Brimbank City Council

[2015] FWC 1677

[2015] FWC 1677

FAIR WORK COMMISSION

DECISION

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

Brimbank City Council
(AG2015/1851)

COMMISSIONER JOHNS MELBOURNE, 11 MARCH 2015

Transferring employees from Nurses and Midwives (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2012-2016 to Brimbank City Council Enterprise Agreement 7, 2014.

[1] On 4 March 2015 the Fair Work Commission (Commission), as presently constituted, indicated its preparedness to order that, upon approval of the Brimbank City Council Enterprise Agreement 7, 2014 (EB7), pursuant to section:

a) 318(l)(a) of the Fair Work Act (FW Act) that the Nurses and Midwives (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2012-2016 (Nurses EA) not cover employees who were previously employed by ISIS Primary Care (ISIS) and who became transferring employees upon their employment by Brimbank City Council;
b) 318(l)(b) of the FW Act, that the employees will be covered by EB7.

[2] These are the reasons for that decision in respect of the application made by Brimbank City Council (Brimbank) on 11 February 2015.
[3] The background to the application was set out in Annexure 2 to the application. It was explained that:

a) Since 1997 Brimbank has outsourced the provision of Maternal and Child Health Services (“Service”) for the City of Brimbank to ISIS.
b) On 7 March 2013 Brimbank ceased to outsource the Service to ISIS. The management of the Service was transferred back to Brimbank. This was considered a transfer of business within the meaning of section 311(1) FW Act.
c) As part of the transfer, 24 Nurses transferred from ISIS to Brimbank (Transferring Nurses). The 24 Transferring Nurses were employed at ISIS under Nurses EA. The Nurses EA continued to apply to the transferring Nurses upon their employment with Brimbank.
d) Non-transferring Maternal and Child Health Nurses (Non-transferring Nurses) already employed by Brimbank were covered by the Brimbank City Council Enterprises Agreement 2010 - 2014 (EB6) and the Local Government Nurses Award (Transitional).
e) It was recognised by Brimbank at the time of the transfer there may be some inequality between the terms and conditions which applied to the Transferring Nurses when compared to the terms and conditions which applied to Non-transferring Nurses performing the same work as set out in EB6.
f) Brimbank invited the Australian Nursing and Midwifery Federation (ANMF) to negotiate terms and conditions of employment for the Transferring Nurses to align them with EB6 at the time of the transfer. However, it was agreed that the Transferring Nurses would continue to be covered by the Nurses EA, pending the outcome of negotiations for standard employment conditions for all Nurses employed by Brimbank as part of negotiations for EB7.
g) Negotiations for EB7 commenced in December 2013. It was put to a vote on 15 December 2014 and approved by a vote of 641 employees (out of 840 employees who case a valid vote). It was approved by the Commission on 28 January 2015 and commenced operation on 4 February 2015.

[4] Section 318 of the Act sets out the circumstances in which an order 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.

[5] The Commission has considered each of the matters it is required to consider under s.318(3).

s.318(3)(a)(i) - the views of the new employer

[6] In its Form 40 - Application for Orders in Relation to Transfer of Business (Form 40), Brimbank stated that:

a) It believes provides employment conditions which are better overall for the nurses who transferred from ISIS when compared to the Nurses EA. It attached a table to its application (Annexure 3) to demonstrate the claim.
b) It also believes that the Transferring Nurses would not be disadvantaged in relation to the terms and conditions of their employment if they were to become covered by EB7.
c) It considers the continued application of the Nurses EA creates inequality between the Transferring Nurses and those nurses who are employed or who will be employed under EB7.
d) It believes that the continuation of two different sets of terms and conditions for the same job roles has a negative impact on morale.
e) Standardising the employment conditions of the Transferring Nurses would encourage a single workplace culture based on equality.
f) It seeks to standardise the employment conditions for nurses and midwives employed it to reduce the administrative burden of applying two different sets of terms and conditions within the workplace.

