[2020] FWC 1170

FAIR WORK COMMISSION

DECISION

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

Frank Whiddon Masonic Homes of New South Wales Pty Ltd T/A The Whiddon Group
(AG2019/4980)

Aged care industry
COMMISSIONER JOHNS	SYDNEY, 3 MARCH 2020

Sections 318 – Application for an order relating to instruments covering a new employer and transferring employees.

Background

[1] On 19 December 2019, Frank Whiddon Homes of New South Wales Pty Ltd T/A The Whiddon Group (Applicant/Whiddon) lodged a Form F40 application for orders in relation to transferring employees pursuant to s.318 of the Fair Work Act 2009 (Cth) (FW Act).

[2] Whiddon is a not-for-profit aged care organisation operating:

a) residential aged care facilities across regional, rural and remote New South Wales;

b) retirement villages primarily in Sydney, the Hunter Valley and Northern New South Wales; and

c) community care services across the State of New South Wales.

[3] The application concerns approximately 113 employees who previously worked for Fairview Care Limited (Old Employer/Fairview) under the Fairview Care Limited, NSWNMA & HSU NSW Enterprise Agreement 2017 – 2020 [AE427553] (Fairview Agreement)

[4] Whiddon and Fairview entered into an agreement, whereby Fairview’s assets relevant to the operations of its business transferred to Whiddon on 3 February 2020. Under the terms of the transfer of business agreement the Applicant offered employment to a majority of Fairview’s employees.

[5] Approximately, 73% of the offers of employment made by Whiddon have been accepted by former Fairview employees (Transferring Employees). Following the transfer of their employment from Fairview to Whiddon, Transferring Employees have continued to be covered by the Fairview Agreement. Whiddon has facilitated the on-going application of the Fairview Agreement to Transferring Employees through a third-party pay-roll service provider. 1

The Application

[6] In the present application Whiddon seeks orders that:

a) the Fairview Agreement will not cover; and

b) The Whiddon Group Agreement 2017 [AE428129] (Whiddon Agreement) will cover,

Transferring Employees (Proposed Orders).

[7] The application for the Proposed Orders was supported by an Affidavit sworn by Lauren Cauchi, the Applicant’s General Manager, People and Culture (Exhibit 4).

[8] The application for the Proposed Orders is opposed by the New South Wales Nurses and Midwives’ Association (NSWNMA) and the Health Services Union (HSU) (collectively, the Unions).

History of the proceeding

[9] On 13 January 2020 I directed that:

“…

(a) By no later than 4:00pm on Monday, 20 January 2020, the Applicant must serve a copy of these directions, the Form F40 application and accompanying documents on any affected employee and any relevant employee organisation.

(b) By no later than 4:00pm on Tuesday, 21 January 2020, a Director or Officer of the Applicant must file in the Commission a statutory declaration confirming compliance with [1](a).

(c) By no later than 4:00pm on Tuesday, 28 January 2020, any affected employee or any relevant employee organisation which opposes the making of the orders must file in the Commission (by emailing [email protected]) and serve on the Applicant any submissions, statements of evidence or other documents it intends to rely upon in opposition to the application.

[2] If any affected employee or relevant employee organisation opposes the application, the matter will be listed for hearing at 10:00 am (AEDT) on Thursday, 30 January 2020, at the Commission in Sydney.

(FWC Directions)

[10] On 21 January 2020 and in accordance with [1](b) of the FWC Directions, the Applicant filed a Statutory Declaration made by Ms Cauchi. Ms Cauchi set out the steps the Applicant had taken to comply with the FWC Directions.

[11] On 28 January 2020, Ms Kelly of the NSWNMA contacted my chambers requesting to be heard in relation to the matter. Ms Kelly also requested an extension of time to the FWC Directions. Whiddon consented to the extension of time and I granted it.

[12] Later that day the Applicant also foreshadowed that it would file an amended Form F40 application to amend the transfer date of the business. It also foreshadowed that it would be seeking to amend the proposed orders so that the Whiddon Agreement would cover transferring employees from 1 March 2020.

[13] On 28 January 2020 I issued Amended Directions (FWC Amended Directions) allowing the parties further time to file materials. I also directed the Applicant to file any amended Form F40 application by 30 January 2020.

[14] On 29 January 2020 and in accordance with the Amended Directions the Applicant filed in the Commission an amended Form F40 application. Later that day the Applicant wrote to my chambers requesting that, if the order was granted by the Commission, that the order come into operation on 9 March 2020. It filed a further amended Form F40 application to reflect this request. The rationale underpinning this request related to its payroll cycle.

[15] On 31 January 2020, Ms Cauchi of the Applicant filed a further Statutory Declaration in accordance with the FWC Amended Directions. Ms Cauchi set out the steps it had taken to comply with [1](d) of the FWC Amended directions. Having regard to the content of the two Statutory Declarations made by Ms Cauchi I am satisfied that employees proposed to be covered by the Orders have been put on notice about the application and have been afforded procedural fairness and every opportunity to voice their opposition to the application. None did so.

[16] On 14 February 2020 the NSWNMA filed submissions in opposition to the application (Exhibit 9).

[17] On 17 February 2020 the HSU filed submissions in opposition to the application (Exhibit 10).

[18] On 24 February 2020 Whiddon filed:

a) Submissions in Reply (Exhibit 11) to the submissions in opposition filed by the NSWNMA and the HSU; and

b) a Supplementary Affidavit of Ms Cauchi (Exhibit 12).

[19] The matter was listed for hearing on 26 February 2020. Although:

a) the only evidence in the matter was that filed on behalf of Ms Cauchi; and

b) neither union sought to cross-examine Ms Cauchi,

the Unions indicated a desire for an in-person hearing in order that they might make additional oral submissions in response to the Applicant’s Submissions in Reply.

[20] In advance of the hearing I requested Whiddon file in the Commission and serve on the Unions a copy of the bundle of materials constituting the offer of employment to former Fairview employees. Whiddon complied with my request (Exhibit 13).

[21] At the hearing on 26 February 2020:

a) Whiddon was represented by Jessica Fisher, Partner, FCB Workplace Law. Ms Fisher called Ms Cauchi to give evidence. Neither union cross-examined Ms Cauchi. However, I took the opportunity to clarify some of matters arising from her evidence. I deal with that evidence below.

b) the NSWNMA was represented by Alison Rose, Industrial Officer. At the conclusion of her submissions Ms Rose handed up a document entitled “Comparison of Pay Plus Allowances – Whiddon vs. Fairview” (Exhibit 14).

c) the HSU was represented by Chris Friend, Bargaining Officer.

[22] At the conclusion of the hearing I reserved my decision. In coming to this decision I have had regard to all of the materials filed in the proceeding and the oral evidence of Ms Cauchi.

