Scope (Aust) Ltd T/A Scope

[2021] FWC 6368

[2021] FWC 6368

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s. 318 - Application for an order relating to instruments covering new employer and transferring employees

Scope (Aust) Ltd T/A Scope
(AG2021/8138)

Social, community, home care and disability services
COMMISSIONER MIRABELLA	MELBOURNE, 18 NOVEMBER 2021

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

[1] Scope (Aust) Ltd T/A Scope (Scope) has applied for orders under s. 318 of the Fair Work Act 2009 (the Act) in relation to the Victorian Disability Services (NGO) Agreement 2019 (the Victorian Disability Services Agreement), an enterprise agreement that applies to a number of employers listed in Schedule A of the Victorian Disability Services Agreement, including Uniting (Victoria and Tasmania) Limited (Uniting). The Victorian Disability Services Agreement is a “transferrable instrument” as defined in s. 312 of the Act.

[2] Scope is seeking the following orders that:

•  Pursuant to s. 318(1) of the Act, the Victorian Disability Services Agreement does not, and will not, cover any employee whose employment transfers from Uniting to Scope in connection with the transfer of disability residential services; and

•  The order will come into operation on the later of:

a. the date when the first employee transferring from Uniting becomes employed by Scope (22 November 2021); and

b. the day on which this order is made.

Background

[3] Scope and Uniting have entered into an agreement for the transfer of Uniting’s business and related assets to Scope. Uniting carries on a business of providing disability residential services in Victoria. Scope has made offers of employment to 236 of Uniting’s employees and has received 221 acceptances.

Statutory Provisions

[4] Section 318 of the Act provides that:

“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.”

[5] The power to make orders under s. 318 is premised on the Commission being satisfied that there has been, or that there is likely to be, a transfer of business for the purposes of s. 311 of the Act. I am satisfied that there will likely be a transfer of business from Uniting to Scope for the following reasons.

[6] First, as per subsections 311(1)(a) and (b), 221 employees of Uniting have accepted offers of employment made by Scope and they will commence their employment with Scope on 22 November 2021, being within 3 months of them ceasing to work for Uniting. Secondly, having regard to the information in the application, I consider that the work performed by the transferring employees for Uniting is the same or substantially the same as the work they will perform for Scope (s. 311(1)(c)). Finally, there is a “connection” between Uniting and Scope as described in s. 311(4) because the transfer of employment derives from a transfer of assets from Uniting to Scope, including but not limited to goodwill of the business, service agreements and plant and equipment (s. 311(1)(d)).

[7] Next it will be necessary for me to consider s. 318(3), which states that, in deciding whether to make an order under s. 318(1), the Commission must take certain matters into account.

The views of the new employer and affected employees – s. 318(3)(a)

[8] The view of Scope, as the new proposed employer, is that the application should be granted. It contends that there will be benefits in standardising the terms and conditions of transferring employees to those of Scope’s current workforce, in that the standardisation will create uniform employment conditions, thus removing a source of potential workplace disputation, and will reduce costs associated with administering two different enterprise agreements.

[9] Scope filed an Affidavit by Mr Phil Turton of Scope to the effect that Scope conducted a meeting with 220 of the transferring employees on 6 October 2021. At this meeting, the employees were informed of Scope’s purchase of Uniting’s business and the proposed transfer of their employment to Scope. Representatives of the Health and Community Services Union (the HACSU) attended the meeting. Representatives from Scope canvassed the views of the staff who would be transferring employees and invited them to ask questions regarding the proposed transfer.

[10] Scope then provided those employees with a written letter of offer which notified them that Scope intended to apply to the Commission to transfer their employment coverage to the Scope Australia Enterprise Agreement 2019 (the Scope Agreement). Scope detailed some of the effects this would have on any transferring employees’ terms and conditions of employment.

[11] Scope then conducted six virtual “town hall” meetings through email between 8 October to 12 October 2021. 80 transferring employees attended these meetings. Those employees who attended were again invited to raise concerns and ask questions regarding the proposed transfer and they were provided with access to the Scope Agreement.

