Australian Industrial Relations Commission|2003-05-16

Queensland Department of Health v Mater Misericordiae Health Service Brisbane Limited - PR931289 [2003] AIRC 518; (16 May 2003)

s.170MW applications for termination of bargaining period

Mater Misericordiae Health Service Brisbane Limited

Arbitration under section 170MX; weight accordable to considerations of nursing staff shortages and workload intensification; determination of targeted attraction and retention payments justified on cases presented; relevance of comparative wage rates data; cost and budgetary funding shortage a consideration of weight in reaching a balance between interests; determination of award for a package of measures including: new classification structure, wage increases with targeted attraction and retention component, salary packaging, productivity offset measures, 12-hour shift and extended hours facilitation, continuing education accelerated advancement entitlement, increase to night shift loading, preservation of conditions secured by superseded agreement, and dispute settlement procedures.

[1] These matters arise from the termination by Bacon C on 24 July 2002[1] of bargaining periods instituted by the Australian Nursing Federation (the ANF), acting through its Queensland Branch. The bargaining periods were directed respectively to two respondent employers, the Queensland Department of Health (Queensland Health) and the Mater Misericordiae Health Services Brisbane Limited (the Mater).

[2] The ANF and the two respondent employers are among parties bound by an expired but partly extant certified multiple business agreement, the Queensland Public Health Sector Certified Agreement (No 4) 2000[2], (the EB4). The same three entities are parties bound by the Nurses (Queensland Public Hospitals) Award 1991[3], (the QPH Award). Queensland Health and the ANF are parties bound by the Nurses (Queensland Public Health Sector) Award 1992[4], (the QPHS Award).

[3] Those two awards, the parent awards, are the foundation of a more or less common classification structure for Registered Nurses and allied nursing classifications across public health sector employment in Queensland. The parent awards provide for conditions and rates that generally have a common but not invariably uniform application across all workplaces. The EB4 Agreement applied to a similar class of public hospital and health service facilities in which it covered several classification structures including nurses. It provided for a relatively uniform set of percentage pay adjustments across all classifications and for some common conditions for nursing staff across the public health sector. For health sector workers, other than nurses (with the minor exception of one small group), EB4 was replaced by the Queensland Public Health Sector Certified Agreement (No 5) 2002[5], (EB5) to operate from 1 September 2002 to 31 August 2005.

[4] The relevant bargaining periods were initiated by the ANF to secure a replacement for EB4 but covering only nursing classifications. The bargaining periods were terminated after Bacon C was satisfied as to a circumstance made up from two elements. The first was that, prior to the commencement of section 170MW, the wages and conditions of the relevant employees were determined by awards, (the parent awards), that were paid rate awards within the meaning of section 170LG of the Workplace Relations Act 1996 (the Act). Bacon C was also satisfied that, despite intense industrial action and extensive conciliation, there was no reasonable prospect of the negotiating parties reaching agreement during the bargaining period. Those considerations led him to accept that the circumstance identified in subsection 170MW(7) existed.

[5] On 29 July 2002, the President established a Full Bench to deal with the matters under section 170MX awards that were respectively proposed. Some outstanding issues were stated with more precision but the extent of matters at issue was not substantially reduced.

[6] The matters that remained at issue may conveniently be grouped under three main hearings:

· Primary Issues about "new" substantive content provisions relating to the quantum of pay increases based on work value or attraction and retention considerations; increased or new allowances and penalties such as qualifications allowance, night shift loading, meal break and in-charge entitlements covering all employees or some employees in particular classifications or locations;

· Preservation Issues about the form and degree of security to be provided to preserve conditions or policies maintained through EB4 or its predecessor agreements for employees subject to the proposed section 170MX award; and

· Productivity Offset Issues about proposals by the respondent employers for provisions that would arguably improve productivity in activities to be covered by the proposed awards. Those issues included such matters as expanded facilitative provisions for enabling 12 hour shifts and extended working hours, arrangements for special rosters, and working patterns for several specialist clinical units or remote locations.

[7] The Full Bench issued directions on 8 August, 3 September, 31 October and 9 December 2002, and 13 March 2003, about the arbitration of those issues. Under those directions the parties lodged written outlines of contentions, submissions, and statements of evidence together with voluminous evidential material.

[8] On 11 October 2002, the Full Bench ruled on a threshold point about contested jurisdiction to make an interim award[6]. After four days of hearing, on 25 October 2002 the Full Bench made an interim award[7]. That award contained provisions about salaries, workload management, and preservation of rights under EB4. An increase of 3.8% was applied to all salaries within the existing classification structures for Registered Nurses and related classifications under the two parent awards. Provision was also made by the interim award for an agreed process for workload management founded upon nursing hours per patient (HPP) assessment criteria. The Full Bench refused to make an interim award for the qualifications allowance claimed.

[9] In the decision associated with the interim award, the Full Bench sought to encourage the parties to concentrate their presentations about any final award around the limits within which an arbitral determination of outstanding issues could be expected to operate:

"[14] We indicate to the parties that we consider we will be assisted if in their preparation for the completion of these proceedings they address the following points:

(1) The final awards sought by all parties imply the need for an attraction and retention component in classification rates. What justification or rationale exists for differentiation in such components between existing or proposed classification levels? Can the parties supply any evidentiary basis from which inter-sector problems of attraction and retention might be established?

(2) As we have indicated in relation to the issue about qualifications allowances, we are not satisfied that it is appropriate to make provision by interim award without a full presentation of cases. In relation to our consideration of the issues raised for our final determination, the parties should consider and address us on the scope for an accelerated advancement provision or similar salary point recognition provision applicable to particular credentials connoting higher level post-graduate equivalent qualifications associated with competency and skills being used by the employee concerned.

