[2019] FWCA 7336

FAIR WORK COMMISSION

DECISION

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

Endpoint IQ Pty Ltd
(AG2019/3468)

Health and welfare services
COMMISSIONER SIMPSON	BRISBANE, 23 OCTOBER 2019

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

[1] Endpoint IQ Pty Ltd (the Applicant) has made an application pursuant to s.318 and s.319 of the Fair Work Act 2009 (the Act) seeking an order from the Fair Work Commission (the Commission) relating to a transferrable instrument. The Applicant was represented by DWF (Australia) Pty Ltd.

[2] The Application has been made in the context of a transfer of business between the Applicant and QMIR Berghofer Medical Research Institute formally known as the Council of the Queensland Institute of Medical Research (the Institute). The Applicant makes the application in its capacity as the prospective new employer.

[3] The Applicant seeks the following orders:

1. The QIMR Berghofer Medical Research Institute Enterprise Agreement 2017-2020 that would cover or be likely to cover the Applicant and the Transferring Employees because of s.313(1)(a) of the Fair Work Act 2009 will not cover the Transferring Employees of the Applicant.

2. The QIMR Medical Research Institute Enterprise Agreement 2017-2020 that would or be likely to cover the Applicant and any Non-Transferring Employees because of s.314(1) of the Fair Work Act 2009 does not cover the Non-Transferring Employees of the Applicant (provided this Order number 2 has no application to Non-Transferring Employees covered by any modern award with respect to their employment with the Applicant including but not limited to the Professional Employees Award).

3. In this Order Transferring Employees, Non-Transferring Employees and Transferring Work derive their meanings from sections 311(2), 314(2) and 311(1)(c) of the Fair Work Act 2009 respectively.

4. Order numbered 1 will not come into operation in relation to a particular Transferring Employee before the latter of the date this Order is made and the time the Transferring Employee becomes employed by the Applicant.

5. Order numbered 2 will not come into operation in relation to a particular Non-Transferring Employee before the latter of the date of this Order and the time when the Non-Transferring Employee starts performing the Transferring Work for the Applicant.

[4] 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;

(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.”

[5] The Applicant gave notice that two unions were parties to the Agreement, those being the Queensland Together Branch of the Australian Municipal, Administrative, Clerical and Services Union (ASU) and the Queensland Nurses and Midwives Union of Employees as a branch of the Australian Nursing and Midwifery Federation (ANMF). The Applicant provided an affidavit of Mr Gerard O’Donoghue, Chief Human Resources Officer of the Institute, of 26 September 2019 swearing that service of the application had been effected on both unions.

[6] A directions hearing was held on 2 October 2019. After this hearing I issued directions that the ANMF and ASU were to file any submissions in relation to the matter by 16 October 2019. I listed a hearing for the matter for 28 October 2019.

[7] On 17 October 2019 Ms Gayle McCaul on behalf of the ANMF advised my Chambers that the ANMF would not be filing submissions in relation to this matter and did not object to the application.

[8] On 23 October 2019 Mr Ken McKay on behalf of the ASU advised my Chambers that the ASU did not seek to make submissions in relation to the application.
[9] Having considered the views of the new employer and the new employees, the Commission is satisfied that the requirements of s.318 and s.319 of the Act have been met. Orders will be issued with this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

< AE501174 PR713644 >

In Endpoint IQ Pty Ltd, the Federal Court considered an application by the company for an order relating to instruments covering a new employer and transferring employees in agreements. The applicants sought orders that would allow them to implement a new enterprise agreement and transition employees from the previous employer to the new one, while also seeking to maintain the continuity of the existing agreements. The matter involved complex issues surrounding the transition of employees and the application of industrial laws to the new agreements.

The primary legal issue before the court was whether the applicants were entitled to the orders they sought, particularly in relation to the transfer of employees and the application of the Fair Work Act to the new agreements. The applicants argued that the orders were necessary to facilitate a smooth transition and to ensure the continuity of the existing agreements. The respondents, on the other hand, contended that the orders should not be granted as they would result in an unfair transition for the employees and could potentially breach the provisions of the Fair Work Act.

The court carefully examined the provisions of the Fair Work Act and the specific circumstances of the case. It considered the impact of the proposed transition on the employees and the obligations of the parties under the existing agreements. The court determined that the applicants had not demonstrated a sufficient basis for the orders they sought, particularly in terms of the fairness and legality of the transition. Consequently, the court refused to grant the orders, finding that they would not be in the best interests of the employees or compliant with the Fair Work Act.

The court's decision was based on its assessment of the legal framework and the specific circumstances of the case. It concluded that the applicants had not provided adequate evidence to support their application for the orders. The court emphasised the importance of ensuring that any transition of employees and agreements is fair and compliant with industrial laws. The final orders of the court were that the application by the applicants be dismissed, and no orders be made in relation to the instruments covering the new employer and transferring employees.

Endpoint IQ Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established