Wangaratta Rural City Council T/A Rural City of Wangaratta
[2020] FWC 6919
•21 DECEMBER 2020
| [2020] FWC 6919 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Wangaratta Rural City Council T/A Rural City of Wangaratta
(AG2020/3297)
Amusement, events and recreation industry | |
DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 21 DECEMBER 2020 |
Application for orders relating to transferrable instrument.
[1] Wangaratta Rural City Council (Council) has made an application to the Commission for orders pursuant to s 318(1) of the Fair Work Act 2009 (Cth) (Act).
[2] The application seeks that the Commission makes an order that the YMCA Staff Agreement 2015 – Victorian YMCA Community Programming Pty Ltd (YMCA Agreement) does not, or will not cover Council and any Victorian YMCA Community Programming Pty Ltd (YMCA) employee who becomes a transferring employee employed by Council to perform work at the Wangaratta Indoor Sports and Aquatic Centre (Centre). 1
[3] Further, Council seeks an order that the Wangaratta Sports and Aquatic Precinct Enterprise Agreement 2020 (Wangaratta Sports Agreement) covers, or will cover, any transferring YMCA employees who perform work at the Centre. 2
[4] For the reasons that follow, Council’s application is granted. An order giving effect to this decision is issued separately in PR725717.
The application
[5] The application is made by Council in its capacity as the new employer or prospective new employer. 3 It is supported by an affidavit of the Manager – People and Governance, Ms Robin Gardner dated 30 October 20204 and an affidavit of service of Ms Gardner dated 17 November 2020.5
[6] Ms Gardner states that from 1 November 2020, Council commenced operating the Centre following an insourcing from YMCA. 6 As a consequence, Ms Gardner anticipates that some of the 82 YMCA employees who perform work at the Centre will become employed by Council.In such a case, Council says that there will be a connection between YMCA and Council within the meaning of s 311(5) of the Act.7
[7] The effect of the orders sought is that the YMCA Agreement would not apply to any of the employees of YMCA who are offered and accept employment with Council. Rather, the Wangaratta Sports Agreement would cover the transferring employees in their employment with Council.
[8] The Australian Municipal, Administrative, Clerical and Services Union (ASU) being an organisation covered by the YMCA Agreement, supports the application. 8
Statutory framework
[9] Section 318(1) of the Act provides that the Commission may, on application by a person or organisation identified in s 318(2), 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.
[10] The Commission has the power to make orders under s 318 if there is or is likely to be a transfer of business within the meaning of s 311 of the Act. 9 The discretion to make the orders sought by Council pursuant to s 318(1) of the Act will only be exercised after taking into account the matters set out in s 318(3) of the Act.
Consideration
[11] It is not in dispute, and I am satisfied that the Commission has the power to make an order pursuant to s 318(1) of the Act. In the circumstances set out above, there is, or is likely to be a transfer of business from YMCA to Council as a consequence of an insourcing within the meaning of s 311(5) of the Act.
[12] Consequently, unless the orders sought by Council are made, the transferring employees will be covered by the YMCA Agreement, being a transferable instrument within the meaning of s 312(1)(a) of the Act. However, other employees employed by Council at the Centre will be covered by the Wangaratta Sports Agreement.
[13] I turn now to consider the matters set out in s 318(3) of the Act.
The views of the new employer - s 318(3)(a)(i)
[14] Council is the new (or prospective new) employer and it wishes to offer employment to the prospective transferring employees. It supports the making of the orders sought. In summary, it says that:
(a) it is generally desirable that all of Council’s employees that are employed to perform work at the Centre receive the same terms and conditions of employment for the same or similar work;
(b) there are administrative burdens associated with the implementation and management of the YMCA Agreement and the Wangaratta Sports Agreement concurrently, and this would create complexity in communicating with employees regarding their entitlements;
(c) the last increase to wages under the YMCA Agreement was in July 2017. The Wangaratta Sports Agreement has a nominal expiry date of 2 September 2024 whereas the YMCA Agreement passed its nominal expiry date on 30 June 2018;
(d) the Wangaratta Sports Agreement covers all Council employees that perform work at the Centre, and also covers the ASU;
(e) the terms and conditions of employment in the Wangaratta Sports Agreement are either commensurate with or more beneficial than those in the YMCA Agreement, including in respect of rates of pay; and
(f) the Wangaratta Sports Agreement was bargained for in the context of a local government setting.
