C2003/861, Transcript of Proceedings [2003] AIRCTrans 573 (21 February 2003)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS


O/N VT1552
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER BLAIR

C2003/861

AUSTRALIAN HEALTH SERVICES
UNION OF AUSTRALIA

and

GOULBURN VALLEY HEALTH

Notification pursuant to section 99 of the Act
of a dispute re organisational change in relation
to audiology services and the ongoing employment
of audiologists

MELBOURNE

10.06 AM, WEDNESDAY, 5 FEBRUARY 2003

PN1

MR L. BUTLER: I appear on behalf of Goulburn Valley Health in this matter.

PN2

DR R. KELLY: I appear on behalf of the Health Services Union of Australia in this matter. I appear with MS C. BALL.

PN3

THE COMMISSIONER: Yes, Ms Kelly.

PN4

DR KELLY: Commissioner, I thank you for listing this matter at short notice. The reason why I have asked for it to be listed as a matter of urgency may become clearer as I make my submission. Could I just open by saying we have had discussions with the other side and we conceded there would be a benefit in us adjourning into conference but there are some matters that I would like to put on the record first and, no doubt, my friend Mr Butler would like the opportunity to respond to those. But we do consider that a conference may be useful in this matter.

PN5

If I could just start with a bit of history from last year, Commissioner. Last year, beginning around September last year, the HSUA No 4 Branch was in dispute with Goulburn Valley Health in relation to move to privatised public sector pathology laboratories at Shepparton and Cobram. This matter didn't come to the Commission as a dispute because there were a lot of political issues involved in that issue which we took up with the Minister for Health at the time.

PN6

We also reminded Goulburn Valley Health of their obligations under our award in relation to consultation and the provision of documents. I don't want to go too far into that but to say that it sets the scene for what has happened with audiology. I would like to tender some correspondence from that time because it does have a bearing on what has happened in audiology and the failure to consult with the union.

PN7

At the same time as these matters were going on in relation to pathology there were discussions going on in audiology and it was privatised without us being notified, as required by the award. I just table the correspondence for your information. The first item I would like to table is a letter from the chief executive office, Mr Pullen, to me dated 1 October 2002.

PN8

Now, this letter was received - I have made a note on it. I am sorry the notation of mine is still on there. It was received after the intervention of the Minister's office and there had been a series of press releases going backwards and forwards at the time. This refers to advice that:

PN9

There would be no immediate plans to sell Goulburn Valley pathology business. If there was a sale, it would only occur in the context of the broader Goulburn Valley Health strategic plan and after further consultation with your union and the pathology workforce.

PN10

And then it goes on to talk about the Ralston Report which was an independent consultant's report. The rest of that letter is not necessarily relevant to the matters at hand.

PN11

THE COMMISSIONER: Right. If you are tendering that we will mark that HSUA1.

PN12

DR KELLY: Thank you.

EXHIBIT #HSUA1 LETTER FROM MR PULLEN TO DR KELLY DATED 01/10/2002

PN13

DR KELLY: I will also tender a letter from the Minister for Health which follows a meeting that we had with the Minister on 28 October. There had been previous discussions between me and the Minister's office culminating in this written response. Prior to this I had only had verbal responses from the Minister. I would like to tender this letter as well.

EXHIBIT #HSUA2 LETTER FROM MINISTER FOR HEALTH DATED 28/10/2002

PN14

DR KELLY: Now, this letter from the Minister outlines the government's requirements prior to any public sector entities determining to contract out a component of its services and these were the three conditions which were to be met prior to any contracting out of privatisation:

PN15

The decision must be made in the context of an overall business strategy. The service must demonstrate a substantial benefit flowing from the proposal.

PN16

The decision must be made taking into account the public interest.

PN17

And the third dot point:

PN18

There must be discussion and genuine consultation with the staff and relevant employee representatives in accordance with the provisions of industrial awards and agreements.

PN19

The Minister then went on to articulate what matters might be relevant to the public interest test including the length of the contract, accountability mechanisms, the nature of the service and the need to ensure that the service remains accessible and high quality. So at the same time as these letters were going backwards and forwards between the Minister, the health service and the union, I understand that there were discussions occurring over the privatisation of audiology services.

PN20

At no time did Goulburn Valley Health notify me, as required under the award, that there were these intentions. And I would just like to take you to two provisions in the Medical Scientists Award which go to technological change and redundancy. And as the Commission is aware, the HSUA Public Sector Interim Award 1993 incorporates the provisions of the old Medical Scientists Award. So I am tendering those pages, if I may. No doubt, you are familiar with this clause of the award headed Technological Change. Clause 38 defines technological change as:

PN21

... including introduction alteration of equipment or work practices ancillary to equipment.

