Gosford Cubbyhouse Occasional/Long Day Care Inc

[2016] FWC 2389

[2016] FWC 2389

FAIR WORK COMMISSION

DECISION

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

Gosford Cubbyhouse Occasional/Long Day Care Inc
(AG2016/2358)

KU CHILDREN'S SERVICES AND ADMINISTRATIVE EMPLOYEES' ENTERPRISE AGREEMENT 2013
(ODN AG2012/14456)  [AE899974]

Children's services
COMMISSIONER BISSETT	MELBOURNE, 14 APRIL 2016

Application for an order relating to instruments covering transferring employees – KU Children's Services and Administrative Employees' Enterprise Agreement 2013 – application granted.

[1] In late 2015 Gosford Cubbyhouse Occasional/Long Day Care Centre Incorporated (Gosford Cubbyhouse) commenced occupation of premises previously occupied by another childcare provider (KU Children’s Services). In the process Gosford Cubbyhouse has had the beneficial use of assets of KU Children’s Services which were left by KU Children’s Services when it vacated the premises. KU Children’s Services vacated the premises on 23 December 2015 and Gosford Cubbyhouse commenced operations on 4 January 2016.

[2] Gosford Cubbyhouse has continued to provide childcare services to children who were previously cared for by KU Children’s Services. Gosford Cubbyhouse has also offered employment to some previous employees of KU Children’s Services. These offers of employment were accepted by the staff concerned.

[3] KU Children’s Services and its employees were covered by the KU Children’s Services & Administrative Employees Enterprise Agreement 2013 (the KU Agreement).

[4] Gosford Cubbyhouse is covered by the Children’s Services Award 2010.

[5] Gosford Cubbyhouse is keen to ensure that the enterprise agreement that previously applied to KU Children’s Services does not apply to it or the employees to whom it offered employment because Gosford Cubbyhouse has had the beneficial use of some assets of KU Children’s Services.

The Legislation

[6] Section 318 of the Fair Work Act 2009 (Cth) (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 transf erring employees

Orders that the FWC may make

(1) The FWC may make the following orders:

(a) an order that a transferable instrument that would, or would be likely to, cover the new employer and a transferring employee because of paragraph 313(1)(a) does not, or will not, cover the new employer and the transferring employee;

(b) an order that an enterprise agreement or a named employer award that covers the new employer covers, or will cover, the transferring employee.

Who may apply for an order

(2) The FWC may make the order only on application by any of the following:

(a) the new employer or a person who is likely to be the new employer;

(b) a transferring employee, or an employee who is likely to be a transferring employee;

(c) if the application relates to an enterprise agreement—an employee organisation that is, or is likely to be, covered by the agreement;

(d) if the application relates to a named employer award—an employee organisation that is entitled to represent the industrial interests of an employee referred to in paragraph (b).

Matters that the FWC must take into account

(3) In deciding whether to make the order, the FWC must take into account the following:

(a) the views of:

(i) the new employer or a person who is likely to be the new employer; and

(ii) the employees who would be affected by the order;

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

(c) if the order relates to an enterprise agreement—the nominal expiry date of the agreement;

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

(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;

(f) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;

(g) the public interest.

Restriction on when order may come into operation

(4) The order must not come into operation in relation to a particular transferring employee before the later of the following:

(a) the time when the transferring employee becomes employed by the new employer;

(b) the day on which the order is made.

[7] I will consider each of the matters it is required to consider under s.318(3).

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

[8] Gosford Cubbyhouse wants to ensure that all of its employees are engaged under the same terms and conditions of employment. This would allow for greater flexibility in use of staff in a small childcare centre and would ease the administrative burden on centre management.

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

[9] The three effected employees all received outstanding leave entitlements and redundancy entitlements on the closure of KU Children’s Services. They were subsequently offered, and accepted, employment with Gosford Cubbyhouse.

[10] I am satisfied that each of the effected employees has been consulted about the change and is aware of the effect that an order would have on their terms and conditions of employment. Each has indicated that they have nothing they wish to put before the Commission in considering this application.

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

[11] Gosford Children’s Services has committed to maintain the rates of pay of the three transferring employees at the higher rate they would otherwise have been entitled to receive under the KU Agreement or the Children’s’ Services Award 2010.

[12] On the basis of the material provided by Gosford Cubbyhouse I am satisfied that, overall, the employees will not be disadvantaged if the order is made as sought by Gosford Cubbyhouse. Whilst the KU Agreement does have some conditions in excess of those offered by Gosford Cubbyhouse the substantive difference is the provision of paid parental leave under the KU Agreement (of between 3 and 9 weeks, pay based on years of service) and an additional five days personal leave. However, there are conditions applicable to non-transferring employees which are more beneficial than those in the KU Agreement.

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

[13] The nominal expiry date of the KU Agreement is 26 March 2015.

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

[14] I am satisfied that the transferable instrument (the KU Agreement) would have a negative impact on the productivity of Gosford Cubbyhouse. It would place additional strain on Gosford Cubbyhouse and expose it to some rigidity in employment practices, including rostering and catering for individual employee needs, which would not be beneficial to the operation of the centre, staff or the children in its care.

[15] Gosford Cubbyhouse is a small community based childcare service. It employs eight staff (including the three transferring employees). The operation of two industrial instruments would place an unreasonable burden on it from a management of conditions of employment. It also has the potential to create tensions amongst staff given the different conditions of employment negatively affecting the productivity of Gosford Cubbyhouse.

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

[16] I am satisfied that that economic disadvantage could be sustained in the event that Gosford Cubbyhouse had to apply two separate sets of conditions to its staff.

Section 318(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[17] I am satisfied a degree of synergy exists between the transferable instrument and the existing terms and conditions of employment in the Children’s Services Award 2010.

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

[18] I am satisfied that it is in the public interest to grant the application.

[19] The provision of childcare services is important to enable parents to participate in the workforce or undertake further education and training. The loss of a childcare provider can have a devastating impact on the children, staff and the community. The ability, and willingness, of Gosford Cubbyhouse to continue places for children previously placed with KU Children’s Services and to provide employment to some staff of the business, provides stability for the children, peace of mind for parents and a benefit to the community.

Conclusion

[20] For the reasons given above I will make the order as sought in the application. An Order to this effect will issue with this decision.

COMMISSIONER

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