Hayman v Neill [1997] FCA 1084 | Case summary

PANCH was accepted by the Department as the auspice agency for the Central East Area Mental Health Service. On 28 March 1995, a proclamation was made under s 94(2) of the Mental Health Act proclaiming Upon House as an approved psychiatric unit with effect from 9 April 1995. The "25 Bed Acute Inpatient Unit" referred to in the letter of 2 February 1995 was a reference to a building known as "Upton House". Upton House is a facility which was built within the perimeter of the Box Hill Hospital in or about 1993. On 18 April 1995, Upton House commenced to receive patients. Those patients were transferred from North Ward 5 at the Larundel campus of the North East Metropolitan Psychiatric Services ("NEMPS") in Bundoora. The employees who commenced to work at Upon House to provide mental health services to adult inpatients were transferred from North Ward 5. Those persons were made available to PANCH pursuant to s 97 of the Mental Health Act which allows the Department to: "... make available to a person, association or organization providing mental health services the services of any person ... employed in the Department under the Public Service Act 1974." Ms Sainsbery is the Manager, Psychiatric Services for North Eastern. She gave evidence that, prior to 18 April 1995, the adult mental health services for the Central East catchment area were provided by the Department from the NEMPS campus. She also testified that, after 18 April 1995, that the Department no longer provided any services out of NEMPS in relation to adult mental health services for the Central East catchment area. Those services, Ms Sainsbery said, were provided by PANCH until August 1995 when PANCH amalgamated with various other hospitals to form North Eastern. Ms Sainsbery testified that, on 6 June 1995, the Department and PANCH executed the "NEMPS Redevelopment Interim Transition/Service Agreement" to apply for the period 18 April 1995 to 30 June 1995. Under cross-examination, Ms Sainsbery said the reason for the interim agreement was: "... because the services(sic)was taken over in February of the year, so there was an interim agreement until the end of that financial year..." On 24 July 1995, a Health Services Agreement was made between the Department and PANCH pending the finalisation of a further agreement by August 1995 for the year 1995/1996. That agreement referred to the hospital managing and providing mental health services listed in Schedule 1 thereto for a designated catchment area. The services and the catchment area corresponded to those which PANCH, according to Ms Sainsbery, became responsible for in February 1995. The agreement also dealt with the transfer of employees, equipment assets and medical records. Mr Lucas is the Executive Director of the Department of Psychiatry at Maroondah Hospital. He was previously the Director of Nursing Services at NEMPS until October 1995. He testified that, on or after 18 April 1995, the acute adult inpatient services that were provided at North Ward 5 at NEMPS were no longer provided there but were thereafter provided at Upton House. He said that a "relapse patient" attending at North Ward 5 after 18 April 1995 would be re-directed to Upton House. Mr Lucas testified that after 18 April 1995, the services that had previously been provided at North Ward 5 were after that date relocated to Upton House. Ms Mitchell-Dawson is the senior psychiatric nurse for North Eastern. In her evidence in chief Ms Mitchell-Dawson was asked to recall when the patients at North Ward 5 relocated. She replied that "to the best of my recollection Ward North 5 moved to Upton House." At the Larundel campus of NEMPS, prior to mainstreaming, there was a general practice of admitting patients to certain wards based on where the patients lived. This was described by Mr Lucas as "loose admission geographical criteria". Mr Jerry Hall, one of the employees formerly located at North Ward 5 who was transferred to Upton House, gave evidence that five of the wards at Larundel were catchment based but that "from time to time patients from outside the catchment area of the ward would be cared for". This latter happening occurred due to bed shortages and the occasional need to separate certain patients. As well as the five catchment based acute inpatient wards there was a ward at Larundel known as "A Ward". A Ward was a locked acute inpatient ward for high dependency patients. It received patients from all over the State. There was also a unit known as the "Professorial Unit", which was a specialised unit which treated persons with conditions such as eating disorders. North Ward 5 was a twenty-five bed acute inpatient unit with a one bed seclusion room. The catchment area consisted of the former local government areas of Box Hill, Doncaster, Templestowe, Nunawading and Waverley and parts of Warrandyte. The catchment area for North Ward 5 immediately prior to 18 April 1995 was the same catchment area as applied to Upton House on and from 18 April 1995. Relocation of North Ward 5 to Upton House was planned about two years prior to it actually occurring. In the year prior to relocation NEMPS engaged in a "matching process" where it specifically asked staff to nominate their preference for future employment at particular relocated services. The staff were then placed in a particular ward which would relocate to a particular area. For example, those staff who wished to relocate to Upton House requested placement in North Ward 5. The majority of existing staff within North Ward 5 at the commencement of the matching process expressed a preference to stay at North Ward 5 in preparation