Eileen Quinlivan v Monash House Private Hospital Pty Ltd T/A Monash House Private Hospital [2020] FWC 6681 (14 December 2020)

[2020] FWC 6681

Fair Work Act 2009

s.394 - Unfair dismissal

Monash House Private Hospital Pty Ltd T/A Monash House Private Hospital

[1] Ms Eileen Quinlivan (the Applicant) has applied to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy in relation to her dismissal by Monash House Private Hospital Pty Ltd (Monash). She claims to have been unfairly dismissed on 5 June 2020. At the time of her dismissal she was employed as Hospital Director.

[2] Monash oppose the application and submit that the Commission has no jurisdiction to hear the substantive application as Ms Quinlivan is not a person protected from unfair dismissal within the meaning of the Act.

[3] In particular, Monash submit that under s.382(b)(i) no modern award or (ii) no enterprise agreement covers Ms Quinlivan. It submits that she was award free at the time of her dismissal. It further submits that neither the Nurses Award 2010, Health Professional and Support Services Award 2010, the Miscellaneous Award 2010 or Monash House Private Hospital Pty Ltd Nurses' Enterprise Agreement 2019, applied due to her seniority.

[4] Secondly, Monash submits that her sum of annual rate of earnings exceeded the high-income threshold under s.382(b)(iii) of the Act.

[5] In response, Ms Quinlivan says that she is a person protected from unfair dismissal. She contends that her employment was governed by an enterprise agreement, the Monash House Private Hospital Pty Ltd Nurses' Enterprise Agreement 2019 (the Agreement), and while she held the title of Hospital Director her principal duties were of a Director of Nursing - a classification covered by the Agreement.

[6] Ms Quinlivan seeks a remedy of compensation.

[11] Monash House Private Hospital is a 22-bed boutique independent facility within the Monash medical precinct. A consortium of doctors are directors, shareholders and practice in the facility, largely specialising in neurosurgery, orthopaedic surgery, oral and maxillofacial surgery and pain medicine. The hospital employs 60-70 employees and provides hospital facilities for medical specialists from related establishments such as Metro Pain Group.

[12] Ms Quinlivan commenced employment with Monash as Director of Nursing in 2016, reporting to the CEO. She tendered in evidence her offer of employment as a casual Registered Nurse commencing on 25 January 2016 and her further employment agreement for full-time work in the position of Director of Nursing commencing from 22 February 2016.[1] It is not disputed that Ms Quinlivan was engaged under the terms of the Nurses Award 2010 at that time.

[13] Monash was a new private hospital which opened to the public in mid-2016. It is not contested that Ms Quinlivan was one of the first few employees of Monash and her initial duties included working with the CEO to set up the hospital.

[14] In April 2019, after the CEO resigned, she was appointed as Hospital Director and received an adjustment to her salary. Both the Applicant and Respondent accept that Ms Quinlivan's salary exceeded the high income threshold at the time of her dismissal.

[15] Monash dismissed Ms Quinlivan on 5 June 2020 for the reason of misconduct.

[16] Ms Quinlivan contends that while she was paid in excess of the high income threshold, her employment was covered by the Nurses Award 2010 or the hospital's enterprise agreement. The Hospital contends that as Hospital Director neither the Nurses Award 2010 nor Agreement covered her employment.

[17] I received substantial documentary and oral evidence at the hearing of this matter.

[18] In deciding this matter, I have had the advantage of and taken into account the manner in which witnesses before me gave their evidence and responded to cross examination.

Section 382 of the Act - issues to be Determined

[21] I am required to determine whether Ms Quinlivan was a person protected from unfair dismissal within the meaning of s.382 of the Act. It provides:

"382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

ii) an enterprise agreement applies to the person in relation to the employment;

iii) the sum of the person's annual rate of earnings, and such other amounts (if

any) worked out in relation to the person in accordance with the regulations, is less

[22] The minimum employment period required to have been served to comply with s.382(a) is six months. There is no contest that Ms Quinlivan completed the minimum employment period.

