Safe Places for Children (WA) Limited
[2022] FWC 3215
•14 DECEMBER 2022
| [2022] FWC 3215 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
Safe Places for Children (WA) Limited
(AG2022/5076)
| Social, community, home care and disability services | |
| DEPUTY PRESIDENT BEAUMONT | PERTH, 14 DECEMBER 2022 |
Application by Safe Places for Children (WA) Limited – s 319
This decision concerns an application by Safe Places for Children (WA) Limited (the Applicant) for an order under s 319(1)(b) of the Fair Work Act 2009 (Cth) (the Act) that the Safe Places for Children Enterprise Agreement 2013[1] (the Safe Places QLD & WA EA) will cover non-transferring employees of the Applicant. Whilst the application was initially made by Safe Places Community Services Limited (SPCS), the parent company of the Applicant, I permitted a change of name of the Applicant under s 586 of the Act.
SPCS is a not-for-profit organisation that provides a unique model of care to young people at risk with intensive therapeutic support and supervision in a homely residential care setting.[2] SPCS’s goal is to stabilise the young person, educate them on coping strategies and transition them to a less intensive model of care.[3]
SPCS currently employs approximately 757 employees who are covered by one of the following enterprise agreements:
a) Safe Places for Children Enterprise Agreement NSW, VIC, SA, TAS, ACT, NT 2016 (Safe Places AUS EA); or
b) Safe Places QLD & WA EA (collectively the Safe Places EAs).
For reasons that are traversed in full later in the Decision, SPCS has, as part of a recent restructure, established three new state-based employing entities called:
a) Safe Places for Children (WA) Limited (ACN 652 937 249);
b) Safe Places for Children (VIC) Limited (ACN 652 572 113); and
c) Safe Places for Children (NSW) Limited (ACN 652 936 877).
Briefly stated, the Applicant submits that it is necessary to seek the order sought following the recent restructure of SPCS. The impetus for the restructure was said to be the complicated regulatory and compliance requirements in each state within which SPCS operates,[4] the Applicant noting that if the order is not made it will significantly impact the services it can provide.[5]
Whilst no employees have been transferred to the new state-based entities as part of the restructure, that is the plan.
The Safe Places QLD & WA EA is a transferrable instrument[6] to which this application relates, and the Applicant is to be the new employer of that particular business. Although there has not yet been a transfer of business under Part 2-8 of the Act, it is accepted that s 317 empowers the Commission to make certain orders, including orders under s 319 of the Act, if there is, or is likely to be, a transfer of business from an older employer to the new employer.
The Applicant therefore has standing under s 319(2)(a) of the Act to apply for the order sought.
The Applicant has articulated the order sought in the following terms:
Pursuant to section 319(1)(b) of the Act, the Safe Places for Children Enterprise Agreement 2013 will cover Safe Places for Children (WA) Limited (ACN 652 937 249) (Safe Places WA) because of provision of Part 2-8 of the Act, will cover all non-transferring employees of Safe Places WA who perform or are likely to perform, work for Safe Places WA.
That the above order take effect on a date to be determined by the Fair Work Commission.
In deciding whether to make the order, I am obliged to take into account various factors. The factors relevant to the application are set out in s 319(3) of the Act, and include:
a) the views of the Applicant and the employees affected by the Order;
b) whether any employees would be disadvantaged by the Order in relation to their terms and conditions of employment;
c) the nominal expiry of the Agreement;
d) whether the Agreement would have a negative impact on productivity of the Applicant’s workplace;
e) whether the Applicant would incur significant economic disadvantage as a result of the Agreement covering it;
f) the degree of business synergy between the Agreement and any workplace instrument that already covers the Applicant; and
g) the public interest.
Having taken into account each of the above factors, I am satisfied that they weigh in favour of granting the order sought.
An Order[7] that provides that the Safe Places QLD & WA EA will cover the non-transferring employees of the Applicant who perform the same or similar work as the transferred employees is issued concurrently with this Decision.
