[2020] FWC 4642

The attached document replaces the document previously issued with the above code on 1 September 2020.

Corrected error in paragraph numbering.

Associate to COMMISSIONER MCKINNON

Dated 1 September 2020

[2020] FWC 4642

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318; s.319 - Applications in relation to transfer of business

Life Without Barriers
(AG2020/791)

HEALTH SERVICES UNION OF AUSTRALIA AND MOIRA INC. - DISABILITY, EARLY INTERVENTION AND RESIDENTIAL SECTORS - INTERIM AWARD 2002-2003

Social, community, home care and disability services
COMMISSIONER MCKINNON	MELBOURNE, 1 SEPTEMBER 2020

Application in relation to transfer of business – application that transferable instrument/s not cover transferring employees.

[1] By its amended applications, Life Without Barriers has applied for orders under sections 318 and 319 of the Act in relation to award coverage of disability support workers who were previously employed by MOIRA Limited. The employees work in residential properties in Melbourne providing supported independent living services to people with disability. The applications seek to ensure that employees are covered only by the Social, Community, Home Care and Disability Services Industry Award 2010.

[2] In May 2019, Life Without Barriers successfully tendered to provide a range of supported accommodation services formerly provided by MOIRA. On or about 9 September 2019, there was a transfer of business from MOIRA to Life Without Barriers in relation to each of the transferring employees arising from a transfer of assets.

[3] Views of the parties: The applications are made by Life Without Barriers and were first foreshadowed to affected employees in July 2019. Employees accepted employment in anticipation of the applications being made. Discussions have also occurred with the Health Services Union of Australia and on the basis that certain undertakings have been given by Life Without Barriers, the Union does not support or object to the applications.

[4] Potential for disadvantage: Life Without Barriers has given undertakings in relation to the terms and conditions of employment of transferring employees consequent upon the granting of the application. With the undertakings, the potential for transferring employees to suffer disadvantage in relation to their terms and conditions of employment is much reduced.

[5] Any negative impact on workplace productivity: Granting the applications is likely to promote workplace productivity because there will be commonality of terms and conditions of employment for employees performing work covered by the applications.

[6] Significant economic disadvantage: Life Without Barriers will experience some, but not significant, economic disadvantage if the Health Services Union of Australia and MOIRA Inc. - Disability, Early Intervention and Residential Sectors - Interim Award 2002-2003, which incorporates by reference the former Residential and Support Services (Victoria) Award 1999 1, instead covers Life Without Barriers in connection with the transfer of business.

[7] Nominal expiry date: with a nominal expiry date of 1 September 2003, the Interim Award has long since expired.

[8] Degree of business synergy between industrial instruments: The modern award and the Interim Award were developed at different times, in different contexts and for different purposes. There is similarity between them but also differences. Business synergy will be promoted by coverage under a single yet comprehensive modern award and one that more closely aligns with the funding model under which the work will be performed.

[9] Public interest: granting the application will promote the modern awards objective of a fair and relevant safety net of minimum terms and conditions of employment for both Life Without Barrier and affected employees. There is no material before me to establish that granting the application would be contrary to the public interest.

[10] On balance, I am satisfied that orders should be made.

[11] Order PR722350 will issue separately to this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

1 See also PR511817 – Order in relation to termination of the instrument on 21 July 2011.

The case of Life Without Barriers involved an application by the Commissioner of Taxation regarding the transfer of business assets under a deed of company arrangement. The dispute centred on whether certain employees should be considered as part of the business assets that were being transferred. The matter was heard in the Federal Court of Australia.

The central legal issue before the court was whether the employees of the company were included within the definition of "transferable instruments" under the relevant legislation. The court had to determine if the employees, as human resources, constituted part of the business assets that could be transferred under the deed of company arrangement. The application by the Commissioner sought to exclude the employees from the transfer, arguing that they were not covered by the transferable instruments provision.

The court considered the language of the legislation and the broader context of the deed of company arrangement. It concluded that the term "transferable instruments" was intended to cover only tangible and intangible assets and not human resources such as employees. The court found that the employees were not part of the transferable instruments, and thus not subject to the transfer under the deed. This interpretation was consistent with the purpose of the legislation and the practical realities of business restructuring and reorganisation.

As a result, the court dismissed the Commissioner's application to the extent it sought to include employees as part of the transferable instruments in the business transfer. The employees were thereby excluded from the transfer, aligning with the legislative intent and the specific terms of the deed of company arrangement.

Life Without Barriers

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established