(3) The employer parties propose and the ANF opposes provision in the final award for the implementation during the term of the award of the new Career Structure for Registered Nurses. If the award were to include the implementation and translation provisions sought by the employer parties, could it effectively do so without also making detailed provision for classification descriptions and criteria? Are such detailed provisions available? If so, in what way is it intended that they be incorporated in any award duty?

(4) Another point at issue is associated with those aspects of the classification structure. That is the question raised by the ANF about redressing an alleged anomaly in the classification rate for Level 3 Registered Nurse. We would be assisted by the preparation of material and submissions that consolidate the available evidence about the existence or significance of that anomaly and the respective approaches of the parties to any resolution through either the existing classification structure or the proposed new Career Structure for Registered Nurses.

(5) We note that the material points to the likelihood of an extensive list of items and provisions remaining at issue and submitted for determination by the Full Bench in making a final award. We would be assisted by, and we therefore require, the preparation and lodgment by the parties by close of business 26 November of material and submissions that focus closely on what determination is sought from the Commission and the consolidated evidential basis and grounds for the determination sought in respect of each item that remains outstanding as at 6 November."[8]

[10] Further hearings were conducted from 3 to 6 December 2002, after which the parties lodged full written submissions within a timetable completed by 26 February 2003. The Full Bench supplied the parties on 13 March 2003 with a Provisional Draft Award for purposes of closing submissions. The accompanying Direction noted that:

"6. ... The Provisional Draft reflects tentative conclusions, provisional analysis and points intended to test the positions advanced by one or other of the parties. The Provisional Draft incorporates footnotes that pose questions or propositions upon which the further oral submissions of the parties are invited. ...

7. ... The Full Bench seeks not to preclude the possibility of further agreements inconsistent with points raised by the Provisional Draft. Subject to that reservation, the Full Bench directs the parties attention to the questions posed in the footnotes to the Provisional Draft. The Full Bench may be assisted by further submissions responsive to those questions or to other aspects of the content of the Provisional Draft."[9]

[11] The concluding phase of the hearing was conducted from 19 to 21 March 2003. Interposed within those hearing days were a series of conferences between the Full Bench and the parties jointly or separately. Those conferences were held with the consent of all parties and conducted without prejudice against the background of the provisional views indicated in questions posed by the Full Bench.

[12] In the substantive hearings Mr S. Howells with Ms S. Moody, of counsel, instructed by Mr G. Rebetzke, solicitor, appeared by leave for the ANF, with Mr M. Dougherty and Ms G. Hawkesworth and Ms K. Barry; Mr J. Murdoch SC with Mr A. Horneman-Wren, of counsel, instructed by Ms A. Fitzpatrick, solicitor, appeared by leave for Queensland Health and the Mater with Ms G. Wallace and Mr T. Barlow.

[13] In broad summary, the ANF sought the arbitral determination of a single section 170MX award to apply to all Queensland Health and Mater facilities. The provisions claimed by the ANF may be conveniently grouped under one or other of the three headings of issues outlined at [6]. The ANF claims raising Primary Issues may be summarised as claims for the following provisions:

13.1 An 18% pay increase, over a two year term of award, for all classifications, inclusive of a 6% attraction and retention component to align nurse's rates with those of other graduate professionals; plus a further 9% relativity adjustment increase for proposed Nursing Officer (NO), NO3 and NO4 classifications said also to be necessary to conclusively remove an anomaly associated with lack of access to shift and penalty loadings at those levels. As noted at [9], the ANF initially resisted the introduction into the section 170MX award of a new classification structure. The structure was proposed by Queensland Health on the basis of in principle agreements. By the close of proceedings the ANF effectively conceded that the new structure should be introduced in the manner proposed in the Commission's Provisional Draft Award and co-operated in refining the necessary detail.

13.2 A nursing qualification allowance of 4% of base wage for Hospital or Graduate Certificates; 6.5% for Post Graduate Diploma or degree, other than first degree in nursing; and 7.5% for Masters or Doctorates;

13.3 An allowance of $16 per week for an Enrolled Nurse, (EN), who holds a Medication Endorsement;

13.4 An increase in night shift allowance from 15% to 20%;

13.5 A 12% allowance for NO1 in charge on a shift;

13.6 A right for an employee who works night shift only to be treated as a continuous shift worker for the purpose of additional annual leave and leave loading;

13.7 Compulsory 30 minute meal breaks between 4th and 6th hour from commencing shift, in default of which overtime accrues until the meal break is taken;

13.8 Conditions governing breaks between shifts to be revised to reinforce 10 hour minimum; and to treat any return to work or a phone call as a recall to work triggering rest break entitlement;

13.9 Time off in lieu of overtime to accrue in a manner loaded by overtime rate factors;

13.10 Minimum annual conference study leave entitlement of five days paid leave per year;

13.11 On-call staff required to provide advice by phone and without recall to hospital to be paid at overtime rate for that time;

13.12 Imposition of a restriction on redeployment of an employee rostered on for work in a clinical unit on a public holiday but not required to work in that unit;

13.13 Locality Allowance, payable to public service nursing employees under a Public Service Act 1996 (Queensland) Directive, to be available to all public sector nursing staff in relevant locations;

13.14 The Remote Area Nursing Incentive Package (RANIP), a package of benefits approved by the Queensland Cabinet to encourage recruitment and retention of Registered Nurses (RNs) in remote areas, to be made available also to ENs and Assistants in Nursing (AINs);

13.15 A right to credit for nursing experience under a previous employment when determining entry level pay point;

13.16 Expanding to all employees using or assisting in using x-ray and radium equipment, an allowance of $6 per shift normally payable under the QPH Award to RNs or above required to use x-ray apparatus in the absence of a radiographer;

13.17 Payment for Patient Escort Duty at ordinary time or overtime rates consistent with a provision agreed in principle about the operation of clause 12(i) of the QPH Award;

13.18 A joint review of employee car parking facilities and entitlements to be conducted, referenced to make recommendations on several issues about the availability of affordable, secure parking.

