Specialist Diagnostic Services Pty Ltd t/a Dorevitch Pathology Workplace... [2018] FWCFB 4228 | Case summary

Specialist Diagnostic Services Pty Ltd t/a Dorevitch Pathology Workplace... [2018] FWCFB 4228 | Case summary | Zoe

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[1] Specialist Diagnostic Services Pty Ltd t/a Dorevitch Pathology (Dorevitch) is a private company that operates in Victoria with some sites in New South Wales. Its primary business function is to provide pathology and medical diagnostic services to health professionals in both commercial and Government organisations, such as hospitals. Dorevitch is currently covered by the Mayne Health Dorevitch Pathology Certified Agreement 2004 (2004 Agreement). The nominal expiry date of the 2004 Agreement was 1 July 2007. The 2004 Agreement is expressed to bind Mayne Health Pathology Pty Ltd t/a Mayne Health Dorevitch Pathology (as Dorevitch was then known) and the Health Services Union through its (Victorian) Branch No 1 and Branch No 4. The 2004 Agreement is a pre-reform certified agreement which continues to apply under Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.

[2] Dorevitch, the Health Services Union of Australia (HSU) and the Australian Nursing and Midwifery Federation (ANMF) have been engaged in periodic bargaining for a proposed replacement agreement. There was a period of bargaining which occurred in 2009-2010 but which did not result in any agreement being reached. A new round of bargaining commenced in 2016 and continued into 2017, during which employees of Dorevitch took protected industrial action.

[3] On 23 August 2017, the Minister for Industrial Relations for Victoria made an application under s 424 of the Fair Work Act 2009 (FW Act) in relation to industrial action being engaged in by Dorevitch and the HWU. On 25 August 2017, the Commission made an interim order[1] (Suspension Order) pursuant to s 424(4) of the FW Act to suspend the protected industrial action until further order of the Commission. On 4 September 2017, the Commission made an order pursuant to s 424(1) of the FW Act (Termination Order) to terminate the industrial action, on the basis that pathology services were a critical component of the delivery of health services and that the industrial action would threaten to endanger the life, personal safety, health or welfare of a part of the population through the limitation on the availability of pathology services. [2]

[4] The Termination Order was a "termination of industrial action instrument" as defined in s 266(2)(a) of the FW Act. In relation to such instruments, s 266(1) provides for the arbitration of outstanding bargaining issues through the making of a "workplace determination" as follows:

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[15] The parties have filed a number of draft workplace determinations setting out their respective positions on a wide range of issues which were the subject of dispute during bargaining. The parties' respective positions evolved and moved closer to each other over the course of the proceedings, and the final versions of the determinations sought by Dorevitch on the one hand and by the HSU (supported by the ANMF) on the other hand were provided to the Commission on 29 March 2018 immediately before the commencement of closing submissions.

[16] There is a contest between the parties as to which issues were not agreed at the end of the post-industrial action negotiating period on 16 October 2017. As earlier set out, s 267(2) requires that terms agreed as at that date must be included in the workplace determination; the Commission does not have the authority to arbitrate in respect of those terms. The identification of the non-agreed terms is therefore a matter of some significance to the exercise of power under s 267.

[17] It is not in dispute that the following matters were not agreed as at 16 October 2017 and must therefore be the subject of arbitration by the Commission:

classifications and rates of pay;

the nominal expiry date;

the definition of "shiftworker";

definitions of "union" and "unions";

whether the dispute settling procedure (which was otherwise agreed) was to be applicable to individual flexibility arrangements and the taking of parental leave;

whether paid leave was to be provided to employees participating in the dispute settling procedure;

whether Dorevitch should be required to provide reasonable training to employees being made redundant;

certificates of service;

rostering arrangements;

recall to work on overtime and other issues relating to overtime;

whether shift penalties should be indexed;

the public holidays entitlement;

whether employees may take a day off in lieu for working on public holidays;

the calculation of pay for public holidays;

public holidays for part-time employees;

provision of evidence to access personal/carer's leave entitlements;

the method of accrual of personal carer's leave

union facilitation provisions sought by the HSU; and

the maximum period for accident make-up pay.

[18] There was a large number of terms appearing in each party's draft determination which were agreed. They will be included in the final workplace determination which we will make. It is not necessary to determine whether these terms were agreed before or after 16 October 2017; even if they were agreed afterwards we see no reason why they should not be included in the final determination having regard to the matters identified in s 275(a)-(h).

[19] That leaves four matters in relation to which the HSU with the support of the ANMF contend there were agreed terms as at 16 October 2017 but which Dorevitch contends were not agreed, and one matter which Dorevitch contends was agreed but the HSU and the ANMF contend was not agreed. There is also an additional matter which, at the hearing, the parties treated as in dispute but which we consider to have in fact been agreed. We will deal with each of these in turn.

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[38] Dorevitch's pathology business provides clinical laboratory services to private and public hospitals and directly to patients on referrals from GPs and other medical specialists. Its laboratories and collection centres are located in Melbourne, regional and rural Victoria and some areas of southern New South Wales. It is one of Victoria's largest pathology providers, and is the largest provider to Victorian public hospitals and in regional and rural Victoria. Dorevitch is a wholly-owned subsidiary of Primary Health Care Limited (Primary Health Care), which accounts for approximately 36% of the private pathology market and is the second-largest industry participant.

[39] The principal services provided by Dorevitch consist of the following:

pathology services to acute inpatients in emergency departments, intensive care units and other patients admitted to public and private hospitals;

pathology services to residential care patients;

home visit services to collect specimens from patients' homes where their medical condition or immobility prevents them from easily attending collection centres;

specimen collection from relevant health care centres or collection centres and transfer to Dorevitch laboratories (courier services);

various types of pathology testing (to both inpatients and outpatients), including either at an on-site laboratory at a hospital or after transport to an offsite Dorevitch laboratory;

preparation of reports relating to pathology testing;

the provision of blood products for transfusion;

telephone or in person advice regarding pathology testing; and

pathology equipment calibration.

[40] Dorevitch operates 31 laboratories in Victoria and 2 in New South Wales, of which 20 are co-located with public hospitals, 10 are co-located with private hospitals and 3 are stand-alone facilities. For each of the 20 laboratories co-located in public hospitals, Dorevitch has a long term contract with the Victorian Government for the provision of on-site services. These contracts were obtained through competitive tender, involve prices that are on average lower than for the provision of services to the private sector, and with limited exceptions do not provide for inflationary increases in fees. Twenty of these laboratories are located in regional and rural Victoria. Dorevitch's greater presence in non-metropolitan areas distinguishes it from its major competitors. Dorevitch also operates a total of 638 pathology collection centres.

[41] Apart from the contracts with Victorian public hospitals, Dorevitch's revenue for the provision of pathology services are primarily paid by the Federal Government through the Medicare Benefits Schedule (MBS). Dorevitch is usually paid 85% of the scheduled fee because of bulk billing, which leaves no capacity to charge the patient a co-payment.

