Bethanie Group Inc T/A Bethanie Group Inc

[2020] FWC 1065

[2020] FWC 1065

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees

Bethanie Group Inc T/A Bethanie Group Inc
(AG2020/362)

Health and welfare services
DEPUTY PRESIDENT BEAUMONT	PERTH, 27 FEBRUARY 2020

Application for an order relating to instruments covering a new employer and transferring employees.

[1] The Bethanie Group Inc T/A Bethanie Group Inc (Bethanie)has applied for orders under s.318 of the Fair Work Act 2009 (Act) relating to the transfer of 268 employees (Transferring Employees) from the Berrington Care Group (Berrington) to its business.

[2] The Transferring Employees work at Berrington’s Como and Subiaco aged care facilities in Western Australia; facilities which Bethanie is ‘acquiring’. Those same employees are covered by the Berrington Residential Care Staff Agreement 2012 1(Berrington Agreement), and are engaged in classifications such as registered nurse, enrolled nurse, carer, therapy assistant, catering/cleaning/laundry, cook/chef, maintenance gardener, administration and allied health.

[3] Bethanie now seeks orders that the Berrington Agreement will not cover Bethanie or any of the Transferring Employees who work at the facilities. The application extends to seeking orders for three of the Bethanie enterprise agreements to cover the relevant Transferring Employees.

[4] Berrington entered voluntary administration on 4 July 2019, and KPMG were appointed as Administrators. 2 Bethanie has a strategy to expand within the Western Australian market and therefore in December 2019, it entered into a conditional agreement to acquire the assets of the facilities.3 As part of the conditional agreement Bethanie agreed to offer employment to each of the Transferring Employees.

[5] Bethanie now seeks the following orders under s.318(1) of the Act, which are:

1. That the Berrington Residential Care Staff Agreement 2012 4 will not cover Bethanie or any employees of Bethanie formerly employed by Berrington who performed work in relation to the Berrington Care facilities in Como and Subiaco (Transferring Employees).

2. That the relevant Bethanie Enterprise Agreements (relevant Bethanie Agreements) will cover the Transferring Employees as follows:

a. Bethanie Group Inc Registered Nurses (ANMF) Enterprise Agreement 2018 5 (Bethanie RN Agreement) that applies to registered nurses who are employed within the Facilities and Community Programs operated by The Bethanie Group Inc.

b. Bethanie Group Inc and Health Services Union (HSU) Enterprise Agreement 2018 6 (Bethanie HSU Agreement) that applies to therapy assistants, allied health professionals and facility-based administration, coordination and case management roles who are eligible for membership of the Health Services Union.

c. Bethanie Group Inc Enrolled Nurses, Care Workers, Support Workers and Support Services Enterprise Agreement 2018 7 (Bethanie ECSS Agreement) that applies to employees engaged in the classifications of:

•  Domestic, Laundry Assistant, Kitchenhand, Food Services Assistant, Hotel Services

•  Bus Driver, Gardener, Cook (qualified and unqualified), Chef

•  Shift Supervisor and Facility Supervisor

•  Maintenance Worker, Handyperson

•  Care Worker, Support Worker, Activities Assistant

•  Enrolled Nurse

[6] The application contained detailed grounds and submissions, and was accompanied by a statutory declaration of Ms Allison Ross, 8 together with several attachments that, in short, contend that which is listed.

a) On or around 23 December 2019, employees covered by the Berrington Agreement were given a letter that advised that Bethanie would offer a transfer to them on terms and conditions equivalent or better off overall than the Transferring Employees’ current terms and conditions. 9

b) Within the same aforementioned letter, Bethanie notified the Transferring Employees that it was considering what would happen with the Berrington Agreement and that it was Bethanie’s preference to have all employees who were doing the same type of work covered by the same terms and conditions. 10

c) Information sessions were held with the Transferring Employees during the period of 4 February 2020 to 7 February 2020, in which information was provided on several topics including transferring to Bethanie and the Bethanie Agreements. 11 Approximately 100 employees attended the sessions and a detailed explanation was provided regarding the differences between the Berrington Agreement and the Bethanie Agreements.12

d) During the information sessions, Transferring Employees were informed that Bethanie would be conducting a survey to obtain their feedback, which needed to be completed by 14 February 2020. 13

e) During that same period, Bethanie emailed offers of employment to the Transferring Employees that were conditional on the completion of the agreement to acquire the Berrington assets. 14 The Transferring Employees were asked to return their signed offers of employment by 21 February 2020.15

f) On 11 February 2020, the Transferring Employees were emailed a copy of the presentation delivered during the information sessions held between 4 February 2020 and 7 February 2020, enterprise agreement comparisons for each of the Bethanie Agreements and a document titled ‘Transferring to Bethanie Frequently Asked Questions’. In addition, copies of the Bethanie Agreements were left in the staff rooms of the facilities. 16

g) Of the feedback surveys completed:

i. 27 employees indicated they currently work for Berrington and were covered by the Berrington Agreement;

ii. 28 employees indicated they would like to work for Bethanie and be covered by the relevant Bethanie Agreement;

iii. 28 employees acknowledged, and were comfortable, to no longer be covered by the Berrington Agreement;

iv. 23 employees provided no further comment, while three employees provided comments supportive of the application. 17

h) Ms Ross gave evidence that she spoke with representatives of both the HSU and UWU about the consultation process with employees, and both unions were said to have indicated their support for the proposed approach. 18 Whilst the ANMF were contacted, Ms Ross’ evidence was that there had been no response to her emails or calls.19

i) According to Ms Ross, the Berrington Agreement is a ‘baseline’ enterprise agreement in contrast to the Bethanie Agreements, which have been negotiated with relevant unions, are thorough and detailed, and are more closely aligned with the relevant modern awards in addition to being tailored to meet the core business of Bethanie. 20