Agreed matters

[23] It is not in contest and I am satisfied on the evidence that:

a) the acquisition by Whiddon of Fairview in February 2020 was a transfer of business within the meaning of s.311 of the FW Act;

b) pursuant to s.313 of the FW Act, the Fairview Agreement now covers Whiddon and the Transferring Employees;

c) the Fairview Agreement continues to cover the NSWNMA and the HSU pursuant to s.315(3) of the FW Act;

d) the Fairview Agreement has a nominal expiry date of 30 June 2020;

e) Whiddon is covered by the Whiddon Agreement, which was approved on 24 April 2018 and has a nominal expiry date of 1 October 2020;

f) since 3 February 2020 an increasing number of Transferring Employees have shared work premises with, and performed substantially the same work as, Whiddon employees who are covered by the Whiddon Agreement; and

g) the occupations of each of the Transferring Employees fall within the classifications covered by the Whiddon Agreement, with the result that the Whiddon Agreement will cover and apply to the Transferring Employees if the order sought by Whiddon under s.318 of the FW Act is made by the Commission.

Issues

[24] The issue I need to determine in this matter is whether or not to exercise my discretion under s.318(1) of the FW Act to make the orders sought by Whiddon. Section 318(3) of the FW Act provides that, in deciding whether to make the order under section 318(1), I 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.”

Should the orders be made?

[25] I consider each of the mandatory factors set out in s.318(3) of the FW Act below in turn.

Section 318(3)(a) - the views of the new employer

[26] Whiddon clearly supports the Proposed Orders sought by it under s.318(1) of the FW Act for the reasons set out in the Affidavits of Ms Cauchi and the oral evidence given by her.

[27] This factor weighs in favour of granting the Proposed Orders.

Section 318(3)(a) - the views of … the employees who would be affected by the order

[28] Whiddon did not request a written indication from the Transferring Employees about whether they agree to being covered by the Whiddon Agreement.

[29] In her Supplementary Affidavit Ms Cauchi stated that,

“As of the date of this Supplementary Affidavit, 73% of the employment contracts offered by Whiddon to the transferring employees, which noted that their terms and conditions of employment would be subject to The Whiddon Agreement 2017 (pending the making of the order under the Application) have already been signed and returned to Whiddon by the transferring employees.” 2

[30] Having considered the terms of the offer of employment made by Whiddon (Exhibit 13), I am not satisfied that, by accepting employment with Whiddon, any Transferring Employee was expressing a preference to be covered by the Whiddon Agreement in preference to the Fairview Agreement. The offer of employment from Whiddon was not conditional on the Whiddon Agreement applying. Ms Cauchi conceded the same in her evidence before me. 3

[31] Consequently, the signing and returning an offer of employment by a Transferring Employees evidences nothing more than that employee’s preparedness to work for Whiddon. It does not assist me at all in understanding the views of employees who will be affected by the Proposed Orders. Ms Cauchi conceded the same in her evidence before me. 4

[32] Neither did either of the Unions poll their members to gauge any preference between the Whiddon Agreement or the Fairview Agreement. The unions filed no evidence that would be of assistance to me in relation to the views of employees.

[33] For completeness I also note that there was no response to the Directions issued by me that any Transferring Employee who opposes the Proposed Orders make that known to the Commission. However, all that the silence from Transferring Employees evidences is a desire not to participate in Commission proceedings. It does not assist me at all in understanding the views of employees who will be affected by the Proposed Orders.

[34] Because there is no evidence about the views of employees who will be affected by the Proposed Orders this is a neutral factor in deciding whether to grant the Proposed Orders.

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

[35] Section 318(3)(b) requires a comparison between the “terms and conditions of employment” applicable to the employees with their former employer (in this case, Fairview) and those that would be applicable (in this case, with Whiddon) after the transfer of business if an order under s.318(1) were made. Because the inquiry is directed to “terms and conditions of employment” and not simply to the terms of different industrial instruments, the contractual terms and conditions of employment may, in particular cases, have a bearing on the analysis required by s.318(3)(b) of the Act. 5 In the present case, relevant contractual documentation was Exhibit 14.

[36] Notwithstanding the wider inquiry directed at “terms and conditions of employment” the parties substantially confined themselves and their submissions to a comparison between the Whiddon Agreement and the Fairview Agreement.

[37] In Australian Laboratory Services Pty Ltd 6 Commissioner Saunders (as he then was) observed that:

[21] While the terms and conditions of employment to which an employee is entitled (including under an enterprise agreement) with a new employer may be different to those provided by a former employer prior to the transfer of business, the Commission should consider whether “overall, the employees would not be disadvantaged” 7 by making an order under section 318 of the Act.

[22] In the event that employees would be disadvantaged overall to any significant extent by the making of an order under section 318 of the Act in relation to their terms and conditions of employment, this factor would, in my view, weigh considerably against granting an order under section 318. 8

[38] I adopt that reasoning.

[39] In its application Whiddon submitted (Exhibit 6) that:

“Paragraph 7:

…

(b) Many of the Transferring Employees will be placed on a higher base rate of pay under the Whiddon Agreement for their comparison classification.

(c) For those transferring Employees who under their comparison classification under the Whiddon Agreement would receive a lower base rate will have their base rate under the Fairview Agreement grandfathered until the base rate of the Whiddon Agreement meet those in the Fairview Agreement so as not to disadvantage any Transferring Employee.”

[40] The evidence for Ms Cauchi was to the effect that:

“15. Earlier this year the Applicant caused a comparison to be undertaken between wage rates of each classification between the Whiddon Agreement and the Fairview Agreement. Annexed and marked “ LC-1” is a copy of this wage comparison (Wage Comparison).

16. As highlighted in the Wage Comparison of the 168 classifications, Transferring Employees falling into 113 classifications with green cells will be immediately better off under that Whiddon Agreement.

17. Upon review of the classifications under the Whiddon Agreement the transfer would result in some employees being placed on lower base rates than they were receiving under the Fairview Agreement (see the classifications with red cells in the Wage Comparison). However, Whiddon will grandfathered the base rates of the impacted Transferring Employees from the Fairview Agreement to ensure that no Transferring Employees will be disadvantaged by the transfer. These grandfathered rates will be in place until the Whiddon Agreement base rates are increased to meet the Fairview Agreement rates.”

[41] In the present matter the NSWNMA submitted 9 that:

4. With regards to s318(3)(a)(ii), the ANMF notes that from communications with members we understand that ANMF members who are transferring employees do not want to have their pay and/or employment conditions reduced. The ANMF understands transferring employees have been offered employment contracts on the understanding that, should the FWC grant an order that they will be covered by the Whiddon Agreement, their pay and employment conditions will not decrease.