[42] Over 90% of Dorevitch's cost structure consists of three components: labour (the largest), real estate/rent and consumables. It has approximately 2,465 employees, of whom approximately 1,789 will fall within the agreed scope of coverage of the workplace determination we will make. Those to be covered may be categorised as follows:

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[46] The performance of Dorevitch as a stand-alone business within Primary Health Care's group of businesses is not separately reported publicly. Primary Health Care's annual reports since 2011 disclose the following in respect of the Primary Health Care group of businesses:

it has enjoyed about 25% in revenue growth since 2011, with about 40% growth in the pathology businesses (which include Dorevitch);

EBIT has been deteriorating since 2014, but this has been caused mainly by events outside the pathology businesses;

the group's businesses generated a significant cash surplus from operations for each year from 2011 to 2017, and has paid out dividends in each year; and

EBIT growth in the pathology segment since 2011 is 20%.

[47] An analysis of the financial position since 2011 does not take into account the reduction in the MBS payments for pathology services which occurred in 2010, so that if a 2010 to 2017 comparison is done, the growth in EBIT for the pathology segment of Primary Health Care was minimal. The differential between revenue and EBIT growth suggests that the profitability of the new revenue obtained through acquisitions is less than that of the existing revenue. A proportion of the revenue growth had been through acquisitions rather than organic growth. Nonetheless the EBIT to revenue ratio for the pathology segment of Primary Health Care is expected to be around 14% in the coming years.

[48] Prior to 1 January 2018, Dorevitch held the Federal Government contract for the assembly, distribution and testing of faecal occult blood test (FOBT) kits. However in 2017 there was a competitive tender for the contract, and it was awarded to Dorevitch's largest pathology industry competitor, Sonic Healthcare Limited. This contract had been worth about $90 million in revenue over three years. Work under the contract will have fully wound down by the end of 2018.

[49] The estimates of the effect of a 3% wage increase on Dorevitch's profit are in the range of a 4.2%-7.5% reduction. However Primary Health Care has not issued a profit warning about the pending workplace determination or otherwise publicly identified it as a potential risk to its business.

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[50] The 2004 Agreement came into effect on 22 December 2004 with a nominal expiry date of 1 July 2007. It contains the following classifications:

Collector Grade 1 Years 1-4

Collector Grade 2 Years 1-4

Collector Reliever Years 1-3

Collector Grade 3 Years 1-3

Courier Years 1-5

Courier Reliever Years 1-3

Scientist Grade 1 Years 1-7

Scientist Grade 2 Years 1-4

Scientist Grade 3 Years 1-4

Scientist Grade 4 Years 1-5

Scientist Trainee Years 1-4+

Cleaner Years 1-3

Laboratory Assistant Grade 1 Years 1-3

Laboratory Assistant Grade 2 Years 1-3

Laboratory Assistant Grade 3 Years 1-3

Storeperson Years 1-3

Storeperson working alone Years 1-3

Storeperson Advanced Years 1-3

Maintenance/Handy Person Years 1-3

Maintenance/Handy Person Advanced Years 1-3

Clerk Grade 1 Years 1-3

Clerk Grade 2 Years 1-3

Clerk Grade 3 Years 1-3

Clerk Grade 4 Years 1-3

Clerk Grade 5 Years 1-3

Clerk Grade 6 Years 1-3

Medical Laboratory Technicians Trainees Years 1-4

Medical Laboratory Technicians Grade 1 Years 1-8

Medical Laboratory Technicians Grade 2 Years 1-4

[51] The wage increases provided for in clause 9 of the 2004 Agreement were as follows:

3% from 1 July 2004;

3% from 1 July 2005;

3% from 1 April 2006;

1.5% from 1 January 2007; and

1.5% from 1 July 2007.

[52] The 2004 Agreement provides for a range of other conditions of employment which it is not necessary to detail, except to say that clause 5 provides that all terms and conditions in the Health Services Union of Australia (Private Pathology - Victoria) Award 2003 as at the date of the execution of the 2004 Agreement (2003 Award) were to apply "in total for the duration of this agreement or until it is replaced by another agreement between the parties" except where there was an inconsistent term in the 2004 Agreement in which case the latter was to prevail. The practical effect of this is that, to a significant degree, provisions of the 2003 Award incorporated into the 2004 Agreement by clause 5 remain part of the terms and conditions of employment currently applying to Dorevitch and its workforce.

[53] Clause 42 of the 2004 Agreement relevantly provides:

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[54] The evidence did not disclose that there was any bargaining for a new agreement after the nominal expiry date of the 2004 Agreement passed as contemplated by clause 42 of that agreement. However the change in the ownership of the Dorevitch business from Mayne Health to Symbion Health, and the subsequent takeover by Primary Health Care in 2008, undoubtedly served as distractions. In 2009, bargaining commenced between Dorevitch, the HSU and the ANMF. Dorevitch subsequently decided to seek five separate agreements covering collectors, scientists, technicians, couriers and other support staff (including laboratory assistants, clerical staff, storepersons, maintenance staff and cleaners). A proposed agreement applying to collectors, which provided for a 2-year enterprise agreement with 1.5% wage increases per year, was put to a vote and rejected. In August 2010 another proposed agreement covering collectors was put to a vote and rejected. The HSU campaigned against the approval of these proposed agreements. It appears that Dorevitch issued a notice of employee representational rights pursuant to the FW Act in 2012, but bargaining ended after one meeting with the HSU and the ANMF.

[55] In February 2016 and again in April 2016, the HSU requested in writing that Dorevitch recommence bargaining for a new enterprise agreement. There was initially no response from Dorevitch, which led the HSU to commence preparation of an application for a majority support determination pursuant to s 236 of the FW Act. However on 21 April 2016 the HSU was successful in arranging a meeting with Dorevitch at which Dorevitch's then CEO, Neville Moller, was in attendance. Other participants at the meeting were David Eden, the Assistant Secretary of the HSU's Victoria No.1 Branch (Branch), Ray Collins, an HSU Organiser, Scott Crawford, the Branch's Industrial Officer, and Dorevitch's Human Resources Manager, Rebecca Sekic. At this meeting, Mr Moller agreed that Dorevitch would engage in bargaining with the HSU. However when the HSU representatives attempted to schedule a program of bargaining meetings and a process for the exchange of logs of claim, the meeting became heated and ended up with Mr Moller walking out. Notwithstanding this Dorevitch subsequently issued notices of employee representational rights to its employees.

[56] On 2 May 2016 the HSU sent a letter to Dorevitch seeking a meeting date and time to progress negotiations, and on 20 June 2016 the HSU sent its log of claims to Dorevitch. There were further exchanges of correspondence, but no meeting was able to be arranged. On 13 July 2016 the HSU lodged an application with the Commission for bargaining orders pursuant to s 230 of the FW Act. This application was the subject of a conference before the Commission on 19 July 2016, at which Dorevitch agreed to a timetable of bargaining meetings with the HSU.

