Melbourne Pathology Pty Ltd T/A Melbourne Pathology
[2024] FWC 565
•4 MARCH 2024
| [2024] FWC 565 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Melbourne Pathology Pty Ltd T/A Melbourne Pathology
(AG2024/65)
| DEPUTY PRESIDENT MASSON | MELBOURNE, 4 MARCH 2024 |
Application for orders relating to instruments covering new employer and transferring employees – whether transfer of business – whether the work the same or substantially the same – found that there was no transfer of business within the meaning of s 311(1) of the Fair Work Act 2009 – no jurisdiction for Commission to make orders sought – application dismissed.
An application has been made pursuant to s 318 of the Fair Work Act 2009 (the Act) by Melbourne Pathology Pty Ltd T/A Melbourne Pathology (Melbourne Pathology) seeking an order from the Fair Work Commission (the Commission) that the Sullivan Nicolaides Pathology Collective Workplace Agreement No. 4 (the Sullivan Nicolaides Agreement)[1] not cover an employee, Ms Kimberley Ward, who was formerly employed by Sullivan Nicolaides Pathology (the Old Employer) and who has now accepted employment with Melbourne Pathology (the New Employer). Ms Ward supports Melbourne Pathology’s application.
Directions were issued by the Commission on the 7 February 2024 allowing for submissions and materials to be filed in relation to the application by: Melbourne Pathology, Ms Ward, the Health Services Union (HSU), the United Workers’ Union (UWU) and the Australian Municipal, Administrative, Clerical and Services Union (ASU). The Applicant filed material in support of the application including witness statements of Ms Ward and Louise Douglas who is the Head of Laboratories for Melbourne Pathology. No other party filed material and I acceded to the request of the Applicant that the matter be determined on the papers.
Background and evidence
Melbourne Pathology and Sullivan Nicolaides Pathology are divisions of Sonic Healthcare and are associated entities[2].
Sullivan Nicolaides Pathology’s Mackay laboratory, where Ms Ward previously worked, is located at the Mater Private Hospital in Mackay, Queensland and provides 24-hour on call services as well as community pathology services to general practitioners, specialist rehabilitation hospitals and day surgeries throughout Mackay, Whitsunday, and the Coalfields districts of Central Queensland. The Mater Private Hospital is a 103-bed hospital and does not have an Emergency Department or provide oncology services or undertake major surgery[3].
Melbourne Pathology provides services to hospitals, community, general practitioners, and has state of the art 24-hour laboratories in Collingwood, Richmond, Box Hill, Mulgrave, and Geelong with additional laboratories in Mornington, Malvern, Footscray, Moe, Bendigo, and Ballarat. These laboratories support more than 300 collection centres throughout Melbourne and regional Victoria. The Epworth Laboratory where Ms Ward has now commenced employment provides services to the Epworth Hospital which is a 700-bed hospital that has an Emergency Department, Intensive Care Units and provides for major surgery which includes cardiac and oncology surgery[4].
While Melbourne Pathology and Sullivan Nicolaides Pathology are part of the same corporate group, they are separate businesses according to Ms Douglas. The reporting structures, management lines, budgeting, financial reporting, and administrative functions are separate and distinct. The services provided by the two organisations are delivered in different states and regional locations and the role of Ms Ward in Melbourne Pathology is in a much larger medical facility, than that of the Epworth Hospital[5]. Both the Queensland and Victorian laboratories are subject to the same quality NPAAC accreditation standards required by NATA[6].
Ms Ward commenced her employment with Sullivan Nicolaides Pathology on 22 January 2021 and resigned on 28 December 2023 with her last day of employment being 2 February 2024[7]. Prior to the cessation of her employment with Sullivan Nicolaides Pathology she was based at the Mater Private Hospital in Mackay, was classified as a Medical Scientist S1.3 (the Old Role) on a base hourly rate of pay of $38.70 for a 35-hour week and was covered in her employment by the Sullivan Nicolaides Agreement. A Job Description (Old Role Position Description)[8] sets out the duties and responsibilities of the role Ms Ward was required to fulfil while employed by Sullivan Nicolaides Pathology in the Old Role.
Ms Ward resigned her employment with Sullivan Nicolaides Pathology to relocate to Melbourne for personal reasons[9]. She applied for and accepted a position on 22 December 2023 with Melbourne Pathology as a Grade 1 Scientist[10] (the New Role) and in doing so understood her terms and conditions in that role would be covered by the Melbourne Pathology and Health Services Union - Scientists - Enterprise Agreement 2010 (Melbourne Pathology Agreement)[11]. Her employment in the New Role was not conditional upon the Commission granting the order sought by Melbourne Pathology by its application in this matter. Ms Ward commenced her employment with Melbourne Pathology on 12 February 2024 as a Medical Scientist Grade 1 – 5th year on a base hourly rate of pay of $37.49 for a 38-hour week[12]. A Job Description (New Role Job Description)[13] sets out the duties and responsibilities Ms Ward is required to carry out in the New Role.
