Life Without Barriers T/A Life Without Barriers
[2023] FWC 3193
•1 DECEMBER 2023
| [2023] FWC 3193 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Life Without Barriers T/A Life Without Barriers
(AG2023/4469)
| Social, community, home care and disability services | |
| DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 1 DECEMBER 2023 |
Application for an order under s 318 of the Fair Work Act 2009 (Cth)
Introduction and background
Life Without Barriers (LWB) is a not-for-profit employing entity which provides disability and community support services across Australia, including therapeutic residential care services for children and young people with or without disability.
LWB is contracted by the New South Wales Department of Communities & Justice (DCJ) to deliver intensive therapeutic care in a number of regions across New South Wales. Where the DCJ engages LWB to provide intensive therapeutic care services LWB receives funding from the DCJ. That funding is aligned to the Social, Community, Home Care and Disability Services Industry Award (SCHADS Award).
All LWB’s intensive therapeutic care workers are covered by, and employed on terms and conditions of employment consistent with, the SCHADS Award.
Bright Now is a not-for-profit organisation dedicated to providing residential care for between 30 to 40 children and young people in the Lake Macquarie and Newcastle regions. Bright Now made the decision to cease operations with effect from 8 November 2023. As a result, Bright Now has closed approximately 26 residential care homes and terminated its employees on the ground of redundancy. In light of Bright Now’s decision to cease operations, it returned the care of the children residing in its residential care homes to the DCJ effective 8 November 2023.
The DCJ requested LWB to establish a new residential intensive therapeutic care service in the Lake Macquarie and Newcastle region and assume responsibility for providing residential care for 16 of the children and young people formerly cared for by Bright Now. LWB has accepted this proposal. As a result, LWB will be responsible for operating seven intensive therapeutic care homes, and one crisis care home. Six of those care homes were previously operated by Bright Now.
To satisfy the DCJ service arrangements for the care homes, LWB has been required to employ more than 100 additional staff to service the care homes. In order to recruit employees for these roles, LWB opened the available positions to the general market, as well as former Bright Now employees. LWB applied its usual screening and verification checks.
LWB has now employed 97 former Bright Now employees and is undertaking probity checks for a further 6 former Bright Now employees.
About 43% of the former Bright Now employees were covered by the Premier Youthworks Pty Limited Residential Care Worker Agreement 2016 (Bright Now EA) and the remaining 57% were covered by the SCHADS Award. The reason only some former Bright Now employees were covered by the Bright Now EA is because that instrument transferred to Bright Now from Premier Youthworks Pty Limited when that organisation ceased the delivery of services under a contract with the DCJ and Bright Now commenced the delivery of those services in January 2022. Employees engaged by Bright Now after that transfer of business took place were not covered by the Bright Now EA and were instead covered by the SCHADS Award.
LWB does not know which former Bright Now employees were within the 43% cohort that were covered by the Bright Now EA.
LWB seeks an order under s 318(1)(a) of the Fair Work Act 2009 (Cth) (Act) that the Bright Now EA does not cover LWB and the former employees of Bright Now.
Procedural matters
On the filing of LWB’s application for an order pursuant to s 318 of the Act, I made the following directions:
“1.By 4pm on 24 November 2023, the applicant must provide each of the following persons with a copy of (i) this email, (ii) Life Without Barriers’ Application for orders in relation to a transfer of business, (iii) the witness statement of Benjamin John Spence, (iv) the draft order prepared by Life Without Barriers, and (v) written notice that this application will be heard by the Fair Work Commission, by Microsoft Teams, at 11am on 29 November 2023 and any interested person may either participate in the hearing by video conference or telephone by contacting the Associate to Deputy President Saunders on 02 9308 1827 or [email protected], or send an email to the Associate to Deputy President Saunders at [email protected], by 4pm on 28 November 2023 setting out their views in relation to the application:
a.each former employee of Bright Now to whom Life Without Barriers has issued or offered a contract of employment, or who is in the process of undergoing screening and verification checks by Life Without Barriers; and
b. the Australian Services Union.
2.By 4pm on 28 November 2023, the applicant must file in the Fair Work Commission a witness statement to confirm the steps it has taken to comply with direction 1 above.
3.The application is listed for hearing, by video conference (or telephone for any person who cannot participate by video conference), at 11am on 29 November 2023. Please see the attached Notice of Listing.”