for relocation to Upton House. During the matching process and beyond, in preparation for the move to Upton House, the geographical admission criteria was tightened so that the patients treated at North Ward 5 became almost exclusively from the catchment area for the Central East area. The evidence disclosed, however, that catchment areas are adjusted from time to time having regard to population changes. In late 1992 or early 1993 "Crisis and Assessment Teams" were established in catchment areas. Those teams worked in the community in their relevant areas and often directly admitted patients to wards. The Crisis and Assessment Team for the Central East Area Mental Health Service was established in August 1994. It was based in Upton House and operated from there in advance of Upton House being opened as an inpatient unit. A "Mobile Support and Treatment Service" was established by North Eastern with respect to the Central East area in November 1995. This service had no equivalent in any service previously operated by the Department. Ms Sainsbery agreed, under cross-examination, that all other services which were provided by PANCH/North Eastern after 18 April 1995, had previously been provided by the Department. On 18 April 1995, most of the patients at North Ward 5 were transferred to Upton House. Some patients were allowed to go home for the week-end and come to Upton House the following week. All North Ward 5 nursing staff moved to Upton House. Two domestic staff were recruited from other wards at NEMPS. All relevant documents (including patient records) and necessary paper work were transferred to Upton House from NEMPS. NEMPS letterhead continued to be used for a while until replaced by Upton House stationery. Food for use at Upton House was brought in from the Box Hill Hospital kitchen. At NEMPS, food for North Ward 5 was brought in from a kitchen outside the ward at Larundel. At North Ward 5 security was provided as part of the NEMPS emergency system. Originally at Upton House security was provided by a contractor. It is now provided by Box Hill Hospital. The four bed acute admission faculty, or high dependency unit, at Upton House had no equivalent at North Ward 5. Patients who are treated in that unit would formerly have been treated at A Ward at the Larundel campus of NEMPS. Further, Upton House invoices other auspice agencies when patients from their catchment areas are treated at Upton House. As Mr Lucas testified, "after the first 24 hours you invoice them for the bed day rate and any other additional costs." This is because North Eastern only receives departmental funding for patients for the Central East catchment area. After 18 April 1995, North Ward 5 closed for a short time for some minor refurbishment. It is currently used as an extended care unit to house patients requiring rehabilitation. That service is shortly to be relocated in Dandenong, according to Ms Mitchell-Dawson. Ms Carson is currently employed by North Eastern as a registered psychiatric nurse at the Central East Area Mental Health Service, Upton House. She was an employee of the Department until July 1995 and worked at the Royal Park campus of NEMPS for two and a half years before July 1995. Towards the end of March 1995 Ms Carson applied for a position at Upton House which she knew was coming into operation. In June 1995 she was offered a position at Upton House. Ms Carson requested a transfer under s 97 of the Mental Health Act but was told by an officer of the Department that she would have to resign from it to take up her position with what was then PANCH. Ms Carson commenced her employment with PANCH at Upton House on 23 July 1995. In the period 14 to 27 August 1995 she was required to work weekends and public holidays but testified that she did not receive a commuted allowance which was available to employees who were entitled to benefits of the 1994 award and the 1995 award. Ms Carson also claimed that she did not receive the correct shift penalty for afternoon shifts which she was required to work on 14, 15 and 21 August 1995. Under cross-examination Ms Carson acknowledged that she was aware upon taking up employment with PANCH that her employer would apply the Nurses (Victorian Health Services) Award 1992 ("the Nurses Award") to her employment. The Nurses Award bound PANCH in respect of employment by it of nursing staff. (c) Western Western Hospital's expression of interest document expressed interest in the mental health service in the Western Metropolitan Region for the South-West and Mid-West areas. Those service elements included "GENERAL ADULT" services constituted by: · crisis assessment and treatment; · mobile treatment and support; · continuing care, clinical and consultancy; and · acute inpatient. On 30 June 1995, Western Hospital was advised by the Department that it was successful in its application "to manage and control" the relevant services. A transitional Health Services Agreement was sent to Western Hospital by the Department "to enable a seamless mainstreaming of services on 1 July, 1995." Western Hospital was thus accepted by the Department as the auspice agency for the South-West and Mid-West acute adult mental health service. On 11 July 1995, a proclamation was made under s 94(2) of the Mental Health Act proclaiming: "... the whole of the property situated at 160 Gordon Street, Footscray, formerly gazetted as the Footscray Psychiatric Hospital, to be an approved psychiatric unit known as the Western Hospital Psychiatric Unit from 13 July 1995." On 1 August 1995, Western came into existence as a result of an order of the Governor in Council which effectively amalgamated Western