The Frank Whiddon Masonic Homes of New South Wales t/as The Whiddon Group

[2013] FWC 1279

[2013] FWC 1279

FAIR WORK COMMISSION

DECISION

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

The Frank Whiddon Masonic Homes of New South Wales t/as The Whiddon Group
(AG2013/376)

DEPUTY PRESIDENT SAMS SYDNEY, 4 MARCH 2013

Application in relation to transfer of business - transferrable instrument - application that the transferrable instrument not cover transferring employees - orders granted.

The application

[1] This decision will confirm the orders I made in this matter on 27 February 2013. What follows are my reasons for doing so.

[2] This is an application filed by the Frank Whiddon Masonic Homes of New South Wales [ACN 082 385 091] t/as The Whiddon Group (the ‘applicant’), pursuant to s 318 of the Fair Work Act 2009 (the ‘Act’). The applicant seeks orders from the Fair Work Commission (the ‘Commission’) that the Domain Principal Group Enterprise Agreement 2010 (the ‘DPG Agreement’) will not cover the applicant or any transferring employee who commences employment with the applicant at the Jessie Hunt Nursing Home (the ‘Nursing Home’) in Narrabri, New South Wales.

[3] The applicant seeks consequential orders that the transferring employees are henceforth to be covered by the Whiddon Group Collective Agreement 2009-2013 (the ‘Whiddon Agreement’). These orders are sought in the context of an arrangement between the applicant and DPG Services Pty Ltd (‘DPG’), under which DPG will transfer the operation, management and approved provider status of the Nursing Home to the applicant, effective from 1 March 2013. Both the Whiddon Agreement and the DPG Agreement are currently within their nominal terms. Having regard for ss 318(1) and (2) of the Act, I am satisfied the application is competently before the Commission.

The applicable legislation

[4] The following provisions of the Act are relevant to my determination of this application:

317 FWC may make orders in relation to a transfer of business

This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.

318 Orders relating to instruments covering new employer and 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 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.

The transfer

[5] The application was accompanied by an affidavit of Mr C Marmarelis, Chief Financial Officer of the applicant. Mr Marmarelis deposed that the applicant had entered into an agreement with DPG Services Pty Ltd on 23 January 2013 to become the approved provider and operator of the Nursing Home by no later than 30 April 2013 (the ‘Business Sale Agreement’). It is a condition precedent of the Business Sale Agreement that the Commonwealth approve the transfer of the 60 residential aged care places allocated to DPG. This approval was received on 14 February 2013. It is also a term of the Business Sale Agreement that any DPG employee, offered employment by the applicant, be offered terms and conditions of employment that are, overall, no less favourable than those offered by DPG.

[6] In this respect, the applicant attached a comprehensive comparative document outlining the differences between the DPG Agreement and the Whiddon Agreement. This information had been supplied to the transferring employees. In reviewing this document, I am satisfied that the transferring employees will be better off overall under the Whiddon Agreement.

Views of the employees

[7] The applicant also relied on an affidavit of Ms K White, People and Culture Manager of the applicant, to which was annexed a number of forms marked ‘Consent to Transfer Enterprise Agreement Coverage’ (the ‘consent forms’). Ms White had ensured that each of the affected employees attended one of three information sessions or she met them individually if they could not attend one of these sessions. The consent forms were individually filled out by all 35 transferring employees. Specifically, the form asked each employee to confirm that they had received a copy of the Whiddon Agreement and the Form F40 lodged with the Commission. It asked the employees to confirm that they understood that, should this application be successful and they were offered employment with the applicant, the Whiddon Agreement would apply to their employment from 1 March 2013. Further, the employees were asked to confirm that they had had the opportunity to ask questions and seek advice as to how the application would affect them. All 35 employees agreed to these propositions.

[8] The employees were also asked if they had any concerns with the transfer. A total of five employees raised concerns: two related to sponsored visas; one related to ‘continued employment’; another related to a concern about being moved around between the applicant’s nursing homes; and one related to training arrangements. In answering these concerns, I note that firstly, the applicant is pursuing enquiries with the Department of Immigration and Citizenship as a matter of urgency to ensure that ‘continued employment’ is the outcome of this application being approved by the Commission. Secondly, there was an assurance given that employees will not be ‘moved around’ the applicant’s nursing homes and thirdly, there was agreement to support the concerned employee’s training arrangements.

[9] Ms White also deposed that she had consulted with representatives from the New South Wales Nurses and Midwives’ Association (NSWNMA) and the Health Services Union (HSU). Neither Union had expressed any objection in relation to the application. I am satisfied that the applicant has sufficiently dealt with the concerns of the employees and has widely consulted with them.

The hearing

[10] At a hearing of the application on 27 February 2013, Ms H Winklemann, Solicitor, appeared with Mr Mamarelis and Ms White for the applicant. Mr B Mason appeared for the NSWNMA. The HSU did not appear. Ms Winklemann outlined the history of the application and explained that seven employees of DPG Services Pty Ltd will not be transferring employment: two employees have elected to resign prior to the transfer of business, one person was employed on a temporary contract and four employees were not selected for employment by the applicant and would be offered redundancy. Ms Winklemann tendered draft orders for the Commission’s consideration (Exhibit 4).

[11] Mr Mason agreed that the transferring employees would be better off under the Whiddon Agreement. He noted that the Union’s organiser for the Nursing Home had had some concerns, specifically in relation to two employees whose nominal rate under the Whiddon Agreement would be lower than that under the DPG Agreement and one employee had concerns over her regular span of hours. Mr Mason said that the applicant had agreed to maintain the rate of pay of the two employees and that he was confident that the issue in relation to span of hours could be resolved. While the Union had concerns about a process which required employees to resign and reapply for their positions, on balance the NSWNMA supported the application and the proposed draft orders.

Conclusion

[12] Having considered the comprehensive and well presented material filed by the applicant and the submissions of Ms Winklemann and Mr Mason, I have no hesitation in confirming the orders in the form sought by Ms Winklemann in Exhibit 4. In doing so, I have taken all of the matters in s 318(3) of the Act into account; in particular, the views of the employees and their Union and the fact that the employees will be better off under the transfer arrangement. The orders shall be effective from 27 February 2013 and are issued separately to this decision.

DEPUTY PRESIDENT

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