I am satisfied that LWB has complied with these directions.
In addition to its detailed application, LWB filed witness statements made by Mr Benjamin John Spence dated 21 November 2023 and Ms Angela Leigh Bryant dated 28 November 2023. Neither of those witnesses was required for cross examination when the matter was heard, by video conference, on 29 November 2023. LWB was represented (with permission) at the hearing by Ms Phillipa Noakes, Solicitor.
The Commission has not received any submission, witness statement, document or other communication from any former Bright Now employees.
The Australian Services Union (ASU) represents a number of the Bright Now employees who have been employed by LWB. The ASU neither supports nor opposes the order sought by LWB under s 318 of the Act. The ASU was represented at the hearing on 29 November 2023 by Mr Ben Kruse, Legal Counsel.
Section 318 of the Act
The issue I need to determine in this matter is whether or not to exercise my discretion under section 318(1) of the Act to make the order sought by LWB.
Section 318(2) of the Act provides that the Commission may make an order under s 318 only on application by, inter alia, “the new employer or a person who is likely to be the new employer”. In light of the uncontested evidence before the Commission that LWB has employed a significant number of former Bright Now employees, I am satisfied that LWB is “a person who is likely to be the new employer” within the meaning of s 318(2)(a) of the Act. I am also satisfied that there has been a transfer of business within the meaning of s 311 of the Act. Both LWB and the ASU agree that there has been a transfer of business.
Section 318(3) of the Act provides that, in deciding whether to make the order under section 318(1), I 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.”
Should the orders be made?
I consider each of the mandatory factors set out in section 318(3) of the Act below in turn.
Section 318(3)(a) - the views of the new employer and the employees who would be affected by the order
LWB supports the orders sought by it under section 318(1) of the Act. So much is clear from Mr Spence’s statement and Ms Bryant’s statement.
I do not have any direct evidence from the former Bright Now employees who have been employed by LWB about their views. The ASU represents a number of those employees and neither supports nor opposes the order sought by LWB. The material contained within the exhibit to Mr Spence’s statement includes correspondence concerning particular issues which individual former Bright Now employees have raised with LWB about the offers of employment made to those employees, but there is no general statement of support or disagreement from employees in relation to the order sought by LWB. It is also relevant that LWB made offers of employment to former Bright Now employees on the express basis that it would be seeking an order under s 318 of the Act that the Bright Now EA not apply, and the vast majority of those former Bright Now employees accepted the offer of employment with LWB on that basis.
This factor (s 318(3)(a) of the Act) weighs in favour of making the orders sought by LWB.
Section 318(3)(b) – whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
Section 318(3)(b) requires a comparison between the “terms and conditions of employment” applicable to the employees with their former employer (in this case, Bright Now) and those that would be applicable after the transfer of business (in this case, with LWB) if an order under section 318(1) were made.
While the terms and conditions of employment to which an employee is entitled (including under an enterprise agreement) with a new employer may be different to those provided by a former employer prior to the transfer of business, the Commission should consider whether “overall, the employees would not be disadvantaged”[1] by making an order under section 318 of the Act. In the event that employees would be disadvantaged overall to any significant extent by the making of an order under section 318 of the Act in relation to their terms and conditions of employment, this factor would, in my view, weigh considerably against granting an order under section 318.[2]
If the order sought by LWB were made, the former Bright Now employees who have been employed by LWB would have their terms and conditions of employment governed by their contracts of employment and the SCHADS Award. LWB has provided a comprehensive comparison between the Bright Now EA terms and conditions and the terms and conditions under the SCHADS Award. The pay rates under both instruments are the same. The SCHADS Award is more beneficial than Bright Now EA in a number of respects, predominantly because it provides for (a) casual loadings to be paid during overtime and on weekends, (b) a minimum payment for part-time employees, and (c) shorter rest breaks after a sleepover. The Bright Now includes some benefits over and above the SCHADS Award, the most significant of which are (a) an 8 week rostering pattern for employees, (b) annual leave for full-time employees of 5 weeks per year, and (c) ordinary hours for full-time employees of 31.14 hours per week. As to the last of these differences, I accept LWB’s submission that it would not roster any full-time employee covered by the Bright Now EA to work more than 31.14 ordinary hours in a week because it does not have the funding from the DCJ to pay overtime, whereas under the SCHADS Award it could give full-time employees the benefit of up to 38 ordinary hours per week, which would increase the earning capacity of the employees.