[23] Therefore, the issue to be determined is whether Ms Quinlivan's employment was covered by the Monash House Private Hospital Pty Ltd Nursing Enterprise Agreement 2019 or the Nurses Award 2010.

[24] In addition to coverage by an award or enterprise agreement, I am required to consider whether Ms Quinlivan's earnings exceeded the high income threshold. It is established on the evidence and it is not contested, that at the date of dismissal Ms Quinlivan's remuneration package comprised a base salary of $165,000 per annum, plus superannuation and plus bonus.[2]

[25] Having regard to the definitions of "high income threshold" and "earnings" in sections 333 and 332 of the Act, I find that at the date of dismissal, Ms Quinlivan's "earnings" were in excess of the high income threshold which was $148,700 at the time of dismissal. Therefore, Ms Quinlivan was not protected from unfair dismissal by s.382(b)(iii) of the Act.

[26] There are two limbs in s.382 concerning when a person is protected from unfair dismissal; one relating to earnings and the other is coverage under an award or enterprise agreement. Even if the earnings exceed the high income threshold and the person is covered by an award or enterprise agreement, the person is protected from unfair dismissal. However, if there is no coverage of an award or enterprise agreement and the threshold is exceeded, then there is no protection of unfair dismissal.

Was Ms Quinlivan covered by the Monash House Private Hospital Pty Ltd Nurses' Enterprise Agreement 2019?

[27] The Agreement is a single enterprise agreement approved on 22 April 2020 and the ANMF being a bargaining representative is covered by it. Clause 3 dealing with coverage states that it shall cover "nursing staff employed by Monash House Private Hospital as classified in schedule 1 of this Agreement". Schedule 1 of the Agreement provides classification levels for registered and enrolled nurses. Clause 10 states that wage rates and wage increases are set out in Appendix 1. It further provides that any wage increases provided by the Agreement are absorbed into the rate of pay payable to the employee and any wage increases shall be at the discretion of the employer, unless the pay rate falls below the minimum award rate.

[28] Schedule 1 contains the employment classifications of registered and enrolled nurses. I note that each grade of registered nurse, other than nurse educator at grade 4A, is "as appointed (however titled) and paid as such". There are no further descriptors for each grade level of registered nurse. The rates of pay in the schedule at Appendix 1 and as at 1 January 2020 (the rate applicable at the time of Ms Quinlivan's dismissal) provides for the deputy director of nursing, a classification of registered nurse at grade 6 as $2,100 per week ($109,200 per year) and the director of nursing also a classification of registered nurse at grade 7 as $2,300 per week ($119,600 per year). The Agreement further includes applicable shift, on call and qualification allowances.

[29] Monash submits the scope of the Agreement covers nursing staff and that Ms Quinlivan was not nursing staff but was appointed the hospital director. It also submits that the Agreement requires that nursing staff must fall within one of the classifications at schedule 1 of the Agreement. It submits that applying the ordinary meaning of the words "nursing staff" in the coverage clause reaches the conclusion that to be covered by the Agreement the staff member must perform nursing duties. However, it concedes that Ms Quinlivan was a nursing staff member before her appointment to hospital director but was not a nursing staff member upon her appointment as hospital director.

[30] The Agreement covers the Monash's nurses, there is no classification for hospital director in the Agreement. Ms Quinlivan contends that her title of hospital director is a title only and her duties are covered by the classification of director of nursing (however titled) which is covered by the Agreement.

Was Ms Quinlivan covered by the Nurses Award 2010?

[33] Ms Quinlivan submits that she was a person covered by the Nurses Award 2010 throughout the course of her employment, including at the time of her dismissal, unless she was covered by the Agreement.

[34] By virtue of s.143 of the Act, a modern award must include coverage terms and it must be expressed to cover specific employers and specified employees. The Nurses Award 2010 is an occupational award.

[35] To establish that an Applicant is covered by an award, it needs to be established that they are within the coverage clause of the Award and employed in a classification in the Award.[3]

[36] Clause 4 of the Nurses Award 2010 deals with coverage. It relevantly provides:

(a) employers throughout Australia in the health industry and their employees in the classifications listed in Schedule B - Classification Definitions to the exclusion of any other modern award; and

(b) employers who employ a nurse/midwife, principally engaged in nursing/midwifery duties comprehended by the classifications listed in Schedule B - Classification Definitions.

