Karingal St Laurence Limited T/A genU
[2019] FWC 3729
•31 MAY 2019
[2019] FWC 3729
The attached document replaces the document previously issued with the above code on 31 May 2019.
The Order PR number has been changed to the correct PR number at paragraph 29.
Deputy President Masson’s Chambers
3 June 2019.
| [2019] FWC 3729 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Karingal St Laurence Limited T/A genU
(AG2019/1591)
Health and welfare services
DEPUTY PRESIDENT MASSON | MELBOURNE, 31 MAY 2019 |
Application for an order relating to instruments covering new employer and non-transferring employees.
Application for an order relating to instruments covering new employer and transferring employees
Introduction
[1] An application has been made pursuant to ss 318 & 319 of the Fair Work Act 2009 (Act) by Karingal St Laurence Limited T/A genU (genU) seeking orders from the Fair Work Commission (Commission) that a transferrable instrument, being the Northern Support Services and HSU Disability Services Union Collective Agreement 2006-2009 (the NSS HSU Agreement)not apply to;
(i) employees whose employment transfers from Northern Support Services (NSS) to genU as a result of a transfer of business on 31 May 2019;
(ii) employees of genU who commence employment with genU after the period of the transfer of business who were not, immediately prior to the date of the transfer of business, employees of NSS and who are performing the transferring work; and
(iii) employees of genU that are currently employed, who are award free and perform the transferring work.
[2] The Form F40 – Application for orders in relation to a transfer of business filed in support of this Application was accompanied by an affidavit by Ms Emma Rachael Hickson who is the Group Manager, Business Partnering and Employee Relations for genU.
[3] Following the application being filed a conference was conducted on 22 May 2019 at which genU and representatives of the relevant unions were invited to attend. The relevant unions are the Health and Community Services Union (HACSU) and the Health Workers Union (HWU). At the conclusion of the conference Directions were issued inviting submissions from genU, the Employees and the relevant unions in relation to the application. genU were also required to serve the Directions, its submissions and other materials on which it sought to rely on the relevant employees.
[4] genU and HACSU filed submissions and/or materials in relation to the application in accordance with the Directions. No submissions or materials were received from any of the affected employees or the HWU. Based on the materials received I determined to deal with the application on the papers.
Background
[5] NSS and genU are organisations engaged in the provision of employment, aged care, disability services and mental health services. NSS operates in the northern suburbs of Melbourne whereas genU have a national footprint with some 2800 staff. genU is in the process of completing an asset purchase of NSS which is due to complete on 31 May 2019. As part of the terms of purchase, genU has made employment offers to a number of employees of NSS (the Employees) whose employment is currently regulated by the NSS HSU Agreement. It is expected that the Employees will transfer to genU on 31 May 2019.
[6] The NSS HSU Agreement reached its nominal expiry date on 30 June 2009. In the absence of orders in the form sought, the Employees and potentially certain non-transferring employees would otherwise be covered by the NSS HSU Agreement. The NSS HSU Agreement is expressed to apply to NSS and
“the Health Services Union (“the HSU”), its members and those eligible for membership in respect of all such employees employed by the employer, and covered by the Health and Allied Services - Private Sector – Victoria Consolidated Award 1998 and/or the Health Services Union of Australia (Health Professional Services - Private Sector Victoria) Award 2004 and/or the Residential and Support Services (Victoria) Award 1999.”
[7] genU seeks that on transfer of the Employees from NSS to genU that all the terms and conditions of those employees currently covered by the NSS HSU Agreement will be covered by the Karingal Inc Residential and Support Services CA 2006 (Karingal Inc Agreement), which currently operates within genU’s business. They also seek that any non-transferring employees not be otherwise covered by the NSS HSU Agreement.
[8] The Karingal Inc Agreement is expressed to apply to;
“(a) Karingal Inc and
(b) Residential and Support Services Workers employed by Karingal Inc. in Victoria and
(c) the Health Services Union (‘HSU’).”
[9] genU (and NSS) have been negotiating with Jobs Australia and the relevant unions for a multi-employer agreement (MEA) to cover front-line client facing staff however these discussions have been delayed. As a consequence genU seeks to transfer Employees across and to be covered by the Karingal Inc Agreement along with current genU employees.
[10] Ms Hickson states that commencing on 28 March 2019 a rigorous consultation process was initiated with Employees regarding the transfer of their employment to genU and that they would no longer be covered by the NSS HSU Agreement and would, if the application to the Commission was successful, be covered by the Karingal Inc Agreement. That consultation included;
(i) On 18 April 2019, representatives of the HACSU and HWU were advised by email of genU’s proposed transition of Employees to the Karingal Inc Agreement.
(ii) Formal consultation and information sessions were conducted with the Employees on 23, 24, 26 and 29 April 2019 at multiple times across NSS’ Northcote, Thornbury and Reservoir sites.
(iii) Informal consultation sessions were conducted with some Employees on 2 & 6 May 2019.
(iv) A delegate from the HACSU attended all consultation sessions and met with their members after those sessions.
(v) Operations managers of genU visited all NSS sites between 1 and 10 May 2019 and were available to answer any queries or concerns held by Employees.
[11] During consultation sessions Employees were provided with a copy of a comparison document that compared key terms and conditions under the NSS HSU Agreement and the Karingal Inc Agreement. A copy of that document was attached to the statutory declaration of Ms Hickson and revealed that the terms and conditions under the Karingal Inc Agreement, including rates of pay, were broadly comparable to those of the NSS HSU Agreement.
[12] Ms Hickson also states in her statutory declaration that written offers of employment from genU to Employees have confirmed the grandfathering of entitlements of the NSS HSU Agreement, to the extent that the NSS HSU Agreement contained entitlements that are not provided for in the Karingal Inc Agreement.
