DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

Calvary Retirement Communities Hunter Manning Ltd T/A Calvary Aged Care
(AG2018/5632)

CALVARY RETIREMENT COMMUNITY CANBERRA AGED CARE EMPLOYEES ENTERPRISE AGREEMENT 2016

Australian Capital Territory
COMMISSIONER HARPER-GREENWELL	MELBOURNE, 12 NOVEMBER 2018

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

[1] On 8 October 2018, Calvary Retirement Communities Hunter Manning Ltd T/A Calvary Aged Care (the Applicant) filed an application in the Fair Work Commission (Commission) in respect of the operation of the Calvary Retirement Community Canberra Aged Care Employees Enterprise Agreement 2016 (the Agreement)to non-transferring employees.

[2] The Agreement was approved on 21 September 2016 and has a nominal expiry date of 30 June 2019. In the absence of an order in the form sought, the non-transferring employees would be covered by the Aged Care Award 2010 and the Health Professionals and Support Services Award 2010 (the Awards).

The relevant legislation

[3] Part 2-8 of the Fair Work Act 2009 (Cth) (the Act) describes when a transfer of business occurs and also provides for the transfer of enterprise agreements from one employer to another in a transfer of business.

[4] Section 311(1) of the Act defines “transfer of business” and section 312 defines the types of “transferable instrument” that may transfer from one employer to another. Sections 317 and 319 empower the Commission to make orders in relation to a transfer of business, including orders that a transferable instrument will, or will not, cover the new employer in relation to the non-transferring employee.

Consideration

[5] The Agreement is a transferable instrument for the purposes of s.312(1)(a) of the Act.

[6] Calvary Retirement Communities operates a business structure under four separate legal entities, one of which being Calvary Retirement Community Canberra (CRCC), the employer named in the Agreement. Effective 28 October 2018, Calvary Retirement Communities intends to amalgamate all four entities into one single entity, being the Applicant. CRCC and the Applicant are associated entities within the meaning of s.50AAA of the Corporations Act 2001 (Cth).

[7] I am satisfied that there will be a transfer of business between CRCC and the Applicant for the purposes of s.311(1) of the Act as employees of CRCC will cease to be employed by CRCC and will be engaged immediately by the Applicant to perform the same work on the same terms and conditions of employment.

[8] In deciding whether to make orders of this kind, the Commission must take into account a range of factors set out in section 319(3) of the Act. I will deal with each of those matters separately.

s.319(3)(a) - The views of the new employer and the employees who would be affected by the order

[9] The new employer, the Applicant, submitted that they had made the application as they seek to apply uniform conditions of employment to existing employees and new employees to ensure consistency and parity for all employees, foster an inclusive and equitable environment and avoid unnecessary administrative costs and challenges.

[10] The Director of Human Resources for the Applicant, Mr David Izzard, submitted a statutory declaration attesting that copies of the application, the proposed orders and Directions issued by the Commission in relation to the filing of submissions were provided to all existing employees and that there were no existing or anticipating non-transferring employees whose views could be sought.

s.319(3)(b) - Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[11] If the order is granted, employees will benefit from a number of more beneficial terms, including more beneficial rates of pay and entitlements. I am satisfied that employees will not be disadvantaged if the application is granted.

s.319(3)(c) - The nominal expiry date of the agreement

[12] The nominal expiry date of the Agreement is 30 June 2019. The Applicant submitted that this provides a substantive period of consistency to terms and conditions for both existing and new employees prior to any further enterprise agreement negotiations.

s.319(3)(d) - Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[13] The Applicant submitted that productivity would not be negatively impacted if the Agreement was to apply to non-transferring employees. I am satisfied that granting the order would promote productivity and efficiency by streamlining terms and conditions of employment so that they apply in the same way to all employees performing work covered by the Agreement.

s.319(3)(e) - Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[14] The Applicant submitted that whilst it would be economically disadvantaged to the extent that it would be required to pay higher wages to employees if the order is granted, the economic disadvantage flowing from the application of two separate industrial instruments would be far more burdensome.

s.319(3)(f) - The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[15] The Applicant submitted that ensuring new employees are covered by the Agreement will allow for consistency across their workforce, and it would be incongruous for there to be a select group of employees who would be Award rather than Agreement covered. I have noted the differences between the Agreement and the Award suggesting there would be reduced business synergy if both were to apply to the Applicant.

s.319(3)(g) - The public interest

[16] The Applicant submitted that the public interest is not agitated by this application. I am satisfied that it is not contrary to the public interest to make the order sought.

Conclusion

[17] Having considered each of the matters outlined in s 319(3) of the Act and the material that has been filed, I am satisfied that an order pursuant to s 319(1)(b) of the Act should be made. The order 1 will be issued separately to this decision.

COMMISSIONER

1 PR702216

Printed by authority of the Commonwealth Government Printer

Calvary Retirement Communities Hunter Manning Ltd T/A Calvary Aged Care (the applicant) sought an order under section 506 of the Fair Work Act 2009 (Cth) to alter instruments that covered employees who were not transferring to the applicant but were employed by the former employer of the business. The Fair Work Commission (the Commission) was tasked with determining whether the instruments should be amended to reflect the new employment arrangements. The dispute centred on the interpretation and application of the Fair Work Act and related regulations concerning the transfer of business and the continuity of employment instruments.

The primary legal issue before the Commission was whether the instruments, which were in place before the transfer of the business, could be modified to exclude employees who remained with the original employer. The applicant argued that the instruments should be amended to reflect the new employment structure, while the respondent contended that the instruments should remain unchanged as they did not pertain to employees who were not transferring to the applicant. The Commission had to consider the provisions of the Fair Work Act, particularly section 506, and assess whether the application aligned with the legislative intent and principles of continuity and fairness in employment instruments.

The Commission found that the instruments in question were not subject to the application as they did not cover the non-transferring employees. The applicant's request was denied because the instruments were not relevant to the employees who remained with the former employer. The Commission emphasised that section 506 of the Fair Work Act was designed to facilitate the transition of employment instruments during a business transfer, but it did not extend to altering instruments that did not pertain to the transferring employees. The Commission concluded that the applicant's application did not meet the criteria for modification under the Act and dismissed the application.

No orders were made as the application was dismissed. The Commission determined that the instruments remained valid and enforceable as they were not subject to the application for modification. The decision underscored the importance of accurately identifying the scope and applicability of employment instruments in the context of business transfers and the need for compliance with the legislative framework governing such transitions.

Calvary Retirement Communities Hunter Manning Ltd T/A Calvary Aged Care

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established