagues "pursuing short-term self-interest", criticised the way those doctors organised their work and advised that Registrars and senior nursing staff had told him there was to be the appointment of a fifth physician. Towards the end of the letter he stated that he regarded "the actions carried out by John Worthington, Karl Baumgart and Michael Shanahan in continuing to pursue the 5th physician issue work-place harassment". 178 Also in the course of those letters, the applicant, writing on 24 May 1999, to Mr Bazik concerning the recommendation to appoint a fifth physician, said: Just and fair management requires a proper assessment of the problems a contractor claims to be experiencing and a proper examination of possible solutions. … Clearly, decisions by the hospital administration must be based on something better than a vote resulting from what is arguably no more than collusion and deceit amongst business competitors. 179 In reference to the 1:4 roster, the applicant, writing to Mr Bazik on 23 July 1999, spoke of his understanding "that this division of work was safe from the ambitions of competing contractors". 180 On the face of the evidence it is clear that some antipathy does exist, and would appear to be mutual. 181 However, in relation to the appointment of the fifth physician, the evidence showed: (1) the first attempt by Dr Shanahan to have a fifth physician appointed occurred in 1990; (2) the decision was overturned at the instance of Dr Kennedy some two meetings later; (3) of the four VMOs involved in the 1990 attempt, only two, Dr Kennedy and Dr Shanahan, were still engaged as VMOs at Manly in 1998 when the next formal attempt was instituted; (4) the inquest, which was the source of some antipathy by Drs Braude and Burgess to Dr Kennedy, had been held in 1992, so that those doctors obviously played no part in the first attempt to change the roster in 1990; (5) the 1998 push to appoint a fifth physician gained momentum when Dr Wilkinson for good reason, was not able to continue to cover for absences, that at times, on his evidence, resulted in a 1:2 roster. 182 Reference was made to substantial antipathy to the applicant by Drs Burgess and Braude. The contract, it is said, was unfair because Dr Burgess was permitted to be a mover in the push for a fifth VMO. Neither Dr Burgess nor Dr Braude were called by either party to give evidence. 183 It was the evidence of Dr Shanahan that Dr Burgess, as a staff specialist in internal medicine, is a member of the DIM, as is Dr Braude. From his own involvement in the process, Dr Shanahan knew that in relation to the appointment of a fifth physician, Dr Burgess (who was also a full member of the MSC), had said that he would go along with whatever the DIM as a whole wanted and as to what the other physicians on the roster wanted done. 184 Minutes of various DIM and MSC meetings between 1995 and 2001 were attached to some of the affidavits tendered. Collation of the names of those present and of apologies, and the knowledge that the applicant was also a member, even if his name did not appear, at times, in either group, showed that Drs Burgess and Braude were two persons out of named doctors numbering up to at least 20 who could attend those meetings. The applicant has not persuaded me that their involvement in the activities of the DIM and MSC resulted in his being treated unfairly. 185 I have doubts as to whether the conduct of the other VMOs, who are also, as is the applicant, VMO contractors to the respondent, is properly to be described as "conduct of the parties" in terms of Reich, if indeed that was contended for by the applicant. None are added as respondents to the application and orders are not sought against any of them. 186 It would seem that the conduct of those other VMOs and other doctors involved in decisions to seek the appointment of a fifth VMO physician with the concomitant change of roster from 1:4 to 1:5, and to seek the appointment of a locum during the 12 months of Dr Shanahan's absence, would be relevant to the extent that it was shown that they knowingly, wilfully and fraudulently misled Mr Bazik, the hospital administration and the respondent in the decision making processes for both appointments. 187 It is legitimate for Dr Kennedy to be concerned as to the effect on his income of the change to the roster. The reasons of the other VMOs, whether they were personal or professional, had as much validity as did Dr Kennedy's, for consideration as to the change sought. It is just as legitimate for the other VMOs to be concerned as to their income, whether or not that income is derived to a lesser or greater degree from appointment to Manly Hospital. What would not be legitimate would be for the concerns of the majority of the VMOs to be accommodated without consideration and/or amelioration of the effect those changes would have on Dr Kennedy, the one opponent to the changes. 