Australian Capital Territory (as represented by Canberra Health Services)
[2023] FWC 2462
•29 SEPTEMBER 2023
| [2023] FWC 2462 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Australian Capital Territory (as represented by Canberra Health Services)
(AG2023/3064)
| DEPUTY PRESIDENT DEAN | CANBERRA, 29 SEPTEMBER 2023 |
Application for orders relating to instruments covering new employer and transferring employees.
Australian Capital Territory (as represented by Canberra Health Services) has applied for orders pursuant to s.318 of the Fair Work Act 2009 (the Act). The application arises from the Applicant’s decision to insource renal care services at Belconnen Health Centre and Tuggeranong Health Centre which have been outsourced to Baxter Renal Care Services Pty Ltd (Baxter).
Baxter employs about 61 employees at the two facilities in the roles of Registered Nurse (Level 1 and Level 2), Nurse Unit Manager, Receptionist and Healthcare Assistant, who are engaged either under the Baxter Renal Care Services Pty Ltd Nursing Enterprise Agreement 2021 - 2023 (the Baxter Agreement) or the Health Professionals and Support Services Award 2020 (the Award).
It is accepted that the contemplated transition constitutes a transfer of business within the meaning of s.311(1) of the Act and by virtue of s.313, the Baxter Agreement and the Award are transferable instruments which would cover the Applicant (new employer) and employees transferred from Baxter (transferring employees).
The transfer of business is set to occur on 12 October 2023 when the employment of Baxter employees will be transferred to the Applicant’s Division of Medicine. The Applicant intends for the transferring employees to be covered by three instruments currently applying to employees who perform similar roles at the Applicant’s other facilities, namely ACT Public Sector Nursing and Midwifery Enterprise Agreement 2020 – 2022 (ACT Nursing and Midwifery Agreement); ACT Public Sector Support Services Enterprise Agreement 2021 – 2022 (ACT Support Services Agreement) and ACT Public Sector Administrative and Related Classifications Enterprise Agreement 2021 – 2022 (ACT Administrative and Related Classifications Agreement).
The orders sought by the Applicant are in the following terms:
“1. The Baxter Renal Care Services Pty Ltd Nursing Enterprise Agreement 2021 - 2023 does not, and will not, cover Canberra Health Services in respect of employees transferring from employment with Baxter Renal Care Services Pty Ltd (ABN: 625 652 280) who would otherwise be covered by the Baxter Renal Care Services Pty Ltd Nursing Enterprise Agreement 2021 - 2023.
2. The Baxter Renal Care Services Pty Ltd Nursing Enterprise Agreement 2021 - 2023 does not, and will not, cover any employee whose employment transfers from Baxter Renal Care Services Pty Ltd (ABN: 625 652 280).
3. Any employee of Baxter Renal Care Services Pty Ltd (ABN: 625 652 280) transferring to Canberra Health Services in accordance with section 311 of the Fair Work Act 2009 (Cth) and who is covered or should be covered by the Baxter Renal Care Services Pty Ltd Nursing Enterprise Agreement 2021 - 2023 will be covered by the ACT Public Sector Nursing and Midwifery Enterprise Agreement 2020 - 2022 instead.
4. The Health Professionals and Support Services Award 2020 does not, and will not, cover Canberra Health Services in respect of employees transferring from employment with Baxter Renal Care Services Pty Ltd (ABN: 625 652 280) who would otherwise be covered by the Health Professionals and Support Services Award 2020.
5.The Health Professionals and Support Services Award 2020 does not, and will not, cover any employees whose employment transfers from Baxter Renal Care Services Pty Ltd (ABN: 625 652 280).
6.Any employee of Baxter Renal Care Services Pty Ltd (ABN: 625 652 280) transferring to Canberra Health Services in accordance with section 311 of the Fair Work Act 2009 (Cth) and who is covered or should be covered by the Health Professionals and Support Services Award 2020 will be covered by either the ACT Public Sector Support Services Enterprise Agreement 2021 - 2022 or the ACT Public Sector Administrative and Related Classifications Enterprise Agreement 2021 - 2022, being whichever is most suitable in relation to the nature of their work and employment.
7.Subject to section 318(4) of the Fair Work Act 2009 (Cth), the orders will come into operation from the date when the first employee transferring from Baxter Renal Care Services Pty Ltd (ABN: 625 652 280) becomes employed by Canberra Health Services.”
Relevant Legislation
Section 318 of the Act relevantly provides:
“318 Orders relating to instruments covering new employer and transferring employees
Orders that the FWC may make
(1) The FWC may make the following orders:
(a) an order that a transferable instrument that would, or would be likely to, cover the new employer and a transferring employee because of paragraph 313(1)(a) does not, or will not, cover the new employer and the transferring employee;
(b) an order that an enterprise agreement or a named employer award that covers the new employer covers, or will cover, the transferring employee.
Who may apply for an order
(2) The FWC may make the order only on application by any of the following:
(a) the new employer or a person who is likely to be the new employer;
(b) a transferring employee, or an employee who is likely to be a transferring employee;
(c) if the application relates to an enterprise agreement—an employee organisation that is, or is likely to be, covered by the agreement;
(d) if the application relates to a named employer award—an employee organisation that is entitled to represent the industrial interests of an employee referred to in paragraph (b).
