Moran Australia (Residential Aged Care) Pty Limited

Case •

[2023] FWC 662

•

20 MARCH 2023
[2023] FWC 662

FAIR WORK COMMISSION
DECISION

Fair Work Act 2009

s.318 - Application for an order relating to instruments covering new employer and transferring employees

Moran Australia (Residential Aged Care) Pty Limited

(AG2023/391)

Aged care industry

COMMISSIONER P RYAN

SYDNEY, 20 MARCH 2023

Application for an order relating to instruments covering new employer and transferring employees.

Introduction and Background

  1. This decision concerns an application by Moran Australia (Residential Aged Care) Pty Limited (Applicant) for an order pursuant to s.318 of the Fair Work Act 2009 (the FW Act). 

  1. The Applicant is the operator of the residential aged care facilities in New South Wales and Victoria.

  1. On 1 March 2023, the Applicant purchased the Stockton Residential Home located in Fullerton Street, Stockton, New South Wales from Presbyterian Aged Care (PAC).

  1. The Applicant seeks an order from the Fair Work Commission (Commission) relating to former employees of PAC who became employed by the Applicant on 1 March 2023 (Transferring Employees), and whose employment was covered by the Presbyterian Aged Care, NSWNMA and HSU NSW Enterprise Agreement 2017-2020 (PAC Agreement or transferable instrument).

  1. The Applicant seeks an order in the following terms:

1. That pursuant to s.318 of the Fair Work Act 2009 (Cth)(the Act), the Presbyterian Aged Care, NSWNMA and HSU NSW Enterprise Agreement 2017-2020 will not cover the Moran Australia (Residential Aged Care) Pty Limited and the transferring employees, and that the transferring employees will be covered by the Moran Australia (Residential Aged Care) Pty Limited NSW Enterprise Agreement 2021.

2.   In accordance with s.318(4) of the Act, this Order will operate from the date of this Order or 1 March 2023, whichever is later.

  1. Upon the matter being allocated to my Chambers, I listed the matter for mention and directions and directed the Applicant to provide a copy of the notice of listing and the application to any affected employee and employee organisation.

  1. At the mention and directions hearing, the Health Services Union (HSU) and Australian Nursing and Midwifery Federation (ANMF) appeared and raised some concerns with the application.

  1. Following the mention and directions hearing, the matter was listed for hearing on 13 March 2023 and directions were issued for the parties to file any material and submissions in support of, or in opposition to, the application.

  1. In addition to the material filed as part of the application, the Applicant filed further submissions addressing each of the matters in s.318(3) of the FW Act.

  1. The HSU did not oppose the application but raised concerns about the preservation of more favourable long service leave and paid parental leave entitlements, as well as the preservation of accrued personal/carers leave and annual leave.

  1. The ANMF opposed the application on the basis that the transferring employees would be disadvantaged. However, the ANMF stated that it would consider supporting the application if the Applicant agreed to preserve matters such including paid parental leave, long service leave, the payment of police check renewals, and rest/tea breaks.

  1. The issue between the parties centred on the scope of terms and conditions that the Applicant would preserve and the period over which they would be preserved.

  1. On 10 March 2023, and as part of its materials in reply, the Applicant filed proposed undertakings setting out its position in relation to preserving some of the PAC Agreement’s terms and conditions for the transferring employees. 

  1. During the hearing, the Applicant proposed filing amended undertakings. In response, the ANMF sought a period to consult with their members and inform the Commission of its position.

  1. I adjourned the proceedings and directed the Applicant to provide its amended undertakings by 4:00pm on 13 March 2023. The HSU and ANMF were directed to confirm their position in relation to the amended undertakings by 4:00pm on 16 March 2023. The parties agreed that I would then determine the matter on the papers.

  1. After consulting with its members who were transferring employees, the ANMF confirmed that based on the amended undertakings it did not object to the proposed Orders being made. The HSU did not make any further submissions.

Relevant Legislation

  1. Section 313 of the Act relevantly 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; and

…

(3)  This section has effect subject to any FWC order under subsection 318(1).

  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.

