Healthe Care Australia Pty Ltd

[2017] FWC 1107

[2017] FWC 1107

FAIR WORK COMMISSION

DECISION

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

Healthe Care Australia Pty Ltd
(AG2016/8104)

Health and welfare services
COMMISSIONER GREGORY	MELBOURNE, 27 FEBRUARY 2017

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

Introduction

[1] This decision deals with an application made under s.318 of the Fair Work Act 2009 (Cth) (“the Act) by Healthe Care Australia Pty Ltd (“Healthe Care”). It seeks an order that the enterprise agreement that currently covers its health professionals and support services employees at the Brisbane Waters Private Hospital no longer cover those employees and instead a new Agreement, being the Health Care (NSW Private Hospitals) Health Professionals and Support Services Enterprise Agreement 2016, 1 cover those employees.

[2] The new Agreement was recently dealt with by the Commission in a separate application, and approved in a decision handed down on 27 February 2017. It commences to operate from 6 March 2017 as a consequence of that decision.

The Relevant Legislation

[3] Section 311(1) defines when a transfer of business occurs under the Act.

[4] Section 312 continues to set out the “Instruments that may transfer.” It states:

“312 Instruments that may transfer

Meaning of transferable instrument

(1) Each of the following is a transferable instrument:

(a) an enterprise Agreement that has been approved by the FWC;

(b) a workplace determination;

(c) a named employer award.

Meaning of named employer award

(2) Each of the following is a named employer award:

(a) a modern award (including a modern enterprise award) that is expressed to cover one or more named employers;

(b) a modern enterprise award that is expressed to cover one or more specified classes of employers (other than a modern enterprise award that is expressed to relate to one or more enterprises as described in paragraph 168A(2)(b)).” 2

[5] Section 317 then provides that the Commission may make certain orders if there is, or is likely to be, a transfer of the business from a previous employer to a new employer.

[6] The Section 318 continues to set out what orders may be made, who may apply for an order, and the matters the Commission must take into account in making any order. It states:

“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;

(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.”³

[7] This decision accordingly deals with whether it is appropriate in all the circumstances to make the orders now sought by Healthe Care.

Grounds on which the application is made

[8] Healthe Care relies on the following grounds in support of its application. On 21 July 2014 there was a transfer of business from Healthscope Limited (“the old employer”) whereby Healthe Care purchased and took over the operation of the Brisbane Waters Private Hospital (“Brisbane Waters”). Healthe Care submits the work the transferring employees now perform is the same or substantially the same as the work they performed previously for the old employer.

[9] It also submits there is a connection between the old employer and Healthe Care in that the business assets owned by the old employer were transferred to Healthe Care with effect from 21 July 2014. Healthe Care has from that date carried on the business previously carried on by the old employer and submits there was therefore a transfer of business at that time as defined by s.311(1).

[10] In addition, as a consequence of s.313(1), Healthe Care is now covered by the Healthscope Agreement in relation to the transferring employees. However, it now seeks that an order be made to provide that the Healthe Care (NSW Private Hospitals) Health Professionals and Support Services Enterprise Agreement 2016 cover its health professional and support services employees working at the Brisbane Waters facility once that Agreement has been approved by the Commission and has come into operation.

Consideration

[11] As indicated, s.318(3) sets out the matters the Commission must take into account in dealing with an application under s.318. I now turn to deal with each of those matters.

(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;

[12] Healthe Care submits that it has sought to standardise employment conditions across the business and reduce administration costs. It has, at the same time, sought to encourage the establishment of a single workplace culture amongst its employees. It also wishes to avoid any disparities that might arise from employees performing similar work, but being covered by different industrial instruments.

[13] It also indicated that it has sought the views of the employees who would be affected by the application, and by the making of any order, by way of a secret ballot which was conducted electronically. It provided a copy of the ballot results as an attachment to the application. It indicates that the employees were asked to vote in response to the following question:

“Do you approve of Healthe Care’s proposal to make an application to the Fair Work Commission for an order that the Healthscope – NSW – Health Professionals & Support Services Agreement 2014 – 2017 will NOT cover your employment.” 4

[14] The attachment sets out the results obtained by the Returning Officer who conducted the ballot. It indicates there were a total of 80 eligible employees who could have participated in the ballot and 56 did vote. All of those 56 employees voted in favour in response to the question posed.

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

[15] Healthe Care submits it has undertaken a detailed comparison between the two industrial instruments in regard to both wage rates and other employment conditions. It also attached a spreadsheet which sets out a comparison between the wages and conditions contained in each of the Agreements. In its submission the comparison indicates employees in the health professional and support service classifications would not be disadvantaged in any way by making the order sought.

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

[16] The nominal expiry date of the existing Healthscope Agreement is 30 September 2017. The proposed nominal expiry date of the Healthe Care Agreement is 1 September 2019.

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

[17] Healthe Care submits if it were required to have employees covered by two different industrial instruments, each providing for different entitlements, that this may lead to dissatisfaction among employees in different parts of its business. In some circumstances those employees may be required to work in close proximity. It submits that this has the potential to impact upon the culture in the workplace.

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

[18] Healthe Care primarily relies in this context upon the potential additional administration costs that might be incurred if it is required to have two different industrial instruments covering its employees on an ongoing basis. It also submits there may be some immediate impact upon productivity if employees performing similar work and working in close proximity are engaged under two different sets of employment conditions.

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

[19] Health Care acknowledges there is some business synergy between the two industrial instruments, but submits that the new Agreement is specifically structured in regard to its hospitals operating in New South Wales.

(g) the public interest.

[20] Healthe Care submits there are no public interest considerations that the Commission need be concerned about in the context of present application.

Consideration

[21] In dealing with this application I am satisfied, firstly, that it has been made by “the new employer” in accordance with s.318(2). I have also reviewed the details contained in the application provided by the National HR Manager of Healthe Care, Ms Sue Elmslie, and the various additional materials attached to the application. These include the ballot results provided by the Returning Officer that conducted the employee ballot, and the table comparing the relevant entitlements in each of the Agreements. I have also had particular regard to each of the matters in s.318(3) that the Commission must take account of in dealing with an application of this kind.

[22] In this context I note, in particular, that all of the employees who voted in the secret ballot that was conducted independently of the Applicant voted in favour of the old Agreement no longer covering their employment conditions. I am also satisfied having regard, in particular, to a review of the comparison between each of the Agreements that has been provided by the Applicant that the employees will not be disadvantaged by the making of the order being sought. It is also noted that the nominal expiry date of the existing Agreement is 30 September 2017, whereas the nominal expiry date of the Healthe Care Agreement is 1 September 2019. I am satisfied, in conclusion, having considered each of the considerations in s.318(3) that it is appropriate to make an order in the terms sought by the Applicant.

[23] As indicated, the application intends that the order comes into effect from the operative date of the Healthcare (NSW Private Hospitals) Health Professionals and Support Services Enterprise Agreement 2016. That Agreement was approved by the Commission on 27 February 2017 and commences to operate from 6 March 2017. The order will accordingly come into force on 6 March 2017. The order is issued in conjunction with this decision.

COMMISSIONER

 1   AE423389.

 2   Fair Work Act 2009 (Cth) s 312.

3 Ibid at s 318.

 4   Form F40 – Application for orders in relation to a transfer of business, dated 21 December 2016, at Attachment C.

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