On 30 March 2021, the Fair Work Commission (Commission) handed down the decision of Health Services Union v Huntingdon Nursing Home Pty Ltd [2021] FWC 1730 (Decision), which dealt with an attempt by New South Wales aged care provider, Huntingdon Nursing Home Pty Ltd (Employer) to implement an exclusive service policy such that employees were required to not work at any other aged care facility other than that of the Employer or if they worked at another facility, then they were prohibited to work for the Employer. The Employer proposed to stand down employees who did not choose one or the other options.
Key points from the Decision
Below we have outlined some key points from the Decision in order to provide further guidance to aged care sector providers:
- In this instance, it was found the Employer implemented the policy without consultation with the affected employees in circumstances in which a relevant enterprise agreement required the employer to consult employees regarding major workplace change. Employers should be aware that implementing a major workplace change without consultation is likely to breach the consultation provisions of relevant industrial instruments, whether Modern Awards or Enterprise Agreements.
- Further, the Employer did not rely on any form of State or Federal government instruction or direction that legal force or effect in creating the policy. It was found that the four sources of information relied upon by the Employer were in fact simply ‘guidelines’ and not official advice or direction from the Health Department or an associated body.
- The Employer argued that there was no work available for the employees who did not agree to render exclusive service. However, the Commission found that the reason there was no work for the employees to undertake was due to the implementation of the exclusive services policy, and that an affected employee was at all times ready and willing to perform her role.
- Finally, the Commission addressed the Employer’s frustration of contract argument, in which the Employer argued that the employment contract was frustrated and that they could then vary the contract to suit the circumstances. The Commission stated that “frustration does not simply recalibrate a contract into something not originally agreed between the parties, or enable the variation of a contract such that it is amended to better favour one party over another.”
Summary
The Decision illustrates the difficulty of implementing an exclusive service policy in the absence of relevant and binding government directions or orders. It also highlights the necessity for employers to obtain expert medical and legal advice about risk management before implementing policies aimed at reducing the risk of transmission of COVID-19, when those policies involve major changes to the working arrangements of employees.
If you require advice on how to best implement workplace changes and navigate potential employment risks, please call our Employment and Workplace Relations team on (08) 9321 0522.
Authors: Jenny Edinger and Jesse Rutigliano.