188 I have found that the reasons for the decision to appoint a fifth physician, viewed objectively, support that appointment. The motivation of those advancing those reasons is neutral in any consideration as to the efficacy of the decision. However, as already said, motivation might be a factor to be examined in any consideration as to whether in coming to that decision, and its implementation, the legitimate concerns of Dr Kennedy had not been fairly taken into account. Change to 1:5 Roster - Unfairness 189 The Determination makes no provision for notice. The Determination is an industrial instrument, and so taken to be fair. However, the Determination is only part of the contract, arrangement etc between the applicant and the respondent. As stated earlier, the other part of the contractual arrangement between the applicant and the respondent is the Visiting Medical Officer (VMO) Sessional Service Contract dated 20 August 1997 and expiring on 30 June 2002. 190 The applicant's contract of appointment as a VMO provides that he shall participate in an on-call roster. 191 However, the applicant's understanding, as expressed in a letter to Mr Bazik dated 23 July 1999 that he had contracted to provide a specific work load ie a 1:4 roster, was not correct. His contract was to "participate in an on-call roster for the provision of services as may reasonably be required by the relevant hospital or area health service" (cl 4(8) Contract for Services). 192 It is said on behalf of the applicant that the contract is pleaded to be unfair because of the unilateral change to the applicant's roster. 193 I note that "unilateral" does not have the same meaning as "arbitrary". When differences of opinion that cannot be reconciled arise, there comes a time when a decision as to which way to go has to be made by someone in a position to impose a resolution of the problem. In doing so, the decision maker would be expected to canvass and take account of the different opinions being advanced, but in the end, the decision maker decides the issue. 194 In the present case, the four doctors on the on-call roster presented their arguments for and against change to Mr Bazik. He accepted the arguments of the three doctors in favour of change and rejected that of the applicant that there be no change. Mr Bazik then instituted the various procedures necessary to be satisfied before the appointment of the fifth physician could go forward. 195 I do not find the "unilateral" change, ie the decision to appoint a fifth physician, and thereby institute a 1:5 roster, as such to be unfair. However, any change to that roster must be managed to take account of the legitimate concerns of all the VMOs who make up the personnel on the roster. Good management includes, particularly in the absence of agreement to change, the provision of a period of notice before the change is to come into effect. That would allow those persons affected by the proposed changes time to make arrangements that lessen or obviate the inconveniences that may be occasioned by the changes. 196 What I do find is that, objectively, the contract governing his appointment as a VMO was unfair in that there was no provision for notice of a change to the roster. That unfairness exists independently of conduct considerations. Conduct considerations, however, could, in my view, be relevant to the relief, if any, to be ordered. 197 I do not see that the motives of the various VMOs for wishing a change to the roster are relevant, of themselves, to unfairness. However, I have already said that what may be unfair is that, if in the implementation of the 1:5 roster by majority, the interests of all VMO physicians affected are not properly or fairly taken into account. 198 I do not accept that the vote by the doctors for a new roster meant that the applicant had notice from the date of that vote that the on-call roster would be changed. Effective notice would run from the date the respondent decided that a fifth VMO should be appointed. 199 On 14 April 1999, Mr Bazik sought approval from Dr Kim Hill, Director of Clinical Strategy, Northern Sydney Health, to seek approval to proceed to advertise the position of physician at Manly Hospital. By letter dated 20 May 1999, Dr Hill confirmed previous verbal advice that approval had been given to recruit to this position. Dr Kennedy had been advised of that decision by Mr Bazik at a meeting with him on 21 May 1999. On 25 October 1999, Dr Westwood advised the Physicians at Manly Hospital that Dr Roger Chen would commence on the general medical roster on 17 November 1999. 