Background
Mr de Villiers, General Manager, Commercial, at SPCS gave evidence that SPCS’s enterprise agreement and industrial relations model is critical to its operational model of care and financial viability, and to ensuring that the organisation is able to continue running efficiently.[8]
Mr de Villiers explained that SPCS had restructured its operations because of a number of significant differences in the regulations and requirements between states, which had impacted SPCS’s operations over the years.[9] These differences had, according to Mr de Villiers, significantly increased the operating costs for the organisation.[10]
Mr de Villiers said that in his view, SPCS was now too big to continue operating effectively under the national umbrella model.[11] Mr de Villiers noted that SPCS required a more independent, tailored team, to be looking after each separate geographical area which could be achieved under a state-based model.[12] Mr de Villiers explained that this would reduce operational costs by being able to tailor training systems and processes to individual state-based entities and it would allow SPCS to invest in training.[13]
Describing the regulatory environment in which SPCS operated, Mr de Villiers said that one of the key differences is the minimum qualification requirements across different states.
Mr de Villiers made the following observations:
a) Western Australia and New South Wales do not have mandated qualifications, however in NSW, depending on the individual agreement, employees may need a minimum of first aid training;[14]
b) in Victoria, minimum qualifications are required as follows:
i.Youth Worker 2 and above employees must already hold a recognised qualification as per the Minimum Qualification requirements stipulated by the Department of Families, Fairness and Housing (DFFH);
ii.Youth Support Worker / Youth Worker 1 must be enrolled into CHC403313 – Certificate 4 in Child, Youth and Family Intervention, or be enrolled in an approved qualification outlined by DFFH;[15]
c) Victorian employees commencing at SPCS are required, regardless of their position, to complete mandatory units of competency;[16] and
d) in Queensland, all residential care employees and their direct supervisors are required to hold, or be enrolled and working towards, obtaining a recognised relevant qualification such as Certificate 4 in Child, Youth and Family Intervention (Residential Care).
Mr de Villiers said that due to the complexities in minimum qualification requirements across the states and to try and ease the administrative burden, SPCS offers all employees the opportunity to obtain their Certificate 4 even in those states where it is not a requirement.[17] The cost of offering the Certificate 4 to all employees (at a cost of approximately $4500 per person) could be avoided by transferring the employees to state-based entities – allowing SPCS to offer Certificate 4 solely to employees who require it in accordance with legislation and standards in their state.
In respect of quality auditing, Mr de Villiers expressed that SPCS currently expends significant time and money carrying out activities across the board under its national umbrella model that are not necessary in every state.[18] Mr de Villiers stated that as a not-for-profit organisation, any financial savings directly impact the services that can be provided to young people in need.[19]
By way of example, Mr de Villiers said that to ease the administrative burden of trying to determine what regulations/requirements are mandatory in each state (which also changes from time to time), SPCS’s auditing team would be able to tailor its approach to the auditing of service delivery on a state-by-state basis.[20] Mr de Villiers considered that a state-based model would be beneficial as it would allow the auditing team to be more focused on individual state-based requirements in their roles and reduce operating compliance costs versus meeting all state requirements as the organisation currently does.[21]
In respect of Queensland, Mr de Villiers said that for Queensland employees who are covered by the Safe Places QLD & WA EA, SPCS would use its own state-based employing entity for those employees and then SPCS would be renamed ‘Safe Places for Children (QLD) Limited’.[22]
Mr de Villiers continued that SPCS proposed to transfer all Victorian, New South Wales and Western Australian employees covered by the Safe Places EAs to their respective state-based entities.
The Applicant considered the application necessary so that any new employees (non-transferring employees) of the Applicant will be subject to the same terms and conditions as other transferring employees of SPCS who will remain covered by the Safe Places QLD & WA EA. The Applicant submitted that the Safe Places QLD & WA EA will apply to the exclusion of the Social, Community, Home Care and Disability Services Award (SCHADS Award).[23]
The Applicant continued that if the SCHADS Award applied to non-transferring employees, it would not align with the operational requirements of the Applicant and would have a negative impact upon it. Effectively, it would mean that non-transferring employees would be working alongside employees who are covered by the different terms and conditions in the Safe Places QLD & WA EA, which would likely create issues and concerns amongst those employees, said the Applicant.
Legislative framework
Section 314 of the Act makes provision for a transferable instrument to automatically cover non-transferring employees in certain circumstances. It provides:
314 When new non-transferring employees of new employer may be covered by transferable instrument
(1) If:
(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and
(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and
(c) the non-transferring employee performs the transferring work; and
(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;
then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.
(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWC order under subsection 319(1).