[57] Bargaining meetings then occurred on 4 August, 18 August, 1 September, 13 September, 5 October, 21 October and 1 December 2016. Jennifer Fraumano, an industrial relations consultant with particular expertise in the health industry, was engaged by Dorevitch as its bargaining representative and led the negotiations. There were exchanges of positions about various matters by correspondence in between these meetings. Dorevitch served a log of claims, but it did not contain any proposal with respect to wages. However in late November 2016 Dorevitch informed its employees, but not the HSU or the ANMF, that it intended unilaterally to increase its employees' wages by 2.4% effective from 3 December 2016. Dorevitch did not inform the HSU and the ANMF about this until the meeting on 1 December 2016.

[58] At or before the 1 December 2016 meeting, the parties agreed to use the proposed agreement from the 2010 negotiations as the working document for future negotiations. On 13 February 2017 the HSU sent Dorevitch a marked-up copy of this document which primarily sought to maintain existing entitlements but also added some new claims. There were further meetings on 20 February, 16 March, 11 April, 4 May and 19 May 2017. At none of those meetings did Dorevitch make any offer or proposal with respect to wages, but the parties continued to exchange their positions about other matters during the meetings and by correspondence.

[59] At this point the HSU, frustrated with the state of progress, apparently decided to launch an industrial campaign against Dorevitch in order to expedite a favourable bargaining outcome. On 13 June 2017 the HSU made an application for a protected action ballot order pursuant to s 437 of the FW Act. It also organised a mobile billboard, which said "Ditch Dorevitch, Fair bloody go, No pay deal since 2010", to tour metropolitan and regional areas. This aspect of the campaign was launched on 14 June 2017 outside Dorevitch's office at Heidelberg, shortly before a bargaining meeting was scheduled to occur there. When the HSU's representatives arrived at the office for the meeting, they were informed by Ms Fraumano, on instruction from Mr Moller, that the meeting was cancelled because of the mobile billboard. No further meeting was arranged at that time.

[60] On 15 June 2017 the protected action ballot order was made by the Commission. On 20 June 2017 Ms Fraumano wrote to the HSU alleging that Mr Collins had entered a Dorevitch site at Frankston the previous day to hand out leaflets to employees contrary to the right of entry requirements of the FW Act. On 21 June 2017 Dorevitch lodged an application in the Commission for it to deal with this alleged right of entry dispute. It subsequently complained about another entry by an HSU representative to a Dorevitch site at Wantirna South.

[61] On 13 July 2017 the results of the protected action ballot were declared, with employees voting to take protected industrial action. On 30 July 2017 the HSU notified Dorevitch of its intention to take protected industrial action on 7 August 2017 by way of a stoppage of work. On 1 August 2017 the HSU gave a further notification of protected industrial action by way of speaking to patients, their families and the community about its campaign during work hours from 5 August 2017. On 2 and 3 August 2017 the HSU gave further notifications of protected industrial action in the form of identified bans and the display of campaign material during work hours. On 4 August 2017 Dorevitch gave notices to its employees pursuant to s 470 of the FW Act of its intention to make deductions from their pay during certain periods of protected industrial action. On 6 August 2017 the HSU gave a further notification of protected industrial action by way of a stoppage of work on 14 August 2017. On the same day it also applied to the Commission for an order under s 472 of the FW Act to vary the proportion of the reduction to payments to employees in respect of the partial work bans.

[62] Dorevitch employees who were members of the HSU commenced taking protected industrial action in accordance with the notices given by the HSU during August 2017. On 7 and 8 August 2017 Dorevitch took employer response action by locking out named employees. On the evening of 7 August 2017, the HSU sent a text message to its members concerning the taking of employee response action in the following terms:

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[63] Later that evening, in an apparent response to this text message, Dorevitch sent an email to its employees stating that should employees take industrial action and not attend work the following day, "...this would not be protected industrial action as there are requirements to be met by FWC...Please ensure you attend to your rostered shift as rostered or there may be claims for unprotected industrial made against you". The HSU regarded Dorevitch's email as constituting a knowing or reckless misrepresentation concerning employees' workplace rights in contravention of s 345 of the FW Act, and on 9 August 2017 the HSU lodged an application in the Federal Circuit Court in respect of this alleged contravention.

[64] Also on 9 August 2017 the HSU applied to the Commission for an extension to the 30-day period for taking protected industrial action and for a bargaining order, and notified Dorevitch of its intention to take employee response action by way of a stoppage of work from 10 to 15 August 2017. The same day Dorevitch locked out employees, and then from 10 to 15 August 2017 employees engaged in a stoppage of work. On 11 August 2017 Dorevitch lodged submissions in the Commission objecting to the extension of the period for taking protected industrial action. On 13 August 2017 the HSU notified further protected industrial action by way of a stoppage of work to occur on 21 August 2017.

[65] On 15 August 2017 Dorevitch, the HSU and the ANMF attended a conference in the Commission before Commissioner Cribb concerning the HSU's applications. An order was made for extending the period for the taking of protected industrial action by 30 days, but no bargaining orders were made. By agreement, the Commissioner scheduled a series of conferences to be conducted in the Commission, to be held on 30 August, 8 September, 13 September, 20 September and 25 September 2017.

[66] On 17 and 18 August 2017, the HSU issued three further notifications of protected industrial action in the form of work stoppages and work bans. From 18 to 23 August 2017, employees of Dorevitch participated in employee response action by way of a stoppage of work. On 22 August 2017 the ANMF, having obtained a protected action ballot order and its members having voted to approve the taking of protected industrial action, notified Dorevitch of protected industrial action in the form of stoppages and work bans. The same day Dorevitch withdrew its s 470 notices.

[67] On 23 August 2017 the Victorian Minister for Industrial Relations lodged the application to terminate the industrial action being taken by the HSU, the ANMF and Dorevitch pursuant to s 424 of the FW Act. The same day Dorevitch ceased its lockout of employees and the HSU directed its members to return to work. On 25 August 2017 the Suspension Order was made by the Commission (Commissioner Bissett) as required by s 424(4) on the basis that the Minister's application could not be determined within 5 days in accordance with s 424(3). On 30 August 2017 there was a conference before Commissioner Cribb to discuss the main issues in dispute in the bargaining. Late in that conference, which was attended by Dorevitch's new CEO, Ian McPhan, Dorevitch made a wage offer of a 3% increase, with annual CPI increases after that. This was the first time that Dorevitch had made a wages proposal. This was rejected by the HSU.