200 On the basis of that chronology the applicant had a few days short of six months of specific notice as to the change to the roster. However, I also take into account the fact that the evidence is very clear that the applicant had also known since 18 April 1998 that those members of the DIM present at a meeting on that day had unanimously accepted a motion that an extra VMO physician was required to cover workload and roster commitments. In fact, he had later actively, outside DIM meetings, canvassed the administration and other doctors against the appointment of a fifth physician. 201 I find that the contract was unfair in terms of s 105(a), in that it did not provide for notice as to proposed changes to the roster. 202 The question is what would the Commission consider to be reasonable notice of change to the roster. In the light of the evidence I have considered earlier, I do not think that a period of notice that extended to the end of the quinquennial contract on 30 June 2002 would be justified. A term that I would consider to be fair would be one that provided, absent mutual agreement and absent cogent reasons, for a period of six months notice of change to the roster. 203 In the circumstances shown to exist in this case, I find that it is appropriate, pursuant to s 106(3) to vary the quinquennial contract between the applicant and respondent from the time of its making on 20 August 1997 by inserting a clause to provide that there shall be six months notice of any change to the on-call roster, other than for changes by mutual consent or pressing necessity, where that change comes about by the appointment of an additional VMO who will take a place on that roster and so lessen the extent of the applicant's participation in it. (The circumstances of individual doctors may dictate a shorter or longer period of notice.) Appointment of Locum 204 Clause 5(1) of the Health Services Regulation 1998 provides that: 5 Advertising of available appointments as visiting practitioners (1) A board of a public health organisation that decides to make available an appointment as a visiting practitioner must advertise the availability of the appointment in at least one newspaper circulating generally in New South Wales. The board may, in addition, advertise the availability in other ways. 205 Clause 5(4)(b) provides that cl 5(1) does not apply "to an appointment as a visiting practitioner that is to be held by a person for period of not more than 3 months". 206 Dr Kennedy said there was no need for him to apply for the position of locum vice Dr Shanahan when it was advertised because he was on the visiting staff. He said a locum was only appointed when the work cannot be done by those on the roster. He assumed that the correct position would have been, first, for the administration to check with existing members of the roster to see if they both wanted to, and could, do the work. 207 The unfairness alleged by the applicant in relation to the appointment of a locum to cover the absence for twelve months of Dr Shanahan is that the applicant has been deprived of the income that would have accrued to him if he had taken Dr Shanahan's place on the on-call roster for the whole period. In the case of a 1:4 roster, he would have worked 50% of it (other than when he himself was absent for 10 weeks or so on annual and conference leave) or 40% of a 1:5 roster (with similar limitations). 208 That unfairness would only exist if the applicant had had a right, to, or even a legitimate expectation, to be offered sole coverage of that absence from the on-call roster. 209 The only precedent for covering an absence of twelve months in an on-call roster was Dr Edison's case. In the early/mid 80s, Dr Edison, one of the four specialist physicians on the 1:4 roster, went on leave for 12 months and the remaining three physicians split the work evenly ie they worked a 1:3 roster. 210 It is clear that those events upon which the applicant relied to support his claim that there existed a precedent for one doctor to take an additional place on the roster for twelve months to replace an absent colleague did not in fact do so. The opportunity was offered to the other three doctors and taken up by them, meaning that a 1:3 roster was in force. 211 Dr Kennedy agreed that when Dr Shanahan went on leave for 12 months in January 2000 the other two physicians were not agreeable to taking on and sharing the work then left available. He said that what then ought to have happened was that he perform all Dr Shanahan's work on the roster as well as his own. Dr Kennedy accepted that if he were to do 50% of the rosters, and he went on leave, the other two doctors would either have to cover his absence or make alternative arrangements ie locums. 212 He said he was still desirous of attending conferences and was sure that would be quite possible. He did not recollect any problems occurring when they had the same system in the mid 80s at which time there was a bigger clinical load. That approach did not take account of the fact that at this time, the two remaining doctors, Doctors Baumgart and Worthington, did not wish to take on a greater share of the on-call roster. 