5. Section 318(3)(b) requires the FWC to take into account “whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment” [emphasis added]. The ANMF submits that because most if not all transferred employees would be disadvantaged by the order sought by the Applicant in relation to their terms and conditions of employment, the FWC should give particular weight to this factor in deciding whether to make the order.

a. Pay rates and allowances:

i. Although the Applicant has indicated in its Application that higher base pay rates under the Fairview Agreement will be grandfathered should an order be granted, the Fairview Agreement provides the following allowances whereas the Whiddon Agreement does not:

1. Continuing Education Allowance (clause 20.7 of the Fairview Agreement)

2. Climatic and Isolation Allowance (clause 20.9 of the Fairview Agreement)

3. Broken Shift Allowance (clause 14.5(f) of the Fairview Agreement)

4. Meal Allowance paid during overtime (clause 20.6 of the Fairview Agreement)

5. Uniforms and Laundry Allowance (clause 20.3 of the Fairview Agreement)

ii. As it appears the Applicant has not taken into consideration the allowances paid to a significant percentage of employees on a weekly basis when comparing rates between the two agreements, transferring employees would be worse off under the Whiddon Agreement. Examples of this are set out in the table attached and marked “Annexure C”.

b. Additional Days Off (ADOs):

i. The Whiddon Agreement provides ADOs as a grandfathered arrangement for specific employees listed in Schedule C. The Fairview Agreement provides for ADOs and some full time transferring employees currently work under an ADO arrangement.

ii. The loss of ADOs would be a significant disadvantage for these transferring employees.

iii. The ANMF understands, however, that the Applicant is willing to grandfather the ADO arrangement for the transferring employees.

c. Redundancy Pay:

i. Clause 32 of the Fairview Agreement provides higher redundancy pay than clause 66 of the Whiddon Agreement.

ii. The Whiddon Agreement has some additional benefits in the event of redundancy such as a time off to attend interviews, however this does not balance the significant difference in redundancy pay, for example the Fairview Agreement provides 8 weeks of additional redundancy pay for an employee with 6 years’ service who is 45 years or older. A comparison between redundancy pay provisions is attached and marked “Annexure D”.

d. Long Service Leave:

i. The Fairview Agreement provides significantly higher long service leave provisions when compared to the Whiddon Agreement.

ii. After 10 years of service, under the Fairview Agreement (clause 25) employees accrue long service leave at 5 months for each additional 10 year of service. For the same period the Whiddon Agreement provides for 2 months for each 10 years. This represents a significant decrease in leave accrual for those transferring employees with more than 10 years’ service.

iii. Under the Fairview Agreement (25.8) employees may take long service leave at half pay for a greater period of leave – this is not available under the Whiddon Agreement

iv. The Whiddon Agreement does provide earlier access to long service leave, however this does not balance the considerable difference in long service leave accrual rates.

e. Shift Penalties:

i. The Fairview Agreement (clause 18.1) provides a 10% penalty for week day shifts commencing after 10am and before 1pm. The Whiddon Agreement (clause 38.1) does not.

ii. Further, clause 38.1(a) of the Whiddon Agreement provides that no shift penalties apply where the start and finish times of the employee’s shift both fall between 6am and 6pm. A similar provision in clause 18.1 of the Fairview Agreement only applies to part time and casual employees.

iii. As a result, a full time employee working a shift commencing at 10am and finishing at 5:30pm would be paid a 10% shift penalty under the Fairview Agreement, but would receive no shift penalty under the Whiddon Agreement.

f. Annual leave loading:

i. The Whiddon Agreement (clause 48.8) limits payment of the 17.5% annual leave loading to 4 weeks of leave a year.

ii. The Fairview Agreement (clause 21.6) allows payment of annual leave loading on the employee’s full entitlement to annual leave. The ANMF understands most nurses are entitled to 5 weeks annual leave under the Fairview Agreement.

g. Purchased Leave:

i. The Fairview Agreement provides for the purchase of additional leave, in clause 21.9. The Whiddon Agreement does not provide for purchased leave.

h. Natural Disaster Leave:

i. The Fairview Agreement has paid natural disaster leave, where the employer is required to provide one day of leave in the event of a natural disaster. This is not provided in the Whiddon Agreement.

i. Repatriation Leave:

i. The Fairview Agreement provides up to 6.5 working days of paid special leave in clause 26. The Whiddon Agreement does not provide for repatriation leave.

j. Casual employee conditions:

i. Clause 37.5 of the Whiddon Agreement would remove casual employees’ right to overtime:

1. when they work more than 10 hours;

2. when they don’t receive 10 hours between rostered shift; and

3. when they are recalled to work.

(17.1 (d) and 17.4 of the Fairview EA respectively).

ii. The two Agreements have different arrangements for application of the casual loading for weekend work. The Whiddon Agreement has a related undertaking also going to overtime.

iii. Some casual employees moving from the Fairview Agreement to the Whiddon Agreement would be paid less for weekend work.

iv. The details of this are set out in the table attached and marked “Annexure E”.

[42] In the present matter the HSU submitted 10 that:

3. The HSU is concerned that employees may be disadvantaged by such an order in relation to their terms and conditions of employment.

4. Section 318(3)(b) requires the FWC to take into account “whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment”. The HSU submits that the order would cause transferred employees to be disadvantaged in relation to numerous terms and conditions, when compared to the terms of the Fairview Agreement.

a. Review of Part-time hours

(a) Both agreements allow for employees to request a review of part time hours once per year. However, the Whiddon Agreement requires only that the employer give ‘reasonable consideration to the request’ (clause 14.2 (f)).

(b) The Fairview Agreement stipulates that where the employee is regularly working more than their guaranteed hours, then such hours shall be adjusted and recorded in writing (clause 11.3 (d) of the Fairview agreement). Further in regard to Home Care employees, the request is not to be ‘unreasonably refused’ (clause 11.3 (d) of the Fairview agreement). The provisions in the Fairview agreement are therefore significantly stronger.

b. Casual conversion

(a) Under the Fairview Agreement, casual employees who have worked on a regular and systematic basis for a period of 26 weeks have the right to request conversion to permanent employment. The employer must not unreasonably refuse the request (clause 11.4 of the Fairview agreement).

(b) Under the Whiddon Agreement, the regular and systematic hours must have been worked over a period of 52 weeks to be able to request conversion to permanency. The employer must only give reasonable consideration to the request (clause 14.3 (b) of the Whiddon agreement).

c. Recognition of prior service

(a) The Fairview Agreement allows for employees to be fully back-paid where they provide a relevant qualification which entitles them to be paid at a higher grade within the first three months of employment or within the first three months of being entitled to progress to the next year of service or experience (clause 11.8 of the Fairview agreement).

(b) The Whiddon Agreement does not appear to contain any such provision.

d. Hours of work

(a) The maximum number of hours in a shift under the Fairview Agreement is 10 hours at ordinary time (clause 14.2 (d) in the Fairview agreement)

(b) The maximum number of hours in a shift under the Whiddon Agreement is 11 hours (clause 23.2 in the Whiddon agreement).

(c) Under the Fairview Agreement, an employee must not work more than seven consecutive shifts unless the employee requests and the employer agrees (clause 14.2 (e) of the Fairview agreement). There is no such protection in the Whiddon Agreement.

e. Recall to work

(a) Under the Fairview Agreement, employees recalled to work after the conclusion of their ordinary shift are to be paid a minimum of 4 hours at overtime rates (clause 17.4 of the Fairview agreement).

(b) Under the Whiddon Agreement, the minimum payment after recall to work is 2 hours at overtime rates (clause 24 of the Whiddon agreement).

f. Allocated days off

(a) The Fairview Agreement has a clause providing for ADO arrangements (clause 14.4 of the Fairview agreement).