[68] On 4 September 2017 the Minister's application was heard, and the Termination Order was made. The parties consented to the extension of the post-industrial action bargaining period to 42 days. There then were conferences conducted by Commissioner Cribb on 8 September, 13 September and 20 September 2017. At the 20 September 2017 conference Dorevitch made a wages offer in connection with a proposal for a new classification structure. This wages offer was significantly in excess of the 30 August 2017 offer, and was regarded by the HSU as a serious proposal. There was a further conference conducted by Commissioner Cribb on 25 September 2017. At this conference the HSU gave a preliminary response to Dorevitch's wages offer, and without actually rejecting Dorevitch's proposal indicated that it intended to move from the initial position on wages stated in its log of claims and put a revised wages proposal to Dorevitch in the near future. However Mr McPhan on behalf of Dorevitch stated that he intended to put Dorevitch's offer to a vote of employees, and Commissioner Cribb then adjourned the conference.

[69] On 28 September 2017 Dorevitch sent the HSU and the ANMF a copy of the enterprise agreement it intended to provide to employees. The proposed agreement included terms which Dorevitch understood had been agreed in the negotiations to date. The average wage increase for employees under the proposed agreement (including due to reclassification) was 6.5%. The proposed agreement and a notice of the time, place and method of the vote were sent to employees on 29 September 2017. The further conference in the Commission scheduled for 3 October 2017 did not proceed as a result of Dorevitch's decision to proceed to a ballot. On 4 October 2017 the HSU applied to the Federal Court for an interlocutory injunction to restrain the conduct of the vote upon Dorevitch's proposed enterprise agreement, but this application was refused by the Court on 5 October 2017. The vote took place in the period 7-10 October 2017, and employees voted to reject the proposed agreement by a margin of 78.9% to 21.03%. There were then further conferences conducted in the Commission before Deputy President Gooley until the 42-day post-industrial action period ended.

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[70] Since the nominal expiry date of the 2004 Agreement, Dorevitch has paid its employees the following wage increases:

1 January 2008 - 1.5%.

27 November 2010 - 1.5%.

6 July 2013 - increase to modern award rate for Couriers Yr 1, 2 and 3 and Courier Reliever Yr 1 only.

23 November 2013 - 1.5% for Collectors, Couriers Yrs 3-5, Courier Relievers and Clerks only, but absorbing 6 July 2013 increases where applicable.

21 June 2014 - 2.5% for staff who did not receive the 23 November 2013 increase and 1% for those who did.

5 July 2014 - increase to the modern award rate for Couriers Yrs 1-3, Collector Reliever Yr 1, Cleaners Yr 1 and 2, Laboratory Assistants Grade 1 Yr 1 and 2 and Storepersons.

5 July 2015 - increase to the modern award rate for Couriers, Courier Relievers Yr 1 and 2, Cleaners, Laboratory Assistants Grade 1, Storepersons and Storepersons (alone).

31 August 2015 - 2% increase for Storepersons (Advanced) Yr 1, 2 and 3

1 July 2016 - increase to modern award rate for Collector Grade 1 Yr 1, 2 and 3, Courier Yrs 1-5, Courier Reliever Yr 1 and 2, Cleaner Yrs 1-3, Laboratory Assistant Grade 1 Yrs 1-3, Laboratory Assistant Grade 2 Yr 1, Laboratory Assistant Grade 3 Yr 1 and 2, Storeperson Yrs 1-3, Storeperson (alone) Yrs 1-3, Clerk Grade 3 Yr 2, Clerk Grade 4 Yrs 1-3, Clerk Grade 5 Yrs 1-3 and Clerk Grade 6 Yrs 1-3.

3 December 2016 - 2.4% increase.

1 July 2017 - increase to modern award rate for Collector Grade 1 Yrs 1-4, Collector Grade 2 Yrs 1-3, Courier Yrs 1-5, Courier Reliever Yr 1 and 2, Cleaner Yrs 1-3, Laboratory Assistant Grade 1 Yrs 1-3, Laboratory Assistant Grade 2 Yrs 1-3, Laboratory Assistant Grade 3 Yr 1 and 2, Storeperson Yrs 1-3, Storeperson (alone) Yrs 1-3, Maintenance/Handyperson (advanced) Yrs 1-3, Clerk Grade 1 Yrs 1-3, Clerk Grade 2 Yrs 1-3, Clerk Grade 3 Yr 2 and 3, Clerk Grade 4 Yrs 1-3, and Clerk Grade 5 Yrs 1-3

1 July 2018 - 3.5% increase.

[71] The total increase over the period from the nominal expiry date of the 2004 Agreement to the date of this decision may be illustrated with respect to the following classifications:

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[80] Much time was devoted at the hearing of this matter to the HSU's contention that Dorevitch's conduct during the 2016-17 bargaining was not reasonable. Specifically, the HSU contended that Dorevitch conducted itself unreasonably in the following respects:

the s 471 notification of deduction from pay for partial work bans sent by Dorevitch to its employees on 4 August 2017, which disproportionately quantified the amount of the deductions to be made, deliberately or recklessly and unreasonably misapplied the tests in reg 3.21 of the Fair Work Regulations 2009 for such deductions;

Dorevitch initially opposed unreasonably the HSU's application for an extension of the period for taking protected industrial action, only to drop its opposition after the matter application was listed for hearing;

Dorevitch initially opposed unreasonably the HSU's s 472 application to vary the payment reductions for the partial work bans, only ultimately to withdraw its s 471 notices altogether;

it engaged in employer response action by way of lockouts on 7, 8 and 9 August 2017 in circumstances where it was not genuinely trying to reach agreement contrary to the common requirement for the taking of protected industrial action in s 413(3)(a) in that it had failed to attend meetings, was engaging in surface bargaining, and was unilaterally increasing wages;

in its email of the evening of 7 August 2017, it had misrepresented the workplace rights of HSU members to take employee response action, and then failed to retract the email after notification of the employee response action under s 414(4) was received;

during bargaining, Dorevitch refused to amend discriminatory proposals which prevented same-sex couples from accessing parental leave;

Dorevitch unilaterally decided to put its proposed enterprise agreement to a vote of employees during the post-industrial action negotiation period, a course of conduct which was contrary to s 266 of the FW Act and which led to it not participating in a scheduled conference in the Commission on 3 October 2017;

Dorevitch failed to incorporate terms which had been agreed in the draft determination it prepared for the purpose of the workplace determination arbitration; and

Dorevitch did not comply with the good faith bargaining obligations in clause 42 of the 2004 Agreement.

[81] Except in one respect which we will explain shortly, we do not consider that Dorevitch (or for that matter the HSU or the ANMF) conducted itself other than reasonably during the bargaining process. The scheme of enterprise bargaining in the FW Act has, relevantly, two fundamental features: first, parties are not required to reach an agreement and, secondly, parties may within strictly defined limits use industrial action to coerce each other to reach agreement. In that context, a continued resistance to any departure from a party's starting point position, the use of industrial action including response industrial action and the use of legal means to limit the damage caused by industrial action undertaken by the other side is not by itself necessarily indicative of unreasonable bargaining conduct. Most of the conduct complained about by the HSU occurred in the context of Dorevitch's response to an industrial campaign launched by the HSU after the bargaining process derailed in about June 2017. To say that is not to imply any criticism of the HSU, but merely to observe that Dorevitch's conduct largely occurred in circumstances where the parties were "at war" with each other.

