News and Insights

Written by Chris Pollard.

HSU v Catering Industries (NSW) Pty Ltd [2023] FCAFC 82 (29 May 2023)

A. THE PARTIES

Heritage Botany (“Heritage”) is a residential aged care facility which provides care and accommodation services to residents, including the provision of meals.

Since 1977, Catering Industries (NSW) Pty Ltd (“Catering Industries”) has operated a contract catering, cleaning and laundry services business, providing these services to a number of aged care providers in NSW as well as to other facilities, including boarding schools.

Pursuant to the Fair Work (Registered Organisations) Act 2009 (Cth), the Health Services Union (“the HS Union”) registered an amendment to its Enterprise Bargaining Agreement (“EBA”) and relevant Awards so as to include coverage of catering staff.

B. BRIEF FACTS

In 2019, Heritage and Catering Industries entered into an arrangement whereby Catering Industries agreed to provide catering, cleaning and laundry services at the Heritage facility.  Under that arrangement, Heritage provided the facilities and equipment that were necessary to enable Catering Industries’ employees (the “Catering Employees”) to store, prepare, transport and serve food, beverages and other products.

The work undertaken by the Catering Employees was broadly (if somewhat loosely) described as “food and beverage services” for the purposes of the EBA and the relevant Awards.  The Catering Employees prepared food and beverages for residents as approved by Heritage.  Meals and beverages were prepared in compliance with residents’ personal care plans (where applicable), and consistently with their dietary and care requirements.

In June 2021, the HS Union and Catering Industries commenced bargaining for an EBA that would cover and apply to the Catering Employees.  The parties were in dispute as to which of two relevant awards and EBAs covered the food services work being undertaken by the Catering Employees.

In December 2021, the HS Union sought a declaration as to which Award applied to the Catering Employees providing food services to Heritage and whether the Hospitality Industry (General) Award 2020 (‘Hospitality Award’) applied to these employees, or alternatively (as the HS Union maintained) the Aged Care Award 2010 (‘Aged Care Award’) was the applicable award.

C. DECISION

In the first instance, the Federal Court found that, where the work involved a skilled trade and where the Hospitality Award contained specific classifications, that this should be preferred. The Court found that the more general descriptions of the work was applicable and found that the Hospitality Award covered the Catering Employees providing services to Heritage. The HS Union appealed this decision.

D. APPEAL

The appeal proceeded upon two grounds being:

1. 1. 1. The primary judge erred in finding that the Catering Employees undertaking work in the provision of food services at the Heritage aged care facility are covered by the Hospitality Industry (General) Award 2020 and not covered by the Aged Care Award 2010 ; and
      2. The primary judge erred in failing to find that, in circumstances in which Catering Industries is covered by both the Hospitality Industry (General) Award 2020 and the Aged Care Award 2010, its employees undertaking work in the provision of food services at the Heritage aged care facility are covered by classifications in the Aged Care Award because those classifications are most appropriate to the work performed by the Catering Employees and to the environment in which the Catering Employees normally perform the work.

The Court on appeal found that the issue surrounding coverage was more clearly resolved by the classifications contained in the Hospitality Award and, as such, upheld the Court’s decision at first instance and the appeal was dismissed.

E. CONCLUSION

Essentially, this effect of this case means that an aged care provider is permitted to classify its employees under the Hospitality Award rather than under the Aged Care Award, with the result being a reduction in the wages of these employees due to the Hospitality Award having a lower wage structure than the Aged Care Award .

An article published by Natasha Boddy in the Australian Financial Review (https://www.afr.com/work-and-careers/workplace/union-launches-legal-action-over-slashed-aged-care-wages-20220529-p5apc2) has noted the practical elements of classifying these employees under the Hospitality Award rather than the Aged Care Award, as follows:

“The union argues moving catering workers to a hospitality award would equate to about a 5 per cent pay cut, with a full-time cook left around $4000 a year worse off under the hospitality award while a full-time supervisor with oversight of an aged care kitchen would earn about $3175 less a year.”

As a result, the decision will have a significant impact on the aged care industry and may apply to other outsourced services, such as laundry and cleaning, and highlights difficulties in interpreting the “coverage” of Awards and EBAs.

Wisewould Mahony’s Employment Law and Workplace Relations team can assist employers and employees alike in respect of the coverage, and compliance with, Awards and EBAs.