Victorian Workcover Authority
[2023] FWC 983
•27 APRIL 2023
| [2023] FWC 983 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Victorian Workcover Authority
(AG2023/1161)
| Security services | |
| DEPUTY PRESIDENT BELL | MELBOURNE, 27 APRIL 2023 |
Application for an order relating to instruments covering new employer and transferring employee – application granted.
The Victorian WorkCover Authority (VWA) has made an application to the Fair Work Commission (Commission) for orders under s.318 of the Fair Work Act 2009 (Cth) (Act) in relation to the transferable instrument, the Wilson Security Victoria Agreement 2021 (Wilson Agreement).
In addition to its Form F40 – Application for orders in relation to a transfer of business, VWA has filed a statutory declaration, made on 19 April 2023 by Mr Andrew Keen, its Executive Director, People, Culture and Corporate.
The application relates to the intended employment by VWA of four persons (the transferring employees) who are employed by Wilson Security Pty Ltd (Wilson Security) and whose employment is currently covered by the Wilson Agreement. The transferring employees are identified in the statutory declaration by Mr Keen.
As I will return to below, the application is supported by the transferring employees. Additionally, the United Workers’ Union was consulted, who confirmed it had no objection to the application being granted nor to the application being determined ‘on the papers’.
Background
VWA is Victoria’s workplace health and safety regulator and its workplace injury insurer. The vast majority of VWA’s employees are covered by the Victorian WorkCover Authority Enterprise Agreement 2020-2024 (WorkSafe Agreement).
As part of its operations, VWA has engaged Wilson Security under the terms of a purchase order contract to provide assorted security work. VWA has determined to bring that work “inhouse”. To give effect to that intention, VWA engaged in a recruitment process for the roles of ‘Security and Concierge Officer’ and ‘Senior Security and Concierge Officer’. The work for those proposed roles is the same as, or substantially the same as, the work performed by the transferring employees with Wilson Security.
The employment of the transferring employees with Wilson Security will terminate on 30 April 2023. VWA wishes to employ the transferring employees effective from 1 May 2023 under the terms of the WorkSafe Agreement. The material before me discloses, and I am satisfied, that the overall terms and conditions of the transferring employees will improve if their employment is covered by the WorkSafe Agreement in comparison to the Wilson Agreement.
Consideration
Section 311(1) of the Act provides:
“(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).”
Section 311(5) relevantly provides:
“(5) There is a connection between the old employer and the new employer if:
(a) …
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.”
An employee in relation to whom the requirements in ss.311(1)(a), (b) and (c) are satisfied is a “transferring employee” in relation to the transfer of business: s.311(2). I am satisfied that the requirements of s.311(1)(a) – (c) will be satisfied in relation to the four transferring employees by 1 May 2023, upon their commencement of employment with VWA.
Subsections 311(3) – (6) set out various circumstances where the necessary “connection” referred to in s.311(1)(d) will apply. Relevantly, and I am satisfied, that subsection 311(5)(b) is engaged because VWA (the new employer) has ceased to outsource the work of Wilson Security (the old employer) in the terms described by that subsection.
By s.312 of the Act, an enterprise agreement that has been approved by the Commission is a “transferable instrument”. The Wilson Agreement is therefore a “transferable instrument”.
Section 313 of the Act provides that where there is a “transferring employee” (i.e. an employee for whom the requirements of ss.311(1)(a) – (c) are satisfied) in relation to the “transferring work” (i.e. the “work” for the “new employer”), then the “transferring instrument” (here, the Wilson Agreement) will cover the new employer and the employee.
Division 3 of Part 2-8 sets out various powers of the Commission in relation to a transfer of business. Section 317 provides for the Commission to make certain orders “if there is, or is likely to be, a transfer of business from an old employer to a new employer”. As indicated by my summary above, I am satisfied there is likely to be a transfer of business from Wilson Security to VWA, effective on 1 May 2023.
Section 318(1) provides for one of the orders referred to in s.317. Section 318(1) is as follows:
“(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.”
VWA seeks an order that the Wilson Agreement will not cover VWA or the transferring employees. VWA further seeks an order that the WorkSafe Agreement will cover the transferring employees.
Section 318(3) sets out various matters that the Commission “must” consider before making such orders, if s.318(1) is otherwise satisfied. Section 318(3) is as follows:
“(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.”
No singular factor under s.318(3) is determinative, although in some cases one factor might weigh more heavily than another. Each factor must be taken into account.
I take into account the views of the new employer (which is VWA) and the affected employees, being the transferring employees. They are all supportive and this is a factor in support of the application.
Section 318(3)(b) requires me to take into account whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment. On the material before me, the transferring employees will appear to be significantly better off. I consider this factor to be supportive of the application.
For s.318(3)(c), the nominal expiry date of the Wilson Agreement is 30 June 2025, and the nominal expiry date of the WorkSafe Agreement is 30 November 2024.
In relation to s.318(3)(d), the material in support of the application set out the administrative and payroll challenges that would arise if VWA was required to incorporate the terms and conditions of a new enterprise agreement into its operations, which I accept. Having regard to the fact that the transferable instrument would only apply to four employees, the impact on productivity would not be profound but it would be disproportionate to those employees and I accept there would be some impact. I consider this a factor in favour of the application.
For s.318(3)(e), the material in support of the application identifies various administrative and labour costs and inefficiencies that would arise were the orders sought not granted. I do not consider that VWA would suffer “significant” economic disadvantage in the context of four transferring employees. There might be some economic disadvantage, albeit slight, but I am not prepared to elevate this factor any higher. I consider this a neutral factor.
The WorkSafe Agreement is an enterprise agreement specifically made for VWA’s operations. The Wilson Agreement was not. There does not appear to be any strong business synergy between the Wilson Agreement and WorkSafe Agreement and I consider the factor under s.318(3)(f) to be a factor supportive of the application, although not strongly so.
For s.318(3)(g), there was nothing in the material before me to indicate that the public interest would act against the application being granted. To the contrary, I consider that it is in the public interest for a small cohort of employees, who are seeking to transfer and support the application, being able to do so without the industrial arrangements of the new employer being impacted. I consider this a factor in support of the application.
Having examined and considered the application and supporting documentation, I have taken into account the matters set out in (a) to (g) of subsection 318(3) of the Act and I am satisfied that it is appropriate to make the orders sought under s.318(1)(a)&(b) of the Act. Noting that the employment of the transferring employees will not commence under 1 May 2022, my orders will be expressed to commence on the date that the transferring employees become employed by VWA.
An Order[1] to this effect will be issued along with this decision.
DEPUTY PRESIDENT
[1] PR761384.
Printed by authority of the Commonwealth Government Printer
<AE518430 PR761383>
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