Hospital and certain other hospitals to form Western. Prior to 1 July 1995, the adult mental health services for the Mid-West and South-West regions were provided directly by the Department. These services were chiefly provided at Footscray Psychiatric Hospital which operated as a fifty bed acute inpatient hospital. The hospital was a free standing building located in Gordon Street, Footscray. The first floor consisted of a ward where mental health inpatient services were provided to patients from the Mid-West catchment area. An occupational therapy area was contained on the second floor. The third floor consisted of a ward where mental health inpatient services were provided to patients from the South-West catchment area. An eight bed high dependency unit was located on the ground floor. There was also a community mental health clinic in each of the catchment areas which referred patients to the hospital. In late 1993 or early 1994, a Crisis Assessment Team was established. Initially, it was based on the ground floor of the hospital but some six months later it became based at the two clinics. Mr Rule is a state enrolled psychiatric nurse who is an employee of Western. He commenced work at the Gordon Street site in April 1993 as an employee of the Department on a short fixed term contract. He was employed pursuant to several such contracts and on 1 July 1995 was made available to Western Hospital in the same manner as Ms Carson was made available to North Eastern, namely pursuant to s 97 of the Mental Health Act. Mr Rule testified that the provision of acute adult inpatient services did not alter in any significant way after 1 July 1995. The venue for the provision of services remained. No patients were discharged as a result of the change in service provider. There was some variation in the catchment areas but not to any significant extent. Mr Rule remained an employee of the Department until 23 December 1995 when he was offered permanent employment by Western. As a condition of acceptance of the offer, Mr Rule was required to resign from the Department. Since becoming an employee of Western, Mr Rule has had the Nurses Award applied to his employment. He testified that he has not enjoyed the benefit of substituted leave in recognition of his inability to take public holiday leave as those days occur, which he would otherwise have been granted under the 1995 Award. Under cross-examination, Mr Rule acknowledged that the manner of delivery of the allied health services provided to the catchment areas had altered after June 1995 and that the position of area manager had replaced the former positions of Director of Nursing and Assistant Director of Nursing. During re-examination, Mr Rule testified that his work had not changed on a day to day basis since July 1995 and that nothing had changed apart from some managerial changes and the relocation of some services. Ms Saunders is the Area Manager for the Midwest Area Mental Health Service of Western. She testified that altered health services are now provided by staff based in the community rather than at the Gordon Street site. She also testified that the services provided by the unit had not changed as a result of such relocation. Ms Saunders gave evidence that instead of there being a clinical nurse specialist when the Department ran the service, there is now a clinical nurse consultant with additional duties. She agreed with Mr Bromberg that the services which began to be provided on or about 1 July 1995 by Western Hospital, and then Western, were the services that had been provided by the Department. Mr Shaw is a senior officer with Western whose previous positions included the position of Operations Manager for the Division of Psychiatry at Western Hospital. Mr Shaw testified, inter alia, that the community care unit in St Albans was operated by Western Hospital and although it was in the process of being established by the Department in 1994, it had not been operated by it. Mr Shaw agreed with Mr Bromberg that each of the services provided to the relevant catchment areas by Western when it took over responsibility for those services corresponded to a service previously provided by the Department. Mr Shaw also testified that motor vehicles and other assets had been transferred to Western Hospital from the Department. THE MAIN COMPETING CONTENTIONS It was submitted by Mr Bromberg that PANCH, later known as North Eastern, became a successor, assignee or transmittee of part of the business of the State of Victoria when it commenced to operate the acute adult mental health services for the Central-East region of metropolitan Melbourne. It was also submitted by Mr Bromberg that Western Hospital, later known as Western, became a successor, assignee or transmittee of part of the business of the State of Victoria when it commenced to operate the acute adult mental health services for the Mid-West and South-West regions of metropolitan Melbourne. Central to these submissions is the application of s 149(1)(d) of the Act to the facts and circumstances which I have described. Mr Bromberg contended that an identifiable economic activity, i.e. the provision of acute adult mental health services in identifiable regions, was transmitted from the State of Victoria to each of the respondents. It followed, on his submission, that in each matter a part of the business of the State of Victoria had been transmitted to each respondent. Consequently, it was submitted, North Eastern became bound by the 1994 Award and the 1995 Award and that Western became bound by the 1995 Award. Counsel for each respondent and the intervener contended that the direct provision of mental