Uniting (NSW.ACT) T/A Uniting
[2022] FWC 3207
•7 DECEMBER 2022
| [2022] FWC 3207 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Uniting (NSW.ACT) T/A Uniting
(AG2022/4971)
| Aged care industry | |
| DEPUTY PRESIDENT DEAN | CANBERRA, 7 DECEMBER 2022 |
Application for an order relating to instruments covering new employer and transferring employees.
Uniting (NSW.ACT) T/A Uniting (Applicant) has made an application under s.318 of the Fair Work Act 2009 for an order relating to instruments covering a new employer and transferring employees. The application arises from the Applicant’s purchase of an entity known as Autumn Lodge which provides aged care services at two sites in Armidale, New South Wales.
The Applicant submits that the 161 employees employed at the sites would be offered employment with the Applicant on or about 1 December 2022 when it became the aged care provider of the two facilities. The transferring employees of Autumn Lodge are covered by the Autumn Lodge, NSWNMA and HSU NSW Enterprise Agreement 2017-2020 (Autumn Lodge Agreement).
The Applicant accepts that the sale of the Autumn Lodge sites to the Applicant constitutes a transfer of business within the meaning of s.311(1) of the Act and by virtue of s.313, the Autumn Lodge Agreement is a ‘transferable instrument’ which would cover the employees transferred from Autumn Lodge.
The Applicant seeks an order to the effect that the Autumn Lodge Agreement will not cover the transferring employees of Autumn Lodge and that the transferring employees will instead be covered by the Uniting Aged Care Enterprise Agreement (NSW) 2017 (Uniting Agreement).
Section 318 of the Act sets out the circumstances in which the order sought by the Applicant may be made. It 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.”
The application contains detailed grounds and submissions and is accompanied by a statutory declaration from Ms Allison Claxton, Employment and Industrial Relations Lead of the Applicant. Ms Claxton outlined the background to the application and addressed each of the matters in s.318(3) to which the Commission has to take into account in determining whether to make the order sought.
In summary, Ms Claxton stated that if the order sought is not granted, the Applicant considers the cost of establishing and maintaining an additional enterprise agreement in the administration systems for the Autumn Lodge sites would impact substantially on the sustainability of those sites and its ability to continue to operate the sites on an ongoing basis.
Ms Claxton said that the Applicant conducted a number of consultation meetings with employees at the Autumn Lodge sites which were also attended by union representatives. Both the employees and the unions were provided with detailed information in relation to transferring employment to the Applicant and were invited to make contact if they had any questions about the proposed transition to the Uniting Agreement.
In terms of whether employees would be disadvantaged if the order is made, Ms Claxton said that employees would be placed on the nearest equivalent classification under the Uniting Agreement with a pay rate either equal to or higher than their pay rate pursuant to the Autumn Lodge Agreement. She stated that according to an analysis conducted by a chartered accounting firm which the Applicant engaged, a majority of employees will be paid significantly higher rates under the Uniting Agreement and the conditions of the Uniting Agreement are far more favourable. She highlighted that a small number of employees who are paid above the Uniting Agreement would have their rates grandfathered if transitioned to the new instrument and would not be disadvantaged as a result.
Both instruments have the same nominal expiry date of 30 June 2020. Ms Claxton stated that bargaining discussions for a new enterprise agreement have been delayed due to COVID and the Applicant anticipates the negotiations will recommence in early 2023.
If the Autumn Lodge Agreement continues to apply to the transferring employees, Ms Claxton said that it would unnecessarily complicate the employment arrangements of the Applicant including but not limited to rostering, human resources and payroll. This would mean that the transferring employees would receive lower rates of pay than the employees of the Applicant when performing the same job, thus resulting in disharmony in the workplace. Employees at one site having different entitlements also makes it difficult for managers to manage employees’ wellbeing consistently and effectively. For these reasons, Ms Claxton said that it would negatively impact the productivity and morale of the Applicant’s workplace. In addition, the costs of administering and ensuring compliance with the Autumn Lodge Enterprise Agreement would result in a significant economic disadvantage to the Applicant.
Ms Claxton highlighted a lack of synergy between the instruments as the Autumn Lodge Agreement contains lower rates of pay for staff in comparison to the Uniting Agreement which she said would impair the ability of the Applicant to attract and retain care and nursing staff.
Ms Claxton said that it is in the public interest that the Autumn Lodge Agreement ceases to apply to the transferring employees. She said that the additional costs of administering the instrument would have the potential to negatively impact the ongoing viability of the Autumn Lodge sites. This may result in their closure which has the potential to significantly impact members of the local communities using or seeking to use the Applicant’s services.
The Australian Nursing and Midwifery Federation (NSW Branch) and the Health Services Union, being the employee organisations covered by the Autumn Lodge Agreement, have both indicated that they do not oppose the application.
Having considered the material provided and taking into account all of the matters in s.318(3) of the Act, I am satisfied that an order in the terms sought should be made.
An order will be issued with this decision.
DEPUTY PRESIDENT
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