4.2 The award does not cover employers who employ nurses in primary or secondary schools.

4.3 The award does not cover an employee excluded from award coverage by the Act.

4.4 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees."

[37] In order for Ms Quinlivan to have been covered by the Modern Award at the time of her dismissal, it was necessary for Monash to have been in the health industry and for Ms Quinlivan to have been principally engaged in nursing duties "comprehended by the classifications listed in schedule B."[4]

[38] It is helpful that the Award contains a definition of health industry in clause 3. Relevantly the definition states:

health industry means employers in the business and/or activity of providing health and medical services and who employ nurses and persons who directly assist nurses in the provision of nursing care and nursing services[5]

[39] When the Commission released the exposure draft Nurses Occupational Industry Award 2010, the Full Bench recognised that nurses are the single biggest occupational group in health and welfare services. The material advanced at the time supported the need for an occupational award. The resultant Award is an occupational award covering nurses wherever employed except in secondary schools.[6] The Modern Award reflects the exposure draft released in January 2009 with only minor variations being implemented over time.

[40] There is no dispute that Monash was relevantly engaged in the health industry within the meaning of clause 4.1 of the Award and meets the health industry definition in clause 3.

[41] Clause 13 of the Award refers to Schedule B - Classification definitions, and clause 14 sets out the minimum wages for award classifications.

[42] Ms Quinlivan submits her classification at the date of dismissal was registered nurse level 5 contained in Schedule B of the Award. The Award classification rate of pay at the time of Ms Quinlivan's dismissal was $1,906.50 per week or $99,138 per year.[7] The classification level in the Award was as follows:

(i) holds any other qualification required for working in the employee's particular practice setting; and

(ii) is appointed as such by a selection process or by reclassification from a lower level when the employee is required to perform the duties detailed in this subclause on a continuing basis.

An employee at this level may also be known as a Director of nursing.

(b) Appointment at a particular grade at this level will depend upon the level of complexity associated with the duties described in this clause. In this connection the number of beds in a facility will be a relevant consideration.

(c) In addition to the duties of an RN4, an employee at this level will perform the following duties:

• being accountable for the standards of nursing care for the health unit and for coordination of the nursing service of the health unit;

• participating as a member of the executive of the health unit, being accountable to the executive for the development and evaluation of nursing policy, and generally contributing to the development of health unit policy;

• providing leadership, direction and management of the nursing division of the health unit in accordance with policies, philosophies, objectives and goals established through consultation with staff and in accordance with the directions of the Board of Directors of the health unit;

• providing leadership and role modelling, in collaboration with others, particularly in the areas of staff selection, promotion of participative decision making and decentralisation of nursing management and generally advocating for the interests of nursing to the executive team of the health unit;

• managing the budget of the nursing division of the health unit;

• ensuring that nursing services meeting changing needs of clients or patients through proper strategic planning; and

• complying, and ensuring the compliance of others, with the code of ethics and legal requirements of the nursing profession."

[43] Both parties in their submissions referred to well established principles for the interpretation of industrial instruments.

[44] The principles for interpreting an enterprise agreement are well established. The Commission is to identify the ordinary meaning. A disputed meaning will turn on the language having regard to its context and purpose of the agreement and regard may be had to surrounding circumstances to assist where an ambiguity exists.[8]

[45] It follows that a subjective opinion is not evidence for the Commission to consider, even where ambiguity exists and resort may be had to the intention of the parties that devised the agreement.

[46] Establishing award coverage is a legal issue based on jurisdictional facts. Jurisdictional facts need to be established and applied to the instrument using relevant legal principles.

[47] Terms and conditions of an award are statutory in character and cannot be converted into private contractual rights.[9] Neither party can contract into award coverage or contract out of award coverage unless the award permits it.

