LGT Crestone Wealth Management Limited
[2025] FWC 445
•14 FEBRUARY 2025
| [2025] FWC 445 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s 318 - Application for an order relating to instruments covering new employer and transferring employees
LGT Crestone Wealth Management Limited
(AG2024/4961)
| COMMISSIONER SLOAN | SYDNEY, 14 FEBRUARY 2025 |
Application for orders under s 318 of the Fair Work Act 2009
LGT Crestone Wealth Management Limited is a wealth management firm. It provides private wealth advice services to high net worth families, family offices and not-for-profit organisations.
On or about 1 June 2025, LGT Crestone will acquire the assets of, and a business run by, the Commonwealth Bank of Australia (“Acquisition”). That business is known as Commonwealth Private Advice.
LGT Crestone made offers of employment to forty Commonwealth Bank employees currently working in the Commonwealth Private Advice business. All but two accepted those offers. Thirty four of those who accepted the offers are covered by the Commonwealth Bank Enterprise Agreement 2023 (“Enterprise Agreement”). The remaining four are senior executive managers. The employees who accepted the offers will commence employment with LGT Crestone from the date the Acquisition takes effect or soon afterwards.
These proceedings relate to those employees who are covered by the Enterprise Agreement (“Transferring Employees”).
LGT Crestone seeks orders under s 318 of the Fair Work Act 2009 (“Act”) that the Enterprise Agreement will not cover LGT Crestone or any Transferring Employee following the Acquisition (“Application”).
Procedural Matters
On receipt of the Application, I arranged for an email to be sent to LGT Crestone and its legal representatives, Kingston Reid, that invited any Transferring Employee to provide their views on the Application. The email requested that any response be provided to my Chambers by 6 January 2025. The email included directions that LGT Crestone forward the email to the Transferring Employees by 23 December 2024 and that it provide evidence of having done so by 24 December 2024.
On 24 December 2024, LGT Crestone confirmed that it had forward the Commission’s email to the Transferring Employees.
The Commission has not received any communication from a Transferring Employee.
However, on 17 January 2025 the Commission received an email from the Finance Sector Union of Australia (“FSU”) attaching:
a.a copy of a letter from the FSU to LGT Crestone dated 19 December 2024; and
b.a copy of a letter from Kingston Reid to the FSU dated 24 December 2024.
I arranged for an email to be sent to the parties on 21 January 2025, enquiring whether they wished to be heard further on the Application, or whether I could proceed to determine the Application on the basis of the material that had been provided to the Commission. In an email to the Commission on the same day, the FSU stated that it did not wish to be heard further. In an email to the Commission on 23 January 2025, Kingston Reid confirmed that LGT Crestone similarly did not seek to be heard further, but “noted” some of the matters contained in its letter to the FSU of 24 December 2024.
As a result, I have determined the Application on the basis of the material contained in:
a.the Application;
b.a statement of Jessica Shaw, the Head of Human Resources at LGT Crestone, dated 7 December 2024, filed in support of the Application;
c.the correspondence attached to the FSU’s email of 7 January 2025; and
d.the email from Kingston Reid of 23 January 2025.
The statutory framework
The Application relies on s 318(1)(a) of the Act. That section provides that the Commission may, on application by a person or organisation identified in s 318(2), 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”. Section 318(3) sets out the matters that the Commission must take into account in deciding whether to make such an order.
The Commission’s discretion to make an order under s 318(1) is subject to a number of prerequisites. There is no contest that they are met in this case. I will deal with them briefly.
The Commission must first be satisfied that there has been, or that there is likely to be, a transfer of business within the meaning of s 311 of the Act: s 317. I am satisfied that there will be a transfer of business from the Commonwealth Bank to LGT Crestone for the following reasons:
a.the employment of the Transferring Employees with the Commonwealth Bank will terminate, and within three months (on or soon after the date of the Acquisition) they will become employed by LGT Crestone: s 311(1)(a) and (b);
b.the work to be performed by the Transferring Employees for LGT Crestone will be the same, or substantially the same, as the work they performed for the Commonwealth Bank: s 311(1)(c); and
c.there is a “connection” between the Commonwealth Bank and LGT Crestone in that, due to the arrangement between them, LGT Crestone will own or have the beneficial use of some of the assets that the Commonwealth Bank owned that relate to, or will be used in connection with, the transferring work: ss 311(d) and 311(3).