health services by the State of Victoria did not constitute a "business" within the meaning of s 149(1)(d) of the Act. Section 149(1) of the Act outlines the persons bound by awards by providing as follows: "Subject to any order of the Commission, an award determining an industrial dispute is binding on: (a) all parties to the industrial dispute who appeared or were represented before the Commission; (b) all parties to the industrial dispute who were summoned or notified (either personally or as prescribed) to appear as parties to the industrial dispute (whether or not they appeared); (c) all parties who, having been notified (either personally or as prescribed) of the industrial dispute and of the fact that they were alleged to be parties to the industrial dispute, did not, within the time prescribed, satisfy the Commission that they were not parties to the industrial dispute; (d) any successor, assignee or transmittee (whether immediate or not) to or of the business or part of the business of an employer who was a party to the industrial dispute, including a corporation that has acquired or taken over the business or part of the business of the employer; (e) all organisations and persons on whom the award is binding as a common rule; and (f) all members of organisations bound by the award." (Emphasis added) Counsel for the respondents and the intervener also contended that on the facts of each matter there was no transmission of business even if the provision of mental health services by the State was said to constitute a business. Additionally, they submitted that in making the 1994 Award and the 1995 Award the Commission had effectively ordered that s 149(1)(d) of the Act not have any relevant application. This last submission relies upon the opening words of s 149 of the Act that the section is "[s]ubject to any order of the Commission". DID THE PROVISION OF MENTAL HEALTH SERVICES IN THE RELEVANT AREAS CONSTITUTE "THE BUSINESS" OR "PART OF THE BUSINESS" WITHIN THE MEANING OF SECTION 149(1)(d)? Dr Jessup submitted that for part of a business to be transmitted, it must be capable of itself constituting a business. He referred the Court to the judgments of the New South Wales Industrial Commission in Hayman v Neill [1960] AR 36 at 368 and Manly v Gazal Clothing Co Pty Ltd [1973] AR 547 at 551. In both these cases the New South Wales Industrial Commission ("the NSW Commission") dealt with the meaning of the words "any part thereof" relating to the word "business" in the context of the transmission provisions of the Long Service Leave Act 1955 (NSW). Hayman decided that if any employer merely sold part of the machinery it used in its business there would not be a transmission of business. Manley applied Hayman. I do not doubt the correctness of Hayman but it is of little assistance in the unusualcircumstances of the matters before this Court. It is not suggested that the State of Victoria merely sold equipment to the respondents or made equipment available to them. The respondents conducted operations formerly conducted by the State in the relevant regions. The real question for determination is whether what the State formerly conducted can be described as a business within the meaning of s 149(1)(d) of the Act. Dr Jessup contended that the word "business" connotes a commercial venture which is market-driven and undertaken by business persons. He described the billing process undertaken by health care networks in respect of treatment of patients from outside their catchment areas as "fringe indications of commercial transactions". He initially submitted that government activity cannot be business although later contended that the government can be in business but that the mere fact that it employs people to provide services to the community does not mean it is thereby in business. Dr Jessup highlighted the fact that s 149 (1)(d) of the Act refers to "business" and not what he submitted was the broader concept of an "undertaking" which is referred to elsewhere within the Act, such as in the definition of "industry" in s 4 of the Act. The intervener at paragraph 22 of its written submissions contended as follows: "The provision of mental health services by the State is not an activity which forms part of a business within the meaning of s 149 of the Industrial Relations Act 1960(sic). The State has in that regard been involved in the performance of a Governmental function or activity under statutory duties and powers. That is a public function, not a business." In support of that proposition that intervener cited Crown Employees Roads & Traffic Authority (NSW) (Officers Salaries & Conditions) Award, Re (1989) 29 IR 120 at 139, a judgment of Hill J of the NSW Commission. Crown Employees concerned an application by the Public Service Association of New South Wales ("PSA") for an award governing the salaries and conditions of employment of officers employed by the Roads and Traffic Authority of New South Wales ("RTA"). At the time RTA was a new statutory authority which performed the functions of the former Commissioner for Main Roads ("DMR"), the Traffic Authority ("TA") and many of the functions of the Commissioner for Motor Transport ("DMT"). Leave to intervene in the award application was granted to the Australian Transport Officers Federation ("ATOF"). ATOF's interest was in respect of a substantial number of its members who were formerly employed by DMT and at the time of the application, the RTA. ATOF applied for an adjournment of the PSA application until its notification of industrial dispute had been dealt with federally. Hill J heard and determined ATOF's adjournment application and an