Some individual former Bright Now employees have raised concerns with LWB that they have been offered employment with LWB on a lower pay point than they were paid by Bright Now. This difference does not arise from any difference between the terms of the Bright Now EA and the SCHADS Award; the difference arises from an assessment by LWB of the relevant background and experience of the employee in relation to the model of care offered by LWB to residents of the care homes.
On an overall basis, I am satisfied that the former Bright Now employees who have been employed by LWB will not be materially disadvantaged in relation to their terms and conditions of employment if the proposed order were made. This factor (s 318(3)(b) of the Act) is a neutral consideration.
Section 318(3)(c) – the nominal expiry date of the relevant agreement
The nominal expiry of the Bright Now EA is 11 July 2020.
I consider this factor (s 318(3)(c) of the Act) to be a neutral consideration.
Section 318(3)(d) – whether the Bright Now EA would have a negative impact on the productivity of the new employer’s workplace
I accept the uncontested evidence given by Mr Spence and Ms Bryant that if the Bright Now EA applied to former employees of Bright Now in their employment with LWB there would be a negative impact on the productivity of LWB’s workplace. The decrease in productivity would arise primarily because (a) LWB would need to quarantine the former Bright Now employees from other parts of its business (as a result of their different terms and conditions of employment), which would result in a reduction in the mobility of the former Bright Now employees into other parts of LWB’s extensive business operations, (b) LWB would incur significant expenses and use of resources in reconfiguring and maintaining its payroll system to roster and pay the former Bright Now employees in accordance with the Bright Now EA, and (c) applying two different instruments to employees doing the same work in the same business would give rise to concerns in relation to equity and fairness between employees and LWB’s culture, which could impact the productivity of the relevant group of employees as a whole.
This factor (s 318(3)(d) of the Act) weighs in favour of making the order sought by LWB.
Section 318(3)(e) – whether LWB would incur significant economic disadvantage as a result of the Bright Now EA covering LWB
I accept the uncontested evidence given by Mr Spence and Ms Bryant that if the Bright Now EA applied to former employees of Bright Now in their employment with LWB there would be significant economic disadvantage to LWB. The funding provided by the DCJ to LWB for the provision of the relevant services is aligned to the SCHADS Award. The financial viability of the contract between LWB and the DCJ would be put in jeopardy if the order sought were not made.
This factor (s 318(3)(e) of the Act) weighs in support of the order sought by LWB.
Section 318(3)(f) – the degree of business synergy between the Bright Now EA and the SCHADS Award
I accept from the uncontested evidence given by Mr Spence and Ms Bryant that there are important differences in business synergy between the Bright Now EA and the SCHADS Award. Those differences relate to matters such as the ease with which former Bright Now employees could be rostered to work in other parts of the LWB business if the order sought were made.
This factor (s 318(3)(f) of the Act) weighs in favour of making the order sought by LWB.
Section 318(3)(g) – the public interest
Making an order in the terms sought by LWB would be consistent with the objects of Part 2-8 of the Act, in that it would provide an appropriate a balance between the protection of employees’ terms and conditions of employment under enterprise agreements and the interests of LWB in running its enterprise efficiently. There is also public interest in the vulnerable children and young people who reside in these homes not having further disruption in the business and employees who are engaged to care for them, which could arise if the order sought were not made. Further, the public interest would be enhanced if the order sought were made because it would enable LWB to overcome staff shortages across its business in the Lake Macquarie and Newcastle region, thereby providing greater support to the clients for whom it provides care and support.
I am satisfied that making the order sought by LWB would be in the public interest. This factor (s 318(3)(g) of the Act) weighs in favour of making the order sought by LWB.
Conclusion
Having considered each of the matters set out in s 318(3)(a) to (g) of the Act, I am satisfied that it is appropriate in the circumstances to exercise my discretion to make the order sought by LWB. The matters which weigh in support of the order clearly outweigh the matters which weigh against the order.
An order [PR768928] will be issued with this decision.
DEPUTY PRESIDENT
[1] Stratco (NSW) Pty Ltd [2010] FWA 7036 (Stratco) at [25]
[2] Stratco at [25]; Sonic HealthPlus Pty Ltd [2015] FWC 6460 at [95]; CSIRO at [101]
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