[14] In relation to what we have described as the Preservation Issues, the ANF sought to have included in the final award a set of provisions that would secure or extend the relevant entitlements. Over the course of the proceedings, with some guidance from the Full Bench, the parties arrived at several compromises. Elements of some provisions that had been at issue were agreed upon for inclusion in any final award. Thus, we take the parties to have effectively agreed, or to have acquiesced in a form or provision about the following preserved or modified conditions and matters to be included in the award ultimately determined: categories of employment including casual employment; salary sacrifice entitlements; AIN targeted certificate allowance; Integrated Mental Health Services Special Conditions of Employment; Mental Health Environmental Allowance; Nurse's uniforms entitlements based on EB4; Hyperbaric Allowance based on EB4; Dispute Resolution Procedures; Hours of Work limitations, flexibility and loadings for Directors of Nursing (DON) and Assistants Directors of Nursing (ADON).

[15] The preservation or enlargement of another group of provisions about more generalised conditions, processes or entitlements was also claimed by the ANF. For the most part, Queensland Health did not take issue with the relevant conditions being maintained as entitlements but it opposed the ANF claim for specific clauses in the final award securing the entitlement against any change in policy. The resultant set of preservation issues included conditions, policies or employer commitments covering consultative arrangements about Organisational Change and Restructuring; District Consultative Forums; Collocation of public and private sector health facilities; and Review of Work Practices. Other subjects of the claim concerned the retention of undertakings about: job security; graduate nurse employment; indirect employment arrangements; parental leave; long service leave; industrial education leave; accommodation assistance; and, measures to facilitate freedom of association including assistance to union delegates.

[16] The parties remained at issue about this aspect of the claim up to the most advanced stage of the hearing before us. It was common ground that EB4 and EB5 each included provisions that either adopted or expressed policy positions or entitlements about those general subjects, acknowledged by Queensland Health to be applicable for the life of the respective agreements.

[17] The Full Bench on several occasions indicated that it saw substantial difficulties about the use of the power in section 170MX to determine provisions covering general processes, conditions or matters dependent upon agreed application of policies or undertakings arrived at through past bargaining. Against that background, the Full Bench included in the provisional Draft Order a proposal for consideration and report by the parties. That proposal was based in part upon a provision agreed by the parties to EB5. It also was derived in part from the acceptance by Queensland Health that it would be appropriate for the award to include a provision that stipulated that conditions contained in EB4 and listed in a schedule, would continue to apply as Queensland Health and Queensland Government policies.

[18] Both parties acquiesced in, or did not demur from, that provisional expression of view, subject to one qualification. The qualification concerned the scope for variation of any conditions thus preserved. The ANF objected to the operation of any variation made without its agreement. We have determined awards in a form that addresses that issue in clauses 5.4.1 and 5.4.2 and Schedule 3.

[19] Finally in this context, we note that the ANF advanced certain counter-claims or points in relation to some of the Productivity Offset Issues. To the extent that those points were pressed or not compromised they are discussed in context with the claims made by the employers, to which we now turn.

[20] The employer parties each presented a draft award to apply respectively to the Queensland Public Hospital sector generally and to the Mater Hospitals. Those drafts set out the provisions sought or agreed upon as the appropriate outcome of these proceedings. The proposed award content generally reflected positions that had been put during the bargaining periods.

[21] The employers' joint submissions proposed the following matters should form the core of the final awards:

(a) Appropriate baseline wage increases for all classifications;

(c) The new career classification structure for NO3 and above approved by Queensland Health to better align wages and classification descriptions with contemporary health care roles and functions and modes of service delivery; and to address the alleged anomaly for the current RN3 classification by a proper translation of the positions, roles, or functions into the new structure; and

(d) Agreed workload management provisions, including the grievance procedure for workload issues.

[22] In relation to the most significant of the primary issues the employer parties proposed a three year term for the award. Over that term two further basic increases of 3.8% should be applied. The first, 13 months after the similar increase already awarded as an interim measure to existing classifications and the second 13 months later. In the closing stages of proceedings, Queensland Health conceded that it would be consistent with that proposal to apply the formula as an increase of 3.8% or $25, whichever is the higher, matching the tapered increases applied in EB5.

[23] The employers also proposed, as a discrete provision, an Attraction and Retention package. The main elements of that package were the implementation of the new Nursing Officer Career Structure, with NO levels 3 to 7 replacing existing RN3, 4 and 5 levels; and RN1 and RN2 to be translated to corresponding NO1 and NO2 paypoints. The structure was developed under the auspices of the Ministerial Task Force: Nursing Recruitment and Retention. Apart from pay rates and some details, the structure had been agreed in principle between the parties by the time the hearing of evidence was commenced.

[24] The employers proposed also, as a discrete provision, an attraction and retention payment of 2.7% to NO1 positions only, before other adjustments. Queensland Health indicated that award conditions sought by it, as productivity offset measures, to facilitate 12-hour shifts and to formalise a Fly-in-Fly-out (FIFO) package would serve as attraction and retention measures to supplement the RANIP scheme in alleviating staffing problems in remote communities.

[25] The Productivity Offset Issues were generated by six claims made by Queensland Health for award provisions relating to:

25.1 FIFO: An arrangement that Queensland Health described as included to assist in staffing and service delivery in communities for which difficulty arises in finding resident staff. Under FIFO conditions, an employee who volunteers for the duty, will work 12 hour shifts over a four week 14 days in (two weeks on two weeks off ) cycle. Special conditions of employment apply under the arrangement. The need for the provision was disputed by the ANF. It stated it had no opposition to the concept of a FIFO arrangement but it must be compatible with existing award conditions. The ANF also disputed that FIFO arrangements had been raised during the bargaining period.

