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

Application for an order relating to instruments covering new employer and transferring employees - orders made

• [1] Aged Care Group Unit Trust (the Applicant) has made an application pursuant to s.318 of the Fair Work Act 2009 (Cth) (the Act) seeking the following Orders:

1. Pursuant to s.318(1)(a) of the Fair Work Act 2009 (Cth) (the Act), the Fair Work Commission (Commission) orders that the Cheltenham Manor Pty Ltd (trading as Cheltenham Manor) and Greenwood Manor Pty Ltd (trading as Greenwood Manor) Enterprise Agreement 2018 will not cover Aged Care Group Unit Trust or any transferring employees as defined in Part 2-8 of the Act, being employees of Aged Care Group Unit Trust who were formerly employed by Cheltenham Manor Pty Ltd under the Cheltenham Manor Pty Ltd (trading as Cheltenham Manor) and Greenwood Manor Pty Ltd (trading as Greenwood Manor) Enterprise Agreement 2018 with regard to its residential aged care facility, Cheltenham Manor, located in Cheltenham in Victoria.

1. The Commission further orders, pursuant to section 318(1)(b), that the transferring employees referred to in [1] will be covered in their employment with Aged Care Group Unit Trust by the Medical and Aged Care Group Nursing and Aged Care Enterprise Agreement 2022.

1. In accordance with s.318(4) of the Act, this Order shall come into operation in relation to each transferring employee on and from 13 October 2025, or the date of this Order, or at the time when the transferring employee is employed by Aged Care Group Unit Trust, whichever is the later.

• [2] For the reasons set out below, I am satisfied that it is appropriate to make the Orders sought pursuant to s.318(1) of the Act.

• [3] The Form F40 - Application for orders in relation to a transfer of business (Form F40) filed by Aged Care Group Unit Trust relevantly outlined the background to the application, and I will briefly relay this background here.

• [4] On 1 September 2025 (transfer date), there was a transfer of business from Cheltenham Manor Ltd (old employer) to the Applicant, whereby the Applicant purchased and took over the operations of the 'Cheltenham Manor' residential aged care facility located in Cheltenham in Victoria (Facility).

• [5] The old employer employed 213 employees at the Facility who are covered by the Cheltenham Manor Pty Ltd (trading as Cheltenham Manor) and Greenwood Manor Pty Ltd (trading as Greenwood Manor) Enterprise Agreement 2018 (CM&GM Agreement). The Applicant offered employment to all of those employees (transferring employees) which, where accepted, commenced on the transfer date, being within three months of the termination of their employment with the old employer.

• [6] The Applicant, therefore, is a 'new employer' for the purposes of section 311(1) of the Fair Work Act 2009 (Cth) (FW Act).

• [7] Accordingly, pursuant to section 311(1) of the FW Act, there will be a transfer of business.

• [8] The CM&GM Agreement presently covers the transferring employees.

• [9] Section 313(1) of the FW Act provides that a transferable instrument that covered the old employer and the transferring employees immediately before the termination of the transferring employee's employment, will cover the new employer (i.e., the Applicant). The operation of these sections means that subject to the foregoing, the Applicant is covered by the CM&GM Agreement in relation to the transferring employees - subject to section 318(1) of the FW Act.

• [10] The Applicant seeks an Order pursuant to section 318(1) of the FW Act that the enterprise agreement that currently covers its existing employees in Victoria, also covers the transferring employees. That enterprise agreement is the Medical and Aged Care Group Nursing and Aged Care Enterprise Agreement 2022 (MACG Agreement).

• [11] Section 318 of the Act states as follows:

318  Orders relating to instruments covering new employer and transferring employees

(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.

(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).

(3) In deciding whether to make the order, the FWC must take into account the following:

(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;

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;

• [12] The Applicant submits that the transfer of employees from the CM&GM Agreement is likely to constitute a 'transfer of business' pursuant to s.311(1) of the Act for the following reasons:

1. The work that the transferring employees perform for the Applicant is the same or substantially the same as the work that they perform for the old employer. Specifically, nursing, personal care, diversional therapy and environmental services (e.g., laundry, cleaning, maintenance, kitchen/cooking and general support functions) to facilitate the running of the Facility and provide residential aged care services to the Facility's residents.

1. There is a connection between the old employer and the Applicant in accordance with section 311(3) of the FW Act, in that effective from the transfer date:

1. the business owned by the old employer in respect to the Facility was transferred to the Applicant;

1. the business assets owned by the old employer in respect to the Facility were transferred to the Applicant; and

c. the Applicant is carrying on the business previously carried on by the old employer in respect to the Facility.