application by PSA for an interim award. Hill J said at 139: "In my opinion there were no businesses or undertaking conducted by DMR, DMT, or TA but rather performance by statutory bodies, representing the Crown, of various governmental functions and activities of the Crown... The words 'business' or 'undertaking' are quite inapt to describe the activities." Hill J effectively held that ATOF was not eligible to enrol employees of RTA. A directly contrary conclusion was reached by the High Court in Australian Industrial Relations Commission, Re: Australian Transport Officers Federation, Ex p (1990) 171 CLR 216 in full knowledge of the judgment of Hill J which is referred to at 228 as providing "a comprehensive review" of the relevant "reorganisation". It was submitted to the High Court in ATOF by an unsuccessful party that the relevant successor clause in ATOF's eligibility rules did not apply because the activities of the DMT did not amount to a business and if they did such business was and remains with the Crown: see at 225 and 226. The High Court at 228 rejected that submission. Consequently, I do not regard the judgment of Hill J as good authority for the proposition stated at paragraph 22 of the intervener's written submissions which, I have noted, was also contended for by the respondents. The judgment of Hill J is no longer good law, if it ever was. Mr Bromberg, in reply, referred the Court to the definition of "single business" in s 170LB of the Act in support of his proposition that activities carried on by a State can be considered to be a business for the purposes of the Act. It would be a strange result if a certified agreement could be made under the Act in circumstances where a State might be a party to the agreement in respect of a business but that business would not be able to constitute a business within the meaning of s 149(2)(c) of the Act. Section 149(2)(c) of the Act provides that: "An award that is constituted by a certified agreement ... is binding upon an employer who is a successor, assignee or transmittee (whether immediate or not) to or of the whole or part of the business of a party, including a corporation that has acquired or taken over the whole or part of the business of the party." I see no basis for construing the words "part of a business" in any different way in s 149(2)(c) to the way they should be construed in s 149(1)(d). The submission that the exercise of a public function cannot constitute a business is reminiscent of the submission rejected by the High Court in R v Commonwealth Conciliation & Arbitration Commission; Professional Engineers', Australia, Ex p (1959) 107 CLR 208 that what is governmental cannot be industrial. At 236, Dixon CJ noted that the phrase "industrial dispute" was "very wide and flexible". Similarly, in my view, "business" is also a word of wide import. In ATOF the High Court said that at 226: "Of all words, the word 'business' is notorious for taking its colour and its content from its surroundings... Its meaning depends upon its context." In the context of s 149 of the Act I see no basis for the restrictive interpretation of "business" contended for by the respondents and the intervener. Activities of a State constituted by the employment of persons and the provision of services to the public do not cease to be "business" merely because they are not generally conducted for profit. The Act provides for the making of awards and agreements which apply to business conducted by States. There is no reason to suggest that s 149(1)(d) or s 149(2)(c) of the Act should be interpreted in some different or special way when a State transmits certain of its functions to another entity in circumstances where award application consequences arise for affected employees. I find that the provision of mental health services in the relevant area by the State did constitute "part of the business" within the meaning of s 149(1)(d) of the Act. WAS THERE A TRANSMISSION OF PART OF THE BUSINESS OF THE STATE TO NORTH EASTERN? Being of the view that the activities engaged in by the State of Victoria in the provision of adult mental health services in the Central East area prior to 18 April 1995 constituted part of the business of the State within the meaning of s 149(1)(d) of the Act, it is necessary for the Court to consider whether North Eastern became a successor, assignee or transmittee of part of that business. For convenience I will describe that question as whether there was a transmission of that part of the business of the State on or after 18 April 1995. I have no difficulty in finding that such a transmission occurred. On 18 April 1995 PANCH (which later formed part of North Eastern) took over responsibility for the provision of adult mental health services for the Central East area, which services immediately prior to 18 April 1995 were being provided by the State. In ATOF the High Court considered the meaning of the words a "successor or assignee or transmittee of the business of" in examining the eligibility rule of a registered organisation. At 230 the High Court said: "... on the reading of the clause which we favour, the ultimate issue is whether there is a substantial identity between the old activities and those now carried on by the RTA which correspond with the old activities." Dr Jessup essentially submitted that the Court should not treat ATOF as laying down a test for the Court to apply for the purposes of interpreting s 149 of the Act. In Australian Federation of Air Pilots v Skywest Airlines Pty Ltd (31 October 1995, Industrial Relations Court of Australia, unreported) I dealt with a similar submission made on behalf of the respondent