s.318(3)(a)(ii) - the view of the employees who would be affected by the order
[7] The Applicant, in its Form 40 did not address the views of employees who would be affected by the order.
[8] On 13 February 2015 the Commission wrote to Brimbank explaining that the Commission is required to have regard to the views of employees and inviting Brimbank to provide evidence of the same.
[9] On 18 February 2015 Brimbank filed in the Commission a letter from one employee citing her support for the application. No information was provided about the views of the remaining 19 employees.
[10] Consequently, on 20 February 2015 the Commission listed the matter for hearing.
[11] On 26 February 2015 the ANMF wrote to the Commission and indicated that it “supports the Applicant in this matter... “.
[12] Notwithstanding the support of the ANMF there remained a paucity of material or evidence before the Commission about the views of employees (other than one).
[13] At the hearing on 4 March 2015 Brimbank continued to fail to lead any evidence about the views of employees. It seemed to be of the misunderstanding that the Commission could substitute the views of the ANMF for the requirement, mandated by the FW Act, that the Commission consider the views of the employees.
[14] At this point ANMF organiser, Cynthia Salmons, offered to give evidence about the facts, matters and circumstances leading up to the negotiation and approval of EB7 and the efforts that the ANMF went to, to explain to its members (the former employees of ISIS) the costs and benefits of moving from the Nurses EA to EB7. The ANMF provided with Commission with a detailed chronology of its discussions with employees (ANMF-2) and a list of the former employees of ISIS who are its members (confidential exhibit ANMF-1). The Commission, as presently constituted, was greatly assisted by Ms Salmons’ evidence.
[15] Ms Justine Willis, Employee Relations Advisor, with Brimbank also gave evidence. Her evidence went to the explanation that Brimbank had given employees about the present application and the Nurses EA versus EB7 comparison table that she prepared.
[16] Having regard to all the evidence heard during the hearing the Commission, as presently constituted, is satisfied that:

a) all reasonable attempts have been made to explain:

i. the effect of the proposed order to former employees of ISIS;
ii. the fact of these proceedings; and

b) no Transferring Nurse opposes the present application.
s.318(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

a) The Applicant submits that EB7 provides better overall conditions than the Nurses EA for transferred employees. It is said that, in summary, this is demonstrated through:

i. A higher hourly rate of $47.85 compared $43.76.
ii. Better maternity leave provisions.

iii. Early access to Long Service Leave, providing an additional 1.3 weeks of leave to access each year after 7 years of service in addition to the long service leave these employees have already accrued.
iv. Providing easier access to penalty and overtime rates should the employees work additional hours within a week or longer hours in a day
v. Brimbank providing a personal Salary packaging allowance to transferring employees for the life of the agreement (between $0.04 and $6.75 an hour on top of the base hourly rate) in compensation for Nurse EA salary packaging provisions.
vi. Including an MCH Appendix with Nurse specific conditions to further recognise the place of Maternal and Child Health Nursing as a Local Government occupation.

b) Brimbank further submitted that the continued application of the Nurses EA to the Transferring Nurses may create further economic disadvantage to them in the future as the Nurses EA does not provide for any further pay increases (whereas EB7 provides for pay increases over the next three years).

s.318(3)(c) - if the order relates to an enterprise agreement—the nominal expiry date of the agreement

[17] The nominal expiry date of the Nurses Agreement is 30 June 2016. The nominal expiry date of EB7 is 28 February 2018.

s.318(3)(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[18] The Applicant submitted that it believes that the continuation of two different sets of terms and conditions for the same job roles will have a negative impact on morale. The Commission, as presently constituted, takes judicial notice of the fact that low morale workplaces are usually attended by poor productivity.

s.318(3)(e) - whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[19] The Applicant submits that the application of the Nurses Agreement would be an economic advantage to the Applicant. However, the Applicant may suffer economic disadvantage if it is required to administer two separate industrial instruments.

s.318(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[20] The Applicant submits that it considers EB7 to be a more appropriate industrial instrument for the transferred employees than the Nurses EA as it is more specific to nurses employed in a Local Government environment rather than in a hospital environment.
[21] It says the Nurses EA is more relevant to a medical provider, such as a hospital. Accordingly, there is little business synergy between the Nurses EA and EB7.

s.318(3)(g) - the public interest

[22] The Applicant submits that it foresees no negative impact on public interest in relation to the termination of the Nurses EA as a transferable instrument.
[23] The Commission, as presently constituted, is satisfied that it is not against the public interest to grant the order sought by the Applicant.
[24] Having read the application and supporting documents, the Commission is satisfied that all the requirements of s.318 of the Act have been met. An order will be issued with this decision.

COMMISSIONER

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