j) Ms Ross continued that one of the key matters arising is the different rates of pay between the Berrington Agreement base rate of pay and that of the Bethanie Agreements. 21 Specifics of the impact on the rates of pay are detailed below; save to say that to address the rates of pay issue, Bethanie decided to guarantee the rates of pay of all Transferring Employees (set out in the offer of employment). Ms Ross gave the following evidence regarding the various impacts upon groups within the Transferring Employee cohort:

i. the employees’ base rate of pay would increase if the relevant Bethanie Agreement applied; 22

ii. the employees’ rate of pay would decrease if the relevant Bethanie Agreement applied but their casual loading would increase, and they would be better off overall; 23

iii. the employees’ rate of pay would decrease if the relevant Bethanie Agreement applied but Bethanie would grandfather their rate (stated in the contractual offer of employment) so that they would not be worse off if covered by the relevant Bethanie Agreement; 24

iv. the employees’ rate of pay would decrease if the relevant Bethanie Agreement applied but Bethanie would grandfather their rate (stated in the contractual offer of employment). The casual loading of 25% would be offset and not simply calculated on top of the grandfathered rate. Therefore, on an overall basis an employee would not be worse off if covered by the relevant Bethanie Agreement. 25

k) Ms Ross’ evidence was that across all of the Bethanie Agreements there were some significant additional benefits for the Transferring Employees if the Bethanie Agreements applied to their employment, including casual loading, parental leave, long service leave, compassionate leave, redundancy, professional development, communicable infection leave, access to salary packaging and additional allowances.

l) According to Ms Ross, if the Berrington Agreement continued to apply to the Transferring Employees there would be implications for payroll 26 in addition to employees performing the same work yet attracting different terms and conditions of employment. It would therefore make it difficult for Transferring Employees to access other opportunities at different Bethanie facilities and sites.27

m) Bethanie therefore submitted that having employees undertaking the same work and being covered by the same terms and conditions was necessary to secure a unified, fair and collaborative workforce, thereby facilitating greater flexibility and productivity consistent with the objects of the Act.

n) The Berrington Agreement expired in December 2016. The Bethanie RN Agreement expires on 30 June 2020, the Bethanie HSU Agreement on 30 June 2021 and the Bethanie ECSS Agreement on 30 June 2021. Bethanie advanced that two of the Bethanie Agreements have over 12 months before expiry and, therefore, during that time an increase would be applied to Agreement rates.

[7] Bethanie contended that it was in the public interest for it to continue to provide aged care services to the residents of Berrington following completion of the agreement. In order to achieve this, Bethanie explained that it needed to engage the Berrington workforce who had experienced significant uncertainty since Berrington had entered into voluntary administration in July 2019. It was also in the public interest, stated Bethanie, for it to continue to provide services as any negative impact to the operation and sustainability of the facilities would have flow on effects to the community in terms of service provision.

[8] Upon receipt of the application my Chambers contacted the Health Services Union (HSU), United Workers Union (UWU) and the Australian Nursing and Midwifery Federation (ANMF) seeking confirmation it was in support of the orders sought. The HSU subsequently advised my Chambers it had no issues regarding the application, as did the UWU. The ANMF remained silent.

[9] In the absence of any objection to the application, and having been advised by Bethanie’s representative that it was content for the application to be determined on the papers, I have proceeded to determine the matter by reference to and reliance upon the grounds, submissions and other materials provided with the application.

[10] Section 318 of the Act sets out the circumstances in which an order such as that sought by Bethanie may be made by the Commission:

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.

[11] I have reviewed the application documentation and the accompanying material. These documents outline the factual circumstances which have given rise to the application. Further, the submissions contained in the application address the relevant legislative requirements which are asserted to provide a proper basis for the making of the orders sought.

[12] I am satisfied this circumstance is a transfer of business as understood by reference to s.311 and that the Berrington Agreement is a transferable instrument as described in s.312(1)(a). If the order under s.318(1)(a) was not made, then I consider by virtue of s.313(1)(a) the Berrington Agreement would cover the Transferring Employees notwithstanding their employment with Bethanie.

[13] I have considered all the factors set out in s.318(3) and have concluded that it is appropriate and not contrary to the public interest to make orders sought under ss.318(1)(a) and (b).

[14] In accordance with s.318(4), the orders 28 shall have effect from the time when the Transferring Employees become employed by Bethanie or the date of the orders, whichever is the later.

DEPUTY PRESIDENT

On the papers

Printed by authority of the Commonwealth Government Printer

<AE898775  PR717075 >

 1   [2012] FWAA 10439; AE898775.

 2 Form F40 [6].

 3   Form F40 [6]; Statutory Declaration of Allison Louisa Ross dated 17 February 2020 (Ross Statutory Declaration) [8].

 4   [2012] FWAA 10439; AE898775.

 5   [2018] FWCA 7193; AE500853.

 6   [2018] FWCA 7343; AE500948.

 7   [2019] FWCA 6180; AE505142.

 8   Ross Statutory Declaration.

 9 Ibid [4].

 10 Ibid [4].

 11 Ibid [6].

 12 Ibid [7].

 13   Ibid [7] and [13].

 14 Ibid [9].

 15 Ibid [10].

 16 Ibid [12].

 17 Ibid [23].

 18   Ibid [17] – [18].

 19 Ibid [19].

 20 Ibid [25].

 21 Ibid [27].

 22 Ibid [28].

 23 Ibid [28].

 24 Ibid [28].

 25 Ibid [28].

 26   Ibid [30] – [31].

 27 Ibid [33].

 28   PR717074.