in that case. At 8 I said as follows: "Mr Parry submitted that the Court should pay little regard to the decision in ATOF because it concerned the interpretation of an eligibility rule. I reject that submission. It is well established that eligibility rules should ordinarily be construed generously. See for example, Re Anti-Cancer Council, Ex parte State Public Service Federation (1992) 175 CLR 442, 448. However, there is no indication in ATOF that the Court approached the meaning of the relevant rule in any special way because it was considering an eligibility rule. I agree, with respect, with the views of the Full Bench of the Australian Industrial Relations Commission ("the Commission") in Meat & Allied Trades Federation of Australia v Australasian Meat Industry Employees Union (1995) 58 IR 90 where at 94 the Full Bench said of ATOF: "... The Court in that instance was free to place a liberal construction on the relevant union rules. However the Court's reasoning would appear to be no less applicable to construction of the corresponding terms of that Act, which were alluded to in the same passage of the decision ..." The relevant part of the legislation to which the Full Bench was referring was s 61(d) of the former Act which was in materially identical terms to s 88ZB(1)(c) of the former Act." I am content to adhere to what I said in Skywest. I received no cogent submission as to why I should not do so. In ATOF the relevant rule was in materially identical terms to the relevant part of s 61(d) of the Conciliation and Arbitration Act 1904 which was the predecessor provision to s 149 of the Act. The Conciliation and Arbitration Act did not refer to "part of a business" in s 61(d) as s 149 of the Act now does. However, that distinction makes no difference to the utility of the Court's reference to the approach of the High Court in ATOF. It is beyond dispute that there was a substantial identity between the old activities carried on by the State in the provision of adult mental health services for the Central East area immediately prior to 18 April 1995 and the provision of those services by PANCH on 18 April 1995. Immediately prior to 18 April 1995 persons requiring adult inpatient mental health services from the Central East catchment area were cared for at North Ward 5 at NEMPS. On 18 April 1995 those patients and the large bulk of the staff who provided those services from that day were transferred to Upton House. I accept the evidence of Ms Sainsbery and Mr Lucas that, after 18 April 1995, the Department no longer provided any services out of NEMPS in relation to adult mental health services for the Central East catchment area and that those services were provided by PANCH and, from August 1995, by North Eastern. As well as the transfer of employees, equipment, assets and medical records were transferred to Upton House. As Ms Mitchell-Dawson put it, "Ward North 5 moved to Upton House". An element of the provision of adult mental health services for the Central East area is the Crisis and Assessment Team. The Crisis and Assessment Team was operational some eight months prior to 18 April 1995. It was part of the business of the Department on 17 April 1995 and became part of the business of PANCH on 18 April 1995. The matters referred to above illustrate the substantial identity between the relevant prior activities of the State and those of PANCH/North Eastern. Such "substantial identity" is not diluted by focusing on some operational differences between activities carried on at North Ward 5 and those carried on at Upton House referred to in the relevant background facts set out above, for example, the existence of the four bed acute admission facility at Upton House. Subject to the issues dealt with under the later heading of whether the Commission otherwise ordered, I am of the view that there was, on 18 April 1995, a transmission of part of the business of the State (consisting of its provision of adult mental health services for the Central East area) to PANCH. WAS THERE A TRANSMISSION OF PART OF THE BUSINESS OF THE STATE TO WESTERN? The fact that there was a transmission of that part of the business of the State which provided adult mental health services for the South-West and Mid-West areas is easy to discern. On 1 July 1995 Western Hospital commenced to conduct what was prior to that day part of the business for the State, i.e. the provision of adult mental health services for the South-West and Mid-West areas of metropolitan Melbourne. I accept the evidence of Mr Rule that the provision of acute adult inpatient services at the Gordon Street premises did not alter in any significant way after 1 July 1995. The occurrence after the date of transmission (i.e. 1 July 1995) of some managerial changes and the relocation of some services does not affect the fact that there was a substantial identity between the old activities relevantly carried on by the State immediately prior to 1 July 1995 and the activities carried on by Western Hospital on 1 July 1995. I accept the evidence of Ms Saunders that the services which were provided by Western Hospital on 1 July 1995 were the services that had previously been provided by the Department. I also accept the evidence of Mr Shaw that each of the services provided to the relevant catchment areas by Western when it took over responsibility for those services corresponded to a service previously provided by the Department. HAS THE COMMISSION OTHERWISE ORDERED? Counsel for the respondents and the intervener submitted that s 149(1)(d) of the Act had no application to the maters before the Court because the Commission in making the 1994 Award and the 1995 