Wanslea Ltd T/A Wanslea Family Services Incorporated

Case •

[2023] FWC 1867

•

28 JULY 2023
[2023] FWC 1867

FAIR WORK COMMISSION
DECISION

Fair Work Act 2009

s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

Wanslea Ltd T/A Wanslea Family Services Incorporated

(AG2023/2133)

Children’s services

COMMISSIONER SCHNEIDER

PERTH, 28 JULY 2023

S.319 -Application for an order relating to instruments covering new employer and non-transferring employees

  1. Wanslea Ltd T/A Wanslea Family Services Incorporated (Wanslea or the Applicant), has made an application pursuant to section 319 of the Fair Work Act 2009 (Cth) (the Act) for the Fair Work Commission (the Commission) to make an order in relation to a transfer of business.

  1. The transferrable instrument in this matter is the Wanslea Early Learning and Development Enterprise Agreement 2022 (the WELD Agreement or the Transferrable Instrument).[1]

Background

  1. The Applicant, Wanslea, provides social and community services across Western Australia and employs workers in the following industries:

·   social, community, home care and disability services;

·   health professionals and support services; and

·   educational services (teachers).

  1. Wanslea and its employees are covered by the:

·   Social, Community, Home Care and Disability Services Industry Award 2010;

·   Health Professional and Support Services Award 2020; and

·   Educational Services (Teachers) Award 2020.

  1. Wanslea Early Learning and Development Ltd (WELD) operated and employed workers in the childcare sector.

  1. WELD and its employees were covered by the Children Services Award 2010.

  1. On 1 May 2023 (the Transfer Date), Wanslea, through an asset purchase agreement, assumed ownership of WELD assets (the Acquisition) including existing operations as a going concern.

  1. WELD operations have continued without change or interruption.

  1. As part of the Acquisition, the Applicant offered employment to all WELD employees (the Transferring Employees) on the existing terms and conditions of employment, including performing the same role and duties (the Transferring Work),

  1. All existing WELD employees accepted the transfer.

  1. The employment of the transferring employees with WELD ended effective 30 April 2023 and commenced with the Applicant effective 1 May 2023.

  1. Prior to the Transfer Date, WELD employees were covered by the WELD Agreement.

  1. Prior to the Transfer Date, Wanslea employees were covered by the Wanslea Enterprise Agreement 2022 (the Wanslea Agreement).

  1. The WELD Agreement and the Wanslea Agreement have distinct coverage. That is, the classifications in the Wanslea Agreement do not overlap with the classifications in the WELD Agreement.

  1. Pursuant to section 313 of the Act, the WELD Agreement is a Transferable Instrument which will continue to cover the Transferring Employees

  1. Wanslea will employ new employees, from time to time, to work in the WELD Centres.

  1. These new employees will perform Transferring Work covered by the Transferrable Instrument (Non-transferring Employees).

  1. Where an order is not made pursuant to section 319 of the Act, the Non-Transferring Employees will be covered by the Children's Services Award 2010 (the Award) as they will not be employed by Wanslea in a role covered by the Salary Levels contained in the Wanslea Agreement.

  1. Accordingly, the Applicant seeks an Order in the following terms:

“The Wanslea Early Learning and Development Enterprise Agreement 2022 will cover new and non-transferring employees of Wanslea employed after 1 May 2023 who are engaged to work in the classifications covered by this Agreement.”

Relevant Legislation

  1. Section 313 of the Act provides:

“313 Transferring employees and new employer covered by transferable instrument

(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:

(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and
....

(3) This section has effect subject to any FWC order under subsection 318(1).”

  1. Section 319 of the Act provides:

“319 Orders relating to instruments covering new employer and non-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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;

(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.

Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.

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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(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 non-transferring employee before the later of the following:

(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;

(b) the day on which the order is made.”

Consideration

  1. The Applicant submits the following regarding the preliminary matters that must be dealt with prior to considering whether to grant an order:

·   Wanslea and WELD are associated entities for the purposes of section 12 of the Act and within the meaning of section 50AAA of the Corporations Act 2001 (Cth).

·   WELD and Wanslea have separate Boards but are overseen by the same Executive Team and supported through common shared services.

·   The Acquisition is a transfer of business for the purposes of section 311 of the Act.

·   There is a connection between WELD and Wanslea under the criteria in sections 311(3) and 311(6) of the Act.

·   WELD employees become Transferring Employees within the meaning of section 311(2) of the Act on the Transfer Date.

·   The work performed by the Transferring Employees with WELD is the same, and substantially the same as the work now performed for Wanslea.

  1. On the materials before me, I am satisfied of the preliminary matters detailed within the Act.

  1. In determining the matter, the Commission must take into account the considerations listed above in section 319(3) of the Act.

Views of the new employer

  1. The new employer is the Applicant and is clearly supportive of the Orders being made.

  1. This weighs in favour of the Orders being made.

Views of the employees who would be affected by the Order

  1. The Applicant submits that it has engaged in a detailed communication process regarding the proposed transfer of the Transferring Employees.

  1. The Applicant provided the steps taken during this consultation period, which are outlined below:

·   On 20 March 2023, the Transferring Employees were issued a communication advising of the Merger (the Communications).