• [13] For the purposes of s.311(1) of the Act, I am satisfied that there has been a transfer of business. I am also satisfied that each of Transferring Employees are transferring employees within the meaning of s.311(2) of the Act.

• [14] I will now consider the factors under s.318(3) of the Act in determining whether to make the Orders sought.

Section 318(3)(a) The views of Aged Care Group Unit Trust and of the employees affected by the Orders

• [15] The Applicant seeks to apply uniform conditions of employment to existing and transferring employees to ensure consistency and parity for all employees, foster an inclusive and equitable environment and avoid unnecessary administrative costs and challenges.

• [16] The Applicant seeks to provide parity to all employees and avoid disparities that would otherwise arise should the transferring employees, who are undertaking the same work, not receive the benefit of the MACG Agreement and be subject to differently structured wages and entitlements.

• [17] The Applicant submits that the MACG Agreement provides wages and benefits which, on an overall basis, are more beneficial to those conferred by the CM&GM Agreement and will ensure transferring employees remain better off overall.

• [18] The Applicant has retained payroll support from the old employer to administer the continued application of the CM&GM Agreement terms and conditions until 12 October 2025. Accordingly, the order sought by the Applicant is for the MACG Agreement to the transferring employees from 13 October 2025.

• [19] The Applicant says that there are administrative difficulties in applying two sets of wage structures and terms and conditions of employment within the same workplace, particularly when the Applicant is not familiar with the transferable instrument nor are their systems set up to account for and accommodate the differences. Accordingly, should it be required to apply varying sets of wage structures and conditions of employment within the same workplace beyond 13 October 2025, the Applicant will be subject to increased administrative costs and associated burdens.

• [20] It is noted, and the Applicant has confirmed, that the Form F40 contained a typographical error which states that offers were made to 96 employees instead of 213. The Applicant issued offers of employment to all 213 employees of the old employer who are covered by the CM&GM Agreement.

• [21] On 17 September 2025, the Applicant distributed a memo to the transferring employees by email, advising of the Applicant's intended application to the Fair Work Commission and providing responses to a list of anticipated questions regarding employment entitlements and the Applicant's proposed application to the Fair Work Commission. A copy of this document was filed with the Commission along with the Form F40.

• [22] On 18 September 2025 at 3pm, the Applicant, together with a representative of the Australian Nursing and Midwifery Federation Vic Branch (ANMF), conducted a Q&A session with transferring employees, which included discussing the Applicant's intended application to the Fair Work Commission and to answer any questions from staff regarding same. The transferring employees were able to attend the meeting either in-person or electronically via Microsoft Teams. No concerns were raised by the transferring employees at the meeting regarding the Applicant's proposed application or of the MACG Agreement applying to their employment in place of the CM&GM Agreement.

• [23] As at the date of this application, the Applicant is not aware of, and has not been advised of, any adverse views from the affected employees concerning the proposed application of the MACG Agreement to their employment with the Applicant.

• [24] On 8 September 2025, the Applicant informed the ANMF and the Health Services Union (Victoria No 1 Branch) trading as Health Workers' Union (HWU) via email correspondence of the Applicant's acquisition of the Facility on the transfer date, that the Applicant provided offers of employment to employees of the old employer at the Facility, and of the Applicant's intention to make an application to the Commission for the employment of those employees with the Applicant to be covered by the MACG Agreement from 13 October 2025. A copy of this document was filed with the Commission along with the Form F40.

• [25] As at the date of this application, no objections to the Application have been raised with the Applicant by the ANMF or the HWU.

• [26] As part of the conduct of this matter, I issued Directions for the filing of material. These Directions required the Applicant to serve on all Transferring Employees a copy of the Form F40 and supporting documents filed with the Form F40. These Directions provided the opportunity for any Transferring Employees, and any employee organisation which ordinarily represents the industrial interests of the Transferring Employees, to file any material which addressed certain factors under s.318(3) by 31 October 2025. The parties also had until 7 November 2025 to advise the Commission if they wanted to be heard in relation to the application.

[27] No material was filed by the Transferring Employees or any employee organisations in accordance with the Directions, other than the ANMF who advised they had no objection to the application.

• [28] I am satisfied that the Transferring Employees and employee organisations have had the opportunity to provide their views on the application. I therefore consider that the views before the Commission weigh in favour of making the Orders.

Section 318(3)(b) Whether any employees would be disadvantaged by the Orders in relation to their terms and conditions of employment

• [29] The Applicant submitted that there will be no reduction in the base rate of pay of transferring employees should the Order be granted.

• [30] The MACG EA provided for wages that are higher across all equivalent classifications of the CM&GM Agreement. In addition to providing higher rates of pay for all classifications, the MACG EA contains four further prescribed wage increases over the remaining nominal life of the MACG Agreement (1.25% from the first full pay periods on or after 1 December 2025, 1 February 2026, 1 December 2026 and 1 December 2027).