25.2 An Extended Hours of Service provision whereby shift work and associated hours arrangements and conditions provided for under the QPH Award can be applied to employees engaged in community health service settings, and particularly under Part D of the QPHS Award. Public Service employed RNs in Eventide Homes, or under former specific public service conditions could be accorded the same conditions as non-public service staff with whom they may be working[10]. The proposed measure was linked with a theme for productivity improvement not fully developed by Queensland Health: the amalgamation of the QPH and QPHS Awards. The ANF opposed the provisions. It contended that award amalgamation was not before the Commission. The ANF contended that where extended hours arrangement were necessary it had joined with non-nursing staff in making "subsidiary agreements". An example given was the Queensland Mental Health Services Certified Agreement 1998 (the QMHS Agreement). The ANF sought to preserve those conditions. The ANF proposed the terms of the QMHS Agreement as a model for any expansion of extended hours arrangements for other nursing requirements outside the current acute public hospital setting.

25.3 Integration of Mental Health Services whereby the substantive rights and duties under a subsidiary agreement, (the QMHS Agreement), varying existing award terms and conditions will be specifically preserved against the operation of a section 170MX award. That proposal adopted the form of preservation proposed by Queensland Health. We take that provision to have been agreed, but in any event determine to include it in the final award.

25.4 On-call Home Visiting & Telephone Counselling Services currently associated with another subsidiary certified agreement the Royal Childrens Hospital Paediatric Oncology Outreach Service Certified Agreement 2002. That agreement makes provision for specialised on-call home visiting and telephone counselling currently associated with the Paediatric Oncology Outreach Service. As we understand, the positions put by the parties in response to the Provisional Draft Award acquiesced to a provision which will preserve the existing arrangement and provide for extension of it by agreement to accommodate whatever need may arise for similar services to be provided.

25.5 Implementation of Twelve Hour Shifts in workplaces other than the Nambour Hospital and the Mater Hospital for which subsidiary agreements have been negotiated[11]. The ANF resisted the simplified provision proposed by Queensland Health. Again it sought to have all provisions of the relevant subsidiary agreements incorporated in the award. However, the ANF accepted that similar arrangements might be extended by mutual agreement between the employer and the ANF. By the conclusion of the proceedings, the parties effectively concurred with a provision proposed by the Full Bench for inclusion in the award based on Queensland Health's' approach, save for one point. The ANF maintained that a key component of the two current 12 hour shift arrangements is that employees have the option to work either a 12 hour shift or an 8 hour shift. Nurses who do not elect to work a 12 hour arrangement are not obliged to leave the clinical unit if a 12 hour shift arrangement is introduced for it. Although we have not imposed the condition sought by the ANF, we have determined the content of an appropriate clause that gives effect to our view of the submissions made on that issue[12].

25.6 Registered Midwives - Royal Women's Hospital Birth Centre. That Centre operates under a model of care allowing the midwife to follow the mother through the entire birth. Special conditions have been developed, it appears informally, for those associated with the model. The conditions include an annualised salary compensating for ordinary hours and most penalty entitlements. Queensland Health acknowledged that the conditions are outside the safety net awards. The ANF initially claimed that no issue about the arrangement had been raised during the bargaining periods. It conceded an appropriate salary rate based on salary averaging for nurses in the core area was being negotiated[13]. In submissions in response to the Commission's Provisional Draft Award, which included the provision claimed by Queensland Health, the ANF indicated agreement had been reached on a proposed clause. It also conceded that a demand by Queensland Health during the bargaining period for a general facilitation of subsidiary agreements was sufficient to bring a determination of the process agreed within subsection 170MX(3).

[26] The ANF presented an extensive body of evidence and evidential material in support of the claims made for substantial wage increases and improvements to conditions. That body of evidence was marshalled around two major themes: the existence and impact of severe shortages of nursing staffing throughout Queensland; and, changes in the work value of nurses. Similar themes have been developed in recent arbitrations of nursing pay rates and conditions throughout Australia. The ANF also drew upon comparative data about wage rates and conditions established for nursing staff under awards or agreements in States other than Queensland.

[27] The ANF put its case within a framework of contentions that may reasonably be summarised as follows:

· over the past four bargaining rounds, nurses were integrated within the bargaining process and outcomes for the Queensland public health sector generally. That integration produced a failure to address chronic disparities between the rates of pay for graduate nurses and those for other graduate professional occupations, and between nurses' rates in Queensland and those that apply to nurses in other States;

· a significant increase in the role, function and work value level of Level 3 Registered Nurses (RN3) is manifest. The increase had not been matched by the adjustment necessary to remove a recognised relativity anomaly with RN2, or to reflect changes made in New South Wales and Victoria to recognise devolved responsibilities in management, administration, human resources and budgetary control for counterparts to RN3;

· a proper valuation of nurses and nursing work had not been addressed for many years. The rates of pay of nurses had not been subject to comprehensive work value review since 1987;

· A significant chronic, continuing and increasing shortage of nurses exists within the facilities conducted by Queensland Health and the Mater. The extent of shortages is not unequivocally acknowledged by Queensland Health. The shortage is manifested particularly in relation to nurses prepared to work on a permanent full time basis. The shortage, and the impacts of it, are substantial grounds upon which increases to rates of pay and the changes claimed to conditions of employment should be granted. The industrial merits, the public interest, and attraction and retention considerations relied upon by the ANF are sustained by reference to those grounds.

[28] The ANF evidence incorporated historical references, evidential material, and analytical opinion about wage fixation and collective bargaining outcomes for nurses, and about the conditions of employment most in issue in the competing draft awards. For that purpose, evidence was mustered from several officers and staff well versed in an extensive literature about policy issues and responses in public health administration and nursing. In that first category were Kym Barry, Professional Officer, QNU Branch; Mark Dougherty, Industrial Officer, QNU Branch; Elizabeth Mohle, Project Officer, QNU Branch; and Nicholas Blake, Senior Federal Industrial Officer, ANF.