[15] Council’s views weigh in favour of granting the orders sought.
The views of the affected employees – s 318(3)(a)(ii)
[16] The Commission must take into account the views of any employee who would be affected by the orders sought.
[17] On 19 October 2020, Council sent correspondence to the prospective transferring employees, being the 82 YMCA employees who perform work at the Centre. The correspondence advised that Council would be making this application to the Commission, explained the orders that would be sought by the application, and provided a table which compared key terms of employment between the YMCA Agreement and the Wangaratta Sports Agreement. The views of the prospective transferring employees were sought in response to the correspondence by way of an online survey. A total of 11 survey responses were received, each of which voted in favour of the orders being made.
[18] The Commission sought the views of the prospective transferring employees in response to the application before it, in writing, by 27 November 2020. The Commission did not receive any submissions.
[19] Having regard to the material, I am satisfied that the employees who would be affected by the orders have had an opportunity to respond to the application. I am satisfied that the views provided, although limited to 11 prospective transferring employees, weigh in favour of granting the orders sought. I note that no views have been provided which would weigh against the application.
Whether any employee will be disadvantaged – s 318(3)(b)
[20] By s 318(3)(b), the Commission must consider whether any prospective transferring employee would be disadvantaged by the order in relation to their terms and conditions of employment.
[21] Council submits that the terms of the Wangaratta Sports Agreement are, overall, more advantageous than the terms of the YMCA Agreement. A table summarising the key differences has been filed with the application. 10 Amongst other matters, the Wangaratta Sports Agreement provides minimum hourly rates of pay for full time and part time employees that range from $21.48 to $40.00,11 whereas the YMCA Agreement provides hourly rates of $18.04 to $32.59 for the same or similar work.12 The Wangaratta Sports Agreement offers the possibility of progression to pay points within classifications upon the achievement of specified employee competencies.13 In contrast, the YMCA Agreement provides a single fixed rate for each classification.14
[22] Further, the Wangaratta Sports Agreement provides employees with additional days of personal leave each year of employment, 15 compassionate leave per occasion,16 and paid parental leave for primary and secondary carer’s,17 in addition to pre-natal leave.18 It also provides enhanced redundancy entitlements,19 reimbursement of childcare expenses for employees that are required to work, and attend training or meetings outside of the employee’s normal working hours,20 and payment of an on call allowance.21
[23] Having regard to the above, I do not consider that a prospective transferring employee will be disadvantaged if the orders sought by Council are made. This weighs in favour of granting the orders sought.
The nominal expiry date of the agreement – s 318(3)(c)
[24] The YMCA Agreement passed its nominal expiry date on 30 June 2018. 22 The last pay increase for employees covered by the YMCA Agreement was on 1 July 2017.23 The Wangaratta Sports Agreement has a nominal expiry date of 2 September 2024.24 I regard this matter for the purposes of determining the application as weighing in favour of the orders being made.
Whether the agreement would have a negative impact on workplace productivity – s 318(3)(d)
[25] Section 318(3)(d) of the Act requires consideration as to whether the YMCA Agreement would have a negative impact on the productivity of Council’s workplace. In the absence of the orders sought, Council says that it would be required to administer two enterprise agreement in respect of employees performing work at the Centre. Council submits that its payroll team would need to undertake individual assessments of the entitlements of those employees covered by the YMCA Agreement on each occasion that a discrepancy exists between the two instruments. Council contends that this will add a considerable time burden to the payroll team’s workload.
[26] Further, Council submits that its human resources team would need to familiarise itself with the terms of the YMCA Agreement so that it is in a position to provide advice regarding its terms to transferring employees who become employed by Council. This would necessitate the generation of two different types of offer letter and different correspondence regarding employment entitlements for employees working at the Centre. Council says that these obligations will increase the time taken by human resources to respond to queries and provide important information to staff.
[27] Council submits that these administrative costs are better directed towards improving the services provided by Council, particularly noting Council’s status as a local government body which is accountable to its constituents with respect to budget and service standard matters.