[82] In response to the specific matters raised by the HSU:

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[83] We do consider however that Dorevitch did act unreasonably in failing to make any wages proposal or offer to the HSU or the ANMF during the bargaining process until 30 August 2017, and even then making an offer that was more tokenistic than real having regard to the far more substantive wages proposal which Dorevitch advanced after the termination of protected industrial action. Once Dorevitch agreed to bargain, it was perfectly apparent that wage rates would be the major issue in the bargaining process having regard to the fact that many years had passed since the nominal expiry date of the 2004 Agreement without Dorevitch increasing wages other than by small amounts and on an ad hoc basis. The HSU had provided Dorevitch with a log of claims which included a claim for a large "catch-up" increase on 20 June 2016. In the period until June 2017, when the negotiations effectively broke down and the industrial dispute began, the parties had a total of 12 meetings and between those meetings engaged in extensive correspondence in which they exchanged their positions on a range of issues. Yet at no stage during this process did Dorevitch address the major issue in dispute. Remarkably, its own log of claims said nothing about wages.

[84] There was disputed evidence about the precise position concerning wage rates which Dorevitch advanced in the bargaining meetings in the period to June 2017. Mr Collins' evidence was that he would open every meeting by asking whether Dorevitch had a wage offer yet, and that Ms Fraumano replied by stating words to the effect of: "You have our wage offer, it's zero". Both Mr Collins and Mr Crawford gave evidence that Ms Fraumano communicated that any wage offer would be dependent on "the whole package". Ms Fraumano denied making the first statement, but accepted that the second reflected the position that was communicated and that "Dorevitch was looking to obtain productivity increases in exchange for the wage offer that it would make". It would not be unreasonable, we consider, for an employer's bargaining position on wages to be contingent on "trade-offs", that is, agreement to other changes to conditions sought by the employer. However, in circumstances where wage rates was the major issue for the reason earlier stated, it was simply not reasonable for Dorevitch not to advance any position at all on wage rates in 12 months of negotiations. Even where it sought trade-offs, Dorevitch should have given some indication of what wage increase would be available if the trade-offs were agreed to. It never did this.

[85] It was the failure of Dorevitch to advance any proposal concerning wage rates which could then become the subject of bargaining which, we consider, caused the negotiations to break down in June 2017, resulting in the HSU's campaign of industrial action and Dorevitch's response action. The offer of a 3% increase that was eventually made on 30 August 2017 does not appear to have been a considered or realistic position, since Dorevitch was able to advance a more substantive, detailed and generous proposal shortly afterwards, on 20 September 2017, after the termination of protected industrial action. The 3% offer was also, notably, not linked to any trade-offs or "package" outcome, contrary to the bargaining approach which Dorevitch had ostensibly taken since June 2016.

[86] We consider that it is likely that had Dorevitch advanced its 20 September 2017 proposal during a much earlier stage of the bargaining process, an agreement would have been reached in mid-2017 without the need for an industrial dispute involving the taking of protected action. Although the HSU and the ANMF did not agree to the 20 September 2017 proposal when it was advanced, the evidence demonstrates that nonetheless they recognised it as a serious proposal and it prompted them to modify their positions and develop a new counter-proposal. Indeed, had Dorevitch not abruptly decided to go to a vote of its employees, it may well have led to agreement during the post-industrial action negotiating period. This is demonstrative of the unreasonableness of Dorevitch's approach to the wages issue during bargaining. We will treat this as a particularly relevant matter when we consider the issue of what date the wage increase we propose to award should be payable from.

[128]

[87] We consider that Dorevitch, in respect of the failure to make a wages offer or proposal in bargaining prior to 30 August 2017 which we have just described, failed to comply with the good faith bargaining requirement in s 228(1)(c) and (d), namely "responding to proposals made by other bargaining representatives for the agreement in a timely manner" and "giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative's responses to those proposals". As earlier stated, the HSU had made a wages proposal in its initial log of claims, but the evidence does not indicate that this was ever given serious consideration by Dorevitch, and certainly no substantive response was given over the course of a year of bargaining. Again, we consider this conclusion to be relevant to the date upon which the wage increase we will award should be payable.

[88] The HSU contended that Dorevitch failed to comply with the good faith bargaining requirements in the following respects:

contrary to s 228(1)(a), Dorevitch failed to attend and participate in meetings at reasonable times, including between April and July 2016, on 14 June 2017, and between 14 June and 15 August 2017, and on 3 October 2017;

contrary to s 228(1)(b), Dorevitch failed to disclose relevant information in a timely manner, in that it failed to disclose its intention to make a unilateral wage increase in advance of the announcement to employees, failed to disclose prior to June 2017 that it had budgeted for wage increases in the 2017-18 year, failed to disclose its intention to request employees to vote upon a proposed agreement during the post-industrial action negotiating period, and failed to provide a copy of that proposed agreement to the HSU in a timely manner and to disclose changes in the proposed agreement to items which had previously been agreed in bargaining;

contrary to s 228(1)(d), failed to consider the wage claim foreshadowed by the HSU on 25 September 2017, but instead proceeded to a vote of employees;

contrary to s 228(1)(e), failed to refrain from capricious or unfair conduct which undermined freedom of association or collective bargaining, in that made unilateral wage increases, failed to retract the email of the evening of 7 August 2017, and put its proposed agreement to a vote of employees without the consent of the bargaining representatives in terms which were different to those previously agreed.

[89] We are not satisfied that any of these matters constitutes a failure to comply with the good faith bargaining requirements. Specifically we conclude as follows:

[145]

[93] The rates of pay proposed for the respective proposed classifications structures, and the associated wage increases, are not capable of simple description. During the hearing the parties provided wage comparison tables which identified the wage increases which would apply on top of the actual pay rates as they were as at 1 July 2017. Because the adjustments to pay rates made by Dorevitch since the nominal expiry date of the 2004 Agreement until 1 July 2017 have not been standard across the workforce but have differed as between classifications and also as between incremental levels within classifications (resulting from the need to ensure that rates for the lower-paid classifications kept up with award rates), there is no standard increase involved for the workforce. Dorevitch's proposal would, from 1 October 2017, increase pay rates for lower paid classifications in its structure (such as Collector Grade 1, Courier Yr 1 and Cleaner) by about 3-4%, and about 12-13% for higher paid classifications. It then proposes that there be a 3% increase from the commencement of operation of the workplace determination, and increases in line with the CPI (Melbourne, September quarter) every 12 months after that for 3 years. The HSU proposes increases ranging from 11% to 27% payable from 1 July 2017, and then increases of 3.5% effective from 1 July 2018, 1 July 2019 and 1 July 2020.