[12] Scope further provided the employees with access to resources explaining the proposed transfer through a URL link to a dedicated page on the Scope website.

[13] Mr Turton states that he is not aware of any concerns relating to the proposed transfer being raised to Scope by the transferring employees.

[14] Furthermore, a substantial number of the transferring employees are members of the HACSU. The HACSU has indicated that its members are supportive of the proposed transfer.

[15] I am satisfied that a majority of the employees who would be affected by the proposed transfer support the application.

Whether any employee will be disadvantaged – s. 318(3)(b)

[16] The Commission must consider whether any of the transferring employees will be disadvantaged by the order in relation to their terms and conditions of employment.

[17] Scope submits that the transferring employees will not be disadvantaged by the proposed orders because they will be provided with substantially similar terms and conditions under the Scope Agreement. Scope has submitted that the employees will work a similar number and pattern of hours; they will be paid a similar amount per hour and per annum; they will be paid the same amount in respect of public holiday, night and evening shift loadings; they will receive the same entitlement to personal leave; and they will receive more beneficial parental leave entitlements (an extra two weeks of paid parental leave for the primary carer and an extra week of paid secondary carer leave).

[18] Scope also intends to enter into formal undertakings with the transferring employees to provide them with certain entitlements they currently enjoy under the Victorian Disability Services Agreement: namely, the entitlement to flexible part-time work; the ability to claim overtime for work performed remotely outside of working hours; the ability to take five single day absences of personal/carer’s leave without medical evidence; and, for eligible transferring employees, an additional two weeks’ annual leave on an ongoing basis.

[19] The absence of any demonstrable disadvantage weighs in favour of granting the proposed orders.

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

[20] If the application under s. 318 relates to an enterprise agreement, the Commission must consider the nominal expiry date of the agreement. The expiry date for both the Scope Agreement and the Victorian Disability Services Agreement is 31 December 2022. I consider the nominal expiry date of the agreements to be a neutral factor.

Negative impact on productivity – s. 318(3)(d)

[21] The Act requires the Commission to consider whether the transferrable instrument would have a negative impact on the productivity of the new employer’s workplace.

[22] Scope submits that there would be a negative impact on the productivity of Scope’s workforce in that it will be burdensome for Scope to administer two separate enterprise agreements. Furthermore, Scope admits that morale of the transferring employees would be adversely impacted if they continue to be covered by the Victorian Disability Services Agreement because they would have lesser entitlements than those employees covered by the Scope Agreement. Scope further submits that if the proposed orders are not made, then it may be difficult for casual employees working under the Victorian Disability Services Agreement to be offered shifts in Scope’s existing business. This factor weighs in favour of granting the proposed orders.

Whether the new employer will incur significant economic disadvantage – s. 318(3)(e)

[23] The Commission is required to consider whether the new employer will incur significant economic disadvantage if the transferable instrument continues to cover the transferring employees. Scope concedes that it would not suffer significant economic disadvantage as a result of the Victorian Disability Services Agreement covering it. However, it submits that some economic disadvantage will result from unnecessary administrative inefficiencies and associated costs in having to simultaneously administer the Victorian Disability Services Agreement and the Scope Agreement. I consider this factor to be a neutral consideration in this case.

The degree of business synergy – s. 318(3)(f)

[24] The Commission is required to consider the degree of business synergy between the transferrable instrument and any workplace instrument that already covers the new employer.

[25] While the terms of the Scope Agreement on balance may be comparable to the Victorian Disability Services Agreement, there are differences that would be problematic if both agreements applied to the same class of employees. To that extent, there is a lack of synergy between the transferable instrument and the existing Scope Agreement which covers Scope and its employees. This weighs in favour of the orders sought.

Public Interest – s. 318(3)(g)

[26] Section 318(3)(g) requires the Commission to consider “the public interest”. I am satisfied that it is not contrary to the public interest to grant the orders sought by Scope. This weighs in favour of the orders sought.

Conclusion

[27] Having considered the application and supporting material and after taking into account each of the requirements in s. 318(3), I am satisfied that the orders sought should be granted.

[28] An order giving effect to my decision is issued separately in PR735925.

COMMISSIONER

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