Douglass Hanly Moir Pathology Pty Ltd T/A Douglas Hanly Moir
[2024] FWC 52
•9 JANUARY 2024
| [2024] FWC 52 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Douglass Hanly Moir Pathology Pty Ltd T/A Douglas Hanly Moir
(AG2023/4394)
| Health and welfare services | |
| COMMISSIONER MATHESON | SYDNEY, 9 JANUARY 2024 |
Application for an order relating to instrument covering new employer and transferring employees
Douglass Hanly Moir Pathology Pty Ltd (Applicant) has made an application under s.318 of the Fair Work Act 2009 (Cth) (Act). The Applicant provides pathology services to doctors, private hospitals and aged care facilities in New South Wales and parts of Victoria, employs more than 3,000 employees and is an entity within the Sonic Healthcare Group.
Sullivan Nicolaides Pathology Pty Limited (SNP) is also a member of the Sonic Healthcare Group. SNP operates more than 20 diagnostic testing laboratories across Queensland, northern New South Wales and the Northern Territory. It also employs more than 3,000 employees.
Employees of SNP are covered by the Sullivan Nicolaides Pathology Collective Workplace Agreement No. 4 (SNP Enterprise Agreement) which has a nominal expiry date of 2 December 2026.
Mr Keanu Wong was employed by SNP as an Immunology/Serology Laboratory Scientist and the SNP Enterprise Agreement applied to his employment where he was paid $37.5747 per hour as a Laboratory Scientist Level S1.3. In June 2023 Mr Wong approached the Applicant, applying for a full time position of Health Professional Level 2, Pay Point 1 – Scientific Officer in the Immunoserology Department at the Applicant’s Macquarie Park facility. This followed a personal decision the Applicant made to relocate to Sydney to be closer to his family. The work Mr Wong would perform for the Applicant in this position is substantially similar to the work Mr Wong performed for SNP. The Applicant says that by way of oversight, it appears that Mr Wong commenced temporary employment with the Applicant on 7 August 2023 and remains covered by the SNP Enterprise Agreement. The Applicant says that this has resulted in a need to manually correct Mr Wong’s pay as its systems are not set up to pay under the SNP Enterprise Agreement and it does not have any other employees covered by the SNP Enterprise Agreement.
The Applicant seeks an order that the SNP Enterprise Agreement does not and will not cover Mr Wong in relation to his employment with the Applicant and seeks that this order come into effect at the time Mr Wong commences permanent employment with the Applicant. I understand the offer of permanent full-time employment is conditional upon the orders sought.
The application was supported by a statement of Mr Graham Beal, Chief Human Resources Officer for the Applicant. The application was also supported by a statement of Mr Wong who indicated he supports the orders sought.
On 22 November 2023 I issued Directions requiring the Applicant to serve a copy of those Directions, the application and witness statements on Mr Wong and to file a statutory declaration confirming compliance with the Directions. The Applicant did so. The Directions required that Mr Wong file any submissions in opposition to the application or otherwise provide any views. Mr Wong did not make any submissions in opposition to the orders sought and as such, the application was decided on the papers.
Legislative framework
Section 318 of the Act 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.”
Initial matters
Section 318(1)(a) of the Act provides that the Commission may make an order that a ‘transferable instrument’ that would, or would be likely to cover the new employer and a ‘transferring employee’ because of s.313(1)(a) does not, or will not, cover the new employer and transferring employee.
Section 313(1)(a) of the Act provides that if a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer then the transferable instrument covers the new employer and the transferring employee in relation to the transferring working after the time (the transfer time) the transferring employee becomes employed by the new employer.
A ‘transferring employee’ is defined in s.311(2) as an employee who satisfies the requirements of s.311(1)(a), (b) and (c) of the Act in relation to a transfer of business. This includes:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer; and
(c) the work (the transferring work ) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer.
Section 312(1)(a) provides that a ‘transferrable instrument’ includes an enterprise agreement that has been approved by the Commission.
The Applicant and SNP are constitutional corporations and employers within the meaning of the Act. They are related entities that are both part of the Sonic Healthcare Group and are associated entities within the meaning of s.50AAA of the Corporations Act 2001 (Cth). Mr Wong is an employee within the meaning of the Act. Mr Wong commenced temporary employment with the Applicant on 7 August 2023, being within three months of his employment terminating with SNP. This satisfies s.311(a) and (b) of the Act. The work that Mr Wong performs is substantially the same as the work he performed for SNP. This satisfies s.311(1)(c) of the Act.