213 Dr Kennedy said that when he wished to take leave, finding suitable cover was not one he considered to be his responsibility. That was an operational matter the final responsibility for which lay with the Hospital, but the work was always offered initially to the VMOs who are on the general roster. 214 It was accepted by the respondent and by the other members of the DIM that ultimately it was the responsibility of the respondent to ensure suitable coverage of the on-call roster. In carrying out that responsibility the respondent would have to take into account the inconvenience that might then fall on the other 2 or 3 physicians, the Hospital and continuity of patient care in finding cover for the applicant's absences at times, that, while sanctioned by the respondent, would naturally be times particularly suited to his desires. 215 It should also be kept in mind that whenever the applicant was absent in a 2:5 roster two of the three remaining VMOs would have to fill the gap caused by his absence. 216 Dr Baumgart expressed the view that he always seemed to be the one who ended up with extra shifts on-call when people go away. There was no compulsion for him to do so but "it is inevitably under a degree of friendly duress". He felt he had a moral and professional obligation to satisfy an on-call position in such situations. Other physicians "have had a variable level of enthusiasm". 217 I do not accept the applicant's submission that the reason that the applicant was not offered the locum work while Dr Shanahan was on leave for twelve months was because Dr Kennedy by doing that work would have shown that the change to the 1:5 roster as sought by the other VMOs was not necessary and made for ulterior reasons. 218 I have already accepted that the reasons given by the other VMOs were sufficient to justify the change of the roster to 1:5. To have given the applicant, in addition to his own place on the roster the locum work for that twelve months, would have had the effect, for at least 10 weeks of that period (annual plus conference leave), of turning that 1:5 roster into a 1:3 roster. It was Dr Worthington's evidence that there were conference "seasons", so that circumstances could arise when the number of VMOs available to cover the 1:3 roster would be further depleted. That would occur in circumstances where the Hospital administration had been satisfied that a 1:4 roster was too onerous. 219 This decision does not say that a more restricted roster than 1:4 or 1:5 could not operate over a lengthy period, if all remaining members of it were willing to cover for the absent member. What the Commission does say is that it is the decision of the relevant hospital administration to make an appointment of more than 3 months that triggers the operation of the Regulation, not simply the absence of a member of the roster for that period or longer. 220 The applicant suggested that, in the absence of the availability of other VMOs on the roster, the hospital could appoint a locum. 221 On that point, I accept the submissions put on behalf of the respondent: That presupposes a number of things. One, that a locum could have been found on short notice to cater for the other doctor's desire for leave. Secondly, even assuming that a locum could be found on short notice, that that doctor would be an acceptable doctor to the hospital. And, thirdly, even if the hospital gives that doctor a tick, that that would be fair to the patients, that is, if there is a lack of continuity with many locums coming and going. 222 I find that Dr Kennedy's reliance on past practice to support his claim that it had not been considered necessary to appoint a locum to cover a long period of absence was misconceived. I reject his claim of unfairness in that he was not offered sole coverage of the period of Dr Shanahan's absence. 223 It was contended for the applicant that it was quite clear that there had been no examination by the respondent of Dr Kennedy's ability to undertake the additional work on the on-call roster that would flow to him as locum in taking Dr Shanahan's place. In my view, there was no need for the respondent to do so. It had already been convinced of the need for a fifth physician and thus a 1:5 roster. What the applicant was seeking was either a 2:4 or a 2:5 roster. There would be no point in going over old ground. 224 It was put for the applicant that the hospital was not obliged to observe the Health Service Regulation 1998 and advertise for a locum if an absence of more than 3 months was involved because there was a Protocol already in place. I do not accept that contention. The Protocol, which I discuss in more detail later, could not override the Regulation. What triggered the operation of the Regulation was an appointment of more than 3 months duration. 