(b) The Whiddon Agreement does not include a clause with ADO arrangements.

g. Breaks following broken shifts/overtime

(a) The Fairview Agreement allows for a break of 10 hours between broken shifts worked on consecutive days, or after overtime is worked (clauses 14.5 (e) and 16.4 of the Fairview agreement). There are no specific arrangements for breaks between broken shifts or after overtime in the Whiddon Agreement, meaning the 8-hour break applies.

h. Broken shift allowance

(a) The Fairview Agreement includes a broken shift allowance equivalent to half an hour of ordinary pay per broken shift (clause 15.4 (f) of the Fairview agreement). There is no broken shift allowance in the Whiddon Agreement.

i. Overtime

(a) Overtime is payable under the Fairview Agreement after 10 hours is worked in a shift (clause 17 of the Fairview agreement).

(b) Under the Whiddon Agreement, overtime is not payable until after 11 hours is worked in a shift (clause 37 of the Whiddon agreement).

j. Overtime for casuals

(a) Under the Fairview Agreement, casual employees are paid overtime when they work in excess of 10 hours per shift or 76 hours per fortnight (clause 17 of the Fairview agreement).

(b) Under the Whiddon Agreement, casual employees are only entitled to overtime where they work more than 76 hours in a fortnight (clause 37.5 of the Whiddon agreement).

k. Shift penalties

(a) Under the Fairview Agreement, shift penalties of 10% apply for afternoon shifts commencing after 10am and before 1pm (clause 18.1 (a) of the Fairview agreement).

(b) There is no shift penalty paid for shifts commencing before 1pm under the Whiddon Agreement (clause 38.1 (b) of the Whiddon agreement).

(c) Under the Fairview Agreement, shift penalties of 10% apply for a night shift commencing after 4am and before 6am (clause 18.1 (d) of the Fairview agreement).

(d) There is no shift penalty for shifts commencing after 4am under the Whiddon Agreement.

l. Weekend penalty rates (Home Care)

(a) Under the Fairview Agreement, home care employees benefit from increased penalty rates of double time for all hours worked on Sundays (clause 18.5 (b) of the Fairview agreement).

(b) Under the Whiddon Agreement, home care employees are paid shift penalty of time and a three-quarters for Sunday hours worked (clause 38.2 of the Whiddon agreement).

m. Laundry allowance

(a) There is a laundry/uniform allowance clause in the Fairview Agreement (clause 20.3 (h) of the Fairview agreement).

(b) There is no such clause in the Whiddon Agreement.

n. On call allowance

(a) The on call allowance under the Fairview Agreement is $22.51 per day (clause 20.5 (a) of the Fairview agreement).

(b) Under the Whiddon Agreement, the on call allowance is $22.37 per day (Schedule B of the Whiddon agreement).

o. Meal allowance

(a) The Fairview Agreement allows for a meal allowance where an employee is required to work overtime for more than two hours, and such overtime goes beyond 7am, 1pm, and 6pm, and the employer elects not to supply a meal to the employee (clause 20.6 of the Fairview agreement).

(b) There is no meal allowance in the Whiddon Agreement.

p. Direction to take annual leave

(a) Under the Fairview Agreement, an employee can be directed to take leave where there is accrual of more than 8 weeks annual leave, or 10 weeks for a shift worker (clause 21.4 (e) of the Fairview agreement).

(b) Under the Whiddon Agreement, employees can be directed to take annual leave at any time, so long as the remaining balance is at least 4 weeks (clause 48.6 of the Whiddon agreement).

q. Purchased additional leave

(a) The Fairview Agreement allows employees to elect to purchase an additional one week of annual leave through a proportional reduction in salary (clause 21.9).

(b) There is no such entitlement in the Whiddon Agreement.

r. Cashing out of Paid Personal/Carer’s Leave

(a) The Fairview Agreement entitles employees to cash out their paid personal/carer’s leave, with the employer’s authorisation, where the employee retains a remaining balance of at least 15 days personal/carer’s leave (clause 22.6 of the Fairview agreement).

(b) There is no clause entitling the cashing out of personal leave under the Whiddon Agreement.

s. Long service leave.

(a) Under the Fairview Agreement, after the first 10 years of service (where 2 months LSL are accrued), long service leave accrues at the rate of 5 months for every 10 years (clause 25.2 (a) of the Fairview agreement).

(b) Under the Whiddon Agreement, long service leave accrues at 2 months every 10 years, with no increase after the first 10 years (except for employees who commenced service before 2014) (clause 49.3 of the Whiddon agreement).

t. Repatriation leave

(a) The Fairview Agreement contains a provision for repatriation leave for ex-servicepeople up to 6.5 paid working days (clause 26 of the Fairview agreement).

(b) There is no such provision in the Whiddon Agreement.

u. Natural disaster leave

(a) The Fairview Agreement provides that where a permanent employee is unable to attend work because of a natural disaster, they will be entitled to be paid the ordinary pay for the shift they would otherwise have worked. This entitlement applies only once per year (clause 29 of the Fairview agreement).

(b) There are no Natural Disaster Leave provisions in the Whiddon Agreement.

v. Union delegates

(a) Under the Fairview Agreement, union delegates may take up to 5 paid days per year to attend union training and 3 paid days per year to attend the union’s annual conference (clause 46 of the Fairview agreement).

(b) Under the Whiddon Agreement, union delegates are entitled to 4 days paid leave for union purposes (clause 59 of the Whiddon agreement).

w. Redundancy pay

(a) Redundancy pay is more generous under the Fairview Agreement than it is under the Whiddon Agreement. Further, the increase in redundancy pay for employees aged over 45 is proportionally larger under the Fairview Agreement than it is under the Whiddon Agreement (clause 32.3 (a) and (b) of the Fairview agreement).

x. Continuing professional development

(a) The Fairview Agreement includes a clause on Continuing Professional Development, whereby the employer is required to assist and facilitate professional development opportunities for staff through allowing flexibility of rosters and applications for leave (clause 40 of the Fairview agreement).

(b) There is no such clause in the Whiddon Agreement.

5. Regarding rates of pay, aside from CSE Grade 3 employees, pay rates under the Whiddon Agreement are marginally higher than they are in the Fairview Agreement.

6. However, the HSU is concerned that the slightly higher pay rate may not be enough to offset the other disadvantages identified by way of reductions terms and conditions of employment.

7. The HSU submits that the orders sought would likely cause significant disadvantage to transferring employees, through reductions to the terms and conditions of their employment.

[43] In the present matter Whiddon submitted 11 by way of reply that:

5. Whiddon continues to rely on its previous submissions in respect of the matters above. In response to the submissions objecting to the Order filed by the Australian Nursing and Midwifery Federation (NSW Branch) (ANMF) on 14 February 2020 and the Health Services Union NSW Branch (HSU) on 17 February 2020, Whiddon confines these submissions to matter (b) above: “whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment”, as it understands that this ground is pressed by both unions as the primary (if not sole) basis for their objections.

