Mala’La Health Service Aboriginal Corporation
[2022] FWC 744
| [2022] FWC 744 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Mala’La Health Service Aboriginal Corporation
(AG2021/8399)
| Social, community, home care and disability services | |
| COMMISSIONER MATHESON | SYDNEY, 4 APRIL 2022 |
Application for an order relating to instruments covering new employer and transferring employees.
Mala’la Health Service Aboriginal Corporation (Applicant) has made an application under s.318 of the Fair Work Act 2009 (Cth) (Act). The application seeks an order from the Fair Work Commission (Commission) that the Mala’la Health Service Aboriginal Corporation Enterprise Agreement 2019 - 2023 (Agreement) will cover the former employees of the Department of Health, Northern Territory Government (Old Employer) who became employed by the Applicant on 1 February 2021 (Transferring Employees) and whose employment was covered by the following instruments (Transferable Instruments):
Northern Territory Public Sector Nurses and Midwives’ 2018 - 2022 Enterprise Agreement, which covered two Transferring Employees employed as nurses;
Northern Territory Public Sector 2017 - 2021 Enterprise Agreement, which covered nine Transferring Employees in various roles; and
NTPS Aboriginal Health Practitioner 2018-2022 Enterprise Agreement, which covered one Transferring Employee employed as an Aboriginal Health Practitioner.
At a mention/directions hearing on 26 November 2021, the Applicant clarified that it was also seeking an order that the Transferable Instruments cease to cover the Transferring Employees.
The Commission directed the Applicant to file submissions in support of its application, addressing the relevant provisions of the Act, and directed that it serve the submissions and a copy of its application on the Transferring Employees. The Applicant filed its submissions on 24 March 2022, following a request for an extension. The Transferring Employees did not file any submissions in opposition to the application and did not request to be heard in relation to the application.
Legislation
Section 311 of the Act provides:
“311 When does a transfer of business occur
Meanings of transfer of business , old employer , new employer and transferring work
(1) There is a transfer of business from an employer (the old employer ) to another employer (the new employer ) if the following requirements are satisfied:
(a)the employment of an employee of the old employer has terminated;
(b)within 3 months after the termination, the employee becomes employed by the new employer;
(c)the work (the transferring work ) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d)there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a)the old employer or an associated entity of the old employer; and
(b)the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c)that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d)that relate to, or are used in connection with, the transferring work.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a)the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b)the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
Section 313 of the Act provides:
“313 Transferring employees and new employer covered by transferable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee's employment with the old employer, then:
(a)the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; …
(3) This section has effect subject to any FWC order under subsection 318(1).”
Sections 317 and 318 of the Act relevantly provide:
“317 FWC may make orders in relation to a transfer of business
This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.
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.”
Initial matters
Based on the material before the Commission, I am satisfied that:
· The employment of the Transferring Employees with the Old Employer was terminated (s.311(1)(a) of the Act).
· The Transferring Employees became employed by the Applicant within three months after the termination of their employment with the Old Employer (s.311(1)(b) of the Act) and are transferring employees for the purposes of s.311(2) of the Act.
· The work the Transferring Employees perform for the Applicant is substantially the same as the work they performed for the Old Employer (s.311(1)(c) of the Act).
· There is a connection between the Old Employer and the Applicant as:
othe Applicant owns or has the beneficial use of the assets that the Old Employer previously owned and that relate to, or are used in connection with, the transferring work (s.311(3)(a)-(d)). These include a Health Centre, morgue, ambulance, utility vehicles, and houses occupied by the Transferring Employees; and
othe transferring work is performed by the Transferring Employees because the Old Employer outsourced the transferring work to the Applicant (s.311(4)).
· The Transferring Employees are transferring employees in relation to the transfer of business (s.311(2) of the Act).
· The Transferable Instruments covered the Old Employer and Transferring Employees immediately before the termination of the Transferring Employees’ employment with the Old Employer.
· The Transferable Instruments cover the Applicant and the Transferring Employees in relation to the transferring work subject to any order of the Commission under s.318(1) of the Act (s.313 of the Act).
· The Applicant has standing to apply for the orders it seeks pursuant to s.318(2) of the Act.
Consideration
In deciding whether or not to make an order pursuant to s.318(1) of the Act, the Commission must take into account the matters set out in s.318(3) of the Act.
The views of the Applicant (new employer) – s.318(3)(a)(i)
The Applicant supports the orders sought. By way of summary, the Applicant’s stated reasons for making the application include challenges in administration and compliance and differences between the Applicant’s business and the business of the Old Employer. The Applicant submits that money and time would be saved if the application is approved and that that money and time would be better directed at providing support to some of the most disadvantaged and vulnerable people in the Australian community.
The views of the Applicant weigh in favour of the making of the orders.
The views of the employees who would be affected by the order – s.318(3)(a)(ii)
There are currently 12 Transferring Employees covered by the Transferable Instruments. The Applicant filed documents in relation to each of the Transferring Employees which indicates that they support the application. The Transferring Employees did not file any submissions in opposition to the application and did not request to be heard in relation to the application.