PN22

So technological change means both the replacement of equipment, also the changes in the way the equipment is used and it talks about material effects which mean termination of employment, the elimination of diminution of job opportunities, job tenure, the use of skills, alterations of the hours of work, transfer of employees to other work or locations.

PN23

Now, under that clause an employer who constructs commissions or engages consultants or supplies any other person to look at a feasibility of change is required to notify the executive officer of the Medical Scientists Association of Victoria and to identify the employees who will be materially affected. It then goes on to mandate consultation during those investigations and, indeed, if there is a decision to implement the changes then the employer is under the award required to notify the association and the employees who will be materially affected.

PN24

And after that negotiation to consult with both the union and the employees about the reasons for the change and to try and ameliorate any likely material effects and provide information. Now, that clause was not complied with in relation to the changes that have occurred in audiology. I also draw your attention to the redundancy clause:

PN25

Where an employer has made a definite decision that the employer will no longer, which the job the employee has been doing not to be done, then the employer shall hold discussions with the employees directly affected and with the union.

PN26

Then it goes on to mandate how those discussions are going to occur. There is a severance pay clause in that award but that has been overtaken by general agreements we have with the public sector over redundancies and targeted separations. I also draw your attention to paragraph (i) transmission of business and there is provision in there that:

PN27

When there is a sale or a transmission of a business that the employer will be - if the employer - employee -

PN28

sorry -

PN29

becomes an employer of the transmittee that service transmits across and there is no break in the continuity of service.

PN30

Now, all this came to our attention because we were notified by a member that she returned from maternity leave, I believe it was last week or it may have been the week before, to be told by the human resources department of Goulburn Valley Health that she should tender her resignation because audiology had been privatised and contracted out.

PN31

They actually asked her to resign from the hospital. Now, this would have two impacts on her. First of all, if she resigned that would mean that the termination payment she would be - the redundancy/severance pay that she would be entitled to under our agreement with the public sector would not apply. Further, if she resigned from the hospital and then took up an appointment with the private provider that transmission of service would be terminated because it would not be a transmission across.

PN32

And she was told, as I understand it, by human resources that her employment would be transferred to the incoming private provider. Now, if the Commission pleases, it is not up to an employer to treat an employee like that and just tell them that they are moving from their employment of the employer across to the employment of a third party. That the employee's choice. Nor is it appropriate for an employer to request that an employee resigns in a situation which is clearly one of redundancy and technological change, as technological change is defined by our award.

PN33

As soon as this was brought to the union's attention we contacted Mr Pullen's office, that was on Thursday, January 30. I left two messages for Mr Pullen and a message for the human resource director. Neither of my calls - none of my three calls were returned. I then wrote to Mr Pullen on 31 January outlining my concerns about the process.

PN34

Now, I understand this privatisation occurred at the end of October 2002 and I further understand that there are only two employees affected. One was the grade 3 audiologist and one was the other member whom I have discussed. Her name is Belinda Shmedje, S-h-m-e-d-j-e. She worked one day a week, as I understand it, for Goulburn Valley Health.

PN35

I will tender that letter which I wrote to Mr Pullen which outlines by concerns about the process.

EXHIBIT #HSUA3 LETTER FROM DR KELLY TO MR PULLEN DATED 31/01/2003

PN36

DR KELLY: In that letter I draw Mr Pullen's attention to the provisions of the award, as I have explained to the Commission, and I have asked for any relevant documentation associated with the decision to privatise audiology to be provided to me, and that is in paragraph 2. I drew his attention to the fact that it was mandatory under the award for consultation to occur prior to any implementation. And in paragraph 4 I drew Mr Pullen's attention to the redundancy provisions of the award.

PN37

And then I also reminded him of the Minister for Health's determinations in relation to the proposal to privatise services and I go on to outline those three dot points again and it has to be in line with the strategic plan, would not occur without full consultation with staff and the relevant unions. And I also drew his attention to his letter to me dated 1 October 2002.

PN38

What I then suggested is that, over there page, that I meet with Mr Pullen and Dr Brian Cole, who is the director of medical services at Goulburn Valley Health, to discuss the implications of the decision to privatise audiology. And at that meeting I wanted to discuss the breaches of the award, the current arrangements for privations or provision of audiology services, a strategy for bringing audiology back in house, maintenance of the employment of the part-time audiologist as an employee of Goulburn Valley Health and, importantly, the Goulburn Valley Health's strategic plan.

PN39

Now, when I last discussed the strategic plan with Mr Pullen and it had not been finalised, and I understood that was still in the basis - sorry, in the process of being finalised by Goulburn Valley Health, in response to my letter I also received a letter from Mr Pullen which I received by e-mail yesterday dated 3 February 2003, which I would like to table.