[48] Further, "ordinary or well understood words are in general to be accorded their ordinary or usual meaning".[10]

[49] The approach when determining whether an employee was covered by an award is referred to as the principal purpose test. Monash in their submissions relies on the major and substantial test.[11] This test is also applied by Courts and Tribunals. The Full Bench of the Commission observed the adoption of different tests when it considered an appeal against Commissioner Deegan.[12] The Full Bench in considering the appeal determined that the question of whether Mr Brand was covered by the classification structure was the important question. The matter before the Full Bench may be considered similar to this matter before me because it was not contentious that the Respondent was covered by the incidence clause of the Award, therefore consideration is to be had to the classification.

The appellant held a senior position and earned three times the award rate, however noting that where the employee receives wages in excess of the award does not preclude the operation of the award

[51] Employment under award conditions is a question of fact in each case, requiring an examination of the terms of the award against the tasks and responsibilities.

[52] Commissioner Deegan in her decision cited the authority of Carpenter v Corona Manufacturing Pty Ltd,[13] where the Full Bench observed that when determining if an award applies it requires more than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances the employee is employed to do the work to ascertain the principal purpose.

[53] The relevant reasoning by the Full Bench of the Commission in Carpenter v Corona Manufacturing Pty Ltd was:

"In our view, in determining whether or not a particular award applies to identified employment, more is required than a mere quantitative assessment of the time spent in carrying out various duties. An examination must be made of the nature of the work and the circumstances in which the employee is employed to do the work with a view to ascertaining the principal purpose for which the employee is employed."[14]

[54] Also relevant, is the observation of the Commission in Kaufman v Jones Lang LaSalle (Vic) Pty Ltd:

"the question of award coverage is not determined by the person's title - it is the duties performed that will be of significance."[15]

[55] In deciding this matter, I apply the principal purpose test. What is relevant is the nature of the work undertaken and the circumstances in which the employee was employed to do the work duties performed.

[56] Ms Quinlivan submits that the principal purpose of her role did not change with the change in title, her role remained as director of nursing (however titled). She submits her duties were those as set out in Schedule B, clause B.5.5 registered nurse level 5 of the Nurses Award 2020. She submits the classification descriptors in the Award are relevant to the classification levels in the Agreement. She further contends that "merely because [she] undertook additional duties beyond what is set out in clause B.5.5 of the Award does not mean that the principal purpose of her employment was other than that of director of nursing."[16]

[57] Ms Quinlivan relies on her director of nursing job description and points out that her role as hospital director included the same duties and responsibilities.[17]

[58] The difficulty arising from Ms Quinlivan's submissions emerges because the Agreement classification structure relies on descriptors contained in the Nurses Award 2010, her rate of pay far exceeded the rate in the Agreement by at least $45,500 per year, and the responsibilities and duties were contested in evidence between her and Monash, and to add further to this complexity is the purported role of Ms Quinlivan in the making of the Agreement that covers the enterprise.

[59] These points of contention are also relevant to the question regarding whether Ms Quinlivan was covered by the Nurses Award 2010.

Circumstances leading to change in title and salary

[60] Ms Quinlivan was a member of the executive team and reported to the chief executive officer (CEO) when employed in the role of director of nursing.[18] Her duties as a director of nursing included:

• Engagement of nursing staff and theatre technicians

• Rostering of nursing staff

• Interacting with practitioners and patients regarding patient care

• Oversight of day to day patient care and

• Ordering medical supplies for use in day to day operations.[19]

• Operational leadership, financial management, quality and safety, education and professional development in the context of all patient contact and staff from reception, pre-admission nurses, theatre nurses, recovery nurses to clinical administration staff [20]

• Clinical governance, including risk assessment and continuous improvement of quality relating to patients and customer service principles[21]

[61] Ms Quinlivan's salary package when appointed to the position of director of nursing was $135,000 inclusive of superannuation, overtime, penalties and allowances provided in the Nurses Award 2010. This was reflected in her contract of employment signed on 21 January 2016 effective from 22 February 2016.[22] The same contract of employment refers to discretionary bonus arrangements that reward general profitability, process performance, people (nursing staff) and patient key performance measures. A comparison of the base salary ($127,854) with the rate provided in the Agreement at the time shows a difference of $18,384.[23]

