HammondCare

[2020] FWCA 4048

[2020] FWCA 4048

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

HammondCare
(AG2020/2141)

TINONEE GARDENS THE MULTICULTURAL VILLAGE LIMITED, NSWNMA AND HSU NSW ENTERPRISE AGREEMENT 2017 - 2020

Aged care industry
DEPUTY PRESIDENT BOYCE	SYDNEY, 3 AUGUST 2020

Application for termination of the Tinonee Gardens The Multicultural Village Limited, NSWNMA and HSU NSW Enterprise Agreement 2017 – 2020 — termination approved.

[1] This decision concerns an application made by HammondCare for the termination of the Tinonee Gardens The Multicultural Village Limited, NSWNMA and HSU NSW Enterprise Agreement 2017 - 2020 (Agreement).

[2] This application is made under s.225 of the Fair Work Act 2009 (Act), which enables an employer to apply to the Commission for the termination of an enterprise agreement that has passed its nominal expiry date.

[3] Section 226 of the Act, details the considerations for the Commission when dealing with such an application:

“226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them”.

[4] In support of its application, the Applicant has provided the Fair Work Commission (Commission) a statutory declaration and accompanying affidavit, both being dated 21 July 2020, and both having been signed by Mr Jeff Wright (People Services Operations Manager, HammondCare).

[5] By way of his affidavit, Mr Wright relevantly discloses the following:

(a) On 5 October 2020, the Applicant acquired the Tinonee Gardens Residential Aged Care Facility (Tinonee) from the previous provider, being Tinonee Gardens The Multicultural Village Limited.

(b) The acquisition of Tinonee by the Applicant triggered a transfer of business for the purposes of the Act, and the transfer of employment for those employees previously employed by Tinonee who subsequently accepted an offer of employment from the Applicant (effective from 5 November 2018).

(c) As at 21 July 2020, there were 98 transferring employees still employed by the Applicant (94 of those transferring employees were classified either as Care Service Employees, or Registered Nurses). If the Applicant is successful in seeking the Agreement’s termination, those employees will become covered by the HammondCare Residential Care and HammondCare At Home Enterprise Agreement 2018 (HammondCare Agreement).

(d) Another four employees working in administrative roles will be covered by the Aged Care Award 2010 (AC Award). All of these four employees are employed pursuant to common law contracts, which are (overall) more favourable than the terms and conditions contained in the AC Award.

(e) The Applicant seeks to implement a uniform set of terms and conditions of employment for all of its residential aged care employees in New South Wales. To minimise the potential for disparity in terms and conditions of employment between transferring employees and non-transferring employees at Tinonee, the Applicant has introduced a "Tinonee Equalisation Allowance" since the acquisition of Tinonee — the effect of which is to align the base rates of pay in the Agreement with the base rates of pay in the HammondCare Agreement (where there is a disparity in those rates of pay). The implementation of the Tinonee Equalisation Allowance effectively requires the implementation of three levels of industrial arrangements and payroll processes across the Applicant’s operations in New South Wales (namely the Agreement, the HammondCare Agreement, and the Tinonee Equalisation Allowance).

(f) On 8 July 2020, the Applicant wrote to all employees at Tinonee advising them of the Applicant’s intention to make the termination application. On 8, 9 and 10 July 2020, 14 staff consultation meetings were held with staff at Tinonee to provide employees with the opportunity to ask questions in relation to the proposed termination of the Agreement. Mr Wright says the primary questions asked by staff related to the following:

(i) confirmation that employee pay rates would not be decreasing as a result of the termination of the Agreement, which was confirmed by the Applicant; and

(ii) confirmation that the more favourable long service leave accrual under the Agreement would continue, which was also confirmed by Applicant. More specifically, in addition to the terms and conditions of employment in the HammondCare Agreement, the Applicant has agreed to “grandfather” the more favourable long service leave accrual provisions in the Agreement for all transferring employees for so long as they remain employed in residential care roles covered by the HammondCare Agreement. As a result, transferring employees who would become covered by the HammondCare Agreement would not suffer a reduction in their long service leave entitlements as a result of the termination of the Agreement.

[6] The Health Services Union of Australia (HSU), and New South Wales Nursing and Midwifery Federation (NSWNMF) (collectively, Unions), are covered by the Agreement and were invited to provide their views on the application. The NSWNMF raised concerns regarding the termination of the Agreement. However, during a hearing held by telephone on 31 July 2020, the NSWNMF withdrew those concerns (having been satisfied by the submissions of the Applicant regarding same), and otherwise did not object to the application. The HSU does not oppose the application.

[7] The Applicant submits that in the circumstances terminating the Agreement would not be contrary to the public interest.

Consideration

[8] I am satisfied that termination of the Agreement is not contrary to the public interest. Further, I agree with the Applicant’s views regarding the matters that need to be considered under the Act, namely:

(a) As a not-for-profit provider of aged care services, the Applicant is reliant upon funding from the Federal Government. It is in the public interest that those funds be directed towards providing care and support to the Applicant’s aged and vulnerable residents, not in the administration of multiple enterprise agreements.

(b) Non-transferring employees (i.e. those employees who commenced employment at Tinonee after the acquisition by the Applicant) are currently covered by the HammondCare Agreement. As a result, employees performing the same the work in the same location are covered by different industrial instruments. If the Applicant was to negotiate a new enterprise agreement covering only transferring employees, in circumstances where the Applicant has already expended time and resources in negotiating the HammondCare Agreement, such a course of action would result in unnecessary duplication of resources throughout the bargaining process, and the perpetuation of disparate terms and conditions of employment amongst co-workers (both of which have the potential to result in industrial disputation). On the contrary, if the orders sought by the Applicant are made by the Commission, the result would be the application of uniform terms and conditions of employment for all the Applicant's residential aged care employees in New South Wales.

(c) If the Agreement is not terminated then:

(i) transferring employees covered by the Agreement and non-Transferring Employees covered by the HammondCare Agreement performing the same work in the same location will be entitled to different rates of pay and covered by different enterprise agreements;

(ii) to minimise the potential for industrial disputation, the Applicant would likely need to continue the application of the Tinonee Equalisation Allowance, which imposes an additional third layer on the Applicant’s already complex industrial arrangements;

(iii) new and existing human resources staff at the Applicant will require training in administering both the Agreement and the HammondCare Agreement; and

(iv) if the Applicant is required to negotiate a replacement enterprise agreement to replace the Agreement, this will require an unnecessary duplication of the Applicant’s resources (resulting in a new enterprise agreement covering only a small percentage of the Applicant’s total residential aged care workforce in New South Wales), and will result in the transferring employees being the only employees engaged in the Applicant’s residential aged care operations in New South Wales who are not covered by the HammondCare Agreement.

Conclusion

[9] Having considered the foregoing, and the requirements of the Act, the Agreement is terminated and pursuant to s.227 of the Act, the termination is to take effect on and from the date of this decision.

DEPUTY PRESIDENT

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