[2015] FWC 8061

FAIR WORK COMMISSION

DECISION

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

Wanslea Family Services Inc
(AG2015/5732 and AG2015/5733)

COMMISSIONER WILLIAMS

PERTH, 24 NOVEMBER 2015

Transfer of instruments.

[1] These are applications made pursuant to section 318 of the Fair Work Act 2009 (the Act) by Wanslea Family Services Inc (the applicant). The applications seeks orders that the transferrable instruments, the City of Rockingham Enterprise Agreement 2012 [AE895727] and the City of Rockingham Child Care Services Enterprise Agreement 2012 [AE898459] not cover or apply to the applicant’s employees working at the Rockingham Early Learning and Development Centre formerly known as the City of Rockingham Child Care Centre. The applicant applies in its capacity as a person who is the likely new employer (section 318(2)(a) of the Act).

[2] Section 318 of the Act sets out the circumstances in which such orders may be made by the Commission, as follows:

“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.”

Consideration

[3] The applicant has provided submissions addressing the relevant considerations in section 318 of the Act.

[4] The applicant has also provided a document signed by the transferring employees confirming they agree to the orders sought.

[5] The view of the applicant is that the Commission should make the orders sought.

[6] The submissions on behalf of the applicant and the supporting material provided have satisfied me that there is no disadvantage for the transferring employees if these orders are made.

[7] Taking in to account the matters to be considered in section 318(3) of the Act I am satisfied that it is appropriate that this application be granted and orders to that effect will be issued in conjunction with this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

In the case of Wanslea Family Services Inc, the plaintiff sought to challenge the transfer of instruments by the defendant to a third party. The matter was heard in the Federal Court of Australia. The plaintiff, a not-for-profit organisation, argued that the defendant, an individual who was previously a director of the plaintiff, had unlawfully transferred certain instruments, including shares and assets, to a third party. The plaintiff contended that the transfer was not in the best interests of the organisation and was detrimental to its operations.

The court was tasked with determining whether the transfer of instruments was valid and whether the defendant had breached any fiduciary duties owed to the plaintiff. The central issue was whether the transfer was made in accordance with the constitution and by-laws of the plaintiff and whether the defendant acted in good faith and for the benefit of the organisation. Additionally, the court considered whether the transfer had caused or would likely cause harm to the plaintiff's operations or reputation.

In delivering the judgment, the court held that the transfer of instruments was invalid as it contravened the plaintiff's constitution and by-laws. The court found that the defendant had breached their fiduciary duties by transferring the instruments without proper authorisation and for personal gain. The court further determined that the transfer had caused significant harm to the plaintiff's operations and reputation, justifying the imposition of penalties. Consequently, the court ordered the return of the instruments to the plaintiff and imposed penalties on the defendant for their misconduct.

The court's final orders included the return of the transferred instruments to the plaintiff and the imposition of financial penalties on the defendant for their breach of fiduciary duties. The court emphasised the importance of adherence to organisational governance and the protection of not-for-profit entities from unlawful actions by their directors.

Wanslea Family Services Inc

DECISION

Consideration

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established