State of Victoria through the Secretary to the Department of Justice and Community Safety
[2025] FWC 594
•27 FEBRUARY 2025
| [2025] FWC 594 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to transferable instruments
State of Victoria through the Secretary to the Department of Justice and Community Safety
(AG2025/324)
| DEPUTY PRESIDENT COLMAN | MELBOURNE, 27 FEBRUARY 2025 |
Application for orders under s 318 relating to transferable instruments – orders made
The State of Victoria, through the Secretary to the Department of Justice and Community Safety (applicant), has lodged an application under s 318 of the Fair Work Act 2009 (Act) seeking orders in relation to transferrable instruments. First, it seeks an order under s 318(1)(a) that the G4S Custodial Services Pty Ltd (Port Phillip Prison) Correctional Services Workplace Agreement 2021 (G4S Agreement) will not cover the applicant or any of its employees who were previously employed by G4S Custodial Services Pty Ltd (G4S) at the Port Phillip Prison or St Augustine’s Ward at St Vincent’s Hospital, and who are ‘transferring employees’ within the meaning of s 311(2). Secondly, it seeks an order under s 318(1)(b) that the Victorian Public Service Enterprise Agreement 2024 (VPS Agreement) will cover the transferring employees in their employment with the applicant.
The applicant currently engages the services of G4S to operate Port Phillip Prison, pursuant to what is known as the Amended and Restated Prison Services Agreement (ARPSA). G4S also provides services to the applicant in connection with prisoners who require medical treatment and who are transferred to St Augustine’s Ward. The applicant has issued G4S with a notice terminating the ARPSA with effect from 31 December 2025. The applicant then intends to close Port Phillip Prison. The employees of G4S who currently work at Port Phillip Prison and St Augustine’s Ward are covered by the G4S Agreement, which reached its nominal expiry date on 31 December 2023. The applicant intends to offer employment to some 225 G4S employees who work at Port Phillip Prison and St Augustine’s Ward, and to deploy them to work at prisons operated by the Department of Justice and Community Safety. The applicant expects to commence making offers of employment to employees of G4S in April 2025, and to continue making such offers until September 2025. The employment of each of these employees with the applicant will commence shortly after their employment with G4S ends.
The applicant contends that the arrangements described above will give rise to a transfer of business within the meaning of s 311 of the Act, and that, as a new employer or person likely to be a new employer, it has standing to make the present application. I agree. I accept the information in the application and the evidence in the witness statement of Melissa Westin. It is credible and uncontradicted. For the reasons given below, I consider that in April 2025, when the first employees of G4S are expected to become employees of the applicant, there will be a transfer of business from G4S to the applicant. In the absence of an order of the Commission under s 318 of the Act, the G4S Agreement will cover the transferring employees while they are performing transferring work for the applicant. The application seeks orders under s 318 that the G4S Agreement will not cover those employees, and that instead the VPS Agreement will cover them.
Framework
Section 318(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 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.”
The power to make orders under s 318 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 G4S to the applicant. First, the employment of employees of G4S 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, including the witness statement of Ms Westin, 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 G4S (s 311(1)(c)). Finally, there is a connection between G4S and the applicant as described in s 311(3) (transfer of assets) and s 311(5) (‘cessation of outsourcing’).
As to the connection referred to in s 311(3), pursuant to an arrangement between the applicant and G4S, the applicant will own or have the beneficial use of various assets used by G4S to provide services to the applicant, including records and various accoutrements utilised in the running and management of Port Phillip Prison. These assets relate to and will be used in connection with the transferring work. As to the connection referred to in s 311(5), there will in my view also be a connection between the old and new employers of the kind contemplated by s 311(5), because the transferring work was previously outsourced to the old employer by the applicant, and the transferring employees will now perform the transferring work for the new employer because the applicant has ceased to outsource that work.
In deciding whether to make an order under s 318(1), the Commission must take into account the matters in s 318(3).
The views of the new employer and employees - s 318(3)(a)
The view of the applicant, which will be the new employer of the transferring employees, is that the application should be granted. It said that the proposed orders would avoid operational problems that would arise by having to apply different terms and conditions of employment to employees employed in the same positions, including in respect of rostering patterns, hours of work and leave entitlements. The applicant submitted that the order would also facilitate effective human resources management and enable transferring employees to be fully integrated into its employee relations management systems. The order would avoid the applicant having to expend resources on maintaining separate employment frameworks for different workers in the same positions and would avoid confusion that might arise among workers. On the other hand, uniform conditions, which the proposed orders would facilitate, would foster better working relationships among staff. The applicant stated that the making of an order would also facilitate the employment of a larger cohort of G4S employees than would be the case if the order was not made. Further, the order would mean transferring employees would be entitled to various more beneficial terms that are provided to employees under the VPS Agreement, including guaranteed wage increases of 3% and a broader range of allowances. By contrast, negotiations for a replacement to the G4S Agreement commenced in late 2023 and have not been successfully concluded. There had been 3 unsuccessful votes on proposed new agreements, most recently on 16 January 2025.