The Applicant is covered by the SCHADS Award, which is a modern award within the meaning of s 314(1)(d) of the Act. As any non-transferring employee would be engaged subsequent to the Safe Places QLD & WA EA covering the Applicant, and the Applicant is covered by the abovementioned SCHADS Award, the broader coverage of the Safe Places QLD & WA EA to the non-transferring employees, as contemplated by s 314, does not operate in relation to those employees.
However, the operation of s 314 is subject to s 319, which allows for the Commission to make an order notwithstanding the provisions of s 314, that a transferring instrument covers non-transferring employees.
Section 319(1) provides:
319 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.
Consideration of factors in s 319(3)
I now deal with each of the matters under s 319(3) of the Act. I am assisted in this by virtue of a detailed application filed by the Applicant,[24] and witness statements of Mr de Villiers, Ms Dunn, Chief of Operations of SPCS, and Mr Cluney, Senior Area Manager of SPCS.
The discretion to make the order sought by the Applicant under s 319(1)(b) of the Act will only be exercised after taking into account the matters set out in s 319(3) of the Act. These factors, which must be read having regard to the objects of the Part, are intended to enable the Commission to balance appropriately the protection of employees’ ‘entitlements under certain instruments with the need for some flexibility to depart from the default rules about coverage of instruments following a transfer of business.[25]
Views of the new employer – s 319(3)(a)(i)
Expanding upon the information detailed in the background of this Decision, the new employer is the Applicant, who supports the application. The Applicant submits that the following factors should weigh in favour of the Commission granting the order sought.
In addition to relying upon Mr de Villier’s evidence, the Applicant also referred to the evidence of Ms Dunn. Ms Dunn expressed her view that the SCHADS Award did not align with SPCS’s current operations and model of care, particularly with respect to the rostering and payroll systems.[26]
Ms Dunn observed that working under state-based models would be beneficial for employees and the organisation as operations could be more easily streamlined to respective state and territory requirements and regulations.[27] Ms Dunn stated that this would result in more focused training at a state level and result in greater ease of service delivery and regulatory compliance by the Applicant’s employees.
In respect of disruption in the workplace, it was Ms Dunn’s view that having the SCHADS Award apply to non-transferring employees would cause substantial disruptions in the workplace because the non-transferring employees would be performing the same role and work alongside employees covered by the Safe Places QLD & WA EA. Ms Dunn gave evidence that she believed the Applicant’s employees would consider it unfair to have different terms and conditions of employment when performing the same role.
Addressing the disadvantages that non-transferring employees would face were the SCHADS Award to apply to them, Ms Dunn noted the following in respect of the terms and conditions under the Safe Places QLD & WA EA:
a) employees receive five weeks of annual leave, which in 2020 was increased to six weeks of annual leaver, which is one week more than provided for under the SCHADS Award for non-shift workers;
b) full-time employees receive a service bonus of $1000.00 each year from the second year of service onwards – capped at $5000.00 per year; and
c) employees benefit from roster flexibility, such as undertaking 24-hour shifts (which includes an 8-hour sleepover), and ordinary hours of work an employee is required to work include shift work rosters thereby significantly reducing the number of days worked each month.[28]
The Applicant summarised its view in the following terms:
a) provide industrial harmony between the proposed transferring and non-transferring employees;
b) minimise disruptions and provide stability;
c) assist to maintain certainty and consistency of employment and conditions;
d) assist to maintain security of employment for employees;
e) reduce the risk of non-compliance for the Applicant;
f) reduce forecasted operational costs by reducing non-value adding overhead costs (for example, new systems and people to operate those new systems);
g) assist SPCS/the Applicant to maintain or increase its level of service to young people;
h) assist in continuity of service delivery to the relevant state departments; and
i) assist in the continuity of service delivery to the young people.[29]
Ms Dunn observed that as part of the approval process for the Safe Places QLD & WA EA, the Applicant had provided an undertaking that all employees covered by the Safe Places QLD & WA EA would be paid either the equivalent to or more than what is required under the SCHADS Award. This involved conducting reconciliations to ensure compliance with the undertaking.[30]
Views of the employees who would be affected by the Order – s 319(3)(a)(ii)
As observed, there are currently no non-transferring employees who are employed by the Applicant.
Whether any employees would be disadvantaged by the Order – s 319(3)(b)
The Applicant submitted that the non-transferring employees would not be disadvantaged by the proposed order because they would be able to access entitlements under the Safe Places QLD & WA EA that are not available to them under the SCHADS Award. These entitlements have been outlined at paragraph [35] of this Decision.