·   The Communications confirmed:

i.Employees would be employed with Wanslea on the same terms and conditions of employment as provided for with WELD and with recognition of all accrued service and leave entitlements.

ii.Employees could speak with Human Resources if they had any questions or concerns including if they did not want to continue employment with Wanslea.

·   The Transferring Employees were receptive and positive about the Merger, particularly given the access to salary sacrifice arrangements. No questions, concerns, or opposition to transferring were raised by Transferring Employees and all existing WELD employees transferred effective 1 May 2023.

·   On 1 May 2023, Transferring Employees were issued correspondence confirming their transfer of employment. Wanslea did not receive any questions or concerns in relation to the correspondence.

·   Wanslea also engaged in communication with the WELD Employee Bargaining Representatives (Bargaining Representatives) in relation to the coverage of Non-transferring Employees by the WELD Agreement.

·   On 21 June 2023, Bargaining Representatives were emailed advising of Wanslea's intention to seek to have Non-transferring Employees covered by the WELD Agreement (the Proposed Application).

·   The Bargaining Representatives were provided until 23 June 2023 to advise if they had any concerns with the Proposed Application.

·   Wanslea did not receive any questions or comments in response from the Bargaining Representatives in relation to the Proposed Application.

  1. The Applicant provided copies of the several pieces of correspondence noted above.

  1. The Applicant notes that the WELD Agreement was voted up, on 20 March 2023, following significant negotiation over 18 months. The vote was successful by an overwhelming majority, with a 98% yes vote and 63% of the workforce participating in the vote.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

  1. As part of the Acquisition, Wanslea submits that it offered employment to all WELD employees:

·   on the existing terms and conditions of employment, including performing the same role and duties;

·   with fully recognised prior service; and

·   transferred all leave accruals.

·   In addition to the existing terms, Transferring Employees would, as a result of the transfer, become eligible to participate in the beneficial salary sacrifice scheme available to Wanslea employees as a result of Wanslea being a registered public benevolent institution.

  1. The Applicant submits that New Non-transferring Employees will not be disadvantaged by having the WELD Agreement apply to their employment.

  1. The Commission notes that New Non-transferring Employees who would be affected by the Orders have not yet been engaged and therefore their views cannot be sought.

  1. The Applicant submits that, if orders under section 319(1)(b) of the Act are not made, Non-transferring Employees will instead be covered by the Award.

  1. The Applicant submits that the WELD Agreement provides for more beneficial entitlements than those entitlements Non-transferring Employees would receive under the Award. The Applicant notes several specific more favourable terms in their application.

  1. The Applicant also submits that the making of the order will ensure that new employees performing the same role as existing employees receive the same terms and conditions of employment.

  1. I accept the above submissions and agree with the Applicant’s position.

The nominal expiry date of the agreements

  1. The nominal expiry date of the WELD Agreement is 26 April 2027.

  1. As the WELD Agreement has only recently come into effect, the Applicant submits that Transferring Employees and Non-transferring Employees will receive an extended period of stability in employment conditions and have the benefit of known terms for a minimum of a four-year period.

  1. I accept the above submissions and agree with the Applicant’s position.

Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace and if the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

  1. The Applicant submits the following in support of its position that not issuing the order would have a negative impact:

·   New employees working in the roles covered by the WELD Agreement will be covered by the Award and will not receive the enforceable benefits and rights that exist under the WELD Agreement which are available to Transferring Employees.

·   Unfairness within the workplace which may result in a negative impact on productivity particularly in respect of employee engagement, attraction, and retention.

·   A potential increase in the administrative burden on Wanslea and its managers in applying differing sets of employment terms and conditions.

·   Operational and administrative inefficiencies if the order is not made, as it would result in the need to administer two different industrial arrangements across the same class of employees. 

·   Increased risk of payroll errors arising due to the complexity of employees in the same positions having different governing instruments.

  1. I accept the above submissions and agree with the Applicant’s position.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

  1. The Applicant submitted that the orders sought are to extend the coverage of the WELD Agreement to new and non-transferring employees who are engaged to perform transferring work. The Applicant asserts this will create a consistent set of terms and conditions of employment across employees who are performing the Transferring Work.

The public interest

  1. The Applicant submits that it is in the public interest to grant the order sought, as the outcomes of that order appeal to the objects of the Act.

  1. Specifically, the Applicant submits that granting the orders will ensure employees:

·   are treated fairly and consistently with the Transferring Employees performing the same work and role;

·   receive terms and conditions of employment that are overall more beneficial than the underlying Award;

·   have access to the same flexibility and working arrangements that are available to Transferring Employees; and

·   receive the full benefit on an enterprise agreement recently negotiated to cover the Transferring Work.

  1. I accept the above submissions and agree with the Applicant’s position.

Conclusion

  1. It follows that the application should be granted. The Orders sought by the Applicant have been issued concurrently with this decision.[2]


[1] [AE519813].

[2] [PR764676].

Printed by authority of the Commonwealth Government Printer

<AE519813  PR764675>

Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0

Cases Cited

0

Statutory Material Cited

0