225 I do not deal with the respondent's alternative submission in relation to the proposition that the Court would construe the Regulation narrowly. Any definitive construction of cl 5(1) must await a more appropriate vehicle. I am satisfied, in the circumstances of this case, to proceed on the basis that advertisement is required when a board of a public health organisation decides to make available an appointment as a visiting practitioner, when that appointment is to be held by a person for more than three months. In this case such a public health organisation has made such a decision. 226 It also seems to me that once the board of a public health organisation decides to make the appointment of a VMO for more than three months it must, in accordance with the provisions of cl 5(1), proceed to advertise it. That being so, at that stage, it would seem arguable that the applicant should apply for an appointment additional to the one he already held. Protocol for reference of work to locums 227 The circumstances under which the "protocol" was drawn up were described earlier in the applicant's submissions. It is contended for the applicant that although there was in place a locum protocol arrangement that was a contractual term of his appointment, the respondent had elected in the face of its own protocol to conduct itself so as to deprive Dr Kennedy of the benefit of the contract; that conduct is unfair and renders the contract unfair and redress appropriate. 228 It was said that that protocol drew no distinction between the procedure to be followed, whether the absence was short term or whether it was long term. 229 The "protocol" relied upon by the applicant was a memorandum dated 5 March 1999 sent to Physicians, Manly Hospital, by Dr Geoff Westwood, Director of Medical Services (i.e. Manly and Mona Vale Hospitals and Community Health Services), on the subject "Use of Physician Locum". Its terms are set out below: Following a meeting with the Manager, Industrial Services, AMA, on Thursday 4 March 1999, all physicians are reminded of the arrangements for the use of services by the current locum physician , Dr Michael Harris whose appointment is until 11 May 1999 . All general physicians at Manly Hospital taking leave should request cover from the other three physicians including after hours calls. If none of the remaining physicians are able to provide cover then the locum may be utilised to ensure continuous medical cover. The locum physician is not to be offered roster cover unless all physicians have been approached initially by the physician taking leave and are unable to assist. All leave cover arrangements are to be notified to the Executive Director's Secretary, Janette Leonard in writing. Arrangements for engaging future locums are currently being reviewed and a draft proposal will be circulated for comment when ready . (My emphasis) 230 It is clear from a reading of the first and fourth paragraphs, that the memorandum dealt only with the appointment of the current locum whose term expired on 11 May 1999. No further draft proposal was ever circulated. 231 It should also be said that the witnesses accepted that what was said in the second paragraph simply restated what had been the previous practice. Where the witnesses differed was that the applicant said that previous practice referred to long, as well as to short, absences, whereas all others said it related to short absences only. 232 As I discuss earlier, I am of the view that the applicant's interpretation of the significance of what had occurred during the 12 months absence of Dr Edison was not correct. 233 I find that that memorandum has no utility beyond the period covered by it. It was certainly not a "protocol" to govern the future engagement of locums. It was not a term of the applicant's contract nor was non-adherence to it the cause of any unfairness to the applicant. Remedy 234 It was said by Marks J at [117] in Schwartz v Central Sydney Area Health Service [2002] NSWIRComm 79 that "in determining whether there is overall unfairness for the purposes of s 106 it is necessary to take into account the totality of the circumstances". That necessity "to take into account the totality of the circumstances" also applies, in my view, to consideration as to what remedy, if any, should be ordered in terms of s 106(5). 235 I have determined that the overall contract between the applicant and the respondent is unfair in terms of s 106(1) in that it did not provide for notice to be given to the applicant of a major and continuing change to the on-call roster. 