6. In Whiddon’s view, the transferring employees will not be disadvantaged by the making of the Order in relation to their terms and conditions of employment, because The Whiddon Group Agreement 2017 (Whiddon Agreement) provides for minimum rates of pay and other terms and conditions that are, on an overall assessment, equivalent to or more advantageous to the transferring employees than the Fairview Care Limited, NSWNMA & HSU NSW Enterprise Agreement 2017 – 2020 (Fairview Agreement).

7. In response to the submissions made by the ANMF on 14 February 2020, Whiddon says as follows:

(a) regarding allowances, Whiddon acknowledges that the Fairview Agreement contains some allowances that are not provided for in the Whiddon Agreement. However, there are allowances in the Whiddon Agreement which are higher than the Fairview Agreement: for example, the vehicle allowance (clause 39.4 of the Whiddon Agreement/clause 20.2 of the Fairview Agreement). The in-charge allowance may be more or less favourable under the Whiddon Agreement depending on the number of hours worked by the employee on a particular day.

In addition, as many hourly rates under the Whiddon Agreement are higher than the Fairview Agreement, we do not consider that employees will be overall disadvantaged. By way of example, if the rate calculations used by the ANMF in the ‘Annexure C’ to their submissions were applied to a Registered Nurse – 1st Year and an Enrolled Nurse – 1st Year, these employees would be $31.16 and $5.32 better off per week respectively under the Whiddon Agreement, even when the uniform allowance and climatic and isolation allowances under the Fairview Agreement are taken into account.

(b) regarding additional/accrued days off (ADOs), we submit that there is no guaranteed entitlement under the Fairview Agreement to work under an ADO arrangement, as it is merely one of the possible arrangements of hours of work under clause 14.2(b) of the Fairview Agreement. Nonetheless, Whiddon is prepared to agree to continue the current ADO arrangements as allowed under the Fairview Agreement for any existing transferring employees working an ADO arrangement at the time of the transfer.

(c) regarding redundancy pay, Whiddon acknowledges that the Fairview Agreement scale is more beneficial but notes that the Whiddon Agreement provides some additional benefits (for example, a weekly day off for attending interviews under clause 66.6 of the Whiddon Agreement), which are not included in the Fairview Agreement. We submit that redundancy pay is a contingent entitlement and only arises where a redundancy occurs, and therefore it should not be heavily weighted as a factor when assessing employee terms and conditions;

(d) regarding long service leave, Whiddon acknowledges that the rate of accrual is higher under the Fairview Agreement. However, it submits that the Whiddon Agreement offers earlier access to long service leave under clause 49.2 of the Whiddon Agreement), which is more beneficial for shorter-term employment, and allows employees to access their long service not just earlier but often in circumstances where employees may not otherwise have been able to access the benefit at all.

(e) regarding shift penalties, Whiddon submits that it is difficult to directly compare between the relevant entitlements under the Whiddon Agreement and the Fairview Agreement due to the varying definitions and application of the penalties. There are circumstances in which a shift would attract penalties under one agreement, but not the other. The ANMF submits that, for example, shifts commencing after 10.00am and before 1.00pm would attract a shift penalty under the Fairview Agreement. However, we note that such a shift, unless it was less than 3 hours (which is not possible for full-time or part-time employees as a result of clause 24.1 of the Whiddon Agreement), will also attract a shift penalty under the Whiddon Agreement, for the amount of time worked after 1.00pm.

Further, an example shift which runs from 12.30pm-5.30pm would attract 3 hours at 12.5% and 1.5 hours at 15% under the Whiddon Agreement (total of 60% in penalties), but only 5 hours at 10% under the Fairview Agreement (total of 50% in penalties). In our view, the overall effect on the transferring employees would be, at worst, a neutral consideration, and cannot reasonably be said to disadvantage the transferring employees.

(f) regarding annual leave loading, Whiddon acknowledges that the Whiddon Agreement limits the annual leave loading entitlement to the first four weeks of leave accrued in each year of service, but submits that nursing employees who did not meet the definition of a shift worker for the purposes of the NES under the Fairview Agreement would not be disadvantaged by this cap. Any such employees would actually be advantaged under the Whiddon Agreement as they would be guaranteed to receive an additional week of annual leave per annum (clause 48.1 of the Whiddon Agreement).

(g) regarding purchased leave, Whiddon submits that purchased leave under the Fairview Agreement is subject to the employer’s agreement, which is not required to be given. As a result, we consider this to be a neutral consideration.

(h) regarding natural disaster leave, Whiddon submits that the absence of this leave entitlement in the Whiddon Agreement is balanced by the provision of leave types which are not accessible under the Fairview Agreement, including increased compassionate leave, paid community service leave, access to paid personal leave by way of grandparent’s leave and paid ceremonial leave.

(i) regarding repatriation leave, Whiddon submits that this leave type is subject to strict eligibility requirements which substantially limit an employee’s access to such leave, and as such, it should not be taken into account as a factor in whether an employee would be advantaged or disadvantaged by the Order. Whiddon submits that the absence of this leave entitlement in the Whiddon Agreement is balanced by the provision of leave types for a wider group of employees which are not accessible under the Fairview Agreement, including increased compassionate leave, paid community service leave, access to paid personal leave by way of grandparent’s leave and paid ceremonial leave.

(j) regarding overtime eligibility for casual employees, Whiddon submits that the ANMF has incorrectly identified that the Whiddon Agreement would remove their entitlement to overtime for working in excess of 10 hours on a day. We draw the FWC’s attention to Undertaking 6 in the Whiddon Agreement, which provides that employees engaged in the clinical and personal care streams will be paid overtime after 10 hours, excluding meal breaks.

As a result, the only circumstances in which casual employees will not receive overtime payments under the Whiddon Agreement when they would have received them under the Fairview Agreement, are the limited circumstances where they don’t receive a sufficient break between shifts (noting that they are entitled to receive such a break under clause 23.4 of the Whiddon Agreement) or when they are recalled to work. In our view, these situations will rarely occur, and do not place these employees in a position where they would be overall disadvantaged by the Order.

(k) regarding weekend penalty rates for casual employees, Whiddon acknowledges that the Whiddon Agreement does not apply a casual loading on top of the weekend penalty rates, whereas the Fairview Agreement does. However, it submits that the generally higher rates of pay under the Whiddon Agreement make most employees better off on an hour-for-hour basis, and the remainder will be better off on an overall basis when considering the terms and conditions imposed by the Whiddon Agreement as a whole.

Whiddon submits that the calculations applied in ‘Annexure E’ of the ANMF’s submissions are not accurate, as there is not an obligation under the Whiddon Agreement to apply a rate which is no less than 0.5% higher than the rates under the Nurses Award 2010 on an hourly basis: rather, Undertaking 9 of the Whiddon Agreement applies a minimum remuneration amount on a fortnightly basis. However, if the calculations of ‘Annexure E’ of the ANMF’s submissions were to be relied on as an indicative basis for casual rates of pay only, we note that there are several discrepancies in the document. We have attached a corrected version of this document to these submissions, marked ‘Annexure A’.