Award effectively determined that s 149(1)(d) of the Act should not apply. They relied upon the opening words in s 149(1) of the Act which provides, immediately prior to describing persons bound by awards, that the sub-section is: "Subject to any order of the Commission ...". (a) The 1994 Award Mr Kaufman submitted that from its very terms it is obvious that the 1994 Award was only intended to apply to the State of Victoria. He referred in that context to the inclusion in that award of provisions that applied specifically to public servants. He submitted that it was "an award peculiar and unique to the Victorian Public Service". He noted that the 1994 Award included, by reference, the provisions of the Victorian Public Service Regulations in force as at 27 October 1992. He acknowledged that the 1994 Award was an interim award, designed to maintain the status quo, which included the operation of relevant public service conditions found in Public Service Board determinations and the State Public Service Personnel Management Manual. Counsel also referred to the fact that the 1994 Award in terms was made binding on the employer side upon (at clause 2(1)): "The Crown in Right of the State of Victoria in respect of all employees of the Department of Health and Community Services (Victoria) eligible to be members of the ... [relevant unions]." I do not consider that an award tailored to meet the circumstances of employment of employees by a particular employer cannot apply to another employer upon the transmission of part of the business of the first employer to the second. I do not accept that in the making of an employer specific award the Commission should be considered to have made an order ousting the effect of s 149(1)(d) of the Act. It will not often be known with any certainty when an award is made whether an employer bound by it will transmit part of its business to another entity. If the other entity finds the provisions of the award unsuitable to its business, it is open to it to apply to the Commission to have the award varied or set aside in so far as it applies to it. If it was the intention of the Commission in making the 1994 Award it would have been an easy task for it to provide that s 149(1)(d) of the Act did not apply by adding a provision which had that effect. No such clause found its way into the 1994 Award. I find that, in making the 1994 Award on 15 August 1994, the Commission did not intend to oust the operation of s 149(1)(d) of the Act. (b) The 1995 Award The 1995 Award was made on 9 February 1996 with retrospective effect to 1 March 1995. Clause 3 of the 1995 Award provides that: "This award shall apply to the employment of all employees of the Crown in the Right of the State of Victoria, including temporary employees, part-time employees and casual employees, engaged in the performance of work in or in connection with industries and/or industrial pursuits of health and community services, and in or about places where such industries and/or related pursuits are undertaken, and in particular: (a) Psychiatric and mental health services; and/or (b) Intellectual Disability services; and/or (c) Alcohol and Drug related services." Clause 5 of the 1995 Award provides that: "This award shall be binding upon: (a) the Crown in the Right of the State of Victoria in respect of all its employees for whom provision is made in this award, (b) the Health Services Union of Australia in respect of all employees employed pursuant to this award." Mr Kaufman referred the Court to certain clauses in the 1995 Award which show that it was intended to apply to public servants only. This is unsurprising having regard to the content of the scope and parties bound clauses referred to above (cls 3 and 5 respectively). Apart from one aspect, to which I will now turn, there is no relevant basis to treat the argument that the 1995 Award was not intended to attract the operation of s 149(1)(d) of the Act any differently to the same argument raised in the context of the 1994 Award. That one aspect was the submission of Dr Jessup that the transcript of the proceedings in the Commission which led to the making of the 1995 Award indicates that it was not the intention of the parties to the award that it attract the operation of s 149(1)(d) of the Act upon a relevant transmission. On a superficial reading of the relevant parts of the transcript that submission is not unattractive. However, on a thorough and close analysis of that transcript I do not believe it can be said that it was the unambiguous intention of the parties to what became the 1995 Award to exclude it being applied to other entities upon a transmission of part of the business of the State. The relevant hearing before the Commission took place on 17 October 1995 before Senior Deputy President MacBean. Mr Stephens, an industrial officer employed by the Union, testified that prior to that hearing a document was prepared by the parties which included a draft cl 3 of the draft award. The draft clause did not include the words "the Crown in the Right of the State of Victoria" but was otherwise identical to what became cl 3 of the 1995 Award. When cls 3 and 5 of the 1995 Award are read together, it is difficult to discern what work the additional words do. As a result of the wording of cl 5, the Award could not apply at its making to any employer other than the State. The additional words were added at the suggestion of counsel for the State, Mr McDonald, after the solicitor for the Victorian Hospitals Industrial Association, Mr Szlawski, had raised the issue of mainstreaming of mental health services. The relevant transcript was in evidence before me