Whilst the Applicant purports that non-transferring employees would receive six weeks of annual leave in circumstances where the Safe Places QLD & WA EA were to cover and apply to them, it is observed that at clause 23.1 of the Safe Places QLD & WA EA, full-time employees are entitled to five weeks of paid annual leave. However, the Applicant provided an undertaking which is annexed to this Decision as Annexure One and reads as follows:
All new non-transferring and transferring employees employed by Safe Places WA, who are covered by the Agreement, will be entitled to six (6) weeks’ of paid annual leave for each completed year of service (for full time employees or on a pro rata basis for part time employees, calculated on the Employee's ordinary hours of work), notwithstanding the operation of clause 23 of the Agreement.
There is the provision of a bonus at clause 19.4 of the Safe Places QLD & WA EA and the Applicant submitted that in respect of the 2022 reconciliations conducted to ensure compliance with the abovementioned undertaking, Youth Workers under the Safe Places QLD & WA EA were paid approximately 5-7% more than what they would have received under the SCHADS Award and Case Managers were paid up to 22% more than what they would have received under the SCHADS Award. The Applicant provided the following table demonstrating that when the reconciliation was conducted, employees under the Safe Places QLD & WA EA were paid more than provided under the equivalent classification in the SCHADS Award:
Employee Level Safe Places EA % above Award equivalent YSW 5% YW1 7% YW2 2% YW3 6% CM1 3% CM2 12% CM3 22%
When one considers the terms of the SPCS EAs in comparison to the SCHADS Award, it can be seen that some terms could be seen to disadvantage non-transferring employees and others not.
Under the SPCS EAs, Undertaking 1 provides hours worked in addition to the ordinary hours are dealt with as time off in lieu of payment (TOIL), rather than payment for overtime, which is provided for in the SCHADS Award. The Safe Places QLD & WA EA provides that TOIL hours are accrued at a rate of 1.75 for Saturday and Sunday, with the Safe Places AUS EA also including public holidays. The rate of pay for TOIL (casual rates) is less than most of the rates of overtime provided for in clause 28.1 of the SCHADS Award. However, as identified by the Applicant, Undertaking 2 to the SPCS EAs ensures that employees are paid no less than they would be paid under the SCHADS Award for the same work performed.
It is evident that the SPCS EAs do not have prescriptive rostering patterns like the SCHADS Award and do not have maximum shift length or minimum length of break between shifts. Furthermore, the SPCS EAs are silent on roster notice requirements, and under the SPCS EAs, there is no additional payment for ordinary hours of work undertaken outside of 6:00AM to 8:00PM Monday to Sunday or shift work allowances on weekends or public holidays. These factors have been weighed against the rates of pay provided for by the SPCS EAs (inclusive of Undertaking 2).
The Agreement has a nominal expiry date of 7 March 2018. The Applicant submitted that notwithstanding the nominal expiry date, the undertakings in the Safe Places QLD & WA EA ensure that employees are not paid less than they would be entitled under the SCHADS Award.
I have considered the rates of pay afforded by the Safe Places QLD & WA EA against other benefits and parameters (such as the ordinary hours of work) provided by the SCHADS Award.
In this case, it is a fine line that separates disadvantage from not being disadvantaged. However, on balance, I have found it is not the case that non-transferring employees would suffer a disadvantage.
Productivity – s 319(3)(d)
The Applicant submitted that the order sought is consistent with the Applicant’s desire to integrate non-transferring employees into its existing workforce and business in a streamlined manner.
Having considered the Applicant’s evidence and submissions, I am persuaded that the administrative and operational procedures of the Applicant and its parent company would run more efficiently if the Safe Places QLD & WA EA applied consistently to each non-transferring employee, and there would be less risk of disharmony in the workplace.
Economic disadvantage – s 319(3)(e)
The Applicant pressed that whilst the Safe Places QLD & WA EA is more expensive (as employees are paid more under it than compared to the SCHADS Award), in the long term it will be economically beneficial to the Applicant to have it in place, as it can maintain its current care model without having to change payroll systems or hire new staff to manage two sets of terms and conditions.[31]
The Applicant continued that SPCS had recently invested several million dollars configuring and implementing a new accounting system and if the SCHADS Award were to apply to non-transferring employees, a whole new parallel payroll system would need to be built.[32] The cost of this would exceed $250,000 and new employees would need to be engaged to run the parallel payroll.
