DPG Services Pty Ltd T/A Opal Aged Care

[2014] FWC 6418

[2014] FWC 6418

FAIR WORK COMMISSION

DECISION

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

DPG Services Pty Ltd T/A Opal Aged Care
(AG2014/8763)

COMMISSIONER JOHNS MELBOURNE, 17 SEPTEMBER 2014

Transferring employees from The Aevum Ltd NSWNA & HSU Enterprise Agreement 2010 to the Domain Principal Group (NSW) Facilities Enterprise Agreement 2013.

[1] This is an application pursuant to s.318 of the Fair Work Act 2009 (Act) by DPG Services Pty Ltd (trading as Opal Aged Care) (Applicant) seeking an order from the Fair Work Commission (Commission) that:

(a) A transferrable instrument, being the Aevum Ltd NSWNA and HSU Enterprise Agreement 2010 (Aevum Agreement) not apply to the Applicant and any employees of the Applicant formerly engaged by Aevum Ltd, and that instead,

(b) the Domain Principal Group (NSW) Facilities Enterprise Agreement 2013 (Domain Agreement) cover the transferring employees.

[2] On or around 1 July 2014 a transfer of business occurred from Aevum Ltd (Aevum) to the Applicant. Employees of Aevum will be, or are likely to be, employed by the Applicant. The work that the transferring employees will perform will be the same, or substantially the same, as the work they performed for Aevum.

[3] 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.

[4] The Commission will now consider each of the matters it is required to consider under s.318(3).

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

[5] The Applicant, in its Form 40 - Application for Orders in Relation to Transfer of Business (Form 40), states it seeks to standardise employment conditions, reduce administration costs and encourage a single workplace culture. It states there will be administrative difficulties in applying two different sets of terms and conditions within the workplace.

s.318(3)(a)(i) - the view of the employees who would be affected by the order

[6] In support of the application, the Applicant filed 85 Employee Response Forms completed by transferring employees. Although not all of the forms explicitly state that employees agree to the application. However, none of the forms raised any issues or objections from transferring employees. Further, the Commission notes that the application is supported by the Health Services Union and the New South Wales Nurses and Midwives’ Association.

s.318(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[7] The Applicant submits that transferring employees would be better off with regard to wages and conditions as compared to the Aevum Agreement. The Commission notes the Applicant gave the following undertakings in its Form 40:

The Applicant undertakes to apply the paid parental leave entitlements in clause 35 of the Aevum Agreement to any employee who has notified the old employer of their pregnancy prior to the date they commence employment with the Applicant.

The Applicant undertakes that in classifying employees under the Domain Agreement, no employee will be placed in a classification that pays them at a lower rate than their classification under the Aevum Agreement.

The Applicant undertakes to apply the Domain Agreement retrospectively to the transferring employees from the Date the Commission makes the orders sought in this application, to the date the employees commenced employment with the Applicant.

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

[8] The nominal expiry date of the Aevum Agreement is 24 June 2014. The nominal expiry date of the Domain Agreement is 30 June 2016.

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

[9] The Applicant submits that a transfer of the Aevum Agreement to Applicant will lead to dissatisfaction amongst employees. Transferring employees would likely be required to undertake similar duties whilst receiving different and lesser entitlements.

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

[10] The Applicant submits that the application of the Aevum 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

[11] The Applicant submits there is little business synergy between the Domain and Aevum Agreements.

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

[12] The Commission, as presently constituted, is satisfied that it is not against the public interest to grant the order sought by the Applicant.

[13] 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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