as Exhibit DWS-6 to the affidavit of Mr Stephens, which is Exhibit KK in the proceedings. At 98-99 of the transcript, Mr Szlawski acknowledged that: "... at this stage public hospitals are clearly not respondent (sic) to this award. This award covers public servants and s 97 staff. The union is seeking to perhaps change the situation in the future, ...". After somewhat vaguely adumbrating his concerns, Mr Szlawski was interrupted at 101 by MacBean SDP who said: "Yes. I think you are really foreshadowing something further down the track as it were in regard to this problem of the two awards operating side by side." Mr Szlawski relevantly replied: "Well, quite. Our position is quite clear on that. Obviously this is - I am just putting it in a base (sic) of setting the scene so to speak, your Honour. ... Obviously, I do not propose to take it any further before you today, because this is not the appropriate forum for it." Shortly thereafter Mr McDonald, at 102, suggested that the extra words referred to above be inserted in cl 3 to: "... address the particular point which Mr Szlawski raises." Apart from those extra words not making any difference to the combined meaning of cls 3 and 5, it was not clear on a fair reading of the transcript as to whether Mr Szlawski was making any point of immediate consequence rather than foreshadowing a point that if State services were mainstreamed into public hospitals, the public hospitals would seek to argue on another day that the award that was in the process of then being made should not apply to employees of public hospitals. Mr Stephens submitted to the Commission, at 103, that the matter as to what would follow for award application purposes upon mainstreaming was a matter of "significant disagreement between the parties at the moment." The Senior Deputy President then said that: "I would be surprised if it was otherwise." The Senior Deputy President enquired of Mr Stephens whether he objected to the extra words sought by Mr McDonald. Mr Stephens replied to the effect that he did not know what Mr Szlawski's problem was. MacBean SDP then said: "If it makes him happy and does not upset you, well there is no problem." Mr Stephens replied: "Let him have it." I do not consider that any fair minded reader of the transcript, upon a thorough analysis of it, would be able to form the view that the parties to the 1995 Award intended to oust the operation of s 149(1)(d) of the Act and ensure that it did not apply in the event of mainstreaming. As the transcript shows, what would apply in that event was a matter for future debate. Consequently, I find that the Commission did not order that s 149(1)(d) of the Act has no application to the 1995 Award. AWARD APPLICATION CONSEQUENCES The Nurses Award has application to employees of North Eastern and Western. The 1995 Award also applies to employees of North Eastern who are engaged in the provision of adult mental health services for the Central East area and employees of Western engaged in the provision of the services of the Mid-West and South-West regions. The appropriateness of the 1995 Award or the Nurses Award applying to such employees was a matter raised in evidence. At an early stage in the proceedings Dr Jessup objected to the Court receiving such evidence on the basis that it was irrelevant to any issue in the proceedings. I admitted the evidence as I was not at that stage sufficiently confident that it was irrelevant. It consisted of evidence then given by Ms Anderson for the Union. An uncontested affidavit in reply sworn by Ms Sharrock was filed by each respondent. The evidence contained in it appears to be at odds with the thrust of Ms Anderson's evidence. On reflection I now consider that such material is not relevant to the legal questions which I am required to determine in these proceedings. The appropriateness of the 1995 Award's application as against the application of the Nurses Award is a matter which can be addressed by the relevant parties before the Commission. The situation where two awards govern the terms and conditions of employment of certain employees, whilst relatively unusual, is not an unknown one. In those circumstances, the employer is obliged to accord to its employees the better conditions in respect of the matters dealt with in the awards, thus obeying all its obligations. It is not the function of this Court to determine which award is more appropriate. ANCILLARY ISSUES (a) Certified Agreements with the Nurses Award as the Parent Award The respondents referred the Court to material which was supplied to the Commission during the making of certified agreements. One such certified agreement was made between PANCH on the one hand and the Union and the Australian Nursing Federation ("ANF") on the other. It appears that the parties to that agreement submitted to the Commission that the Nurses Award applied to the employees covered by the agreement. Whether or not that is so, as it plainly is, it is not an issue which this Court must consider in determining the application of s 149(1)(d) of the Act to the facts and circumstances of the applications before it. The application of that agreement upon the 1995 Award was dealt with by Mr Bromberg in reply. However, it is not a matter that I find necessary to deal with in answering the legal questions that are relevant to these proceedings. Even if certain officials of the Union had formed a view that the 1994 Award and the 1995 Award did not apply to the respondents, that view, if it existed, would not bind the Court in the way it dealt with the applications now before it.

Hayman v Neill

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