The views of the Transferring Employees weigh in favour of the making of the orders.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.318(3)(b)
The Applicant submits that the Transferring Employees would not be disadvantaged by the orders sought in relation to their terms and conditions of employment as the terms and conditions of employment set out in the Agreement are substantially similar as those in the Transferable Instruments. The Applicant filed analysis with the Commission setting out the differences between the instruments. While there are some differences between the instruments, I accept that these differences mean that employees are unlikely to be disadvantaged or alternatively, that the impact on Transferring Employees will be minimal.
Having considered the differences between the Award and Transferable Instrument, I consider this to be a neutral consideration.
The nominal expiry date of the agreements – s.318(3)(c)
The Transferable Instruments have the following nominal expiry dates:
· 20 August 2022 for the Northern Territory Public Sector Nurses and Midwives’ 2018 - 2022 Enterprise Agreement.
· 10 August 2021 for the Northern Territory Public Sector 2017 - 2021 Enterprise Agreement; and
· 10 August 2022 for the NTPS Aboriginal Health Practitioner 2018-2022 Enterprise Agreement.
In relation to the Northern Territory Public Sector 2017 - 2021 Enterprise Agreement, the last pay increase prescribed by the agreement came into effect in August 2020. In relation to the Northern Territory Public Sector Nurses and Midwives’ 2018 - 2022 Enterprise Agreement and NTPS Aboriginal Health Practitioner 2018-2022 Enterprise Agreement, the last pay increase prescribed by the agreements came into effect in August 2021.
I consider this to be a neutral consideration.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace – s.318(3)(d)
The Applicant submits that the Transferable Instruments have a negative impact on the productivity of the Applicant’s workplace because they add three additional enterprise agreements that need to be complied with.
I accept that the administration of multiple instruments across the 12 Transferring Employees would create additional payroll complexity giving rise to additional administrative activities that would have some negative impact on the productivity of the Applicant’s workplace.
This weighs in favour of the making of the orders.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer – s.318(3)(e)
The Applicant submits that it would (and currently does) incur significant economic disadvantage as a result of the Transferable Instruments covering it due to the complicated payroll processes that it has outsourced to an external provider to process weekly pay under four separate enterprise agreements (the Transferable Instruments and the Agreement). The Applicant submits that having the one enterprise agreement cover all of its employees will simplify the process of managing employees and payroll.
I accept that the Applicant will incur economic disadvantage as a result of having to administer multiple instruments in relation to what is a relatively small portion of its workforce however it cannot be established based on the material before me that this is significant.
I consider this to be a neutral consideration.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer – s.318(3)(f)
The Applicant submits that there is no business synergy between the Transferable Instruments and the Agreement that applies to the Applicant’s employees that do similar work. I accept that the Transferable Instruments were designed for a much larger public sector employer and that they were not designed for implementation in a business environment of the nature of the Applicant’s. Notwithstanding this, the analysis filed by the Applicant that compares the instruments suggests there is some synergy between the terms of the instruments.
I consider this to be a neutral consideration.
The public interest – s.318(3)(f)
The notion of public interest refers to matters that might affect the public as a whole.[1] I do not consider that the termination of the Agreement would impact employment levels, inflation and the maintenance of proper industrial standards, particularly noting that the Agreement would apply if the orders are made. I have not identified any interests in relation to the Application that are distinct in nature from the interests of the parties. In all the circumstances, and having considered the materials before the Commission, I am satisfied that there are no public interest considerations that weigh against making the orders sought.
Conclusion
Having taken into account the considerations in s.318(3) of the Act, I consider that the following orders should be made:
“A. Further to the decision in [[2022] FWC 744], the Fair Work Commission (Commission) orders that, pursuant to s.318(1)(a) of the Fair Work Act 2009 (Cth) (Act), the Northern Territory Public Sector Nurses and Midwives’ 2018 - 2022 Enterprise Agreement, Northern Territory Public Sector 2017 - 2021 Enterprise Agreement and NTPS Aboriginal Health Practitioner 2018-2022 Enterprise Agreement will not cover Mala’la Health Service Aboriginal Corporation and the following transferring employees in respect of their employment with Mala’la Health Service Aboriginal Corporation:
(a)Charlene Bonson;
(b)Isaac Brown;
(c)Shannon Brown;
(d)Shelley Cook;
(e)Charlie Gunabarra;
(f)Vincent Head;
(g)Jermaine Namanurki;
(h)David Pascoe;
(i)Karen Shergold;
(j)Fabian Smith;
(k)Cyril Wilson; and
(l)James Woods.
(Transferring Employees).
B. The Commission also orders that, pursuant to s.318(1)(b) of the Act, the Mala’la Health Service Corporation Enterprise Agreement 2019 - 2023 will cover the Transferring Employees in relation to their employment with Mala’la Health Service Aboriginal Corporation.”
For the purposes of s.318(4) of the Act, the order will come into operation on 4 April 2022. The order giving effect to this decision will be issued separately in [PR739998].
COMMISSIONER
[1] Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34, [23].
Printed by authority of the Commonwealth Government Printer
<AE506591 PR739997 >
0