[94] We have determined that we will not attempt to resolve the differences between the parties in relation to a new classification structure. There was insufficient evidence before us concerning the nature of the work performed, employees' skill development over time and the current make-up of the workforce in terms of classification distribution and years of service to permit us to make the sort of judgments required to establish a new long-term classification structure. The parties' submissions barely addressed some of the major differences between them. Additionally we consider that the creation of a long-term and sustainable classification structure for the parties would best be arrived at through future bargaining. Accordingly, except as modified by agreement, we will largely retain the classification structure contained in the 2004 Agreement as relevant to the agreed coverage of the workplace determination we make. We will adopt classification definitions where they have been agreed in relation to existing classifications. We will also include the two agreed new classifications and their definitions (the pay rates for these classifications are dealt with separately below). Existing classifications which have been retained but for which there is no agreed definition will not be assigned a definition, consistent with the position in the 2004 Agreement. Attachment A sets out the translation table from the classifications as described in the 2004 Agreement to the classification in the workplace determination we will make.

[95] In relation to the rates of pay to be set, we consider the following propositions to be critical:

there is no evidence that there has been any diminution in the value of work performed by Dorevitch employees since the nominal expiry date of the 2004 Agreement;

the wage rates of Dorevitch employees have declined significantly in real terms since the nominal expiry date of the 2004 Agreement, and have fallen well behind when compared to wages growth in the Australian economy generally over that period;

the wage rates of Dorevitch employees have been kept artificially low over an extended period due to a lack of bargaining power and the failure of bargaining when it has occurred;

the Dorevitch business is in a sound commercial position, and it is likely to enjoy continued revenue growth over the limited term of the workplace determination we will make; and

the low wages growth for Dorevitch employees has no rational connection to the viability or profitability of Dorevitch's business or to the state of the pathology industry generally.

[96] We consider that in the circumstances described, the appropriate course is to increase the rates of pay as they were in the 2004 Agreement as at the nominal expiry date of 1 July 2007 by an amount which preserves their real value. Using the Consumer Price Index for Melbourne, this requires, as at the date of this decision, a total increase of 29.5% to those 1 July 2007 rates. That is not of course the actual increase which employees will receive, since pay increases of varying amounts have been paid by Dorevitch since 1 July 2007, and they will be absorbed into the new rates. The actual increases involved will be in the range of approximately 4%-20%. In some cases, the increases will be large in nominal terms, but in the over 14 years since the nominal expiry date of the 2004 Agreement, the total increase will remain significantly below the rate of increase in the National Minimum Wage (40.5%) and average wages growth (38.8%). We reject Dorevitch's submissions that pay increases which maintain the real value of the 2007 rates would have a "chilling" effect on bargaining. Dorevitch's employees will not have shared in the real wages growth which the Australian workforce generally has enjoyed since 2007, notwithstanding the increases we propose to award them, and the relative position vis-à-vis the applicable award rates will have declined significantly because award rates have been increased at a higher rate than inflation. If Dorevitch employees seek to improve the real value of their wages, they will have to do so through future bargaining.

[97] Having regard to the history of bargaining which we have earlier set out, and our conclusion that Dorevitch acted unreasonably and did not comply with the good faith bargaining requirements by failing to make any wages offer or proposal until 30 August 2017, well over a year after bargaining had commenced, we consider that a substantial proportion of the total increase should be payable on and from 1 July 2017. Therefore the workplace determination will require Dorevitch to pay employees, upon the commencement of operation of the determination, an amount representing a 25% increase on the 1 July 2007 rates in the 2004 Agreement. The remainder (4.5%) will be payable on and from the date of commencement of the workplace determination. We have also determined that a further increase of 2.5% should be payable 12 months after the date of the commencement of operation of the determination. We consider this amount to be appropriate having regard to current and expected rates of inflation and wages growth. In summary therefore the wage increases will be as follows:

from 1 July 2017, an increase of 25% to the rates in the 2004 Agreement as at its nominal expiry date;

from the determination's date of commencement, a further increase amounting to 4.5% upon the rates in the 2002 Agreement as at its nominal expiry date; and

12 months after the date of commencement, a 2.5% increase to the determination's wage rates.

[98] In reaching this conclusion, we reject Dorevitch's submission that it should not be compelled to maintain the real value of the wage rates it agreed to in the 2004 Agreement, which were substantially above award rates at the time (in the range of 12-27%), because this would have a "chilling" effect on bargaining. Merely maintaining the real value of those wages rates means that employees and their bargaining representatives, the HSU and the ANMF, will have the incentive to engage positively in future bargaining in order to improve their real incomes and to make up some of the ground they have lost compared to the general labour market in terms of wages growth.

[99] There are two instances where agreed new classification definitions have been adopted but the classifications and pay structures have not been agreed. Our conclusions concerning these matters are as follows:

[150]

[102] Clause 3.1.7 of Dorevitch's proposed determination provides that "shiftworker" be defined to mean: "A shiftworker for the purpose of the additional annual leave in the NES is an employee who works for four (4) or more hours on ten (10) weekends in the year". Additionally, clause 28.3(a) of its proposed determination provides that an employee "who works for four (4) or more hours on ten (10) weekends in a year is entitled to an additional week's annual leave on the same terms and conditions". Clause 28.3(b) then provides that "Employees who meet the requirements of (a) will be considered shift workers for the purpose of the additional annual leave provided for in the NES".

[103] The HSU proposes, in clause 3.6 of its draft determination, that shiftworker mean "...an employee who is regularly rostered to work their ordinary hours outside the ordinary hours of a day worker as defined in clause 30". Clause 30 provides that the ordinary hours of work for a day worker are to be worked between 6.00am and 7.00pm Monday to Friday unless stated otherwise. This latter provision is agreed to by Dorevitch. Clauses 36.3-36.8 of the HSU's proposed determination contain provisions concerning the additional week's annual leave. Clause 36.6 sets out two categories for employees who are eligible for this entitlement: the first (in clause 36.6.1) is the same in substance as Dorevitch's clause 28.3(a), and the second (in clause 36.6.2) consists of any employee who "Works for three (3) or more ordinary hours on twenty six (26) or more occasions falling on a weekend in a year". Clause 36.7 of the HSU's proposed determination provides that employees in the two categories will be considered to be shiftworkers for the purpose of the additional annual leave provided for in the NES.