8. In response to the submissions made by the HSU on 17 February 2020, Whiddon says as follows:

(l) Whiddon relies on paragraphs 7 to (d) and (f) to (h) of these submissions in respect of the matters already addressed in those paragraphs;

(m) regarding reviews of part-time hours, casual conversion entitlements, recognition of prior service and recall to work, Whiddon acknowledges that these particular entitlements are more beneficial under the Fairview Agreement, but submits that this is not sufficient to find that the transferring employees are disadvantaged under the Whiddon Agreement.

(n) regarding hours of work, Whiddon submits that the HSU incorrectly states in its submissions that the maximum number of ordinary hours in a shift is 11 hours. While this may be stated as such in clause 23.2 of the Whiddon Agreement, it is subject to Undertaking 6 of the Whiddon Agreement which imposes overtime payments for hours worked in excess of 8 to 10 hours per day, dependent on the employee’s classification stream. As a result, the transferring employees are either better off under the Whiddon Agreement in respect of daily hours of work, or no worse off.

Whiddon acknowledges that there is no specific provision in the Whiddon Agreement that an employee must not work more than seven consecutive shifts (unless requested by the employee and agreed to by the employer), however it submits that the hours of work and overtime provisions in the Whiddon Agreement, in conjunction with its statutory obligations under work health and safety legislation, render such a situation extremely unlikely to occur.

(o) regarding breaks between shifts, Whiddon submits that while there may not be an express increase in the hours of work required between shifts where broken shifts or overtime are worked, clause 23.4 of the Whiddon Agreement imposes an obligation on Whiddon to “increase the break between shifts where possible”, with a guaranteed minimum of 8 hours.

regarding overtime payments, Whiddon submits that the HSU has incorrectly identified that the Whiddon Agreement only imposes overtime after 11 hours are worked in a day, and does not provide for overtime payments to casual employees other than for exceeding 76 hours of work in a fortnight. We once again draw the FWC’s attention to Undertaking 6 in the Whiddon Agreement, which provides that employees will be paid overtime after 8 to 10 hours (depending on their classification stream), excluding meal breaks. As a result, the transferring employees are either better off under the Whiddon Agreement in respect of daily hours of work, or no worse off.

(p) regarding weekend penalty rates for home care employees, most of the home care classifications are subject to substantially higher rates of pay under the Whiddon Agreement such that the Sunday hourly rates under the Whiddon Agreement are higher than the Sunday hourly rates under the Fairview Agreement. Regardless of this, none of the transferring employees are home care employees, and will therefore not be affected by the Order, so this should be dealt with as a neutral consideration.

(q) regarding meal allowances, Whiddon acknowledges that the Whiddon Agreement does not provide for a meal allowance, but submits that the circumstances of eligibility for a meal allowance under the Fairview Agreement are unlikely to occur. Under the Whiddon Agreement where an employee works through their break (which as on night shift), they are paid for the 30 minute meal break at ordinary time.

(r) regarding the employer’s ability to direct an employee to take annual leave, Whiddon acknowledges that there are some benefits to employees under the Fairview Agreement in respect of minimum leave accrual, but submits that the Whiddon Agreement provides employees with other protections, such as the requirement to give an employee at least 6 weeks’ notice of a direction to take leave (2 weeks to request the employee to identify a date, and failing this, 4 weeks’ notice of a date identified by Whiddon, per clause 48.6 of the Whiddon Agreement), an entitlement which is not provided for in the Fairview Agreement. Whiddon considers this to be, on balance, a neutral consideration.

(s) regarding the cashing out of paid personal/carer’s leave, Whiddon submits that cashing out of paid personal/carer’s leave under the Fairview Agreement is subject to the employer’s authorisation, which is not required to be given and expressed as being completely discretionary. As a result, we consider this to be a neutral consideration.

(t) regarding union delegate leave, Whiddon submits that this leave type is not accessible to most of the transferring employees as a result of the eligibility requirements, and as such, it should not be taken into account as a factor in whether an employee would be advantaged or disadvantaged by the Order.

(u) regarding continuing professional development, Whiddon submits that is a vaguely expressed entitlement under the Fairview Agreement and does not constitute a tangible benefit to the employees that should be taken into account by the FWC when it decides whether to make the Order.

(v) regarding base rates of pay, Whiddon submits that other than where the rates of pay are lower in the Whiddon Agreement, in which case the employee’s current rate under the Fairview Agreement will continue to be honoured, the rates of pay under the Whiddon Agreement for non-clinical streams are between 1% and 70% higher than the Fairview Agreement, with an average of 29% higher per classification.

9. Whiddon further submits that neither the ANMF or the HSU have taken into account the terms and conditions of the Whiddon Agreement that are more favourable to the transferring employees than the Fairview Agreement, which should be considered by the FWC in the context of this application. We have set out these terms in the attached document marked ‘Annexure B’.

10. Whiddon submits that s318 of the Act solely grants the FWC the power to make an order that a transferable instrument that would, or would be likely to, cover the new employer and a transferring employee does not, or will not, cover the new employer and the transferring employee; and an order that an enterprise agreement that covers the new employer covers, or will cover, the transferring employee. s318 does not grant the FWC the power to make an order which amends the substantive terms and conditions provided under an enterprise agreement as suggested by the ANMF.

11. Whiddon submits that while the FWC must take into account whether any employees would be disadvantaged by the Order in relation to their terms and conditions of employment, this does not mean that the Order can only be made where each employee is better off under the Order on a line-by-line comparison between the two industrial instruments. It further submits that the FWC should consider the advantage or disadvantage to the transferring employees as a whole, on an overall basis, when determining whether to make the Order, particularly in the confines of the power conferred on the FWC under s318 of the Act to either make, or not make, the Order.

12. In this regard, Whiddon relies on the principles expressed in the decision of Application by Sonic HealthPlus Pty Ltd [2015] FWC 6460, in which Commissioner Cribb framed the FWC’s consideration of employee disadvantage as involving a “balancing” of all entitlements on a “net” basis, and Application by Australian Laboratory Services Pty Ltd [2015] FWC 7916 where Commissioner Saunders expressed it as being a determination of whether the employees are “disadvantaged overall” (emphasis added).

[44] I accept that a line by line comparison as between the Whiddon Agreement and the Fairview Agreement identifies both the potential for advantages and disadvantages for Transferring Employees.

[45] However, because of the way both Whiddon and the Unions ran their respective cases I am not able to make an informed assessment about whether actual Transferring Employees will be disadvantaged by the Proposed Orders.

[46] No substantive evidence was led about what classifications Transferring Employees are employed in, their work patterns, their shift patterns or their entitlement to the range of allowances provided for in the Agreements. While this factor does not require the parties or the Commission to conduct a Better Off Overall Test, something akin to it would have been of use in the present matter.