EXHIBIT #HSUA4 LETTER FROM MR PULLEN TO DR KELLY RECEIVED BY E-MAIL DATED 03/02/2003

PN40

DR KELLY: Now, in that letter Mr Pullen talks in paragraph 2 as the service having been a one-person department and recently supported by a speech therapist. That is, in fact, incorrect. The person concerned, Belinda, is employed four days a week by Goulburn Valley Health as a speech therapist and one day a week as an audiologist. I understand it has two separate contracts, one for the four day a week speech therapy position, one for the audiology position.

PN41

In the third paragraph Mr Pullen refers to the approach by the senior audiologist to say that he intended leaving to set up in private practice and that the chief medical officer accepted a proposal from him. So clearly, the privatisation of audiology services did not go out to tender. This was just a private proposal from the senior audiologist to the chief medical officer.

PN42

I would also say that there is - this paragraph, indeed, contains errors as well because I understand from Mr Symons that he has had a private practice for many years running in conjunction with his duties in the public sector. He has worked four days a week in the public sector and one day a week in his private practice, up to this point.

PN43

The next paragraph talks about the one day a week speech therapist which should be a reference to the audiologist and she was on maternity leave at the time. We now get a statement that he ongoing employment is guaranteed by Goulburn Valley Health. But the next paragraph contradicts that because it says:

PN44

Ian Dempsey, the HR, human resources manager, is currently discussing a matter of entitlements with Belinda...

PN45

and -

PN46

...Lindsay Symons has indicated he will pay her in accordance with the EBA.

PN47

So we have got an immediate contradiction here. Is Goulburn Valley Health proposing to maintain the employment of the one day a week audiology position or is it not? In terms of Ian Dempsey discussing the matter entitlements with Belinda, as I have pointed out, under our award it is a requirement that the hospital include the union in those discussions.

PN48

Goulburn Valley Health is clearly trying to bypass the union in all of these arrangements and discussions. And I won't go into the rest of the letter or the gratuitous final paragraph but this is a serous matter which our union regards as serious. Privatisation as a political issue is one that our union has taken a strong stand on. But in terms of the industrial relations side of the matter, privatisation has significant implications for jobs, job security, gradings of scientists and audiologists and other members of our union, workloads, transmission of business issues, redundancy payments, entitlements and so on.

PN49

So leaving aside the public policy implications of contracting out and privatisation and leaving aside the breach of the Minister's letter, the issues to us are the serious industrial relations issues and it should not be trivialised by Mr Pullen referring to other matters involving pathology. This is a serious issue for us and for the individual audiologists concerned.

PN50

So clearly from Mr Pullen's letter he was not going to meet with me, that was very obvious, again continuing to breach the requirements of the Medical Scientists Award which is part of that HSUA Public Sector Interim Award 1993.

PN51

Now, there is another issue going on in relation to Goulburn Valley Health pathology services in that Goulburn Valley is now looking at entering into a merger agreement with the services at Bendigo. Again, I have written to Mr Pullen asking him for discussions in relation to the proposed joint venture, any documents that have been drafted up so far, any documents that go to consultants reports or - and, indeed, specifying the employer's objectives in any investigation of a joint venture with Bendigo.

PN52

Now, I haven't received a response to that letter but given the track record of Goulburn Valley Health I am most concerned that Goulburn Valley Health will again attempt to sideline the union in this matter. It does not seem to - Goulburn Valley Health does not seem to accept that the union has a legitimate interest in any changes that are made to the conditions and terms and conditions of its employees and members of the HSUA 4. It continually attempts to sideline the union from these discussions.

PN53

In audiology the horse has bolted to some extent and we are trying to retrieve the situation. We do not want that to happen with pathology. I will tender this letter just to put it on the record, Commissioner, and that is my letter to Mr Pullen on 30 January 2003 to which I haven't yet had a response.

PN54

The matters are linked in that our concern is that Goulburn Valley Health will do what it did in relation to audiology, simply not notify the union until it is too late for us to have any meaningful discussions about the implication of any decision that they make or may not make in relation to pathology. I think it would be useful to discuss these matters around the table but I would also be seeking some directions from you in relation to ensuring that Goulburn Valley Health does meet with the HSUA 4 on both of these issues.

PN55

The first issue being the issues around audiology and the continued employment of the audiologist who has just returned from maternity leave and the second issue being notification to the union and consultation with the union in relation to proposed merger with Bendigo Health Care Group. If the Commission pleases.

PN56

THE COMMISSIONER: Thank you. Yes, Mr Butler.

[10.28am]

PN57

MR BUTLER: Thank you, Commissioner. I would like to - I will try and keep my responses in order of Ms Kelly's submission but I may not be able to do that given that this matter is a little more complex than one might understand on the surface.

