DPG Services Pty Ltd T/A Opal HealthCare
[2023] FWC 1215
•25 MAY 2023
| [2023] FWC 1215 |
| 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 HealthCare
(AG2023/1301)
| Aged care industry | |
| COMMISSIONER JOHNS | MELBOURNE, 25 MAY 2023 |
Application for orders in relation to transfer of business – application granted
Background
This is an application pursuant to s.318 of the Fair Work Act 2009 (FWAct) made by DPG Services Pty Ltd T/A Opal HealthCare (Applicant) seeking an order from the Fair Work Commission (Commission) as follows:
“[1] Pursuant to s.318(1)(a) of the Fair Work Act 2009 (Cth) (the Act), the Fair Work Commission orders that the Llandysil Pty Ltd (trading as Edenvale Manor) and Orollo Pty Ltd (trading as Emerald Terrace Aged Care), ANMF and HSU Enterprise Agreement 2018 will not cover DPG Services Pty Ltd T/A Opal HealthCare (Opal HealthCare) or any transferring employees as defined in Part 2-8 of the Act, being employees of Opal HealthCare who were formerly employed by Llandysil Pty Ltd at Edenvale Manor in Keilor East in Victoria.
[2] The Commission further orders, pursuant to section 318(1)(b), that the transferring employees referred to in [1] will be covered in their employment with Opal HealthCare by the Opal Aged Care (Victoria) Enterprise Agreement 2018.
[3] In accordance with s.318(4) of the Act, this Order shall come into operation in relation to each transferring employee on and from the date of this Order, or at the time when the transferring employee is employed by Opal HealthCare, whichever is the later.”
On 9 May 2023, I issued Directions in furtherance of the matter.
On 12 May 2023, the Applicant provided a statutory declaration confirming a copy of my Directions, the Form F40 application and its accompanying documents was served on any affected employee and any relevant employee organisation.
On 16 May 2023, the Applicant provided further supporting documents by way of submissions and the witness statement of Karenne Hall, People and Culture Business Partner with the Applicant.
The Australian Nursing and Midwifery Federation (ANMF) supported the orders sought.
The Health Workers’ Union (HWU) nor any affected employees objected to the orders sought. Accordingly, the application was decided on the papers.
Legislative framework
Section 318 of the FW 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) 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.”
Consideration
The Applicant submitted that the relevant acquisition is subject to approval by the Department of Health and Aged Care. However, as an approved provider of aged care, the Applicant submitted that it does not envisage any barriers to receiving the approval.
In light of no contrary view to this submission, I am satisfied that the Applicant is likely to be the new employer and thus covered pursuant to s.318(2)(a) of the FW Act.
I am also satisfied that there is, or is likely to be a transfer of business in satisfaction of s.311 of the FW Act.
The Commission will now consider each of the matters it is required to consider under s.318(3) of the FW Act.
s.318(3)(a)(i) - the views of the new employer
The Applicant submitted that it seeks the order to facilitate applying uniform conditions of employment to existing and transferring employees to ensure consistency and foster an inclusive and equitable environment.
The Applicant submitted that its unfamiliarity with the Llandysil and Orollo Agreement would not only be onerous and costly, but would also create disparities and unfairness in the conditions of employment.
s.318(3)(a)(ii) - the view of the employees who would be affected by the Order
The Applicant submitted that it took various steps to explain the changes to the transferring employees by way of emails, information sessions (in-person and remote) and staff visits to the site to answer queries if any.
The Applicant submitted that on 18 April 2023, it provided an “Enterprise Agreement information and Consent Form” (Form) to employees who it made an offer of employment to. The Form sought the views of the employees about the proposal by the Applicant.
The Applicant submitted that the feedback it received was one of general support.
On 11 May 2023, the ANMF confirmed that it is supportive of the orders sought.
On 24 May 2023, the HWU confirmed that it raises no objection to the application being determined on the papers, but otherwise did not provide any submissions either in approval or opposition.
s.318(3)(b) - whether any employees would be disadvantaged by the Order in relation to their terms and conditions of employment
The Applicant in making submissions in relation to this factor directed me to the decision of DPG Services Pty Ltd where Deputy President Coleman observed:[1]
“Section 318(3)(b) requires the Commission to consider whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment. In my view this consideration is concerned with the question of whether any employees would be disadvantaged on an overall, rather than a line-by-line basis. Further, although s 318(3)(b) requires the Commission to consider whether employees would be disadvantaged by the order, I consider it relevant to take into account benefits and detriments that might accrue to employees outside of the terms of the instrument that would apply as a consequence of the order, because the question of whether employees would be disadvantaged by the order can only be meaningfully assessed objectively and in the context of all of the circumstances that are likely to exist if the order is made. For example, an order under s 318 might on its terms bring about a particular detriment because a condition in a transferable instrument would not apply to transferring employees. But if the new employer undertook to provide that condition, the detriment would be removed.”
The Applicant further submitted:
32. Opal HealthCare submits that whilst there are some conditions conferred by the Opal Agreement that are less beneficial compared to comparable conditions under the Llandysil and Orollo Agreement, there are a significant number of equal or superior conditions under the Opal Agreement which compensate transferring employees for any reductions or omissions, and ensure the transferring employees will be better off overall under the Opal Agreement.
s.318(3)(c) - if the Order relates to an enterprise agreement—the nominal expiry date of the agreement
The nominal expiry date of the Llandysil and Orollo Agreement was on 31 May 2021.
The nominal expiry date of the Opal Agreement was on 30 June 2022, with the Applicant submitting that bargaining has now commenced with ANMF and HWU for a new enterprise agreement. Accordingly, the Applicant submitted that the transferring employees will have the benefit of bargaining for a new Agreement shortly upon commencement.
s.318(3)(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
The Applicant submitted that the operation of two Agreements will likely have a negative impact due to the inconsistencies in entitlements among employees leading to lower morale and decreased productivity for managerial and human resources staff to implement two Agreements as it will require the reconfiguration of the payroll system.
s.318(3)(e) - whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
The Applicant submitted that if the orders sought were not made, this would result in additional burdens and costs for administering and interpreting different terms and conditions.
The Applicant also submitted that it has agreed to maintain the transferring employee’s higher pay rate where the Opal Agreement comparable classification is lower. Therefore, the Applicant submitted that it has undertaken to incur the economic disadvantage for the benefit of the transferring employees.
s.318(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
The Applicant submitted that due to ample points of differences between the Agreements, greater business synergy arises from the operation of the Opal Agreement.
s.318(3)(g) - the public interest
The Applicant submitted that the public interest is not enlivened and that this is therefore a neutral consideration.
Conclusion
Having considered the application and the materials filed in support of the application, the Commission is satisfied that all the requirements of s.318 of the FW Act have been met. An Order will be issued with this decision [PR762459].
COMMISSIONER
[1] [2022] FWC 1651, [11].
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<AE505154 PR762458>
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