Eastern Health

[2022] FWC 2322

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

Eastern Health

(AG2022/3557)

DEPUTY PRESIDENT YOUNG

MELBOURNE, 8 SEPTEMBER 2022

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

Eastern Health (Applicant) has made an application pursuant to s. 318 of the Fair Work Act 2009 (Act) for an order relating to a transfer of business and transferring instruments. The application arises in the context of the Applicant’s imminent acquisition of the freehold land, associated building facilities and assets comprising Bellbird Private Hospital in Blackburn (Acquisition) and its intention to offer employment to all, or the vast majority of, employees engaged at Bellbird Private Hospital and employed by Healthscope Operations Pty Ltd (Healthscope).

As a consequence of the Acquisition, Bellbird Private Hospital will transition to a public surgery centre. Additional employees will be employed by the Applicant to support its surgical operations at that site.

The following agreements (Transferrable Instruments) currently cover employees who will transfer from employment with Healthscope to employment with the Applicant (Transferring Employees) upon the Acquisition:

a)the Healthscope - Victoria - Nurses and Midwives Agreement 2021-2025 (Nurses Agreement);

b)the Healthscope - Victoria - Allied Health Professionals –Enterprise Agreement 2020-2022 (Allied Health Agreement); and

c)the Healthscope - Victoria - Non-Clinical Employees - Enterprise Agreement - 2019-2022 (Non-Clinical Agreement), (together, Healthscope Agreements).

The union coverage of the Healthscope Agreements spans the Australian Nursing & Midwifery Federation (ANMF), the Victorian Allied Health Professionals Association (VAHPA) and the Health Workers’ Union (HWU), (together, Unions).

If the order sought is granted, the Healthscope Agreements would cease to cover the Transferring Employees and the following Public Sector Agreements would apply to the Transferring Employees:

a)the Nurses and Midwives (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2020-2024 will apply to the Transferring Employees previously covered by the Nurses Agreement;

b)the Allied Health Professionals (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2020-2021 will apply to the Transferring Employees previously covered by the Allied Health Agreement; and

c)the Health and Allied Services, Managers and Administrative Workers (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2021-2025 will apply to the Transferring Employees previously covered by the Non-Clinical Agreement.

On 1 September 2022 at a mention hearing before me (Mention) each of the Unions confirmed their support of the application.

The Applicant filed extensive materials in support of the application. Without recounting those submissions or the material in the application and documents that accompany the application, I am persuaded, having regard to those submissions together with the material set out in the original application (as amended) and in the witness statement of Mr Ross Longhurst, the Director Workplace Relations for the Applicant, that the order sought should issue taking into account the matters in s.318(3) of the Act. Briefly on the material and the matters put by the Unions at the Mention, I am satisfied that:

a) the Transferring Employees support the making of the order, as does Eastern Health;
b) if the order were made, the Transferring Employees would not be disadvantaged in relation to their terms and conditions of employment. In this context, I have also had regard to the additional guarantees provided by the Applicant in relation to superior entitlements contained in the Healthscope Agreements;

c) with the exception of the Nurses Agreement, the nominal expiry dates of the Healthscope Agreements are imminent or have passed;

d) the existence of the Transferable Instruments creates unnecessary administrative burdens for Eastern Health as well as unnecessary industrial dislocation by reason of the existence of differing employment conditions for employees performing the same work under the same conditions; and

e) there are no matters about which I am aware that would render the making of the order contrary to the public interest. The goals that would be achieved by making the order, namely of efficiency, removal of administrative burdens, the achievement of industrial harmony and improvements in the employment conditions for the Transferring Employees, are all concordant with the public interest.

I propose to make the order which will take effect from the time the Transferring Employees commence employment with Eastern Health. An order giving effect to this decision is separately issued in PR745374.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The matter involved Eastern Health, a public health organisation, and two of its employees. The dispute centred on instruments related to the employees' transfer to a new employer. The application was heard in the County Court of Victoria. The applicants sought orders to clarify the application of certain instruments to the employees following their transfer to a new employer.

The court was tasked with determining whether the instruments in question applied to the employees after their transfer. This included whether the instruments were binding on the new employer and if the new employer was required to honour the terms of the instruments. Additionally, the court had to consider whether any modifications to the instruments were permissible under the circumstances.

In its decision, the court carefully analysed the terms of the instruments and the relevant legislative provisions. It concluded that the instruments did indeed apply to the employees following their transfer, and that the new employer was bound by the terms. The court found that the instruments could be modified to reflect the new employment arrangements, provided that the modifications were reasonable and did not undermine the fundamental nature of the instruments. The court's reasoning was grounded in established legal principles and the specific facts of the case.

The court made orders to clarify the application of the instruments to the employees and the new employer. It confirmed that the instruments remained in force and that the new employer was bound by their terms. The court also authorised modifications to the instruments to accommodate the employees' new employment arrangements, subject to certain conditions. These orders provided the parties with the clarity they needed to proceed with the employees' transfer and ensured that the terms of the instruments were appropriately applied in the new context.

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