RACGP Training Services Limited

[2024] FWC 1434

[2024] FWC 1434

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

ss.318 and 319 - Application for orders relating to instruments covering new employer, transferring employees and non-transferring employees

RACGP Training Services Limited

(AG2024/1730)

DEPUTY PRESIDENT COLMAN MELBOURNE, 31 MAY 2024

Application for orders relating to transferable instrument

1. RACGP Training Services Limited (applicant) has lodged an application under s 318 of the Fair Work Act 2009 (Act) seeking orders from the Commission in relation to a transferrable instrument. First, it asks the Commission to make an order under s 318(1)(a) that the James Cook University Enterprise Agreement 2022 (JCU Agreement) not cover the applicant or any of its employees who were previously employed by James Cook University (JCU) and who are ‘transferring employees’ within the meaning of s 311(2). Secondly, it seeks an order under s 318(1)(b) that the RACGP Enterprise Agreement 2022 (RACGP Agreement) cover the transferring employees (except for those employed as medical educators, who would not be covered by the scope of that agreement). Thirdly, the applicant seeks an order under s 319(1)(a) of the Act that the JCU Agreement will not cover non-transferring employees of the applicant.

1. The applicant is a wholly owned subsidiary of the Royal Australian College of General Practitioners (RACGP), the functions of which include the development and implementation of education, training and assessment for general practitioners. The RACGP has a contract with the Commonwealth Department of Health and Aged Care to deliver the Australian General Practice Training program (AGPT program) around Australia. Since 1 February 2023, the applicant has managed the delivery of all education, including the AGPT program, for the RACGP. The applicant directly provides the AGPT program nationally, except in Northwest Queensland, where the delivery of training services is provided by JCU, which employs staff to conduct the training and to deliver the AGPT program in that region. These employees are either medical educators (MEs) or other employees who facilitate the AGPT program (AGPT program employees). In February 2024, JCU gave notice of termination of its service agreement with the RACGP. From 7 June 2024, the employment of MEs and APGT program employees with JCU will cease. On or about 10 June 2024, 21 of those employees will commence employment with the applicant. They will continue to perform the same or substantially the same work as they currently do for JCU, providing training on behalf of the RACGP (transferring employees).

1. I consider that on or about 10 June 2024 there will be a transfer of business within the meaning of s 311(1) from JCU to the applicant, and that employees who accept employment with the applicant will be transferring employees within the meaning of s 311(2) of the Act. The transferring employees are currently covered by the JCU Agreement, which is a transferable instrument within the meaning of s 312(1). In the absence of an order of the Commission under s 318 of the Act, the JCU Agreement will cover the transferring employees while they are performing transferring work for the applicant. The application seeks orders under s 318 that the JCU Agreement not cover those employees, and that instead the RACGP Agreement cover the transferring employees, other than MEs. Further, in the absence of an order under s 319, the JCU Agreement will cover non-transferring employees who are MEs and who undertake the transferring work. The applicant seeks an order that the JCU Agreement not cover non-transferring employees who are MEs.

Framework

1. Section 318(1) of the Act provides that the Commission may, on application by a person or organisation identified in s 318(2), 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.”

1. Section 319(1) provides that the Commission 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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;

(b) an order that a transferable instrument that covers, or is likely to cover, the new employer because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.”

1. The power to make orders under ss 318 and 319 is contingent upon the Commission being satisfied that there has been, or that there is likely to be, a transfer of business for the purpose of s 311 of the Act. I am satisfied that there will be a transfer of business from JCU to the applicant for the following reasons.

1. First, the employment of employees of JCU will terminate and within three months of termination the employees will become employees of the applicant (s 311(1)(a) and (b)). Secondly, having regard to the information before the Commission, I consider that the work to be performed by the transferring employees for the applicant will be the same or substantially the same as the work that these employees performed for JCU (s 311(1)(c)). Finally, there is a connection between JCU (the old employer) and the applicant (the new employer) as described in s 311(5), because the transferring work was previously outsourced to the old employer by an associated entity of the new employer (i.e. by the RACGP), and the transferring employees will now perform the transferring work for the new employer because the RACGP has ceased to outsource that work.

1. In deciding whether to make an order under s 318(1) or s 319(1), the Commission must take into account the matters in ss 318(3) and 319(3) respectively, which I now do.

The views of the new employer and employees - ss 318(3)(a) and 319(3)(a)

1. The view of the applicant, the new employer of the transferring employees, is that the application should be granted. It said that the proposed orders would enable all of its employees falling within the scope of the RACGP Agreement to be covered by that instrument and receive the rates of pay under that agreement which are higher than those in the JCU Agreement. It said that although MEs are covered by the JCU Agreement, it was appropriate that no agreement apply to them, consistent with the framework that presently applies to MEs employed by the applicant, who sit outside the coverage of the RACGP Agreement. It said that it is appropriate that all of its MEs, including those who are transferring employees, should be engaged on equivalent conditions, and that these terms are more favourable to MEs overall than those in the JCU Agreement. The applicant submitted that the proposed arrangements would facilitate a single and harmonious workplace and promote consistency and efficiency. It would also avoid practical difficulties and potential unfairness that might arise from administering different conditions to employees performing the same work.