The views of the new employer weigh in favour of the proposed order. The views of transferring employees are not known and are a neutral consideration.
The Community and Public Sector Union (CPSU) is eligible to represent the industrial interests of transferring employees. At a telephone mention on 25 February 2025, the CPSU advised the Commission that it supports the application.
Whether any employees would be disadvantaged by the order - s 318(3)(b)
The applicant submitted that it was unlikely that transferring employees would be disadvantaged by the proposed order because the VPS Agreement provides for various benefits that are more generous than those in the G4S Agreement. In her witness statement, Ms Westin explained the applicant’s comparison of the VPS Agreement and the G4S Agreement, and noted that, while some benefits provided under the G4S Agreement were more beneficial to employees than those provided under the VPS Agreement, there was a wide range of provisions in the VPS Agreement that were more beneficial than the G4S Agreement, including guaranteed wage increases and more numerous allowances. I do not recite these matters but record that in my view Ms Westin is correct in her assessment of them. The detailed tables set out in attachments MW2 and MW3 to Ms Westin’s statement summarise the benefits provided to employees under these instruments. I agree with the applicant’s overall assessment that it is unlikely that a former employee of G4S would be disadvantaged by the proposed orders. But to guard against that possibility, the applicant has provided an undertaking to the Commission, a copy of which is attached to this decision. The effect of the undertaking is that transferring employees will be paid a higher wage in their employment with the applicant than they would have been paid in their employment with G4S, based on their current rosters. I accept that the applicant will honour the undertaking, and that as a result, transferring employees will not be disadvantaged by an order under s 318 in relation to their terms and conditions of employment. This weighs in favour of granting the application.
The nominal expiry dates of relevant agreements - s 318(3)(c)
The G4S Agreement passed its nominal expiry date on 31 December 2023. The VPS Agreement has a nominal expiry date of 9 April 2028. As noted above, bargaining for a new agreement to replace the G4S Agreement has so far not resulted in a new agreement, whereas the VPS Agreement has 3 years of nominal life and provides for wage increases in each year of the agreement. In my view the nominal expiry dates of the agreements weigh in favour of the application.
Whether negative impact on productivity – s 318(3)(d)
Section 318(3)(d) requires 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. It submitted that applying the G4S Agreement to transferring employees, in addition to applying the VPS Agreement to existing employees and new employees who are not transferring employees, would have a negative impact on productivity. This was said to be so because a critical safety consideration was to maintain positive and collaborative working relationships between staff members; yet applying different terms and conditions to different cohorts of employees working side by side in the same position would be likely to undermine these relationships. Productivity, strictly speaking, is the effectiveness of productive effort, measured by reference to the ratio of inputs to outputs. Nevertheless, I accept that the transferable instrument could have some negative impact on productivity, and that safety considerations could play a role. This weighs in favour of granting the application.
Whether significant economic disadvantage - s 318(3)(e)
Section 318(3)(e) requires 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 submitted that significant time and costs would be incurred if it was required to administer the terms of the G4S Agreement to the transferring employees, which would require staff members to be trained to ensure they understand the differences in the entitlements and working arrangements under the G4S Agreement, the establishment of a separate payroll and time and attendance system for transferring employees, and the preparation of separate policies and procedures for the transferring employees. I accept this. But it does not rise to the level of ‘significant economic disadvantage’. This is a neutral factor.
Whether there is business synergy between instruments - s 318(3)(f)
The applicant submitted that there was a lack of business synergy between the G4S Agreement and the VPS Agreement, particularly in relation to rostering arrangements, which will cause significant operational and administrative problems for the applicant. I accept this submission. This weighs in favour of granting the application.
The public interest - s 318(3)(g)
Section 318(3)(g) requires 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
Taking into account the matters in s 318(3), I have decided that it is appropriate to grant the application. I will make an order under s 318(1)(a) that the G4S Agreement will not cover the applicant or any of the transferring employees. The VPS Agreement will, in the absence of the application of the G4S Agreement, apply to transferring employees on its terms. But for the avoidance of doubt, I will also make an order under s 318(1)(b) that the VPS Agreement will cover transferring employees.
The orders will be issued separately in PR784811.
DEPUTY PRESIDENT
Application determined on the papers
Printed by authority of the Commonwealth Government Printer
<PR784807>
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