LGT Crestone is entitled to bring the Application. It is “likely to be the new employer” of the Transferring Employees following the Acquisition: s 318(2)(a).
Following the Acquisition, the Enterprise Agreement will become a transferable instrument which will, unless the orders sought by LGT Crestone are made, cover LGT Crestone and the Transferring Employees: s 313.
Consideration of the statutory criteria
I will consider each of the mandatory factors set out in s 318(3) of the Act in turn.
The views of LGT Crestone and the Transferring Employees – s 318(3)(a)
It is perhaps trite to observe that LGT Crestone supports the Commission making the orders it seeks. This is apparent from Ms Shaw’s statement.
None of the Transferring Employees have offered the Commission their views on the Application. However, it can reasonably be inferred that they are not opposed to it, for the following reasons.
First, Ms Shaw described in detail the efforts made by LGT Crestone to consult with the Transferring Employees (and the other Commonwealth Bank employees to whom LGT Crestone made offers of employment). That consultation was conducted in cooperation with the Commonwealth Bank. I will not traverse all of that evidence. Suffice it to say, the Transferring Employees were provided with information comparing some of the conditions under the Enterprise Agreement with those they would receive at LGT Crestone. Significantly, the Transferring Employees were informed of LGT Crestone’s intention to make the Application and the consequences for them if the Application were granted. The Transferring Employees were invited to raise any questions or concerns regarding the proposed application. None of them did so.
Second, after this consultation process, 38 out of 40 employees (34 of whom are the Transferring Employees) accepted an offer of employment from LGT Crestone. Of the remaining two employees, one indicated that their personal business and client strategy (which was Asia focussed) did not align with LBT Crestone’s strategy. The other could not perform duties for LGT Crestone due to them residing in a location at which LGT Crestone does not operate. This suggests a very high level of support for the anticipated new arrangements.
Third, none of the Transferring Employees raised any objection to the Application despite being invited by the Commission to offer their views.
The views of LGT Crestone and the apparent lack of objection from the Transferring Employees to the Application weigh in favour of granting the Application.
Whether any employees would be disadvantaged by the order – s 318(3)(b)
LGT Crestone submitted that the Transferred Employees would not be disadvantaged were the Commission to make the orders it seeks. Ms Shaw stated that:
a.if the Application is granted, the base salaries of all Transferring Employees will, on joining LGT Crestone, increase by 1% over their base salaries at the Commonwealth Bank;
b.in addition, the salaries that LGT Crestone has offered to the Transferring Employees have been calculated to include any increases that they would have received under the Enterprise Agreement from 1 June 2025;
c.Advisers (a particular cohort comprising 15 of the 34 Transferring Employees) will in the future participate in LGT Crestone’s Adviser remuneration plans. The timing of their participation will be from either 1 July 2026 or 1 July 2027, depending on their classification. LGT Crestone has assessed that Advisers will earn on average 33% more than they would receive under the Commonwealth Bank’s remuneration structures. Some Advisers have the potential to earn triple their current earnings;
d.the leave entitlements that LGT Crestone offers to the Transferring Employees are comparable to, and in some respects more favourable than, those in the Enterprise Agreement. LGT Crestone is not offering some of the forms of leave contained in the Enterprise Agreement, such as pet leave and Sorry Business leave, but its enquiries suggest that this leave has rarely been taken;
e.LGT Crestone will recognise the Transferring Employees’ service with the Commonwealth Bank (and its related bodies corporate) for the purposes of calculating leave entitlements and redundancy pay. The Transferring Employees’ accrued entitlements to annual leave, long service leave and personal/carer’s leave will transfer to LGT Crestone;
f.LGT Crestone will continue to apply the long service leave provisions of the Enterprise Agreement (which exceed the statutory minima) to the Transferring Employees;
g.for two years after they commence employment with LGT Crestone, Transferring Employees will receive personal/carer’s leave, parental leave and compassionate leave in accordance with the terms of the Enterprise Agreement; and
h.the redundancy entitlements under the Enterprise Agreement (which exceed the statutory minima) will continue to apply to the Transferring Employees.