[104] Section 87(1)(b)(i) of the FW Act provides that an employee is entitled to 5 weeks of paid annual leave if "a modern award applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards", and s 87(1)(b)(ii) affords the same entitlement if "an enterprise agreement applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards". In relation to the approval of enterprise agreements which cover employees who are defined or described as a shiftworker for the purpose of the NES in a modern award which covers them, s 196(2) provides that "The FWC must be satisfied that the agreement defines or describes the employee as a shiftworker for the purposes of the National Employment Standards". Section 272(5)(b), to which we have earlier referred, provides that a workplace determination must not include a term that, if the determination were an enterprise agreement, would require the agreement not to be approved because of the operation of Subdivision E of Division 4 of Part 2-4, which includes s 196.

[105] There appears to be no dispute that the workplace determination we are required to make will cover employees who are covered by the Health Professionals and Support Services Award 2010 (Health Award) and are defined as shiftworkers for the purpose of the NES. Clause 31.1(b) of that award provides: "For the purpose of the NES a shiftworker is an employee who is regularly rostered to work Sundays and public holidays". We also note that clause 31.1(b) of the Nurses Award 2010 provides that, for the purpose of the additional annual leave provided by the NES, a shiftworker is defined as an employee who is regularly rostered over seven days of the week and regularly works on weekends.

[106] Accordingly the workplace determination we make, in order to satisfy the s 272(5)(b) requirement, must at least include a provision defining a shiftworker for the purpose of the NES as being an employee who is regularly rostered to work Sundays and Public Holidays, and perhaps also an employee who is regularly rostered over seven days of the week and regularly rostered to work Sundays and public holidays. Dorevitch submits, and the HSU does not dispute, that the definition of shiftworker as an employee who works for four (4) or more hours on ten (10) weekends in the year is sufficient to achieve compliance with s 272(5)(b). It also appears to be agreed that this definition reflects the status quo.

[107] The HSU submits that its claim to have an additional category of employees defined as shiftworkers is "meritorious", would provide for "just compensation for the anti-social nature of weekend work", and is "fair and equitable" for employees who are "regularly and routinely rostered for short weekend shifts". We are not persuaded that this claim should be granted. The status quo position not only meets the requirement in s 272(5)(b), but goes well beyond it and may be characterised as reasonably generous in its conferral of the five weeks' annual leave entitlement. The evidentiary basis for a further extension of this entitlement was not established. It is a claim which the HSU will have the incentive to pursue in future enterprise bargaining. Accordingly the annual leave provision in the workplace determination will reflect clause 28.3 of Dorevitch's proposed determination.

[108] The definition of shiftworker in clause 3.1.7 of Dorevitch's proposed determination is unnecessary because it is merely repetitive of clause 28.3(a). The definition of shiftworker in clause 3.6 of the HSU's determination is also unnecessary because clause 30, which is in agreed terms, adequately explains the circumstances in which it applies.

[152]

[111] There remain two issues concerning the content of the dispute resolution provision in determination to be made. The first concerns whether the procedure is to apply to disputes concerning individual flexibility arrangements. In this respect, clause 9.1.2 of the HSU's proposed determination provides that the procedure will apply to disputes relating to "the National Employment Standards (including all matters relating to requests for extended parental leave and requests for flexible working arrangements)". The equivalent provision in Dorevitch's proposed determination refers simply to disputes relating to the NES.

[112] The second issue concerns a claim by the HSU that the disputes resolution procedure contain the following provision (clause 9.11 of the HSU's draft determination): "An employee who is part of the dispute will be released by the employer from normal duties as is reasonably necessary to enable them to participate in this dispute settling procedure so long as it does not unduly affect the operations of the employer". No such provision is included in Dorevitch's proposed determination.

[113] In respect of the first issue, we will simply adopt Dorevitch's formulation, which reflects the expression of the requirement for a dispute settling procedure in s 273(2). We note that there is some doubt whether a dispute resolution in a workplace determination can empower the Commission to deal with a dispute concerning whether an employer had reasonable business grounds to refuse a request for flexible working arrangements under s 65(5) or extended parental leave under s 76(4), having regard to the terms of s 739(2)(a), but we do not need to express a final view concerning this question.

[114] In relation to the second issue, the current dispute procedure in the 2004 Agreement does not contain any provision of the type proposed by the HSU, and there is insufficient evidence to persuade us that there is any need to depart from the status quo in this respect. This is, again, an issue which the HSU may pursue in future enterprise bargaining. If there arises any difficulty under the workplace determination concerning an unreasonable refusal by Dorevitch to release an employee from duty in order to attend dispute resolution proceedings conducted by the Commission pursuant to the dispute resolution procedure, it would be open for the HSU to apply for an order under s 590(2)(a) compelling the employee's attendance. Further, any dispute about non-payment of an employee for participation in the dispute resolution process could itself become the subject of a dispute and ultimately be arbitrated by the Commission pursuant to the procedure.

[181]

[131] There are a number of issues relating to the public holiday provisions in the parties' respective proposed determination. First, clause 31.1 of Dorevitch's proposed determination seeks to confine the entitlement to public holidays to full-time employees. Clause 37.2 of the HSU's proposed determination is not so confined.

[132] Second, clause 37.3 of the HSU's proposed determination would provide that full-time Monday to Friday employees, and part-time employees who work in services, facilities or centres that operate only on a Monday to Friday basis, would receive substitute holidays where Christmas Day, Boxing Day, New Year's Day or Australia Day falls on a Saturday or Sunday. Clause 31.2 of Dorevitch's proposed determination simply provides for holidays in lieu when Christmas Day, Boxing Day, New Year's Day or Australia Day fall on a Saturday or Sunday. The difference between the parties appears about this issue appears to arise from clause 31.1 of Dorevitch's proposed determination, so that the public holidays in lieu provisions it proposes would presumably operate only by reference to full-time employees.

[133] Third, clause 37.5 of the HSU's draft determination provides that where an employee works on a public holiday falling on a Saturday or Sunday for which there is a substitute holiday, the employee will received public holiday penalty rates for working on the actual holiday and ordinary rates for the substitute holiday, except in the case of a full-time Monday-Friday employee or a part-time employee who works in an area that operates on a Monday-Friday basis, who will instead receive public holiday penalty rates for working on the substitute holiday. Dorevitch's proposed determination contains no such provision. The parties are also in disagreement concerning the formulation of the entitlement to public holiday penalty rates.

[134] Fourth, clauses 37.8 and 37.9 of the HSU's proposed determination provide that part-time employees will not be entitled to a public holiday unless they are required to work on the day, but in the case of part-time employees who work a rotating roster, where the employee has worked the day of the week on which the public holiday falls on 50% or more occasions over the previous six months, the employee will be entitled to receive the rostered off benefit for that holiday. The equivalent provision in Dorevitch's draft determination simply provides that "Part time employees who are rostered to work and work on a public holiday will be paid for the time worked on the public holiday at the rate of double time and a half".

