What underpayment of junior doctors reveals about employment class actions

Hayden Stephens, lawyer and founder of Hayden Stephens & Associates, has established his reputation as a fierce advocate for junior doctors in Australia since his firm launched the first junior doctors class action in 2020. Since then, he has represented junior doctors from NSW, Tasmania, ACT and Victoria in class actions that strive to hold health authorities to account for unfit workplace conditions and underpayment. To date, he has ensured that underpaid junior doctors have been paid back $435 million in unpaid wages. 

Stephens tells LSJ Online that the NSW case achieved a settlement of $229 million. It was, and remains, the largest underpayment action of its kind in Australian legal history. Pursuant class actions have also achieved substantial results for plaintiffs, with the ACT junior doctors case settling for $31.5 million, and the Victorian case $175 million. 

There were approximately 27,000 group members covered by the NSW class action, with some 16,000 junior doctors eventually participating in the settlement scheme.  

Stephens says it is not unusual in class actions for the participants in a scheme to be less than the total class size. This reflects a range of factors, including, in this matter, the nearly three years it took to run the class action. People are sometimes reluctant to sign up to employment class actions, over concerns that doing so might somehow impact their career.  

“Over the life of this case, many doctors we spoke to held a genuine fear that if they stuck their hand up and claimed, they would be marked as a black sheep in their workplace.”  

Litigation funders v self-funding

Stephens acknowledges that litigation funders play an important part in the class action landscape in Australia, providing funding for cases where the plaintiff or applicant has no other way of funding the action. But the junior doctors’ cases – focused only on wage underpayments – didn’t fit the profile of a typical shareholder, consumer or product liability class action typically backed by major funders. 

“Employment class actions remain relatively nascent as a vehicle for large-scale litigation. We were pioneering, really, because this was one of the very few self-funded underpayment class actions at the time. I and my colleagues at Maurice Blackburn, who I chose to collaborate with in this action, felt that, on balance, it would be preferable to self-fund for two reasons.”  

The first, he explains, was confidence in the claim’s prospects.  

“The second reason was that I was concerned that at the conclusion of the matter, where we had a potential settlement available, a court may not award a litigation funder the percentage return they would typically expect in large-scale commercial litigation.” 

He adds, “These were workers’ hard-earned wages.  I accept that there’s perhaps more art than science in my approach, but I felt intuitively that a court might find it less palatable to reward a litigation funder a sizable chunk of settlement monies where those funds were derived from a person’s weekly packet.”    

Stephens left Slater and Gordon at the end of 2019, having begun his career there in 1993 as a solicitor in asbestos, product liability, work injury and child sexual abuse class actions. The last two years with the firm, he was CEO of the Australian operations, encompassing some 1,200 staff and a range of different departments and over 40 offices.  

“As is often in law practices, I moved up the ladder into different executive roles which was a terrific experience but of course, with that additional responsibility, there is tendency to become more distant from file work and being in court.”   

In 2020, Stephens founded his own practice with a goal to ensure underpaid workers received decent payouts without the burden of high legal fees that individual underpayment claims or wrongful dismissal cases frequently attract. Class actions allowed for applicants to recover their fair entitlements without revealing their identity or jeopardising their careers, nor acting alone. Still, finding a lead applicant to launch a class action in NSW on behalf of junior doctors was a major hurdle, with many unwilling to be the face of the case. 

Then, Stephens met a NSW-trained doctor who had taken up work in Victoria, Dr Amireh Fakhouri.  

“She showed enormous courage to step up to the plate in New South Wales. I had been trying to find a lead applicant for nine months prior to meeting with Amireh, and on each and every occasion where a lead applicant in New South Wales met the relevant criteria, they withdrew. It was just a step too far for them, to put their head up and face their employer in circumstances where they feared reprisals at their workplace.” 

Amireh is quietly spoken, says Stephens, adding that shouldn’t be mistaken for meekness.  

‘Articulating the problem’

“She’s a very considerate person, a hugely empathetic doctor … She’s incredibly intelligent, tough, and stands up for herself. When we were looking over the documents and her prior email exchanges of underpayment with her employer, Westmead Hospital, you saw a woman who was particularly good at articulating the problem and the injustice she was facing,” explains Stephens. 

He and Maurice Blackburn represented the NSW junior doctors on a No Win No Fee basis. If they won, both would be paid for their work, plus receive a 25 per cent loading on fees, accounting for risk. 