[29] The first three of those witnesses added supplementary affidavits of evidence and developed their testimony in response to evidential issues raised in the respondent employers' presentation. It is neither practicable nor necessary for our decision to attempt to summarise what became a voluminous mass of evidence. Extensive secondary material drawn from research or official policy formulations and inquiry sources was incorporated as attachments to affidavits. We discuss aspects of the material that we consider to be of greatest weight in our conclusions about particular evidentiary or merits issues. A summary of the sources of evidence is set out at Appendix 1 as to witnesses and Appendix 2 as to exhibits.

[30] The ANF also lead evidence from a representative array of nursing employees and some selected other public health service specialists. This evidence was directed particularly to the impact of change upon the work level within the experience of the particular witness; to perceptions of staff shortages and the impact of these shortages in particular areas; and, to opinions about the benefits or merits of our making changes to particular conditions of employment.

5. THE JOINT CASE PRESENTED BY QUEENLAND HEALTH AND THE MATER:

[31] The Respondent employers jointly opposed those elements of the ANF claim that went beyond matters sought or conceded in the awards they proposed. Without attempting to be exhaustive, the broad propositions propounded in opposition to the case put by the ANF may be summarised as follows:

· the ANF evidentiary material was flawed by a failure to accurately represent and reflect the fact and substance of four settlements between the parties reached through the enterprise bargaining process since 1994;

· no comprehensive or conceptually adequate work value analysis has been presented or attempted by the ANF. Such a presentation would not have been consistent with the primary functions of the arbitration required under section 170MX in the circumstances;

· the core increases to wage rate for nurses proposed by the respondent employers are consistent with other recent public sector wage outcomes, and would be affordable within anticipated budgetary limits;

· No nursing workload crisis in Queensland has been or could be established. References to comparative staffing levels, increased patient acuity, reduced bed numbers, increased throughput and decreased lengths of stay, do not establish a nursing workload crisis. No critical shortage of nurses exists in Queensland. Staffing levels are improving when measured in terms of ratio of Full-Time equivalents (FTEs) to beds or occasions of service to FTEs. Some "intensification" of nursing work is manifest. Any such factor should be assessed in perspective with: technological innovations that reduce need for nursing care; improved bed utilisation measures compatible with constant levels of activity and approved staffing; changes over time in data collection methodology about occasions of services; and, with lower patient acuity levels.

· Even if the Commission were to accept that that workload has intensified in association with staffing resource contraction, on established industrial principles no justification for pay rises of the kind and at the levels claimed is made out. Workload issues should be best addressed through work management processes, flexible staffing techniques and staff reviews and development.

· In the era of enterprise bargaining, wages cannot now be fixed on a principle of maintaining national consistency, or of reflecting so called "national standards".

· The Queensland employers have devised appropriately targeted attraction and retention measures including, for purposes of the section 170MX award, a special payment at RN1, and salary provision for new classifications replacing RN3, 4 and 5. Attraction and retention problems are not uniform; locally specific measures are usually the most appropriate response. Evaluation of the benefits of some measures adopted by the respondent employers is not completed. Untargeted measures will not decrease demand for nursing positions, or increase the supply of registered nurses.

· The cost of implementing an award containing the provisions sought by the ANF would generate a funding shortfall in excess of $114 m for Queensland Health in 2003 - 2004 for wages component only. No provision exists in the Queensland Budget for the costs of non-wage provisions claimed, estimated to amount to around $223m. If Queensland Health is forced to absorb the unfunded shortfall of the cost of a section 170MX award based on the ANF claim, significant detriment to the public health system will be caused. Among other effects detrimental to the public interest, would be a forced curtailment of expenditure on other services. Almost inevitably a flow-on of wage increases to private sector nursing facilities in Queensland would be stimulated if the Full Bench were to make an award in the terms sought by the ANF.

[32] Those propositions were supported by a body of evidence and analytical material that more or less matched the volume of the evidence presented by the ANF. The case presented by the respondent employers was built substantially upon five affidavits attested to by Gloria Wallace, State Manager, Organisational Development for Queensland Health; three affidavits each from Bruce Hayward, Team Leader, (Remuneration and Conditions) for Queensland Health and Terry Meehan, Zonal Manager, North Zone, Queensland Health. In addition; supporting evidence was presented about the relative costs of elements of the ANF's claims, and the provisions proposed by the respondent employers; the budgetary constraints within which Queensland Health operates; and, on specific subject matters raised in the evidence of ANF witnesses. The sources of the evidence and evidentiary material relied upon are also listed at Appendices 1 and 2.

[33] No issue of substance was generated between the parties as to the principles that should guide us in the determination of these matters. It was common ground that an award or awards should be made under 14.

[34] That consensus did not extend to a joint acceptance of the extent to which this section 170MX arbitration should properly be a vehicle for a "special case" or "work value" fixation of outcomes. In its closing submissions, the ANF contended that it could properly rely upon the notions inherent in the traditional work value and special case principles as a basis for an arbitrated outcome.

[35] We accept that such notions may be relatively supportive of the industrial merits of particular provision claimed, in a general sense. However, for reasons that we will develop when considering the ANF case on work value changes, it would be unusual for a Full Bench to determine a matter of this kind on the basis that a section 170MX(5), allow considerable flexibility in the selection of guiding reference considerations. The Full Bench is not constrained by principles or precedents formulated for purposes and circumstances unrelated to the particular matter before it. However, when such a principle is invoked for application in an arbitrated determination, it should be applied in a manner consistent with the use of it for the purposes and circumstances for which it was formulated.

[36] Apart from that point, the parties were otherwise not in dispute about the principles that should guide the Full Bench in arbitration of this matter. The differences between them were about degrees of weight and emphasis or inferences from substantially uncontested facts. The respective submissions about the considerations to which paragraphs 170MX(5)(a) and (e) direct the Full Bench to have regard, reflected such differences.