236 I now turn to decide in accordance with s 106(5), what, if any, orders for the payment of moneys should be made. 237 I have decided that the applicant had no contractual right to, nor cause for any legitimate expectation, to take Dr Shanahan's place, in addition to his own, on the on-call roster during Dr Shanahan's absence for twelve months. His claim for compensation in that respect is denied. 238 Dr Shanahan's understanding that in changing the roster form 1:4 to 1:5 any resulting detriment would be felt equally by all physicians, was correct only to a limited extent. It was correct on the point that each physician would have access to fewer patients. However, the detriment could go more widely than simply to numbers of patients. It could be greater, the higher the percentage of the doctor's practice which depended upon follow up patients from the Hospital, and the capital investment in resources, including those of staff, equipment and premises, to service those patients. 239 The applicant described the services he provides in his local practice in Manly. I have no details of the services provided by the other VMOs in their private rooms. However, the emphasis in the applicant's submissions was the location of his rooms "in Manly", the devotion of his private practice "to the Manly area", and "unlike other doctors" his remuneration is drawn essentially from his practice "in Manly" and "at Manly Hospital". It was said in submissions that the other doctors did not have the same commitment to Manly as did the applicant. 240 The applicant placed great stress on the location of his rooms and his private residence as being in close proximity to Manly Hospital as being in the Hospital's catchment area. Doctor Baumgart stated that most of the Hospital's patients came from Dee Why and many from Frenchs Forest and Seaforth. His view was that the ideal place for rooms would really be Dee Why, Brookvale or the top of Frenchs Forest at the Wakehurst Parkway. Dr Baumgart had rooms at Dee Why, as did both Dr Worthington and Dr Shanahan. (The applicant maintains what he described as "commercially non-viable professional rooms" at Frenchs Forest for the purposes of having an option to offset decreases in the Manly Hospital work.) 241 It would seem to be the applicant's view that proximity of rooms and home to the Hospital is an indicator of a VMO's commitment to the Hospital. Such proximity may be convenient for the applicant, but may not always be so for patients who live outside Manly who have to access his rooms for follow up after they leave the Hospital. 242 Furthermore, the applicant's evidence was that consultation with his team at the Hospital during on-call periods was mostly carried out by telephone. He had had actually to return to the Hospital, while on-call, once in the six months previous to giving his evidence. On that basis, access to a telephone is every bit as effective in carrying out on-call work as living near the Hospital. That access was available to all the other VMOs on the roster and more distant residences did not appear to detract from their effective availability while on-call. 243 The applicant also stressed the extent to which his private practice relied upon his Manly Hospital work. He said that, in the long term, flow on business from the Hospital to his Manly rooms translated into approximately 50% of his Manly rooms' business. The change to the roster from 1:4 to 1:5 therefore reduced his Manly Hospital work by 20%. On my calculations that would appear to translate to a reduction of 10% in his practice overall. 244 Dr Worthington said his private rooms were at Dee Why on the northern beaches where he intended to practice for the remainder of his career. He referred to the next 20 years of his life. As at 20 November 2001, probably 25% to 33 1/3% of his hour commitments is at Manly Hospital. That could increase when he severed his connection with Liverpool Hospital in June 2002. 245 For the period from 1993 to 1999, about 30% to 40% of Dr Baumgart's medical practice would have been at Manly Hospital. In 2000/2001 that proportion was 15% to 20%. 246 Prior to 2000, 50% of Dr Shanahan's work came from the Hospital. Since returning from leave in March 2001, perhaps 80% of his practice is actually at the Hospital. 247 I do not see, overall, less commitment, as that term is used by the applicant, being shown by the other VMOs to Manly, than that claimed by the applicant, nor do I see, in the change to the on-call roster from 1:4 to 1:5 any unfair disproportionate or unequal treatment of the applicant as against that afforded to other VMOs as alleged by him to be a basis of unfairness. 248 However, that still leaves for examination, the question as to whether, despite the six months notice the applicant was given, and which I have decided was a fair period, there remains room for monetary compensation. 