Ms Douglas’ evidence was that the duties of Ms Ward in the New Role are substantially the same as the Old Role and may be summarised as follows;
specimen triage and reception;
routine blood & biochemical testing, reporting on human samples;
cross matching including basic blood banking and massive transfusion scenarios;
equipment maintenance and quality control; and
participate in a 24/7 rotating roster across three hospital sites at Epworth Richmond, Epworth Box Hill and Mulgrave Private Hospitals.
Statutory Provisions
As earlier stated, Melbourne Pathology seeks an order pursuant to s 318 of the Act that the Sullivan Nicolaides Agreement not apply to Ms Ward in her employment with Melbourne Pathology. The relevant sections of the Act that deal with the transfer of rights and obligations under enterprise agreements if there is a transfer of business from an old employer to a new employer are found in Part 2-8 of Chapter 2 of the Act.
Section 311 of the Act sets out the circumstances in which a transfer of business occurs and relevantly provides as follows;
“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).”
An employee in relation to whom the requirements in ss (1)(a), (b) and (c) are satisfied is a “transferring employee” in relation to the transfer of business (s 311(2)). Subsections (3) – (6) then sets out various circumstances where the necessary “connection” referred to in s 311(1)(d) will apply. It is not dispute in the present matter that the relevant “connection” is that dealt with at s 311(6) which deals with associated entities and provides as follows;
“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.”
Subject to a transfer of business having occurred within the meaning of s 311 of the Act, s 313 of the Act then provides that the transferrable instrument which is defined under s 312 of the Act as including an enterprise agreement that covered the old employer and transferring employee, will cover the new employer in relation to the transferring work.
Division 3 of Part 2-8 sets out the various powers of the Commission in relation to a transfer of business. Relevantly, s 317 provides for the Commission to make certain orders “if there is, or is likely to be, a transfer of business from an old employer to a new employer”. Section 318 of the Act then sets out the circumstances in which an order may be made and the matters to be considered 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;
(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.”
Consideration
It follows from the foregoing statutory provisions that before turning to consider whether to issue the order sought by Melbourne Pathology, it is necessary for me to establish that the relevant jurisdictional requirements are present. Specifically, it is necessary for me to determine whether the Sullivan Nicolaides Agreement is in fact a transferrable instrument that would cover Melbourne Pathology and Ms Ward, subject to any order of the Commission. That requires me to firstly determine whether there has been a transfer of business within the meaning of s 311(1) of the Act and it is to that question I turn.
Has there has been a transfer of business within the meaning of s 311(1) of Act?
It is uncontroversial and I accept that Ms Ward’s employment with Sullivan Nicolaides Pathology terminated with effect from 2 February 2024 (s 311(1)(a)) and that she commenced employment with Melbourne Pathology on 12 February 2024, thus meeting the requirement that her break in employment was less than three months (s 311(1)(b)). I also accept that Sullivan Nicolaides Pathology and Melbourne Pathology are associated entities (s 311(6)), thus establishing the relevant ‘connection’ (s 311(1)(d)) for the purposes of s 311(1).
The remaining element to be considered in determining whether there has been a transfer of business is that of s 311(1)(c). This requires me to determine whether the work Ms Ward now performs for the Melbourne Pathology is the same, or substantially the same, as the work she performed for Sullivan Nicolaides Pathology.
The evidence set out above which includes position descriptions for both the New Role and the Old Role establishes that Ms Ward is engaged as Medical Scientist Grade 1 in the New Role and has the following duties which are said by Ms Douglas to be the same or substantially the same as in the Old Role. Those duties may be summarised as follows;
specimen triage and reception;
routine blood & biochemical testing, reporting on human samples;
cross matching including basic blood banking and massive transfusion scenarios;
equipment maintenance and quality control; and
participate in a 24/7 rotating roster across three hospital sites at Epworth Richmond, Epworth Box Hill and Mulgrave Private Hospitals.