[47] There was some evidence from Ms Cauchi 12 to the following effect:

6. On review of the Documents, I have identified that:

a. None of the transferring employees are home care employees;

b. 76% of the transferring employees had less than 5 years’ continuous service as at the Transfer Date;

c. the average length of employment of the transferring employees with Fairview Care was 3.7 years;

d. approximately 32% of the transferring employees engaged as nursing staff were not characterised as shiftworkers at Fairview Care, and were not receiving the associated entitlement to the additional week of annual leave;

e. none of the transferring employees used or accessed purchased annual leave for at least 12 months prior to the Transfer Date;

f. none of the transferring employees used or accessed natural disaster leave for at least 12 months prior to the Transfer Date; and

g. none of the transferring employees used or accessed repatriation leave for at least 12 months prior to the Transfer Date.

[48] I accept that evidence. It establishes that some of the complaints made by the Unions about potential losses of terms and conditions of employment are not likely to disadvantage employees. However, Whiddon did not address all of the identified issues and entitlements to allowances that will be lost if the Proposed Orders are made. It was within its power to do so.

[49] Consequently, in respect of the case run by Whiddon and the case run by the Unions all I am mostly left with are theoretical cases about certain employees if they exist within the cohort comprising the Transferring Employees.

[50] For example, if the Transferring Employees include a cohort of employees who would be entitled to the more favourable terms contained in the Fairview Agreement then it would follow that a number of the Transferring Employees would be disadvantaged if the s.318(1) orders sought by Whiddon were made. The problem is I have no way of knowing whether the theoretical disadvantaged employees identified by the Unions are likely to ever eventuate. It was within the power of the Unions to serve Notices to Produce on Whiddon and then lead evidence or to cross examine Ms Cauchi about the same, but they chose not to do so. Curiously, all of Ms Cauchi’s evidence was left unchallenged by the Unions.

[51] Consequently, I am left in a position where all I can conclude is that it is possible that some employees may be:

a) advantaged by the Proposed Orders, and

b) disadvantaged by the Proposed Orders.

[52] For this reason I have decided to treat the possible disadvantage as a neutral factor in deciding whether to grant the Proposed Orders.

Section 318(3)(c) - the nominal expiry date of the enterprise agreement

[53] The Fairview Agreement will nominally expire on 30 June 2020. The Whiddon Agreement will nominally expire on 1 October 2020. The application of the latter agreement as sought by Whiddon would therefore result in the Transferring Employees having certainty as to their terms and conditions of employment (as governed by an enterprise agreement) for a longer period. 13

[54] This factor weighs in favour of the order sought by Whiddon.

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

[55] First, it is important to understand what is meant by productivity. In short, it is a measure of the efficiency. It is computed by dividing average output per period by the total costs incurred or resources (capital, energy, material, personnel) consumed in that period. Labour productivity measures output per labour hour.

[56] The Transferring Employees operate at a separate facility to other Whiddon employees. So the question is whether the Fairview Agreement (that the Transferring Employees currently operate under) would have a negative impact on efficiency at the transferred facility or elsewhere within Whiddon’s workplace? The evidence in this regard was unsatisfactory. Statements about increased costs or convenience do not necessarily result in a decrease in productivity or efficiency.

[57] In its application Whiddon submitted (Exhibit 6) that,

“Paragraph 7:

(d) In the absence of the orders being made, the processes required to ensure compliance with the Fairview Agreement after the transfers employment would have a negative impact on the productivity of the applicant’s workplace and result in the applicant incurring significant economic disadvantage. For example, if the Fairview Agreement apply to Transferring Employees:

i. The Applicant will experience a significant increase in administration costs in order to ensure compliance with different industrial instruments for employees otherwise performing the same work;

ii. productivity is likely to be reduced because of the investment of time and energy by management staff in managing different industrial instruments at the Fairview site, rather than using these resources to manage its aged resident’s needs.”

[58] The evidence for Ms Cauchi was to the effect that:

“18. If the orders were made to have the Whiddon Agreement apply at Fairview this will greatly assist the Transferring Employees see themselves as Whiddon employees and achieve cultural alignment across the aged care facilities of Whiddon.”

[59] However, although it is intended that the Whiddon Agreement will apply under the Proposed Orders, it is the intention of Whiddon to grandfather higher rates of pay. Consequently, regardless of whether the Proposed Orders are made Whiddon proposes to continue to operate different pay scales for employees undertaking the same work. While this proposal is sensible in order to shield Transferring Employees from potential disadvantage it is inconsistent with the “one Agreement/cultural alignment” argument contended by Whiddon. They cannot have it both ways.

[60] Before me Ms Cauchi gave the following evidence: 14

Commissioner Johns: What do you mean by "cultural alignment", though?

Ms Cauchi: Can I provide an example in a similar situation. In 2018, when we acquired a different - another service.

Commissioner Johns: This is Beaudesert?

Ms Cauchi: Beaudesert. We didn't progress down this path and that service has two enterprise agreements on its own, so we operate the three different enterprise agreements in place, and the feedback ongoing from team members, because they're under a different agreement, among other things, they feel as though they're not part of Whiddon because their terms and conditions to some degree are different because they're under a different enterprise agreement.

Commissioner Johns: Is there some empirical study of that or is that just hearsay?

Ms Cauchi: It's feedback that employees have shared.

Commissioner Johns: It's not an empirical study?

Ms Cauchi: No.

Commissioner Johns: There's no employee engagement survey that backs up that?

Ms Cauchi: No.

[61] The NSWNMA submitted that,

“6(b) Section 318(3)(d) requires consideration of whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace. Section 318(3)(e) requires consideration as to whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer. The Applicant has submitted in its Application and in the witness statement of Lauren Cauchi, The Whiddon Group General Manager People and Culture, that “significant increases in administration causing additional labour costs” and “significant consultancy and software costs to set up a secondary payroll system”. The impact on productivity has not been quantified; the financial impact on the business has not been not quantified. The ANMF submits that these costs would, however, be the usual costs and risks associated with a transfer of business of this kind, and should not be found to outweigh the impact of the reduction of pay and conditions of employment experienced by the transferring employees.

[62] Before me Ms Fisher conceded there was “no compelling evidence” about a negative impact on productivity. 15

[63] On the basis of the evidence from Ms Cauchi, I am not satisfied that the continuation of the application of the Fairview Agreement to the Transferring Employees would have a negative impact on the productivity of Whiddon’s workplace.

[64] This factor weighs against granting the order sought by Whiddon.

Section 318(3)(e) - whether Whiddon would incur significant economic disadvantage as a result of the Fairview Agreement covering Whiddon

[65] Whiddon attempted to make much of the disadvantage that would result from the continuation of the Fairview Agreement.

[66] The evidence for Ms Cauchi was to the effect that:

“19. If the orders were made it would also prevent significant costs being incurred in terms of ensuring compliance [with the]’s Fairview Agreement. It would further prevent significant cost to Whiddon as described below.

