Respect Group Limited T/A Respect Aged Care

[2021] FWC 3609

[2021] FWC 3609

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

Respect Group Limited T/A Respect Aged Care
(AG2021/5100)

Aged care industry
COMMISSIONER JOHNS	SYDNEY, 29 JUNE 2021

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

Background

[1] On 12 May 2021, Respect Group Limited T/A Respect Aged Care (Respect/the Applicant), made an application (the Application) pursuant to s.319 of the Fair Work Act 2009 (Cth) (the Act) for the Fair Work Commission (the Commission) to make an order relating to instruments covering new employer and non-transferring employees. The Applicant seeks an Order in the following terms:

“The Lithgow Aged Care Limited, NSWNMA and HSU NSW Enterprise Agreement 2017-2020 (Lithgow EA) will cover non-transferring employees who:

a. Are employed by Respect Group Limited T/A Respect Aged Care from 17 April 2021 in Lithgow, New South Wales; and

b. Will perform the same, or substantially the same work for Respect Group Limited T/A Respect Aged Care as transferring employees who are covered by the Lithgow EA”

[2] The Application was lodged by email attaching a Form F40 Application form and a statutory declaration of Mr Nicholas Adams, People and Culture Manager of the Applicant, dated 12 May 2021. The Health Services Union of Australia (HSU) and the New South Wales Nurses and Midwives Association (NSWNMA) (collectively, the Unions), who are covered by the Lithgow EA, were copied in by way of service.

[3] The matter was allocated to my Chambers on 13 May 2021. On 14 May 2021, Directions were issued. In accordance with those Directions, a further statutory declaration was filed by Mr Adams on 17 May 2021. In the declaration, Mr Adams advised that there were currently no non-transferring employees who would be affected by the Application. He also confirmed that he had served the Application materials on the Unions.

[4] On 31 May 2021, Sharene Daniel, Industrial Officer of the NSWNMA, advised my Chambers by email that the NSWNMA were supportive of the Application. On 9 June 2021, Chris Friend, Bargaining Officer of the HSU, advised my Chambers by email that the HSU were also supportive of the Application.

[5] No submissions in opposition to the Application were received. I have made my determination on the basis of all the written materials, whether mentioned in this decision or not.

Relevant Legislation

[6] Section 313 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).

[7] Section 319 provides:

319 Orders relating to instruments covering new employer and non-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 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.

Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.

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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(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 non-transferring employee before the later of the following:

(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;

(b) the day on which the order is made.

Consideration

[8] In determining the matter, the Commission must take into account s.319(3).

Views of the new employer – s.319(3)(a)(i)

[9] The new employer is the Applicant and is supportive of the Orders being made. This weighs in favour of the Orders being made.

Views of the employees who would be affected by the Order – s.319(3)(a)(ii)

[10] As set out above, the Applicant currently does not have any employees who would be affected by the Order. This is a neutral factor.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.319(3)(b)

[11] In his statutory declaration of 12 May 2021, Mr Adams stated that The Lithgow EA had passed the ‘Better Off Overall Test’ when it was approved by the Fair Work Commission. Further, he stated that he was not aware of any terms or conditions that would be less beneficial than the corresponding terms in the Aged Care Award 2010 or the Nurses Award 2010.

The nominal expiry date of the agreement – s.319(3)(c)

[12] The Agreement reached its nominal expiry date on 30 June 2020. In his statutory declaration of 12 May 2021, Mr Adams stated that, as a result of the Agreement having reached the nominal expiry date, employees may request the commencement of enterprise bargaining. I consider this to be a neutral factor.

Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace – s.319(3)(d)

[13] In his statutory declaration of 12 May 2021, Mr Adams states that there would be an administrative burden associated with maintaining separate HR and payroll systems for transferring and non-transferring employees. As such, I find that there is a productivity benefit in making the Orders sought and that this weighs in favour of the Orders being made.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer – s.319(3)(e)

[14] Noting my finding above at [8], I consider that the making of the Order will have an economic benefit to the Applicant, as it will reduce the costs by lowering the administrative burden on staff and the cost associated with maintaining separate HR and payroll systems. This weighs in favour of the Orders being made.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer – s.319(3)(f)

[15] In his statutory declaration of 12 May 2021, Mr Adams states that there are differences in wage rates, shift penalties, allowances, hours of work, roster arrangements and leave arrangements when comparing the Lithgow EA against the Aged Care Award 2010 and Nurses Award 2010. As such, I am satisfied that it would negatively affect the business synergy of the Applicant if it was required to apply these awards to the non-transferring employees. This weighs in favour of the Orders being made.

The public interest – s.319(3)(g)

[16] Having considered the commercial benefits to the Applicant, the support of the Unions and the fact that there will be no disadvantage to the non-transferring employees, I consider that it is in the public interest for the Orders to be made.

Conclusion

[17] It follows that the Application should be granted. The Orders sought by the Applicant have been issued [PR730979] concurrently with this decision.

COMMISSIONER

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