The fact that the duties Ms Ward now performs may be the same or substantially the same as those required in the Old Role is not necessarily determinative that the ‘work’ is the same, or substantially the same. Guidance on the meaning of the term ‘work’ can be found in the following decisions of the Federal Court. In Community and Public Sector Union, NSW Branch v Northcott Supported Living Limited[14] (Northcott), Katzmann J considered s.311(1)(c) and the meaning of “substantial”. Her Honour also dealt with the term ‘work’ where it appears in s 311(1)(c) and stated as follows;
““Work” in the context of s 311 refers to the nature or character of the employment, rather than the particular duties the employee was undertaking or will or may be called upon to undertake.”[15]
In another federal court decision, Crown Sydney Gaming Pty Limited v United Workers Union[16] (Crown), Jagot J was dealing with an application by Crown Sydney for a declaration that its proposed employment of persons then employed by Crown Melbourne Ltd or Burswood Resort (Management) Ltd would not result in a transfer of business. He relevantly stated as follows;
“the “work” an employee performs or performed is not confined to the mere carrying out of tasks in an abstract sense. Depending on the circumstances, the conception of the “work” an employee performs or performed for the purposes of s 311(1)(c) may include the location at which the work is performed and other aspects related to the performance of the tasks comprising the job or work;”[17]
It is clear enough from the above-referred decisions that it is not merely the duties being performed by Ms Ward in the New Role that must be compared with the duties of the Old Role in assessing whether the work is the same or substantially the same. It is the ‘nature or character’ of the role that must be assessed which may, depending on the circumstances, include more than just the tasks or duties. There are a number of other matters that are relevant to the circumstances of this case, and which tell against a finding that the work performed by Ms Ward in the New Role is the same or substantially the same as the Old Role. These are follows;
(1) The New Role is in an entirely different geographic location to that of the Old Role with the work now being undertaken in Victoria.
(2) While the nature of the tasks and role, that of a Medical Scientist, are the same or substantially the same, those tasks of Ms Ward are being delivered to an entirely different client base, including within a much larger hospital (Epworth) than was the case in the Old Role.
(3) The work of the Old Role is still required to be performed by somebody within the Sullivan Nicolaides Pathology business.
(4) Sullivan Nicolaides Pathology continues to operate as a separate entity within Sonic Healthcare. It has administrative, management, budgeting, and financial reporting requirements that are distinct from Melbourne Pathology. It also continues to provide pathology services within regional Queensland and has no capacity to direct Ms Ward in the New Role.
(5) The Applicant wanted to move to Victoria for personal reasons and successfully applied for a role with Melbourne Pathology. These circumstances may be distinguished from an interstate move forced upon Ms Ward by her employer, be that through a forced transfer, a business acquisition or business divestment for example. None of these circumstances are present.
In weighing all of the particular circumstances set out above, I have formed the view that the transferring work of Ms Ward with Melbourne Pathology is not the same or substantially the same as her work with Sullivan Nicolaides Pathology. In reaching that conclusion I have had particular regard to the principles enunciated in Northcott and Crown. It follows therefore that not all of the requirements set out at s 311(1) of the Act, which are necessary to establish a transfer of business, are present. A transfer of business within the meaning of s 311 of the Act has therefore not taken place.
Having determined that there has not been a transfer of business within the meaning of s 311(1) of the Act, the Sullivan Nicolaides Agreement is not a transferrable instrument within the meaning of s 312 of the Act. Consequently, the Sullivan Nicolaides Agreement does not and cannot cover Ms Ward in her employment with Melbourne Pathology. The Commission’s jurisdiction to make orders pursuant to ss 317 and 318 of the Act will only be enlivened in the present matter if it is, or it is likely to be, a transfer of business from Sullivan Nicolaides Pathology to Melbourne Pathology. Having found there has been no transfer of business, there is no jurisdiction to make the order sought by Melbourne Pathology and it is unnecessary for me to deal with the matters set out in s 318(3) of the Act.
Conclusion
For the reasons set out above, the relevant jurisdictional requirements for the making of an order pursuant to s 318 of the Act are not present. Specifically, the question of whether there has been a transfer of business within the meaning of s 311(1) of the Act has been answered in the negative. I must consequently dismiss the application.
An order giving effect to this decision will be issued concurrently with this decision.
DEPUTY PRESIDENT
[1] AE518400.
[2] Exhibit A3, Second Witness Statement of Louise Douglas, dated 21 February 2024, at [3].
[3] Ibid at [5].
[4] Ibid at [4].
[5] Ibid at [5]-[6].
[6] Ibid at [13].
[7] Exhibit A2, Witness Statement of Kimberley Ward, dated 11 January 2024, at [2].
[8] Exhibit A3, Attachment MP5, Position Description Laboratory Scientist, Sullivan Nicolaides Pathology.
[9] Exhibit A2, at [4].
[10] Ibid, Attachment KW1, Offer of Employment, dated 22 December 2023.
[11] AE894038.
[12] Exhibit A2, Attachment KW1.
[13] Exhibit A3, Attachment MP4, Position Description Grade 1 Scientist. Melbourne Pathology.
[14] [2021] FCA 8.
[15] Ibid at [162].
[16] [2022] FCA 97.
[17] Ibid at [14].
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