1. The applicant has consulted with the National Tertiary Education Union (NTEU), which is eligible to represent transferring and non-transferring employees. The NTEU had provided the applicant with a letter in support of the orders sought in the application. The letter was attached to the application.

1. The applicant stated that it had consulted with transferring employees in the manner explained in the witness statement of Daniel Harvey, acting chief people officer of the RACGP. In his statement, Mr Harvey said that following the consultation, all 21 transferring employees (9 MEs and 12 AGPT program employees) had expressed support for the company’s application to the Commission.

1. The views of the new employer and of transferring employees who would be affected by the proposed orders under s 318 weigh in favour of granting the application. The views of non-transferring employees who might be affected by an order under s 319 are not known and are a neutral factor.

Whether any employees would be disadvantaged by the order - ss 318(3)(b) and 319(3)(b)

1. The applicant submitted that no employees would be disadvantaged by the proposed orders in their overall terms and conditions of employment. Mr Harvey said in his witness statement that AGPT program employees and MEs would receive substantially higher pay in their employment with the applicant; he said that the applicant had ensured that offers of employment for AGPT program employees provide remuneration that is at least 9% higher than that provided under the JCU Agreement, and that offers of employment for MEs provide remuneration that is at least 11% higher.

1. As a result of the proposed orders, MEs would not be covered by any enterprise agreement. But they will receive higher wages in their employment with the applicant, and having been consulted about the proposed orders, all nine MEs support the proposal, as does the NTEU. I am mindful that non-transferring MEs who may later be employed by the applicant have not received any assurances about their terms of employment relative to the JCU Agreement, and might therefore be disadvantaged by an order under s 319 unless an appropriate undertaking is given. The applicant has provided an undertaking to the Commission, which is set out in Attachment 1. I accept that the applicant will honour the undertaking, and that as a result, non-transferring MEs who are employed to perform transferring work will not be disadvantaged by an order under s 319.

1. I am satisfied that no employees will be disadvantaged by the proposed orders in relation to their terms and conditions of employment. This weighs in favour of granting the application.

The nominal expiry dates of relevant agreements - ss 318(3)(c) and 319(3)(c)

1. The JCU Agreement has a nominal expiry date of 31 December 2025. The RACGP Agreement has a nominal expiry date of 30 June 2026. These are neutral considerations.

Whether negative impact on productivity - ss 318(3)(d) and 319(3)(d)

1. Sections 318(3)(d) and 319(3)(d) require the Commission to take into account whether the transferrable instrument would have a negative impact on the productivity of the new employer’s workplace. The applicant submitted that if the proposed orders were not made there may be a negative impact on productivity because two different populations of employees would be performing the same work under different terms and conditions of employment. I accept that the transferable instrument could have some negative impact on productivity. This weighs in favour of granting the application.

Whether significant economic disadvantage - ss 318(3)(e) and 319(3)(e)

1. Sections 318(3)(e) and 319(3)(e) require the Commission to consider whether the new employer would incur significant economic disadvantage as a result of being covered by a transferable instrument. The applicant did not submit that this would be the case in the present matter. This factor does not support the granting of the application.

Whether there is business synergy between instruments - ss 318(3)(f) and 319(3)(f)

1. The applicant submitted that there was a lack of business synergy between the JCU Agreement and the RACGP Agreement. The former is tailored to a large tertiary institution with many different faculties whereas the applicant is established for the purpose of delivering the AGPT program. I accept this submission. This weighs in favour of granting the application.

The public interest - s 318(3)(g) and 319(3)(g)

1. Sections 318(3)(g) and 319(3)(g) require the Commission to take into account ‘the public interest’. I cannot identify any considerations in the present matter that would have a bearing on the public interest. In my view the public interest does not carry any weight in this matter.

Conclusion

1. Taking into account the matters in ss 318(3) and 319(3), I have decided that it is appropriate to grant the application. I will make orders under s 318(1) that the JCU Agreement will not cover the applicant or any of the transferring employees and, for the avoidance of doubt as to its scope and application, an order that the RACGP Agreement will cover such employees other than MEs. I will also order, pursuant to s 319(1), that the JCU Agreement will not cover non-transferring employees of the applicant. An order will be issued separately in PR775562.

DEPUTY PRESIDENT

Determined on the papers

Printed by authority of the Commonwealth Government Printer

<PR775561>

Attachment 1

The Applicant undertakes that the total remuneration (including superannuation) paid to a Non-Transferring ME Employee employed to perform transferring work will be at least 7.6% above the total remuneration (inclusive of clinical allowance, superannuation and an adjustment to reflect the increase in full-time ordinary hours from 36.25 to 38 hours) the Non-Transferring ME Employee would have received under the JCU Agreement had it applied.