Consideration

  1. In deciding whether 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).

  1. Before turning to those matters, I have had regard to all the evidence and submissions, and I am satisfied as to the following:

  1. That there was a transfer of business from PAC to the Applicant (ss.311(1) and 317 of the Act);

  2. That the former employees of PAC who have been employed by the Applicant are transferring employees (s.311(2) of the Act);

  3. That the PAC Agreement covers PAC and the persons likely to be transferring employees (s.313(1) of the Act);

  4. That the PAC Agreement is a transferable instrument (s.312(1) of the Act); and

  5. That the Applicant as the new employer, or a person who is likely to be the new employer, of the transferring employees can make an application for the order sought (s.318(2)(a) of the Act).

  1. I now turn to a consideration of the matters set out in s.318(3) of the Act.

Views of the new employer – s.318(3)(a)(i)

  1. The Applicant is the new employer, or a person who is likely to be the new employer, who seeks, and is supportive of, the proposed Order.  This weighs in favour of making the proposed Order.

Views of the employees who would be affected by the order – s.318(3)(a)(ii)

  1. The directions issued by my Chambers sought the views of the transferring employees. The ANMF and HSU consulted with their members and advised that there was no objection to the making of the proposed Order. No employees sought to provide their views directly to the Commission. This weighs in favour of making the proposed Order.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.318(3)(b)

  1. The Applicant provided undertakings preserving a number of the PAC Agreement’s terms and conditions for the transferring employees including paid parental leave, long service leave, the payment of police check renewals and additional rest/tea breaks.

  1. Having regard to the terms and conditions of the Moran Australia (Residential Aged Care) Pty Limited NSW Enterprise Agreement 2021 (Moran Agreement) and the undertakings provided by the Applicant, I am satisfied that the transferring employees will not be disadvantaged overall if the proposed Order are made. This weighs in favour of making the proposed Order.

The nominal expiry date of the agreement – s.318(3)(c)

  1. The nominal expiry date of the PAC Agreement is 30 June 2020. The nominal expiry date of the Moran Agreement is 1 July 2023. I consider this a neutral factor in relation to the making of the proposed Order.

Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace – s.318(3)(d)

  1. The Applicant submitted that the operation of different enterprise agreements within the same employee cohort may lead to dissatisfaction amongst employees resulting in a negative impact on the productivity of the Applicant’s workplace. Furthermore, the Applicant submitted the continued operation of the PAC Agreement will impose an administrative burden on the Applicant.

  1. I accept these submissions and that this weighs in favour of making the proposed Order.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer – s.318(3)(e)

  1. The Applicant submitted that it would suffer significant economic disadvantage if it were required to administer two different enterprise agreements, which would necessitate the reconfiguration of its payroll system to accommodate the PAC Agreement’s payment rules, as well as additional resourcing to manage those arrangements. The Applicant submitted this weighed in favour of making the proposed Order.

  1. Although the Applicant has undertaken to preserve some entitlements, I accept that if the proposed Order were not made, there is potential for the Applicant to suffer economic disadvantage as a result of administrative burden associated with the interpretation and application of an additional enterprise agreements. This weighs in favour of the making the proposed Order.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer – s.318(3)(f)

  1. The Applicant submitted there is little business synergy between the PAC Agreement and the Moran Agreement and that greater business synergy arises from the Moran Agreement applying to the transferring employees. The Applicant submitted this weighed in favour of making the proposed Order.

  1. Having regard to the materials before me, I am satisfied that there is limited synergy between the PAC Agreement and the Moran Agreement and that this weighs in favour of making the proposed Order.

The public interest – s.318(3)(g)

  1. The Applicant submitted that the public interest is not enlivened by the application and that this is a neutral consideration. Having regard to all the material before me, I am not of the view that there are public interest reasons weighing against making the proposed Order.

Conclusion

  1. Having considered the matters required by s.318(3) of the FW Act and all the materials before me, I am satisfied that it is appropriate that this application be granted and an Order PR760431 to that effect will be issued in conjunction with this decision.

  1. In accordance s.318(4) of the Act, the Order shall take effect from the later of the following:

    a.the time when the transferring employees become employed by the Applicant; or

    b.the day on which the Order is made.

COMMISSIONER

Appearances:

Mr D. Mahendra of counsel for the Applicant.
Ms J. Gordon for the Australian Nursing and Midwifery Federation.
Mr C. Friend for the Health Services Union.

Hearing details:

2023.
Sydney (via Microsoft Teams video-link):
13 March.

Printed by authority of the Commonwealth Government Printer

<AE427744  PR760430>

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