Degree of business synergy – s 319(3)(f)
The Applicant submitted that by putting in place the Safe Places EAs, the application of the SCHADS Award was excluded. The Applicant explained this approach had been adopted because the SCHADS Award failed to align with the operational requirements of SPCS’s model of care with the consequence that there was a very limited degree of business synergy between the SCHADS Award and the Safe Places EAs.
In respect to SPCS’s model of care, Mr Cluney emphasised its uniqueness, noting that SPCS offers support to vulnerable young people at risk aged 8 to 18 years who exhibit complex trauma, emotional and behavioural problems, by providing intensive therapeutic support and supervision in a welcoming residential care setting.[33]
Regarding the classifications under the Safe Places EAs, the Applicant submitted that they had been drafted with the purpose of ensuring that employees can understand the different roles specific to SPCS, and the career progressions available.[34] The Applicant detailed the classification levels available in the Safe Places EAs, which it argued were more specific than the SCHADS Award.[35] It pressed that if the SCHADS Award were to apply to non-transferring employees, the impact would be negative due to the potential confusion of differing classification structures and issues with payroll and rostering.[36]
On the point of rostering, the Applicant argued that the SCHADS Award could not be applied to the current care model which required the Youth Worker position to stay overnight at the house with the young person.[37] The Applicant observed that under the SCHADS Award, shifts are capped at eight hours, which would result in the Applicant needing to change its entire service offering.[38]
The Applicant pressed that rostering flexibility is an integral part of the Applicant’s operations and of SPCS’s care model. The Applicant submitted that the flexibility is important to its customers as it provides a greater level of stability and comfort for the young people who are being cared for.
Public interest – s 319(3)(g)
The Applicant submitted that the young people that SPCS care for have experienced significant trauma and display extremely challenging behaviours.[39] It continued that often the only alternative for the young people, if not supported by the Applicant and SPCS, is the juvenile justice system or a secure mental health facility.[40] According to the Applicant, between 2006 and June 2021, SPCS had supported around 3775 at risk children.[41] The Applicant noted that SPCS receives approximately 500 to 700 requests for care a month, which, arguably, they would be unable to meet if the SCHADS Award were to apply. On that basis, the Applicant contended that it was in the public interest that SPCS be able to improve its operational model and have a harmonised set of terms and conditions which apply to all its employees.
There is no evidence that it would be against the public interest to issue the order, and the evidence points to it being in the public interest to do so.
Conclusion
I have considered the material provided by the Applicant in support of its application and the matters set out in ss 314 and 319 of the Act. I am satisfied the materials provided by the Applicant, when considered against the matters set out in s 319(3) of the Act, support the making of the Order.
DEPUTY PRESIDENT
Annexure One
[1] AE407121.
[2] Witness Statement of Adrian de Villiers [7] (de Villiers Statement).
[3] Form F40 – Application for orders in relation to a transfer of business, 2.3 [40] (Form F40).
[4] Witness Statement of John-Paul Cluney [31] – [68] (Cluney Statement).
[5] de Villiers Statement (n 2) [18] – [30], [69], [71].
[6] Fair Work Act 2009 (Cth) s 312(1)(a).
[7] PR748629.
[8] de Villiers Statement (n 2) [12].
[9] Ibid [18].
[10] Ibid.
[11] Ibid [19].
[12] Ibid.
[13] Ibid.
[14] Ibid [24].
[15] Ibid [22].
[16] Ibid [23].
[17] Ibid [26].
[18] Ibid [28].
[19] Ibid.
[20] Ibid [29].
[21] Ibid [30].
[22] Ibid [14].
[23] MA000100.
[24] Form F40 (n 3).
[25] Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1259].
[26] Witness Statement of Amanda Dunn [20] (Dunn Statement).
[27] Ibid [18].
[28] Ibid [21].
[29] de Villiers Statement (n 2) [33] – [71]; Cluney Statement (n 4) [75] – [96].
[30] Dunn Statement (n 26) [21].
[31] Form F40 (n 3) [26].
[32] Ibid [28].
[33] Cluney Statement (n 4) [10].
[34] Form F40 (n 3) 2.3 [34].
[35] Ibid.
[36] Ibid.
[37] Ibid 2.3 [36].
[38] Ibid.
[39] Ibid 2.3 [41].
[40] Ibid.
[41] Ibid 2.3 [42].
Printed by authority of the Commonwealth Government Printer
<AE407121 PR748628>
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