20. The Applicant considers that the overall productivity of its business will be impacted if the Whiddon Agreement was not to apply to the Transferring Employees because:

(a) The Applicant would have to undertake a process to ensure that the Fairview Agreement was been complied with at all times. This course would require significant increase in administration causing additional labour cost to the applicant; and

(b) it would result in significant consultancy and software costs to set up a secondary payroll system. This of course would also require ongoing additional labour cost to the Applicant.”

[67] Correctly, the NSWNMA called out Whiddon’s failure to quantify any costs.

[68] In fairness to Ms Cauchi I put these matters to her during the hearing. However, before me Ms Cauchi was unable to make good the propositions 16 contained in her Affidavit. No evidence was led about:

a) actual anticipated costs; and or

b) the impact of the same on Whiddon’s profit and loss or balance sheet.

[69] There is no way of knowing what the costs will be or whether those costs are significant in the context of Whiddon’s budget. All of this information was within the power to Whiddon to lead before the Commission. It chose not to do so.

[70] Before me Ms Fisher conceded that “There's no evidence of significant economic [disadvantage] - it's a subjective term,” 17no evidence that it is significant.18

[71] For these reasons I am not satisfied on the evidence from Ms Cauchi that Whiddon would incur significant economic disadvantage as a result of the Fairview Agreement continuing to apply to the Transferring Employees.

[72] This factor weighs against granting the order sought by Whiddon.

Section 318(3)(f) - the degree of business synergy between the Fairview Agreement and the Whiddon Agreement

[73] Before me Ms Fisher conceded that there is some synergy between the two Agreements. 19

[74] This factor weighs against granting the orders sought by Whiddon.

Section 318(3)(g) - the public interest

[75] Whiddon submitted 20 that:

13. Whiddon submits that it is not in the public interest for the Order not to be made, as this would result in significant disadvantage to the transferring employees as a result of:

(a) they will not receive any of the terms and conditions of the Whiddon Agreement, including the higher base rates of pay; and

(b) inferior terms and conditions to any new employees engaged by Whiddon at the facility, as these new employees will be employed under the Whiddon Agreement. As these employees will be working in the same location and performing the same duties as the transferring employees, this could cause significant problems for morale, productivity, and principles of fairness and equality.

14. Furthermore, it is in the public interest to make the Order in that it will promote a seamless transition and continuation of the aged care services provided at the Fairview facility to residents who are among the most vulnerable members of the community.

[76] In the present matter the NSWNMA submitted that:

“… The final criteria the FWC must consider is s318(3)(g), being the public interest. The ANMF submits that is it not in the public interest for transferring employees to be subjected to a reduction in their terms and conditions of employment, which are set by an statutorily approved instrument such as an enterprise agreement, when a transfer of business occurs”. 21

[77] In the hearing the NSWNMA submitted that:

“We acknowledge that the consideration of whether some employees might be better off under the order is a factor potentially in the public interest test at section 318(3)(g). However we submit this would not be a factor that could be found to outweigh the disadvantage experienced by many other employees”. 22

[78] In the present matter the HSU made no submissions about public interest.

[79] Before me Ms Fisher submitted (inconsistently with the written submissions) that,

“I say that the public interest isn't a relevant consideration in this matter. It's one small site in rural New South Wales”. 23

[80] A Full Bench of the Australian Industrial Relations Commission made the following observation in relation to the public interest in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000: 24

“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notional public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.”

[81] The public interest in this context is influenced by the objects of Part 2-8 of the Act as set out in s.309 and those adopted by the Act more broadly. 25

[82] As Commissioner Saunders (as he then was) did in Australian Laboratory Services Pty Ltd 26 I agree with the following comments made by Commissioner Hampton in Stractco concerning the public interest in s.318(3)(g) of the Act:

[43] There is public interest in ensuring that agreed and statutorily approved arrangements are not put aside lightly and where they are to no longer apply, the interests of the employees concerned are safeguarded. The absence of disadvantage and the evident employee support for the change in this case, are important considerations.

[44] Further, and particularly given the above context, there is also public interest in ensuring that the business of Stratco in the Hunter and more broadly, is able to efficiently operate without unnecessary complications in its employment arrangements.

[45] It is also the case the public interest in this matter is served by facilitating arrangements that permit and encourage the maintenance of employment for the former Hunter Timber employees through the transfer of business process.”

[83] In the present case, it is necessary to weigh the public interest associated with the protection of employees’ (such as the Transferring Employees’) terms and conditions of employment against the public interest in facilitating an employer such as Whiddon to run its enterprise efficiently.

[84] Whiddon has principally made this application for reasons of efficiency, alignment, fairness (between employees) and productivity. It is in the public interest that employers achieve such objectives. However, Whiddon failed to make good those propositions on an evidentiary basis.

[85] It is also in the public interest that employees such as the Transferring Employees who work in a business which has been sold by one entity (Fairview) to another (Whiddon) are not, because of that sale, subject to disadvantage in their terms and conditions of employment. Having regard to my conclusion that the Proposed Orders, if made, may disadvantage Transferring Employees in relation to their terms and conditions of employment, I consider that the public interest in protecting the Transferring Employees’ terms and conditions of employment under the Fairview Agreement outweighs the public interest associated with Whiddon running its enterprise efficiently.

[86] This factor weighs against granting the Proposed Orders.

Conclusion

[87] Having carefully played the matters set out in paragraphs above, I declined to exercise my discretion to make an order under section 318(1) of the FW Act in relation to the Fairview Agreement. In my view, the factors weighing against making of the orders sought outweigh those in favour.

[88] Accordingly, the application is dismissed.

[89] An order [PR717216] will be issued concurrently with this decision.

COMMISSIONER

Appearances:

Ms J Fisher, Partner, FCB Workplace Law, for the Applicant.
Ms A Rose, Industrial Officer, for the NSWNMA.
Mr C Friend, Bargaining Officer, for the HSU.

Hearing details:

2020.
26 February.
Sydney.

Printed by authority of the Commonwealth Government Printer

1 Transcript PN72.

2 Exhibit 12.

3 Transcript PN111.

4 Transcript PN121.

5 CEPU; CSIRO [2010] FWA 1171 (CSIRO) at [102].

6 [2015] FWC 7916.

7 Stratco (NSW) Pty Ltd [2010] FWA 7036 (Stratco) at [25].

8 Stratco at [25]; Sonic HealthPlus Pty Ltd [2015] FWC 6460 at [95]; CSIRO at [101].

9 Exhibit 9.

10 Exhibit 10.

11 Exhibit 11.

12 Exhibit 12.

13 Lend Lease Engineering Pty Ltd (formerly known as Abigroup Contractors Pty Ltd) [2014] FWC 5499 at [30(c)].

14 Transcript PN51 – 55.

15 Transcript PN227.

16 Transcript PN57 – 103.

17 Transcript PN229.

18 Transcript PN233.

19 Transcript PN235.

20 Exhibit 11.

21 Exhibit 9 pp 5 – 6.

22 PN206.

23 PN237.

24 (2005) 139 IR 34 at 40.

25 Stratco at [42].

26 [2015] FWC 7916.

Frank Whiddon Masonic Homes of New South Wales Pty Ltd T/A The Whiddon Group