[62] Ms Quinlivan contended that her director of nursing role was no different to the role when appointed as hospital director. Having assessed her job descriptions, contract of employment and witness evidence of Dr Verrills and herself, I have formed the view that the role of director of nursing prior to her appointment as hospital director was principally concerned with nursing and patient care - a nursing role covered by the Nurses Award 2010 classification structure, and by the Monash's 2016 enterprise agreement. Based on the submissions of the parties, I do not consider this a controversial finding, rather it being in keeping with their respective positions.

[70] In addition to the changes to the delegated authorities, Monash describes Ms Quinlivan as having a direct reporting line to the Board as senior executive equal in standing as the former CEO, while previously she reported through the CEO and attended the Board meetings by invitation to report on her area of responsibility concerning nursing and patient care. Both Dr Verrills and Ms Quinlivan gave evidence that since the appointment as hospital director she attended the board meeting in full and took minutes (as the previous CEO had), attended finance meetings and chaired the senior manager meeting.[33] Ms Quinlivan tendered in evidence an organisational chart contained in the Quality Manual which also shows the CFO accountable to the hospital director.[34]

[71] The quality manual document is a 32 page resource that provides an overview how the Monash meets its ISO requirements and National Safety & Quality Health Service Standards. It is a hospital wide relevant document and while it makes reference to organisational roles, responsibilities and authorities, the only piece attached by Ms Quinlivan is the organisational chart. Pages 10 and 12 to 35 are missing. The missing pages presumably would put in context the roles, responsibilities and authorities given the nature of the document and particularly because the introduction on page 3 sets the scene by identifying that the responsibilities sit with the hospital director and followed by departmental managers.[35]

[72] Dr Verrills identified the duties of the hospital director and distinguished the responsibilities with the director of nursing. In evidence he stated that through his interactions with and observations of Ms Quinlivan, her responsibility focussed on the hospital as a whole and less on nursing services. While her qualifications as a registered nurse and experience as a director of nursing was relevant to the Monash compliance requirements, her role was principally concerned with the operation of the hospital, which in Dr Verrills' view took her outside the scope of the Modern Award classification and coverage of the enterprise agreement. Dr Verrills also referred to her role in purchasing important equipment, her role in recruiting visiting medical officers, approval of media and marketing, obtaining neurosurgical licensing, integration of specialists into the Monash and her role in making the enterprise agreement.

[78] What is relevant to this question is the nature of the work undertaken, the responsibilities and the circumstances in which Ms Quinlivan came to perform the job. The Commission must then assess those matters against the relevant award/agreement provision(s).

[79] I am satisfied that following the departure of the CEO in April 2019, that she was promoted to the role of hospital director. This role was a senior executive role with delegated authorities at the highest level for an executive in the hospital. The delegated authorities are broader in nature covering all aspects of the hospital's operations and not confined to nursing and patient care.

[80] I am satisfied that an executive assistant was appointed to assist her in her role due to an increased workload and greater responsibility. An executive assistant is not normally a level of assistance given to a director of nursing, particularly in a hospital of the size of 20 beds.

[81] I am satisfied that Ms Quinlivan signed the undertaking for the enterprise agreement because she had the authority as the employer representative to do so, and I am satisfied that she understood that that was her role which I suspect is the reason she downplayed her role in the making of the Agreement. As the person responsible for clinical governance it is highly probable that she understood the significance of her legal obligations. I am not satisfied that she did not comprehend the significance of signing the undertaking on behalf of the employer. Further, to sign the letter is consistent with the communication delegated limits of authority assigned to her role.

[82] I have considered the relevance of the salary and find that it is more plausible that the adjustment to her salary was a direct result of her appointment to hospital director and the additional responsibilities relating to the job. Ms Quinlivan contended she was "promised" $180,000 for the role of director of nursing, there is no evidence of this contention, but the increase to her salary coincided with the change to her role from director of nursing to hospital director.