Matters that the FWC must take into account
(3) In deciding whether to make the order, the FWC must take into account the following:
(a) the views of:
(i)the new employer or a person who is likely to be the new employer; and
(ii)the employees who would be affected by the order;
(b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;
(c) if the order relates to an enterprise agreement--the nominal expiry date of the agreement;
(d) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace;
(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;
(f) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;
(g) the public interest.
Restriction on when order may come into operation
(4) The order must not come into operation in relation to a particular transferring employee before the later of the following:
(a) the time when the transferring employee becomes employed by the new employer;
(b) the day on which the order is made.”
Consideration
The Applicant has provided detailed grounds and submissions and addressed each of the matters in s.318(3) that the Commission must take into account in determining whether to make the order sought.
Views of the new employer and affected employees (s.318(3)(a))
The Applicant as the new employer supports the proposed orders. The Applicant submits that the orders, if made, will promote a single and harmonious workplace culture, promote consistency and certainty in employment terms and conditions and reduce complexity for both employees and the Applicant who would otherwise have to apply additional industrial instruments to some employees but not others performing similar if not the same work. Further, these additional industrial instruments would obstruct the integration and operation of the transferring employees’ employment with the Applicant, increase costs and administrative pressure and create inequality in the conditions applicable to employees performing the same work such as superannuation and long service leave they would otherwise accrue.
The Commission has issued Directions inviting all transferring employees who wished to be heard on the application to contact my chambers. No response has been received from the transferring employees in response to the Directions.
The Australian Nursing and Midwifery Federation, being the employee organisation covered by the Baxter Agreement, confirmed in writing to the Commission that they do not oppose the application.
Whether any employees would be disadvantaged by the order – s.318(3)(b)
The Applicant filed comparative analysis of the pay rates and conditions between the relevant instruments.
Transferring employees currently covered by the Award will receive higher rates of pay and will not be disadvantaged if they are covered under either the ACT Support Services Agreement or the ACT Administrative and Related Classifications Agreement.
However, the Baxter Agreement which covers Nurses Levels 1 and 2 and Nurse Unit Managers has higher rates of pay for employees in the same classification under the ACT Nursing and Midwifery Agreement. The Applicant concedes that these transferring employees would, despite receiving certain more beneficial terms and conditions of employment, be potentially disadvantaged performing the same or substantially the same work for the Applicant as they did for Baxter under the ACT Nursing and Midwifery Enterprise Agreement.
The Applicant undertakes to ensure that all transferring employees from Baxter would receive at least the same rate of pay including compensation for such conditions and terms as overtime, penalty rates, leave loading and allowances, as they would have if they had remained covered under the transferable instruments. The Applicant submits that this would result in no transferring employees being disadvantaged in relation to their terms and conditions of employment by the orders sought.
Expiry date of the agreements – s.318(3)(c)
The Baxter Agreement has passed its nominal expiry date of 30 June 2023.
The ACT Nursing and Midwifery Agreement has passed its nominal expiry date of 31 December 2022 and the ACT Support Services Agreement has passed its nominal expiry date of 31 October 2022. The Applicant indicates that it is currently bargaining for new replacement agreements with the other bargaining representatives.
At the time of this decision, a replacement agreement for the ACT Administrative and Related Classifications Agreement, known as the ACT Public Sector Administrative and Related Classifications Enterprise Agreement 2023-2026 was approved by the Commission on 13 September 2023 and has a nominal expiry date of 31 March 2026.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace – s.318(3)(d)
If the transferable instruments were to continue to cover the new employees from Baxter, the Applicant submits that the application of differing terms and conditions of employment between these new employees and the Applicant’s existing employees, especially in situations where the two groups of workers are working side by side to one another in the same workplace performing the same work, may adversely impact productivity, workplace harmony and employee morale.
The Applicant further highlighted a negative impact on the productivity as a result of having the Baxter Agreement cover nursing employees previously employed by Baxter. The Applicant explains that it would make integrating these employees into the broader Canberra Health Services Renal Care Service and Canberra Health Services more difficult and complex and discourage these new employees’ deployment to other parts of the Canberra Health Services Renal Care Services as such deployment could lead to additional administrative confusion over their pay and conditions.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer – s.318(3)(e)
If the orders were not made, the Applicant submits that the management of the transferable instruments, in addition to the ones already existing for employees working in the same or substantially the same sort of work, would lead to increased administrative costs by way of training existing managerial, payroll and human resources staff. Such an additional burden could lead to the engagement of more human resources and payroll staff and costs to update the Applicant’s existing payroll systems to incorporate and calculate the different terms and conditions provided in these new industrial instruments.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer – s.318(3)(f)
The Applicant submits that there is little business synergy between the instruments because of the discrepancies in the remuneration structures, classification structures and other conditions of employment. The Applicant highlights that the ACT Agreements, unlike the Award, are specifically tailored to meet the specific requirements of the Applicant and its operations.
The public interest – s.318(3)(f)
The Applicant submits that any additional burden involved in the enforcement and operation of the transferable instruments, which in turn could lead to additional costs and complications in the provision of care for the Applicant’s patients seeking renal care or other healthcare services, is against the public interest.
Conclusion
Having considered the material provided and taking into account all of the matters in s.318(3) of the Act, I am satisfied that it is appropriate to grant the application. The orders will be issued separately with this decision.
DEPUTY PRESIDENT
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