Douglass Hanly Moir Pathology Pty Ltd T/A Douglas Hanly Moir

Case •

[2023] FWC 2383

•

19 SEPTEMBER 2023
[2023] FWC 2383

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

(AG2023/3202)

COMMISSIONER SIMPSON

BRISBANE, 19 SEPTEMBER 2023

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

  1. An application has been made by Douglass Hanly Moir Pathology Pty Ltd T/A Douglas Hanly Moir (the Applicant) to the Fair Work Commission (the Commission) for an order pursuant to s.318 of the Fair Work Act 2009 (the FW Act).

Orders Sought

  1. The Applicant is seeking orders that:

1. Pursuant to s.318(1)(a) of the Fair Work Act 2009 (Cth), the Commission orders that the SAN Pathology Pty Ltd All Staff Enterprise Agreement 2022 does not, and will not, cover Mrs Meredith Wiggs in relation to her employment with Douglass Hanly Moir Pathology Pty Ltd.

2. Pursuant to s.318(4) of the Fair Work Act 2009 (Cth), order 1 comes into effect at the time Mrs Wiggs commences employment with Douglass Hanly Moir Pathology Pty Ltd.

  1. In support of this Application, Douglas Hanly Moir relies on:

1.   A statement from Mr Graham Beal, Head of Human Resources of Douglass Hanly Moir dated 4 August 2023; and

2.   A statement of Mrs Meredith Wiggs dated 1 September 2023 (with her offer of employment).

Jurisdictional Background

  1. For the reasons set out below, the Applicant submitted that the Commission has jurisdiction to make the orders sought by Douglass Hanly Moir under s.318(1)(a) of the FW Act.

  1. Relevantly:

(a) pursuant to s.318(2) of the FW Act, the Commission can only make the order sought under s.318(1)(a) of the FW Act on application by the new employer or a “transferring employee”;

(b) an order under s.318(1)(a) can be made if a “transferrable instrument” “would be likely to” “cover the new employer and a transferring employee” because of s.313(1)(a) of the FW Act;

(c) section 313(1)(a) of the FW Act provides that if a “transferrable instrument” covered “the old employer and a transferring employee immediately before the termination of the transferring employee’s employment” then “the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time the transferring employee becomes employed by the new employer”;

(d) 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 FW Act; and

(e) under s.312(1)(a), a “transferrable instrument” is an enterprise agreement.

  1. It was submitted that Douglass Hanly Moir and SAN Pathology Pty Limited (SAN Pathology) are both constitutional corporations, and within the coverage of the FW Act. Further, it was submitted both Douglass Hanly Moir and SAN Pathology are employers within the meaning of the FW Act.

  1. The Applicant submitted that SAN Pathology is a wholly owned subsidiary of Douglass Hanly Moir. As such, SAN Pathology and Douglass Hanly Moir are associated entities within the meaning of s. 50AAA of the Corporations Act 2001 (Cth).

  1. The Applicant submitted Mrs Wiggs is currently substantially employed as a Scientific Officer at SAN Pathology. Mrs Wiggs is an employee within the meaning of the FW Act.

  1. Mrs Wiggs approached Douglass Hanly Moir about taking up a role as the Branch Laboratory Biochemistry Co-ordinator at the Macquarie Park Laboratory and Douglass Hanly Moir has made an offer of employment to her. A copy of Mrs Wiggs’ offer of employment was attached to this Application. That offer of employment is conditional on an order being made by this Commission under s.318(1) of the FW Act.

  1. It is proposed that when Mrs Wigg’s employment with SAN Pathology terminates, she would then commence employment with Douglass Hanly Moir (and do so within three (3) months of her employment terminating with SAN Pathology). It was submitted that this fact satisfies the requirement of s.311(1)(a) and (b) of the FW Act.

  1. It was submitted that the work Mrs Wiggs will perform for Douglass Hanly Moir is substantially the same to the work Mrs Wiggs performed for SAN Pathology. It was submitted this fact satisfies the requirement of s.311(1)(c) of the FW Act.

  1. As a result of the corporate relationship between Douglass Hanly Moir and SAN Pathology, there is a relevant connection between the two entities for the purposes of s. 311(1)(d) of the FW Act.

  1. It was submitted that as a result of the matters set out above, and for the purposes of s.311 of the FW Act, there would be a transfer of business from SAN Pathology (the old employer) to Douglass Hanly Moir (the new employer), and Mrs Wiggs would be a transferring employee, on her employment with Douglass Hanly Moir commencing. In her employment with SAN Pathology, the old employer, the SAN EA covers her employment and is a transferrable instrument within the meaning of s. 312 of the FW Act. Accordingly, the SAN EA is likely to cover Douglass Hanly Moir and Mrs Wiggs in her employment with Douglass Hanly Moir.

  1. Douglass Hanly Moir, the new employer, has made this Application, as required by s. 318(2) of the FW Act. As such, it was submitted the Commission has jurisdiction to make the order, subject to its consideration of matters it must take into account under s.318(3) of the FW Act.

  1. Before examining each of the matters in s.318(3) of the FW Act the Commission “must take into account”, the following background as provided below.

Background

  1. At Douglass Hanly Moir, Mrs Wiggs will be engaged as a Health Professional Level 4 Pay Point 3 (Scientific Officer) in a much larger business than SAN Pathology. It was submitted that as a result, employment in Douglass Hanly Moir presents Mrs Wiggs with greater career opportunities.

  1. For many reasons, including those set out below, Douglass Hanly Moir does not want the SAN EA applying to employees employed in its business. As such, Mrs Wiggs has been offered employment with Douglass Hanly Moir only on the condition that an order is made under s.318(1) of the FW Act. If the order is not made, Mrs Wiggs will remain employed at SAN Pathology.