In its letter to LGT Crestone, the FSU contended that the 1% increase in salary that LGT Crestone had offered the Transferring Employees was “grossly inadequate” in compensating them for the entitlements under the Enterprise Agreement that they would lose. The FSU stated:
“Those lost entitlements include (but are not limited to) the immediate loss of Rostered Days Off (equivalent to 12 days off per year for those who receive them), the ability to purchase leave, enhanced volunteer leave and rest breaks. Following a two-year grandparenting period further lost entitlements then include a five-day reduction in personal leave per year, two-day reduction in compassionate leave per occasion, five-day family planning leave, and a two-week reduction in paid parental leave entitlement (noting CBAs [sic] entitlement is also available to both parents, provides time off for loss of child and continued superannuation payments for 12 months).”
I will not traverse all of the detail of Kingston Reid’s response to that letter, or its email to the Commission of 23 January 2025. I note in particular that it made the following contentions:
a.The 1% salary increase was never intended to be a precise financial “set off” for all entitlements in the Enterprise Agreement that are not offered, or are more generous than those offered, by LGT Crestone.
b.Only five of the Transferring Employees have an entitlement to rostered days off. They were made aware that they would lose that entitlement were the Application granted.
c.LGT Crestone will consider requests for unpaid leave on a case by case basis.
d.LGT Crestone will work with individual employees who require enhanced volunteer or community leave on a case by case basis.
e.While LGT Crestone does not formally recognise 10 minute rest breaks, it encourages its employees to take breaks as and when needed (without having to follow prescribed procedures and times).
f.It is correct that if the Application is granted, Transferring Employees will after two years be entitled to two weeks less paid parental leave than provided for by the Enterprise Agreement. However, this is not a form of leave that every Transferring Employee will take. In any event, LGT Crestone’s parental leave policy provides benefits in excess of the statutory minima.
Overall, I am satisfied that the Transferred Employees would not be disadvantaged were the Commission to grant the Application. This weighs in favour of doing so.
The nominal expiry date of the Enterprise Agreement – s 318(3)(c)
The nominal expiry date of the Enterprise Agreement is 30 June 2026. There is no enterprise agreement that covers LGT Crestone and its employees. This factor argues neither for nor against the Application being granted.
Whether the Enterprise Agreement would have a negative impact on the productivity of LGT Crestone’s workplace – s 318(3)(d)
Whether LGT Crestone would incur significant economic disadvantage as a result of the Enterprise Agreement covering it – s318(3)(e)
It is convenient to deal with these factors together.
I accept Ms Shaw’s uncontested evidence that:
a.continuing to apply the Enterprise Agreement to its business following the Acquisition would have a negative impact on LGT Crestone’s productivity resulting from there being two sets of different terms and conditions applying to employees performing the same type of work. This would increase the administrative burden and cost to LGT Crestone and impact negatively on productivity;
b.LGT Crestone would need to implement a new payroll system to accommodate the terms, conditions, classifications and pay rates in the Enterprise Agreement, which would apply to less than 10% of LGT Crestone’s workforce following the Acquisition. The annual costs of implementing a new payroll system and employing dedicated payroll and human resources staff to administer the terms of the Enterprise Agreement and the separate payroll system would be approximately $205,000; and
c.applying the Enterprise Agreement would not promote a cohesive workplace culture. The Transferring Employees may not feel part of LGT Crestone’s workplace culture and may not feel connected with other LGT Crestone employees if they were employed under a different set of terms and conditions.
These factors weigh in favour of the Commission granting the Application.
The degree of business synergy between the Enterprise Agreement and any workplace instrument that already covers LGT Crestone – s 318(3)(f)
I accept Ms Shaw’s evidence that the Enterprise Agreement is not fit for LGT Crestone’s business. Ms Shaw stated in particular that Enterprise Agreement was designed for a major retail banking business with approximately 49,000 employees (compared to LGT Crestone’s 350). The Enterprise Agreement therefore has to accommodate more varied and complex work patterns than will apply at LGT Crestone.
This factor weighs in favour of the Commission granting the Application.
The public interest – s 318(3)(g)
Making orders in the terms sought by LGT Crestone would be consistent with the objects of Part 2-8 of the Act (s 309), in that they would provide an appropriate balance between the protection of employees’ terms and conditions of employment under enterprise agreements and the interests of LGT Crestone in running its enterprise efficiently.
I am satisfied that making the orders sought by LGT Crestone would be in the public interest. This weighs in favour of granting the Application.
Conclusion
Having regard to the matters set out above, I am satisfied that it is appropriate in the circumstances to exercise my discretion to make the orders sought by LGT Crestone.
Orders [PR784365] will be issued with this decision.
COMMISSIONER
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