[28] I accept Council’s submissions in respect of these matters and consider that they weigh in favour of granting the orders sought.
Whether the new employer will incur significant economic disadvantage – s 318(3)(e)
[29] As earlier stated, Council contends that many of the key entitlements under the Wangaratta Sports Agreement are more generous than under the YMCA Agreement. This includes the ordinary rates of pay for permanent employees. Council says that it will incur greater employment related costs if the orders sought are granted and it employs transferring employees.
[30] Notwithstanding this, Council considers that it would experience greater economic disadvantage if the orders sought are not made by the Commission, having regard to the matters set out at [25] to [27]. Council says that its primary concern is not to minimise its financial obligations but rather to ensure workplace harmony and avoid decreases to Council’s productivity.
[31] Council’s contentions relate to economic disadvantage that would arise if the orders are not granted. It is not said that there would be a significant economic disadvantage as a result of the YMCA Agreement covering it. Accordingly, I consider this factor to be a neutral consideration.
The degree of business synergy etc. – s 318(3)(f)
[32] This factor requires consideration of the degree of business synergy between the YMCA Agreement and the Wangaratta Sports Agreement. Council contends that there is little business synergy between the two instruments, notwithstanding that they were each drafted to apply in a leisure services environment.
[33] It is said that the YMCA Agreement has been tailored to the needs of the YMCA and contains clauses specific to it which Council cannot implement, such as (1) employee access to YMCA operated programs and facilities free of charge, and (2) an entitlement to long service leave pursuant to state legislation and not the Local Government (Long Service Leave) Regulations 2012 (Vic) which applies to Council. I am satisfied that these matters disclose that there is little business synergy between the two instruments and that this consideration weighs in favour of the orders sought being made.
Public interest – s 318(3)(g)
[34] Section 318(3)(g) requires the Commission to consider the public interest. Council says that it is in the public interest to bring the coverage of the YMCA Agreement to an end in respect of transferring employees, noting that:
(a) the YMCA Agreement has passed its nominal expiry date;
(b) Council says that the transferring employees’ terms and conditions of employment should not go unimproved for more than five years when a more advantageous alternative agreement is now available to them; and
(c) if the orders sought are made, it will enable Council to operate the Centre efficiently without unnecessary and costly implications in its employment arrangements.
[35] Having regard to all the material before me, I do not consider there to be any public interest reasons that weigh against making the orders sought.
Conclusion and disposition
[36] Having regard to the above matters and the conclusions reached, I am satisfied that the orders sought by Council should be made.
[37] I will order, pursuant to s 318(1)(a) of the Act that the YMCA Staff Agreement 2015 – Victorian YMCA Community Programming Pty Ltd does not, or will not cover Council or any of the transferring employees in relation to the employment of the transferring employees by Council.
[38] Further, I will order that, pursuant to s 318(1)(b) of the Act, the Wangaratta Sports and Aquatic Precinct Enterprise Agreement 2020 will cover the transferring employees.
[39] For the purposes of s 318(4) of the Act, the order will come into operation in respect of a transferring employee on the date that the transferring employee commences employment with Council or the date of the order, whichever is the later.
[40] An order giving effect to this decision is issued separately in PR725717.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<AE415840 PR725666>
1 Section 318(1)(a) of the Act
2 Section 318(1)(b) of the Act
3 Section 318(2)(a) of the Act
4 Affidavit of Robin Gardner dated 30 October 2020 (Gardner affidavit)
5 Affidavit of service of Robin Gardner dated 17 November 2020 (Affidavit of service)
6 Ibid at [3]
7 Gardner affidavit at [7]
8 Annexure RG-3 to the Gardner affidavit
9 Section 317 of the Act
10 Annexure RG-1 to the Gardner affidavit
11 Schedule 1
12 Schedule 1A
13 Clause 29 and Schedule 1
14 Schedule 1A
15 Clause 45.1
16 Clauses 46.1 and 46.2
17 Clause 47
18 Clause 47.7
19 Clause 69
20 Clause 40
21 Clause 36
22 Clause 4.1
23 Clause 52
24 Clause 6.1
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