Uniting Church Homes T/A Juniper

[2015] FWC 8582

[2015] FWC 8582

FAIR WORK COMMISSION

DECISION

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

Uniting Church Homes T/A Juniper
(AG2015/6714)

COMMISSIONER CRIBB MELBOURNE, 15 DECEMBER 2015

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

[1] Uniting Church Homes trading as Juniper (the Applicant, Juniper, new employer) has made an application under section 318(1)(a) of the Fair Work Act2009 (the Act). Juniper is seeking an order that the D & R Community Services Pty Ltd Agreement 2009 Employee Collective Workplace Agreement 1 (the D & R Agreement) (the transferable instrument) does not cover Juniper, being the new employer, or the transferring employees (from 1 November 2015) who will perform, or are likely to perform, the transferring work for Juniper.

Further, pursuant to section 318(1)(b) of the Act, Juniper is also seeking that the appropriate Juniper enterprise agreement will cover the transferring and new employees. Depending on the classification of these employees, either the Juniper Enterprise Agreement 2014 2; the Juniper Registered Nurses Enterprise Agreement 20153, the Juniper Administration and Allied Health Enterprise Agreement 20154; or the Juniper Community Support Workers Enterprise Agreement 20155 will cover the transferring and new employees.

[2] With effect from 1 November 2015, Juniper will assume responsibility for the facilities operated by D & R Community Services Pty Ltd at Guwardi Ngadu which is located at Fitzroy Crossing, Western Australia. As a consequence, 14 employees will transfer from D & R Community Services (the old employer) to Juniper (the new employer). The transferring employees are employed in management or nursing or are aged care workers.

[3] Most of the transferring employees are covered by the D & R Agreement, the nominal expiry date of which is 2012. The transferring employees will perform work for the new employer (Juniper) which is the same or substantially the same as the work performed for D & R Community Services (the old employer).

1. The legislation

[4] Section 318 of the Act provides:

“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.”

[5] In relation to section 318(2), the application has been made by the new employer (Juniper) 6

Section 318(3)

[6] With respect to the factors set out in section 318(3), which the Fair Work Commission (the Commission) must take into account, I will deal with each of these in turn.

Section 318(3)(a)(i) – the views of the new employer

[7] It was submitted by Juniper that it is imperative that Juniper assume responsibility for the transferring employees and the aged care residents from 1 November 2015 to ensure that the facility continues to operate. Juniper stated that the new employer has a strong commitment to its employees, their pay and conditions and that it takes the opportunity, through enterprise bargaining, to ensure that wherever possible all employees share the same, or substantially similar, terms and conditions of employment. It was indicated that the Juniper Enterprise Agreement has only been recently negotiated with the result that the transferring employees will enjoy some of the highest rates of pay in the aged care sector. Juniper also explained that maintaining separate enterprise agreements is not practical and will ultimately hinder the operation of the business.

Section 318(3)(a)(ii) – the views of the employees

[8] Juniper submitted that the transferring employees support the order sought and that they consent to the Juniper enterprise agreements applying to their employment. Between 30 October 2015 and 3 November 2015, the Manager Employee Services attended Guwardi Ngadu and conducted team briefs and met individually with the transferring employees. The transferring employees were informed of the differences between the pay conditions of the D & R Agreement and the Juniper enterprise agreements and the proposed transitional arrangements. A ballot was held to ascertain whether or not the transferring employees were in favour of being covered a Juniper enterprise agreement. It was stated that all employees completed the ballot paper and all voted in favour of being covered by a Juniper enterprise agreement.

[9] In addition, it was submitted that Juniper has consulted with representatives of United Voice and the Australian Nursing & Midwifery Federation (ANMF) in relation to the transfer of business. The unions were provided with copies of the supporting documents to this application. United Voice and the ANMF have provided letters of support for the application. It is noted that both unions were bargaining representatives for the Juniper Enterprise Agreement 2014.

Section 318(3)(b) – would any employees be disadvantaged

[10] Juniper contended that, when the terms and conditions of the D & R Agreement and the Juniper enterprise agreements are compared, the benefits provided by the Juniper enterprise agreements ensure that the transferring employees’ take home pay will not be reduced. This was on the basis of, amongst other things, the increased base rates of pay and access to salary packaging. It was stated that, whilst there may be some variation in terms and conditions of employment, on a direct comparison, the transferring employees will not be disadvantaged by the orders sought. It is noted that the transitional arrangements included a commitment that no employee would be financially disadvantaged by the transition of the business.

Section 318(3)(c) - nominal expiry date of the agreement

[11] It was stated that the nominal expiry date of the D & R Agreement was 2012. By way of comparison, it was explained that all of the Juniper enterprise agreements had been recently negotiated and will operate through to 2017/18.

Section 318(3)(d) - negative impact on the productivity of Juniper’s workplace

[12] In its submissions, Juniper expressed the view that productivity would be negatively impacted by inconsistency in terms and conditions of employment and could result in disharmony in the workplace and a loss of productivity. It was stated that integrating the transferring employees’ pay and leave arrangements was critical to the overall efficiency and effectiveness of Juniper’s HR administration.

Section 318 (3)(e) - significant economic disadvantage to the new employer?

[13] Juniper submitted that, whilst there would be a financial benefit to the company if it adopted the D & R Agreement, it would suffer operational and administrative inefficiencies from having to administer the D & R Agreement in parallel with the Juniper enterprise agreements. This was said to result in economic disadvantage on the basis of increased administrative cost as well as increased human resources costs in administering/applying the D & R Agreement’s terms and conditions.

[14] In addition, it was contended that it was important to have consistent terms and conditions across Juniper’s network of aged care facilities, particularly where managers and clinical staff are required to provide relief at new facilities. It was stated that Juniper has currently about 1,566 employees whereas the number of transferring employees is 15. As well, the development and maintenance of two sets of policy manuals (both hard and soft copies), staff handbooks and associated documents to reflect the different Agreements’ terms and conditions would be a complicated and costly exercise.

Section 318(3)(f) - the degree of business synergy between the agreements

[15] Due to the nature of the aged care industry and the modern awards which apply, it was indicated that there is a degree of business synergy between the D & R Agreement and the Juniper enterprise agreements. Notwithstanding this, it was argued that the maintenance of separate pay, terms and conditions for an employee group that represents less than 1% of employees, will result in financial and operational disadvantage and potentially create issues and disharmony amongst Juniper’s employees.

[16] Juniper stated that, despite the differences in the enterprise agreements, there is synergy in the business and the employees will benefit by transferring to an employer that is the largest not-for-profit age care provider in Western Australia. The transferring employees were also said to have the opportunity to advance and work at other Juniper aged care facilities.

Section 318 (3)(g) – the public interest

[17] It was submitted by Juniper that this was probably the most critical matter in relation to the application. This was said to be on the basis that the current employer will cease to provide aged care services at Fitzroy Crossing from 31 October 2015. It was therefore essential that another aged care provider assumes responsibility for the employees and the residents.

2. Conclusions

[18] On the basis of the material before me, I have considered all of the factors specified in section 318(3) and the similar considerations in section 319(3) of the Act. I am satisfied that it is appropriate to make the orders sought under section 318(1)(a) and (b) of the Act.

[19] In accordance with section 318(4) of the Act, the order 7 shall have effect from the time when the transferring employee becomes employed by the new employer or the date of the order, whichever is the later.

 1   AC324071

 2   AE407174

 3   AE415547

 4   AE415677

 5   AE413684

 6 Section 318(2)(a), Fair Work Act 2009.

 7   PR574980

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