318(3)(a)(i) – views of Douglass Hanly Moir

  1. Douglass Hanly Moir applies for the order under s.318(1)(a) of the FW Act.

  1. In addition to the matters set out below, Douglass Hanly Moir seeks an order to facilitate the employment of Mrs Wiggs. If the order is not made, Douglass Hanly Moir will not employ Mrs Wiggs.

318(3)(a)(ii) – views of Mrs Wiggs

  1. It was submitted that Mrs Wiggs has freely accepted an offer of employment with Douglass Hanly Moir, fully aware of the basis of the offer, including being that the SAN EA does not transfer. Mrs Wiggs was not obliged to accept the offer. Mrs Wiggs has chosen to accept the offer and Mrs Wiggs supports the Application for the order.

  1. A statement in support from Mrs Wiggs was attached to the Application.

318(3)(b) – whether Mrs Wiggs will be disadvantaged by the order

  1. The Applicant submitted that the order (and consequently employment with Douglass Hanly Moir on the terms set out in the offer of employment) provides Mrs Wiggs with a number of advantages in relation to the terms and conditions of his employment with Douglass Hanly Moir:

(a)she will be employed by Douglass Hanly Moir;

(b)her rate of pay will increase from her substantive position’s hourly rate of $51.7224 per hour to a base rate of $57.33 per hour plus superannuation. Her salary is in full satisfaction and discharge of, and can be set off against, any and all entitlements under any applicable industrial instrument;

(c)she will enjoy greater career prospects and advancement. Mrs Wigg’s current position at SAN Pathology is as a Scientific Officer. Douglass Hanly Moir is a much larger organisation than SAN Pathology, with far greater career opportunities; and

(d)she will enjoy increased earning capacity in the role at Douglas Hanly Moir with the potential to increase her current earning capacity to $63.29 per hour.

  1. In this new role, Mrs Wiggs will earn $11,079.64 (gross) more a year. Mrs Wiggs will also receive additional superannuation payments as a result of receiving higher wages.

  1. The Applicant submitted that Mrs Wigg’s pay with Douglass Hanly Moir will be higher than the rate of pay that applies under the SAN EA where the minimum rate of pay for the comparable role of Senior Scientific Officer – Year 1, which is a similar role to the position of Health Professional Level 4 Pay Point 3 (Scientific Officer), is $55.6360 per hour. Mrs Wiggs will also have capacity to increase her earning capacity in the position.

  1. The Applicant submitted that there are other benefits in the SAN EA that Mrs Wiggs will no longer be entitled to receive, but the loss of these benefits are accepted by Mrs Wiggs and are minor or notional in nature:

(a)Mrs Wiggs will not be able to bank hours as permitted under clause 28 of the SAN EA. Mrs Wiggs accepts the loss of this benefit. It is a benefit not enjoyed by employees at Douglass Hanly Moir.

(b)Mrs Wiggs will not have the benefit of penalty rates and shift allowances for working weekends or shiftwork under clause 33 of the SAN EA. Whilst Mrs Wiggs may be required to work weekends or shiftwork, this will be a very rare one-off occasion in the DHM role.

(c)Mrs Wiggs will no longer be entitled to severance pay as outlined in clause 22.4 of the SAN EA. The redundancy scale in the SAN EA is above the NES. This is a minor disadvantage (though Mrs Wiggs remains entitled to the standard determined to be fair by Parliament). The entitlement to redundancy pay is contingent on the role being made redundant and there being no redeployment opportunities. Mrs Wiggs accepts that she will not be entitled to this benefit as part of accepting the role at DHM. Further, the increased redundancy entitlement is a benefit not enjoyed by employees at Douglass Hanly Moir (who are subject to the NES).

(d)Mrs Wiggs will have a slightly lower entitlement to paid parental leave than the SAN EA after four years of service. The entitlement at DHM is 12 weeks paid as opposed to 14 weeks paid parental leave.

(e)Mrs Wiggs will not accrue one and one half months long service leave for every five years after fifteen years’ service, but instead accrue the long service leave entitlement as per NSW legislation of one month for every five years’ service.

318(3)(c) – nominal expiry date

  1. The SAN EA which currently covers Mrs Wiggs has a nominal expiry date of 1 July 2025: see clause 2.2.

318(3)(d) – negative impact on productivity

  1. The Applicant submitted this consideration has no application on the facts of this matter, other than to note SAN Pathology has not been operating profitably over the years.

318(3)(e), (f) – economic disadvantage and degree of business synergy

  1. It was submitted that the transfer of the SAN EA to Douglass Hanly Moir will result in additional administrative burdens in administrating different terms and conditions compared to employees at Douglass Hanly Moir.

  1. Douglass Hanly Moir and the SAN Pathology are distinct and different entities.

  1. Mrs Wiggs will be working alongside employees who will not be covered by the SAN EA. For legitimate business reasons, Douglass Hanly Moir does not want employees working alongside each other, covered by different terms and conditions. It seeks to avoid disparity and discontentment between employees performing similar work and working together.

318(3)(g) – public interest

  1. Given the above, the Applicant submitted it is not against the public interest to grant the order sought by Douglass Hanly Moir.

Statutory provisions

  1. Section 318 of the Act relates to the application sought by the Applicant. Section 318(3) of the Act sets out those matters the Commission must have regard to in determining if the orders sought should be granted.

  1. Section 318 provides as follows:

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.

  1. I have reviewed the application documentation and the accompanying material including the Statements provided. These documents outline the 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 for a proper basis for the making of the orders sought.

  1. I am satisfied that the requirements of s.318 of the FW Act have been met. Orders will be issued with this Decision.



COMMISSIONER

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