There is a connection between the Applicant and SNP in accordance with s.311(6) of the Act because the Applicant was an associated entity of SNP when Mr Wong became an employee of the Applicant.
Based on the material before the Commission, I am satisfied that for the purposes of s.311 of the Act there is a transfer of business from SNP to the Applicant and that Mr Wong is a transferring employee. The SNP Enterprise Agreement covered Mr Wong’s employment and is a transferable instrument that covers the Applicant and Mr Wong. I am satisfied that the Commission has jurisdiction to make the orders sought, subject to its consideration of the matters the Commission is required to take into account under s.318(3) of the Act.
Section 318(3) considerations
Section 318(3)(a)(i) - the views of the Applicant (new employer)
The Applicant is the new employer and supports the order sought. Mr Wong has been offered a permanent position with the Applicant, with such offer conditional on an order being made by the Commission under s.318(1) of the Act. The views of the Applicant weigh in favour of the making of the order.
Section 318(3)(a)(ii) - the views of the employees who would be affected by the order
A statement of Mr Wong was filed with the Commission indicating his support for the orders. The views of Mr Wong weigh in favour of the making of the order.
Section 318(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
The Applicant submitted that the order (and consequent employment with the Applicant on the terms set out in the offer of employment) provide Mr Wong with a number of advantages including:
· employment in a full-time capacity without being subject to a qualifying period;
· work at a location that serves his personal needs;
· an ability to enter into an agreement with the Applicant to cash out accrued annual leave under the Health Professionals and Support Services Award 2020 (Award) which is not an entitlement available under the SNP Enterprise Agreement;
· continuity of service, with sick leave and long service leave entitlements transferred across to the Applicant.
The Applicant does however acknowledge that Mr Wong will no longer be entitled to receive a number of benefits under the SNP Enterprise Agreement if the order is made including:
· the higher rate of pay of $37.57 which will be reduced to $34.95, being the rate prescribed for a Health Professional Employee Level 2, Pay Point 1, under the Award;
· more generous overtime rates of pay, time off in lieu of overtime provisions, shift allowances, on-call allowances and meal break entitlements;
· the ability to cash out personal leave;
· more generous long service leave provisions;
· a minimum payment for working on a public holiday;
· payment of double time for working through breaks;
· more generous severance pay.
In his statement Mr Wong indicates he is aware of the above but still supports the making of the order.
Section 318(3)(c)- The nominal expiry date of the agreement
The SNP Enterprise Agreement has a nominal expiry date of 2 December 2026.
Sections 318(3)(d), (e) and (f) – negative impact on productivity, significant economic disadvantage and degree of business synergy between instruments
The Applicant submits that s.318(3)(d) has no application to the facts of the matter.
In relation to ss.318(3)(e) and (f) the Applicant submitted that the transfer of the SNP Enterprise Agreement will result in additional administrative burden as a result of the need to administer different terms and conditions compared to those applying to its other employees. It submitted that the Applicant and SNP are distinct and different entities and Mr Wong will be working alongside employees who will not be covered by the SNP Enterprise Agreement. The Applicant does not wish for employees working alongside each other covered by different terms and conditions as it wishes to avoid disparity and discontentment between employees performing similar work and working together.
Section 318(3)(g) – the public interest
The Applicant submitted that it is not against the public interest to grant the order sought and that the making of an order is not uncommon in similar circumstances to facilitate a voluntary transfer of employment.
I am satisfied that it is not against the public interest to grant the orders sought by the Applicant.
Conclusion
Having taken into account the considerations in s.318(3) of the Act, I consider that the following orders should be made:
Pursuant to s.318(1)(a) of the Fair Work Act 2009 (Cth), the Commission orders that the Sullivan Nicolaides Pathology Collective Workplace Agreement No.4 does not, and will not, cover Mr Keanu Wong in relation to their employment with Douglass Hanly Moir Pathology Pty Ltd.
Pursuant to s.318(4) of the Fair Work Act 2009 (Cth), order 1 comes into effect at the time Mr Wong commences permanent employment with Douglass Hanly Moir Pathology Pty Ltd.
The order [PR770063] will be issued in conjunction with this decision.
COMMISSIONER
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<AE518400 PR770062>
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