[37] We have had close regard to the matters that were addressed during the bargaining period, and to the extent to which the conduct of the negotiating parties during the bargaining period was reasonable. We do not consider that either of those considerations gives rise to any point of sufficient substance to affect our determination of the content of the awards to be made in these matters. The determination we make is formulated substantially around three other considerations listed in subsection 170MX(5): the merits of the case; the interests of the parties and public interest; and, improved productivity in the public health activities concerned.

[38] As we have noted, the parties were at issue about the content of the final awards to be made and about the industrial merits and particular considerations relevant to the merits of several claimed provisions. We have already summarised the primary issues, the preservation issues, and the productivity offset issues presented for our determination.

[39] For the purposes of that determination it is necessary that we form and pronounce our view about several secondary issues. Those issues were generated around considerations upon which each of the parties relied in advancing or contesting provisions for insertion in the final awards. The secondary issues were about :

39.1 the degree and impact of any shortage of nursing staff or work load intensification in Queensland public health services;

39.2 the scope for treating attraction and retention factors as a determinative consideration in fixing conditions and classification rates for nursing staff;

39.3 the weight to be attributed to work value and relativity considerations in the determination of the disputed rates;

39.4 the extent to which comparisons of the rates of pay of nurses or other health sector workers throughout Australia or Queensland should be a consideration of determinative weight in making the award; and

39.5 the estimated cost impact of any award determined and the degree of adverse impact on matters of public interest likely to be caused by increased cost elements for which no budgetary funding exists.

7. SHORTAGES OF NURSING STAFF, WORKLOAD INTENSIFICATION AND ATTRACTION AND RETENTION CONSIDERATIONS:

[40] It is convenient to group the first two secondary issues under one topic heading. Although different questions are posed, resolution about the second is dependent upon conclusions about the extent and nature of nursing workforce shortages.

[41] The issue of whether or not there was a "chronic" shortage of nurses in Queensland was addressed at length by both parties. We consider that much of that debate turned upon a confusion and a lack of agreement about terminology, and the dynamics of the demand and supply relationship being described. Thus, statistical measures of "vacancies", "empty places on rosters", activity levels, use of agency and casual staff and other indicators of staffing resource levels generated much, sometimes heated, debate. We do not deny that room for much the argument about the underlying state of the level of nursing resources exists. However, for the purposes of the determinations we must make, the points and counterpoints between the parties about the extent and nature of nursing shortages effectively reduce to a single issue. It is one about the weight that should be given to shortages and vacancies as a consideration in our determination, and what relevance is properly to be attached to that consideration in the determination of particular provisions that should be included in the final awards.

[42] The ANF summarised its position in its written submission:

"The contention of the ANF is simple. There is a chronic nursing shortage, that is, there is an insufficient number of nurses who are prepared to participate in permanent employment in the Queensland Public Health Sector."[15]

[43] In support of that and related propositions, the ANF canvassed evidence from an array of witnesses at workplace level. It critically analysed the statistical and other aggregate estimations or opinion evidence adduced by Queensland Health[16].

[44] The conclusions derived from the array of ANF material might be more exhaustively stated but for our purposes they sufficiently appear from the following extracts of the ANF's closing submissions:

"It appears to be well recognised by all except Queensland Health that there is a significant shortage of nurses in the labour market, not only locally, but worldwide. Queensland Health's own evidence discloses at least 807 nursing vacancies, as at October 2002, in a workforce of some 16,000 FTE nurses, noting that this does not include temporary vacancies. Queensland Health's own evidence also discloses a turnover rate of at least 10.4%. ...

Whatever the true level of vacancies, there is a significant body of evidence that there is a serious chronic shortage of nurses willing to participate in permanent employment and that this is causing problems and the potential for misadventure in the public health system"[17]

[45] The ANF supplemented those conclusions with details primarily drawn from instances given by individual witnesses of the various impacts at ward level which may be attributed to staff shortages. An exhibit based upon Ms Mohle's evidence for the ANF about data extracted from published Annual Reports of Queensland Health, pointed to a relative decline in Queensland of FTE staffing per Occupied Bed for nursing and domestic and other staff[18]:

From that and like data, Mr Howells argued plausibly that the consequence must be an intensification of work demands across the full spectrum of nursing responsibilities.

[46] Among other results that the ANF attributed to the nursing shortages were: diminished capacity to provide safe patient care; the occurrence of or potential for "patient incidents"; shifts unable to be filled due to no casual or agency staff available and nurses working short staffed; performance of double shifts by permanent staff, or of excessive overtime, and of mixed shifts by part-time staff; high turnover of staff; problems with skill mix due to high turnover, and high utilisation of casual and agency staff; nurses experiencing high levels of anxiety due to workloads and skills mix imbalance; nurses becoming stressed and dissatisfied with work; and, widespread recruitment and retention difficulties through the State.

[47] The ANF contended that the combination of nursing shortages and impacts attributable to them gave rise to a consideration of substantial weight. It was relevant to the merits in support of increases in salaries and other terms and conditions. It also established public interest and other considerations to which regard should be paid under subsection 170MX(5).

[48] Queensland Health asked the Commission to distinguish the Queensland situation from that pertaining in New South Wales. It did so particularly to dissuade the Commission from too readily applying reasoning adapted from the decision of the Full Bench of the Industrial Relations Commission of New South Wales, (the NSWIRC), in January 2003. That decision granted wage increases in part to address a consideration founded upon a conclusion that there is a shortage of nurses in that State. Mr Murdoch declared:

"My clients have presented you with the facts, that establish that over a period of years, they've planned and they've taken appropriate, targeted measures, as well as measures of more general import to ensure that there's an appropriate supply of nurses within Queensland Health."[19]

[49] The position put in Queensland Health's submissions was founded in particular on the evidence of Ms Wallace. She outlined a range of initiatives implemented to rectify a shortage of nurses, and summarised Queensland Health's position on the issue of attraction and retention of nurses:

"Queensland Health's consideration of attraction and retention requirements has occurred within the context of all of these issues. Queensland Health maintains its position that there is not currently a major, general problem of attraction and retention of nurses within Queensland health, as a result of the multi-factorial strategies established within the Nursing Recruitment and Retention Taskforce. Some specialties and locations are harder to recruit to than others and this results from a range of professional and social issues that are being addressed through ongoing wide ranging strategies."[20]

[50] That position was also reflected in the submission made by Queensland Health to the Senate Community Affairs References Committee - Inquiry into Nursing. That submission acknowledged a nurses' shortage in Queensland, analysed it, and elaborated upon the strategy adopted to overcome the situation:

"In 1996, Queensland Health implemented a nursing supply management strategy that involved setting long term sustainable targets for intakes into nursing that would never need to be reduced and that would only have to be increased about every five years or so when considered necessary. This supply management strategy was designed to ensure that the lower end of the nursing age profile was maintained and to provide stability for University nursing schools within a highly competitive tertiary sector. (This is important since graduate positions are difficult to regain once they are lost.)

Implementation of the supply management strategy also meant that rather than continually trying to balance nursing supply and demand, Queensland would consciously move towards a low to moderate supply surplus. This was done in recognition of the fact that the cost of undersupply (i.e., reduction in clinical services) is more serious than the cost of oversupply (i.e. difficulty in obtaining immediate employment). As a result, Queensland had been somewhat insulated against the nursing shortages experienced by other States where the university intakes were reduced in the mid-to late-1990s."[21]

[51] In that submission, Queensland Health also acknowledged that an increase in supply of nurses "... will solve the medium to long term workforce problems but will not address any shortages that occur in the next five years. The only short-term strategy available is to encourage nurses who are not currently in the labour force back to nursing[22]".

[52] We have attempted to form a concluded view as to the state of the facts that may be a key to the issues of interpretation reflected in the parties' submissions. For that purpose we have had regard to an updated version of the National and State skill shortage list - Australia 2003 which is a publication of DEWR. The February 2003 data is an updated version of Exhibit ANF11 Attachment KB1. The following table is extracted from the February 2003 data. It sets out the shortage situation for nurses.

NATIONAL AND STATE SKILL SHORTAGE LISTS AUSTRALIA 2003

Skill Shortage List - Professionals February 2003: Registered Nurses

[53] It can be seen from the table that, at February 2003:

· there was a national shortage of nurses across Australia;

· in Queensland, state wide shortages were recorded for RN and EN's generally, and in each of the specialist classifications which were measured.

[54] Those conclusions are broadly borne out by a comparison of number of vacancies as the percentage of total nurses at each level of the classification structure.

[55] We are obliged to make a determination about whether or not an attraction and retention component should be awarded and, if it should, to whom, and in what quantum. For the purpose of arriving at a view about the existence and nature of any relevant shortages, we are satisfied that most weight should be given to the results of a "snapshot" survey of permanent vacancies. The survey was conducted by Queensland Health on 21 October 2002 at a District Level and collated into totals. We accept the evidence of Ms Wallace that the results of the snapshot were validated by District Managers and that it provides the most reliable data available to Queensland Health. Ms Wallace claimed:

"It is actually producing data that is the closest that we can get to the actual vacancy figures."[23]

[56] The following table is a compilation of number of vacancies disclosed as at the date of the survey in October 2002:

[57] The following conclusions may be reached from the table:

· The L1 and L2 RNs account for almost 80% of all vacancies, but the L1 vacancies are substantially higher than the L2 vacancies.

· The level and proportion of total vacancies which fall within the RN L3, 4 and 5 are relatively low.

· The total number and proportion of total vacancies is extremely low for AIN's. Whilst higher for EN's, it is still low in both absolute and relative terms particularly when compared with the RN's L1 and L2.

7.4 Conclusions about Awarding Entitlements Based on Attraction and Retention Considerations:

[58] We have little doubt that pressures upon the supply of skilled nursing in Queensland Health give rise to problems for patients, for staff, and for health administrators. On the evidence we are not able, nor are we willing to express a definitive or unqualified view about the degree of shortages, or about the relative impact of them. However, our acceptance that there are shortages and there are consequences of these shortages causes us to also accept that public interest and industrial merits considerations are raised by the circumstances of this case.

[59] The AIRC in exercising its discretion to grant a wage claim would not as a general proposition, do so on the basis of attraction and retention for particular classes or categories of employees. It has long been established within federal arbitral jurisprudence that arbitral tribunals consider it should be left within the province of the employer to determine such incentives in accordance with its policy settings. In this matter, issues related to attraction and retention elements in remuneration packages pervaded the bargaining period; they have dominated the hearing before us; and, the employer party has responded by itself seeking particular award provisions, selectively targeted. We have formed the view that, in the circumstances before us, we should depart from the usual practice adopted by the Commission and make award provisions based upon attraction and retention considerations.

[60] We reject the ANF's claim for across the board increases. We are satisfied that on the material before us, a case has been made out for targeted wage adjustments. We consider an adjustment should be awarded on the basis of attraction and retention of nurses at NO Level 1 and to a lesser degree at NO Level 2 level. That structure of targeted adjustments had some support from Queensland Health.

[61] In reaching our decision we have been cognizant of the relativities currently existing within the nursing structure and the fact that those relativities will be altered as a result of this decision. We have given careful consideration to competing factors which we must balance. Those factors include attraction and retention, changing internal relativities within the classification structure and costs. We consider that to grant an attraction and retention increase only to NO Leve1 1 would exacerbate the narrow relativity which currently exists between the top of Level 1 and the bottom of Level 2. Considerations of equity and effective impact in attracting and retaining Level 2 staff have some influence in our decision to not limit any targeted increase to NO1.

[62] We also have had regard to Queensland Health's submission that a targeted continuing education accelerated advancement allowance entitlement will have a considerable impact on Level 2 nurses who attain postgraduate qualifications. An entitlement of that kind would also depend upon it being a reward for a higher work value; any function in attraction and retention is nevertheless a factor to which we have had regard to in considering the impact of a relativity change between Levels 1 and 2.