[83] Ms Quinlivan contended that her change in title resulted in her performing extra duties that came across her desk while still the director of nursing. Statements such as these during her witness evidence did not in my opinion credibly explain the difference in her salary. Firstly, her salary was never adjusted to $180,000 and even with her adjustment to $165,000 per year, it exceeded the enterprise agreement rate by $45,400 per year, a significant amount, and most probably on balance, not to cover extra duties that came across her desk. Further, Ms Quinlivan gave evidence that the Monash hospital staff salaries would not stretch to $150,000 because the staff were covered by the EBA. In this regard her evidence at first instance was revealing and raised sufficient doubt that her role was director of nursing "however titled". Having considered the evidence, I am satisfied that the timing of the two salary increases coincided with the changes to her position following the resignation of the CEO and her appointment to the position of hospital director, which was the most senior role in the hospital.

[94] For these reasons, I am not satisfied that Ms Quinlivan has established that she was covered by the Agreement or the Nurses Award 2010 at the date of her dismissal. I have concluded that she was not covered by either industrial instrument.

[95] As Ms Quinlivan was not a person covered by a modern award or an enterprise agreement at the relevant time, and as her rate of earnings exceeded the high income threshold, she was not a person protected from unfair dismissal.

[96] The application is therefore dismissed. An order to this effect is issued in conjunction with the publication of this decision.

[1] Exhibit A3, attachment EQ1 comprising both employment agreements.

[2] Applicant's outline of argument, Exhibit A3, Respondent's outline of argument and Exhibit R4.

[3] Brand v APIR Systems Ltd, [2003] AIRC 1161 at [11].

[6] PR012009, Award Modernisation Statement [2009] AIRCFB 50 at [75] to [81].

[7] PR707444, Annual Wage Review 2018-19 Determination [2019] FWCFB.

[8] AMWU v Berri Pty Limited [2017] FWCFB 3005 at [114].

[9] Byrne and Frew v Australian Airlines (1995) 131 ALR 422

[10] Kucks v CSR Limited [1996] IRCA 166; (1996) 66 IR 182 at 184.

[11] See The Director of the Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 7) [2013] FCCA 1097, Ware v O'Donnell Griffin (Television Services) Pty Ltd [1971] AR (NSW) 18, Transport Workers' Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCCA 4 at [172], and Construction, Forestry, Mining and Energy Union v CSBP Limited [2012] FCAFC 48.

[12] Appeal by Brand against decision of Deegan C Re: APIR Systems Ltd, AIRCFB, [2003] [PR938031].

[13] [PR925731], cited passage in [PR938031] at [10].

[14] Carpenter v Corona Manufacturing Pty Ltd (AIRCFB, Williams SDP, Lacy SDP, Tolley C, 17 December 2002) at para. 9, [(2002) 122 IR 387].

[15] [2017] FWC 2623 at [45].

[16] Applicant's outline of submissions at [16].

[18] Exhibit A3 and attachment EQ2 Applicant's witness statement.

[19] Respondent's outline of submissions at [6], exhibit R4 at [8] and witness evidence of Dr Verrills.

[20] Director of nursing position description signed on 26 February 2018 contained in EQ2.

[21] Director of nursing position description signed on 22 February 2016 contained in EQ2.

[23] Monash House Private Hospital Pty Ltd Nurses' Enterprise Agreement 2016.

[27] Ibid [19], the CEO had responsibility for 4 related business entities in addition to the Hospital.

[29] Ibid [13] to [15] and attachment PV 1 and PV 2.

[30] Attachment PV 1 and PV 2 of Exhibit R4.

[31] Ibid [16] - [17] and attachment PV 3, PV 4 and PV 5.

[32] Ibid [18] and Attachment PV 6 to exhibit R4. Email from the CFO confirming the Board's decision regarding salary review for hospital director and finance and admin manager.

[33] Exhibit R4 at [25] and [26], Exhibit A3 at [20] and Transcript PN 688 to PN 698.

[41] Sanjay Halasagi v George Weston Foods Limited, [2010] FWA 6503 at [24].

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