[135] The status quo with respect to these contested issues is as provided for in clause 34.1 of the 2003 Award, as incorporated into the 2004 Agreement by clause 5 of that agreement. The parties have, in their respective proposed determinations, "cherry-picked" from clause 34.1. No evidence was adduced by any party that satisfies us that there is any difficulty with the status quo. Accordingly all the contested public holiday issues will be resolved by retaining the relevant provisions of clause 34 of the 2003 Award. The public holidays clause in its entirety, incorporating the agreed matters, will be as follows:

[210]

[145] In its proposed determination, the HSU seeks a number of provisions grouped together under the heading "Union matters". They deal with a requirement for Dorevitch to make available a noticeboard at each workplace for the purpose of the provision of union information, to give unpaid leave to employees who serve on the HSU's Branch Committee of Management or National Council, to provide union delegates with reasonable paid time and access to equipment to perform their representative roles, and to make available information to new employees provided by the unions. The HSU submits that these provisions are justified because:

the remoteness and isolation of many employees and the environments in which they work prevents the HSU from meaningfully exercising rights of entry under s 484;

the proposed requirements in relation to notice boards and circulation of material are fair and just and not unduly onerous on Dorevitch;

the provision concerning union delegates is consistent with the agreed term for professional training and development and would assist efficiency by reducing delays in obtaining union representation; and

the proposed provisions create little if any inconvenience or cost for Dorevitch and recognise the important duties and obligations of employees performing roles within registered organisations.

[146] We are not satisfied that there is a proper merit basis for the provisions proposed by the HSU to be included in the workplace determination we will make. They do not form part of the status quo. We do not accept that the HSU (or the ANMF) have faced any particular inhibition in their capacity to effectively recruit and represent members amongst the Dorevitch workforce. Indeed the extensive evidence we have received concerning the bargaining process strongly suggests that the HSU has been highly effective in recruiting, organising, communicating with and representing members in Dorevitch. The HSU will have the opportunity and incentive to pursue its "Union matters" claim in future enterprise bargaining.

[213]

[149] A workplace determination made in accordance with the conclusions we have earlier expressed would, we consider:

contain all the agreed terms as required by s 267(1)(a) and (2);

deal with all the matters that were still at issue at the end of the post-industrial action negotiating period as required by s 276(1)(a) and (3);

express its coverage in the form required by s 267(4);

contain the mandatory terms as required by s 267(1)(c), namely a procedure for settling disputes in accordance with s 273(2), a flexibility term in accordance with s 273(4) and a consultation term in accordance with s 273(5);

specify a nominal expiry date as required by s 267(1)(b) and s 272(2);

not include terms about non-permitted matters, unlawful terms or designated outworker terms in accordance with s 267(1)(b);

not include a term that would prevent the approval of the determination if it were an enterprise agreement because the term would contravene s 55 or because of the operation of Subdivision E of Division 4 of Part 2-4, in accordance with s 267(1)(b) and s 272(5); and

does not contain any terms other than those required by s 267(1).

[150] There remains the requirement in s 272(4) that the determination must include terms such that it would, if it were an enterprise agreement, pass the better off overall test (BOOT) under s 193. The application of the BOOT to an enterprise agreement requires that every existing and prospective employee covered by a modern award to be better off overall under the agreement for which approval is sought than under the relevant modern award. It will involve the making of an overall assessment as to whether an employee would be better off under the agreement, which necessitates identification of the terms in the agreements which are more and less beneficial to the employee than under the relevant award.[13] In respect of all employees apart from part-time employees, the application of the BOOT causes no difficulty because the rates in the determination we will make are significantly higher than the rates of pay in the relevant award, being the Health Award, and the other terms and conditions in the determination are either more beneficial or at least as beneficial as the award terms and conditions. To the extent that the Nurses Award 2010 may arguably cover the three Gippsland pathology nurses, we consider that the same conclusion applies. The BOOT is therefore easily passed with respect to full-time and casual employees.

[151] In respect of part-time employees, the parties had agreed as at 16 October 2017 to two provisions with respect to the working of additional hours. The first was:

[222]

[154] The agreement referred to in the above provision is an agreement reached under clause 10.3(b) between an employer and a part-time employee before commencing employment on "a regular pattern of work including the number of hours to be worked each week, the days of the week the employee will work and the starting and finishing times each day". Under clause 10.3(c), such an agreement "may be varied by agreement and recorded in writing".

[155] Under the first of the agreed part-time provisions agreed to by the parties, part-time employees may apparently be required to work on past their contracted hours for up to half an hour each day without overtime penalty rates. Conceivably, this might occur across five working days a week. That would amount to two and a half hours per week where under, agreed provision, no overtime penalty rates would be payable, compared to the Health Award under which a penalty rate of time and a half would be payable. However, the rates of pay in the determination we propose to make are sufficiently higher than the rates in the Health Award to ensure that part-time employees would always be better off overall.

[156] Under the second agreed provision, part-time employees may on request work additional hours, up to a total of 7.6 a day, 76 per fortnight or 152 per four week period, without the payment of overtime. The request having been made, it would of course require the employer's agreement then to allow such additional hours to be worked. The method of recording the request is by the employee writing their name on a list prepared for the purpose. The employer will then prepare a roster consistent with the request if there are available hours to be worked.

[157] We do not consider that this is, in substance, detrimental to part-time employees compared to the relevant provisions of the Health Award. Under the award, an employee may request, and an employee may agree to, the employee working additional hours without the payment of overtime. This may be achieved, either for a particular roster or other fixed period or on an ongoing basis by a written variation to the existing agreement concerning the pattern of hours pursuant to clause 10.3(c). If an agreement is made pursuant to clause 10.3(c) to expand the number of hours worked by the part-time employee, the overtime obligation in clause 28.1(d) is no longer applicable to those additional hours. The manner and form of a written variation to a part-time hours agreement under clause 10.3(c) is not prescribed and need not be attended by any particular formality. That the agreed provision achieves the same result by a slightly different administrative mechanism does not, we consider, constitute a detriment to part-time employees relevant to the BOOT. In any event, we note that clause 28.1(d) of the Health Award only confers an entitlement to overtime penalty rates where the employer requires the employee to work additional hours, which would not appear to be applicable to a situation where an employer accedes to an employee's request to work additional hours. The higher pay rates and other superior benefits in the determination that will be made will ensure that part-time employees are always better off overall than under the Health Award.

[158] We are therefore satisfied that a workplace determination made in accordance with the conclusions we have reached in this decision would satisfy the requirement in s 272(4) and hence that in s 267(1)(b).

Specialist Diagnostic Services Pty Ltd t/a Dorevitch Pathology Workplace Determination [2018] FWCFB 4228 (13 September 2018)

At a glance

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Decision date

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Judgment (239 paragraphs)

Specialist Diagnostic Services Pty Ltd t/a Dorevitch Pathology Workplace Determination [2018] FWCFB 4228 (13 September 2018)

Legislation Cited (3)

Cases Cited (1)