[63] We have decided in the circumstances to grant a 4% attraction and retention increase at NO1 and a 2% attraction and retention increase to NO2.

[64] We have formulated and set those targeted increases at a level intended to complement the overall strategy implemented by Queensland Health to combat a shortage of nurses. Undue tension on relativities will not in our view be caused, particularly because the changes will be made in association with the implementation of the new classification structure benefiting those classified at NO3 and above, which will form part of the order arising out of this decision.

[65] The targeted increases are awarded on the basis that a case has been made out on attraction and retention grounds. Limitation of the increase to NO1 and NO2 levels is consistent with an overall approach we adopt in this decision. Any wage or allowance increase beyond the core wage increases must be fully justified on the basis of merit. No extension will be made to categories of nurses for whom such a case has not been made out.

[66] The ANF based a claim for across the board wage increases on changes in work value which it submitted had occurred since 1987. The ANF summarised its position as follows:

"173. The evidence discloses that there has been a dramatic change in the work value of nurses since the last occasion upon which that work value was assessed by an Industrial Tribunal in Queensland. That last assessment of work value was made in proceedings 30 July 1987 in the Queensland Industrial Relations Commission in 1988. The changes in work value demonstrated on the evidence in that fifteen (15) year period have included a significant change in the role and function of nursing staff and an increase and broadening of the tasks variously performed by these nursing staff; there has also been at the same time a radical change in the conditions under which nursing work is performed across the public health sector."[24]

[67] Under the heading, "Not a work value case", Queensland Health's submission stated that:

"... The conduct of a special case or work value claim is not consistent with, nor facilitative of, the expeditious resolution required in a s. 170MX arbitration.

1.12 The specific legislative context and associated basis of proceedings in this matter can be contrasted to the specific work value cases in both the Federal and Queensland jurisdictions to which the ANF refers in it submissions. In each of those matters, extensive evidence was heard over a considerable period of time and extensive inspections were undertaken. The cases were directed to comprehensive work value analysis.

1.13 So too, these proceedings can be contrasted with those recently conducted in New South Wales in respect of which a decision of the Industrial Relations Commission of New South Wales was delivered on 19 December 2002. There, 35 days of hearings were conducted in respect of the issues advanced and even then, issues concerning work value were not finally determined."[25]

[68] In Australian Education Union and another v Department for Education, Training and Employment[26] a Full Bench dealt with wage claims based on work value grounds. As to the approach which should be adopted to assessing change in work value in the context of an MX award, it stated:

"[151] Under the Commission's present Statement of Principles, a change in work value is one of the circumstances upon which wages/salaries may be increased without the application being regarded as a claim for wages and/or conditions above or below the award safety net. Nevertheless, the strict circumstances in which a change in work value justifies a change in salary or conditions remain. The Commission ought not to apply any different approach in a s.170MX arbitration."

[69] We endorse the position that a Full Bench dealing with a work value claim should assess the merits of that claim in the same way that it would an application brought in line with the wage fixing principles. We do not discern the ANF to have sought otherwise. The ANF relied in part upon work value considerations to justify its wage claim. Its position was succinctly summarised:

"2. ANF does rely upon the notions inherent in the traditional work value and special case principles as a basis for an arbitrated outcome that would confer significant wage increases upon nursing staff in Queensland"[27].

[70] The ANF submitted that the Commission should, in determining its work value claim, measure the change in work value for RN's over the period since the QIRC last conducted a work value inquiry, namely 1987. As such, it relied on a departure from the datum point provided for in the Wage Fixing Principles, namely, the date of the second structural efficiency adjustment allowable under the August 1989 National Wage Case decision_[28]_.

[71] In support of its submission that the appropriate starting point for RN's was earlier than the second structural efficiency adjustment the ANF relied on the provisions of the 1991 Work Value Principle which provided, inter alia:

"(c) The time from which work value changes in an award should be measured is, unless extraordinary circumstances can be demonstrated in special case proceedings_, the date of operation of the second structural efficiency adjustment allowable under the 7 August National Wage Case decision."_[29].

[72] The ANF also argued before us that it had demonstrated "extraordinary circumstances" and that a "special case" existed to justify the departure from the general datum point provided for in the work value principle.

[73] The work value principle was varied as a result of the Review of Wage Fixing Principles in 1994. The variations to the work value principle arose out of the following agreed position between the parties which emerged from conferences convened by the Commission:

"The parties agreed that work value considerations should have a continuing role in wage fixation. The Agreed Document states `any changes in minimum rates relationships should be dealt with on a co-ordinated basis with a party making the work value application having to show both a significant net addition to their own work value and justification of any changes in relative position in relativities across awards'.

The Commission endorses that agreement and has substantially adopted the Metal Trades Industry Association of Australia (MTIA) proposed wording on this matter."[30]

[74] The work value principle, as varied, reflected the agreement of the parties to the 1994 Review proceedings. Since 1994, the principle has remained unchanged. It forms part of the extant "Statement of Principles", Safety Net Review Wages May 2002 decision_[31]:_

(a) Changes in work value may arise from changes in the nature of the work, skill and responsibility required or the conditions under which work is performed. Changes in work by themselves may not lead to a change in wage rates. The strict test for an alteration in wage rates is that the change in the nature of the work should constitute such a significant net addition to work requirements as to warrant the creation of a new classification or upgrading to a higher classification.

Queensland Department of Health v Mater Misericordiae Health Service Brisbane Limited - PR931289 [2003] AIRC 518;

At a glance

Court

Decision date

Source

Judgment (586 paragraphs)

Queensland Department of Health v Mater Misericordiae Health Service Brisbane Limited - PR931289 [2003] AIRC 518; (16 May 2003)

Parties

Legislation Cited (3)

Cases Cited (1)