[13] As genU anticipated applying to the Commission for orders in relation to a transfer of business it conducted a ballot of the Employees covered by the NSS HSU Agreement between 6 to 10 May 2019. Of the 41 employees covered by the NSS HSU Agreement, 12 employees voted and of those, 11 voted in favour of the proposed transition to coverage by the Karingal Inc Agreement.
Statutory Provisions
[14] Section 318 of the Act sets out the circumstances in which an order may be made by the Commission in respect of a new employer and transferring employees:
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;
(c) a transferring employee, or an employee who is likely to be a transferring employee;
(d) if the application relates to an enterprise agreement—an employee organisation that is, or is likely to be, covered by the agreement;
(e) 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.”
[15] Section 319 of the Act sets out the circumstances in which an order may be made by the Commission in respect of a new employer and non-transferring employees:
319 Orders relating to instruments covering new employer and non-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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;
(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.
Who may apply for an order
(2) 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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(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 non-transferring employee before the later of the following:
(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;
(b) the day on which the order is made.”
Consideration
[16] I will now consider each of the matters that I am required to consider under ss 318(3) and 319(3).
The views of the new employer
[17] genU seeks that the NSS HSU Agreement does not operate in its business in respect of either transferring or non-transferring employees. This weighs in favour of the granting of the order sought by genU
The views of the employees who would be affected by the order
[18] No Employees responded to the Directions issued by the Commission. The survey conducted by genU also revealed support for the application by a number of the Employees. While one of the Employees apparently voted in opposition to the proposed transition to the Karingal Inc Agreement that Employee did not take up the opportunity to make submissions on the application. In the circumstances I regard the views of Employees as a neutral consideration.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
[19] genU state that any material variations to terms and conditions of employment that arise on transition will be managed through the grandfathering of current entitlements under the NSS HSU Agreement. Furthermore, they state that Employees have received written offers of employment confirming such grandfathering.
[20] HACSU in its submission raised concerns that existing employees covered by the NSS Agreement should maintain all of their existing entitlements where they are more favourable or where they are not covered by the Karingal Inc Agreement. While not objecting to the application by genU HACSU sought specific undertakings from genU in the following terms;
(i) Karingal St Laurence T/A genU where the Northern Support Services and HSU Disability Union Collective Agreement 2006 – 2009 (‘NSS Agreement’), has provisions that are more favourable or that are not covered by the Karingal Inc Residential and Support Services Collective Agreement 2006-2009 (‘Karingal Agreement’) these provisions shall apply to the transferring and non-transferring Employee. The provisions in the Karingal Agreement otherwise apply.
(ii) Karingal St Laurence T/A genU shall transfer all employee entitlements transferring from the Northern Support Services and HSU Disability Union Collective Agreement 2006 – 2009 (‘NSS Agreement’) to the Karingal Inc Residential and Support Services Collective Agreement 2006-2009 (‘Karingal Agreement’) including but not limited to personal leave, long service leave, annual leave, carer’s leave, and parental leave.
[21] HACSU further sought that the wording of the undertakings be added to the contracts of transferring Employees, that if Employees had already signed contracts, that they be issued with amended contracts and that HACSU be provided with copies of the contracts.
[22] I have reviewed the material provided by genU in their application and in particular the document comparing the NSS HSU Agreement and Karingal Inc Agreement conditions. I am satisfied that while there are some differences the terms and conditions, they are broadly comparable and HACSU have not identified the details of their specific concerns. I am further satisfied that the grandfathering of entitlements committed to by genU has the effect of ensuring that where Employees transfer to genU and there was a more favourable benefit under the NSS HSU Agreement, then such benefit will be grandfathered.
[23] I am satisfied in the circumstances that employees will not be disadvantaged by the order sought in relation to terms and conditions of employment. I am also satisfied that no non-transferring employees will be disadvantaged by the order as they do not currently come within the scope of the NSS HSU Agreement. The absence of any demonstrable disadvantage weighs in favour of the granting of the order sought.
If the order relates to an enterprise agreement—the nominal expiry date of the agreement
[24] The nominal expiry date of the Agreement was 30 June 2009. Given that the Karingal Inc Agreement also reached its nominal expiry date on 30 June 2009, this is not a factor that weighs in favour of the application for the orders sought. It is therefore a neutral consideration.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
[25] The transferable instrument would require genU to maintain different and disparate terms and conditions of employment in respect of employees performing similar duties and functions. I am satisfied that it would also create operational inefficiencies arising from the requirement to administer the terms of an enterprise agreement covering 41 transferring employees out of a workforce of 293 employees. This weighs in favour of granting the orders sought.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
[26] genU submits that it will incur an economic disadvantage and face administrative difficulties caused by maintaining and managing disparate terms and conditions of employment if the NSS HSU Agreement transfers with the Employees. This weighs in favour of granting the order.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
[27] The Karingal Inc Agreement already covers genU and its employees within the scope of that agreement. While the terms of that agreement are broadly comparable to the NSS HSU Agreement there are differences that would be problematic if both agreements applied to the same class of employees. To that extent there is lack of synergy between the transferable instrument and the existing Karingal Inc Agreement which covers genU and its employees. This weighs in favour of the orders sought by genU.
The public interest
[28] I am satisfied that it is not against the public interest to grant the order sought by genU. This weighs in favour of granting the order.
Conclusion
[29] Having read the application and supporting documents and having heard from genU and HACSU, I have weighed the various factors and am satisfied that all of the requirements of ss 318 and 319 of the Act have been met and that it is appropriate to issue an order as sought by genU. An Order (PR708931) will be separately issued with this Decision and will take effect on 31 May 2019.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR708837>>
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