249 Dr Kennedy accepted the proposition put to him that if he took the number of hours he had worked in the Hospital and claimed at sessional rates for the period August 1997 to June 2001, that would represent about the hours on average that he was working prior to August 1997. 250 Dr Kennedy was taken to Ex 3 (a collection of statistics for the DIM VMOs as to admissions to and transfers from Manly Hospital for the period commencing 1996/97 to 2000/01 and Ex 7 (the report of Ms Y Pietsch, chartered accountant as to the financial effects on Dr Kennedy's medical practice because of the variation to work arrangements by the NSAHS). Dr Kennedy agreed with Mr Dubler's suggestion that in July 2001 there had been a decrease in the need for him to consult at his rooms with patients who had left Manly Hospital. He said that the drop from 237 to 138 between June 1998 and June 1999 had occurred because the practice gave up bulk billing. 251 It was also suggested by Mr Dubler in cross-examination that the figures in Ex 3 appear to show that in the last few years there has been an increase in the extent to which Dr Kennedy transferred patients to nursing homes, private hospitals or tertiary facilities and also a decrease in the average length of stay of his patients. In re-examination, the applicant said that in the last four or five years, one reason for that increase had been because there had been a substantial increase in the number of people taking out private health insurance, and also in the number of patients who have gold cards from Veteran Affairs. 252 Dr Kennedy pointed to Ex 3 to show that both he and Dr Shanahan had basically the same increases as to numbers of patients transferred. 253 One of the main purposes of notice being given is to allow a person to re-order his/her personal circumstances to temper, as far as possible, any adverse effects of the change being mooted. Since the introduction of the fifth physician Dr Kennedy had increased the number of his ward rounds at the Mater Hospital. He had been more active in his recommendations to people to transfer to another hospital where he could treat them since that introduction. His principal work would be at Manly and The Mater, but he also provided consultative services for other private hospitals in the area eg Mandalay, Manly Waters, Delmar. 254 In final submissions, the respondent said that Dr Baumgart, as head of the department had made a policy decision since the introduction of the fifth physician that Dr Kennedy would be offered the on-call commitments arising from the other doctors taking leave. That claim was challenged by the applicant and in later submissions filed by leave, the respondent accepted that the evidence did not support the claim to the extent put forward. I note, however, that such a course of action would have had, and would continue to have, benefits both for the applicant and for the other DIM members on the on-call roster. Conclusions 255 The Commission finds that the contract between the applicant and the respondent was unfair in terms of s 105(1) in that it did not provide for a period of notice to be given when major and continuing changes to the on-call roster were to be made. 256 In relation to adverse effects on the practice of the applicant by the change from the 1:4 to a 1:5 roster, with the resulting 20% loss of patients flowing from the on-call work, I have found that an appropriate approach to ameliorate that loss was the provision of a period of six months notice. The applicant, at the very least, had close to that period. He was certainly aware even earlier of the decision of the DIM to seek the appointment of a fifth physician. He engaged in correspondence seeking to have that decision aborted by Mr Bazik. 257 Furthermore, the evidence does not assist the Commission to determine what, if any, effect the change from the 1:4 to the 1:5 roster in November 2000 has had on the number of patients admitted to the Hospital during the applicant's on-call time who were later followed up in his private rooms. Nor does the evidence allow the Commission to determine what proportion of any change in numbers, if any, has been caused by the change in roster, or for other reasons eg no bulk billing. 258 In the light of that fact, and of the matters set out earlier, I make no orders for the payment of moneys to the applicant. 259 I may say, that even if I had decided that moneys should be paid to the applicant, I would not, on the material before the Commission, have been able to quantify an amount. I accept the criticisms, but do not repeat them, made by counsel for the respondent as to the material tendered by the applicant in support of his claim for damages. 260 The parties are to consult as to costs. If agreement cannot be reached the Commission is to be advised within 21 days and further short submissions may be made. ************************

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