The first case in NSW, Fakhouri v Ministry of Health [2023] NSWSC, was lodged at the Supreme Court of NSW in December 2020. Interlocutory battles followed. First, NSW Health sought to strike out the action on the basis that doctors could not bring a class action under the prescribed avenues enshrined in the NSW Industrial Relations Act. That application failed, as did NSW Health’s next attempt to declass the group on the basis that the claims were too individualistic.    

A major turning point

Meanwhile, south of the border, Stephens was working on another class action for junior doctors in Victoria. In that case, Australian Salaried Medical Officers’ Federation v Peninsula Health [2023] FCA 939 was first to reach trial and, when a successful judgement followed some months later, a major turning point loomed for underpayment class actions.   

‘”It was a watershed moment. Now armed with a Federal Court judgment that confirmed that junior doctors’ unpaid overtime was work undertaken with their employer’s authorisation, our case in NSW had every prospect of succeeding on the same basis.” 

Within six months of the Victorian win, the NSW class action was on a path to resolution and by late 2024, the NSW Supreme Court approved a $229.8 million settlement for over 16,000 junior doctors.  

In the months that followed, Stephens settled a junior doctors’ class action in the ACT for a landmark $31.5 million settlement on behalf 2,200 doctors, for unpaid overtime. Later that same year, the Victorian class actions against all health services also resolved for $175 million, applying to more than 12,800 doctors.  

More cases, same issues

Stephens is currently acting for junior doctors at St Vincent’s Hospital in Darlinghurst, Sydney and has also launched proceedings for junior doctors in the Supreme Court of Tasmania.  

Critical to Stephens’ success has been his preparedness to partner with law firms. In NSW, the combination of Stephens and Maurice Blackburn’s joint experience and expertise was key to success, he says.  

“At the time that myself and Rebecca Gilsenan, who is the Head of Class Actions of Maurice Blackburn, negotiated and put in place arrangements for this joint venture, law firms working in joint venture perhaps wasn’t as common as we’ve seen in recent years.”  

These cases are extremely expensive to run, he acknowledges.  

“If you are well resourced and have a strong capital base, you are generally better placed to enter battle.” 

Dividing the work

To that end, Stephens explains, “We had a litigation team that met weekly, to review and divide the work on the case. It’s very important in such arrangements that lawyers do not duplicate work. Care was taken to ensure that our team allocated work that was complementary to our respective skills.” 

He adds, “Because Rebecca and I have known each other for a number of years, it was very easy for us to leave egos at the door and work very cooperatively in directing our respective teams to execute on the things that met the needs of the case at the time”. 

Stephens says, at the conclusion of the class actions, an application for approval of the settlement was presented to the court.  

“The independent assessment considers the legal work, the rates charged, and the amounts sought,” he says. “And I know from discussions with independent assessors, it was front of mind for them in looking at our collaborative arrangement, that they ensured that there was not duplicate effort.” 

In 2013, an anonymous Beyond Blue National Mental Health Survey drew from the accounts of 12,252 trainee, intern or vocational training doctors nationally. Junior doctors reported working an average of 50.1 hours per week. Compared to those who worked 40-44 hours a week, those who worked more than 55 hours a week were twice as likely to report common mental disorder (CMD) and suicidal ideation (SI). The survey found that one in four junior doctors were working hours that doubled their risk of common mental health problems and suicidal ideation. A survey of doctors’ working hours by the Australian Medical Association (AMA) in 2016 indicated that nothing had changed as far as demands upon junior doctors, including routine unpaid and unrostered overtime.  

Has anything changed?

Stephens’ firm, Maurice Blackburn, and Gordon Legal continue to administrate settlement funds between both the NSW and Victorian cases.  

“It means that we continue to have a dialog with doctors, and in both Victoria and in New South Wales, the feedback I have received is that there has been improvement in working conditions for junior doctors, but it is inconsistent,” says Stephens. 

In some hospitals and departments, particularly under strong leadership by good senior doctors, there’s been an improved approach towards encouraging doctors to work less excessive hours, Stephens explains. Where junior doctors do work additional hours, they are being encouraged to lodge claims, so they are paid for those hours accordingly.  

“However, in some departments we’ve also heard stories of nothing changing, which is obviously disappointing,” he concedes. “I do think these class actions have served as a major circuit breaker of sorts. At the upper echelons of the bureaucracy of health, we have seen a shift in attitude where we are seeing now additional investment in systems and process for claiming overtime, and we’ve also seen a shift in education and raising awareness of doctors, both junior doctors, but also senior doctors, on the importance of avoiding this behaviour in the future.” 

Ultimately, says Stephens, “It’s great receiving feedback from doctors that our work is making a positive difference in their workplace. I’m very proud of the work we’ve achieved so far”.