PN58

It is true that there have been - that there were discussions and there were thoughts about the privatisation of pathology services at Goulburn Valley Health. And arising out of that there has been correspondence between the health service and the union. And it is true to say that in relation to the consultation in relation to the audiology department that Goulburn Valley Health, simply by oversight because they weren't aware that the audiologist was covered by the number 4 branch of the union and I guess that is understandable at times, Commissioner, because sometimes I think you, yourself, might be confused about what the coverage of these branches of the HSUA is.

PN59

But leaving that side, the decision to privatise the audiology department at Goulburn Valley Health arose out of, as Ms Kelly said, a proposition from the senior - the audiologist in the department who advised Goulburn Valley Health that it was his intention to resign and go into private practice and as such wouldn't be providing a service to them as an employee.

PN60

In those discussions it was agreed, and a contract signed, that the audiology services would be provided by the same person that was providing them in the public sector by contract back to Goulburn Valley Health. That contract was signed in January and is for a period of three - it was signed in November and is for a period of three years.

PN61

In relation to Ms Kelly's assertion that Goulburn Valley Health hasn't taken into consideration any of government policy - and I don't want to get into an ideological argument about the benefits of private as opposed to public and given that this service is being provided by exactly the same person, I am not sure that the service is going to be any different - the decision was made in the context of an overall business strategy.

PN62

It was made taking into account the public interest and there was genuine consultation with the staff. Now, we have already admitted that the union were left out of that and we are going to have to take the consequences of that, whatever they might be.

PN63

The position in relation to the part-time audiologist, she is employed by Goulburn Valley Health as speech therapist and on one day a week she was employed as an audiologist. She doesn't return from maternity leave until April so she hasn't returned to work. Her maternity leave finishes in April. She is currently at the moment working for the audiologist providing the public service we believe for one day a week and there have been discussions with Goulburn Valley Health in relation to her future employment and had a request from her, I believe, in relation to what was going to happen is Goulburn Valley Health have undertaken that they will employ her, if she wishes, as a full-time speech therapist, so the extra day a week, or they would see what they could do to facilitate her transfer to the private provider.

PN64

In relation to the transmission of business, I don't want to get into that discussion. I don't think I am qualified to talk about whether or not the business has been transmitted or has not been transmitted, that is for someone else to deal with.

PN65

The redundancy situation, we don't believe at this stage that there is any redundancy so we don't know why we are talking about redundancies. The strategic plan that Ms Kelly spoke about is not finalised and we can talk about that more in conference, if the Commission pleases.

PN66

The tendering out of service I think is just - in terms of whether or not it went out to tender, that is not mandatory, it is a one person operation. The likelihood of it being tendered out to anyone else other than the person who is doing it is pretty minimal.

PN67

The Goulburn Valley Health are certainly prepared to agree to meet with the union to discuss their concerns in relation to this matter and with a view to reaching an agreement around it.

PN68

In relation to the pathology joint venture, Mr Pullen advises me that he responded to Ms Kelly's letter on the day after he received it and at this stage there are no - there is no documentation relevant to this, that this matter in what could be described as its embryonic stage and until such time as there is some actual either decisions made in terms of going down one path or the other or some propositions that can be discussed, we don't believe at this stage that there is much point in meeting about it until such time as a decision has been made whether or not a joint venture arrangement will be pursued in a more serious manner.

PN69

I guess with that in mind, Commissioner, I would be happy, as Ms Kelly signified before, to adjourn into conference so we can discuss this matter in more detail. If the Commission pleases.

PN70

THE COMMISSIONER: Thank you. The Commission will go into conference.

SHORT ADJOURNMENT [10.35am]

RESUMED [10.55am]

PN71

THE COMMISSIONER: The Commission has had an opportunity to have a conference with the parties. Arising from that conference the Commission would recommend the following. The parties, that is the HSUA and Goulburn Valley Health, look at the contractual arrangements of the audiologist. Two, the parties are to clarify the maternity leave arrangements of a Ms Belinda Shmedje. Three, the parties are to confer over proposals that would suit the Goulburn Valley Health arrangements in terms of audiology and the arrangements best suited to Ms Shmedje. Four, the parties are to confer over any proposals concerning a joint arrangement with the Bendigo Health Care Group.

PN72

Either party is free to have the matter relisted if they believe it necessary and the Commission will relist the matter at the convenience of the parties. The Commission will stand adjourned. Thank you very much.

PN73

MR BUTLER: Thank you, Commissioner.

ADJOURNED INDEFINITELY [10.56am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #HSUA1 LETTER FROM MR PULLEN TO DR KELLY DATED 01/10/2002 PN13
EXHIBIT #HSUA2 LETTER FROM MINISTER FOR HEALTH DATED 28/10/2002 PN14
EXHIBIT #HSUA3 LETTER FROM DR KELLY TO MR PULLEN DATED 31/01/2003 PN36
EXHIBIT #HSUA4 LETTER FROM MR PULLEN TO DR KELLY RECEIVED BY E-MAIL DATED 03/02/2003 PN40