• [31] The Applicant submits that while there are a small number of conditions conferred by the CM&GM Agreement that are either more beneficial than comparable conditions under the MACG Agreement or not otherwise conferred by the MACG Agreement, there are a significant number of equal and more superior conditions and entitlements (in addition higher rate of pay) under the MACG Agreement such that the transferring employees will be better off overall under the MACG Agreement, including (but not limited to):

1. superior shift work, qualification (registered nurses), tool, leader, uniform (Registered

Nurses and aged care employees), laundry (aged care employees), overtime meal, vehicle (aged care employees), change of shift and in charge of facility allowances;

1. access to allowances not otherwise conferred by the CM&GM Agreement - namely, enrolled nurse qualification, medication awareness and administration (personal care workers only), aged care employee in charge and change of allowances;

1. access to leave entitlements not provided for under the CM&GM Agreement - namely, paid parental leave, paid special parental leave, paid examination / assessment leave for enrolled nurses and personal care workers, paid representative leave and unpaid ceremonial leave;

1. an entitlement to access long service leave after 9 years' continuous service, noting that from 1 January 2026 access will be available to employees after completing 8 years' continuous service;

1. access to accident pay entitlements and purchased leave options;

1. a higher rate of accrual of paid personal/carer's leave for employees in their first year of service;

1. higher Sunday Day Shift and AM/PM shift penalty rates for permanent aged care employees, casual aged care employees and casual registered nurses;

1. higher Sunday Day Shift penalty rates for part-time registered nurses and enrolled nurses;

1. higher Sunday penalty rates for casual enrolled nurses;

1. higher public holiday penalty rates for permanent registered nurses and casual aged care employees;

1. a wider (and more beneficial) definition of 'shiftworker' for enrolled nurses and aged care employees for the purposes of the additional week of annual leave under the NES;

1. a higher minimum engagement for part-time employees;

1. the ability to cash out more than 10 days of accrued annual leave in any 12 month period (provided there is at least 4 weeks of accrued annual leave remaining after the cashing out);

1. prescribed minimum payments for attendances at compulsory training other than during the course of a rostered shift;

• an improved redundancy entitlement for employees with 10 or more years of continuous service;

1. the ability to use accrued personal leave for pre-natal appointments and parenting classes; and

1. an ability for unqualified personal care workers who are nursing students to progress to a higher classification upon completing a specified minimum portion of their studies.

• [32] Further, the Applicant has recognised the accrued personal/carer's leave, accrued annual leave and service with the old employer of the transferring employees for the purposes of all service-related entitlements and benefits.

• [33] I have considered the material filed with the Commission, and both Agreements.

• [34] In considering the terms and conditions of the Agreements, I am satisfied that employees would not be disadvantaged in relation to their terms and conditions of employment. I therefore consider that this factor weighs in favour of granting the Orders sought.

Section 318(3)(c) The nominal expiry date of the CM&GM Agreement

• [35] The nominal expiry date of the CM&GM Agreement is 31 May 2021. The nominal expiry date of the MACG Agreement is 1 October 2027. I consider that this factor weighs in favour of granting the Orders sought.

Section 318(3)(d) Whether the CM&GM Agreement would have a negative impact on the productivity of the new employer's workplace

• [36] The Applicant submits that if the Order is not granted, there will be a negative impact to the Applicant's productivity. Having employees of the same cohort covered by two different enterprise agreements which provide for different entitlements may lead to dissatisfaction amongst employees. The transferring employees may be required to undertake similar or identical duties side-by-side with the Applicant's existing (non-transferring) employees, whilst receiving different and, in some cases, lesser entitlements.

• [37] The Applicant considers that applying varying conditions to employees who perform identical work will not promote a cohesive, equitable and inclusive work culture, but rather this has the potential to result in division and negatively impact morale. In turn, productivity will be negatively impacted, which has a direct impact on the quality of care and services provided to residents.

• [38] I accept these submissions. On the material before me, I am satisfied that if the Orders sought were not made, that the application of the CM&GM Agreement would have a negative impact on Aged Care Group Unit Trust's productivity. I am satisfied that the disparate effect on employees associated with the operation of a secondary enterprise agreement would negatively impact Aged Care Group Unit Trust's productivity. I therefore consider that this factor weighs in favour of granting the Orders sought.

Section 318(3)(e) Whether Aged Care Group Unit Trust would incur a significant economic disadvantage as a result of the CM&GM Agreement covering Aged Care Group Unit Trust

• [39] The Applicant submits that the potential economic disadvantage flowing from the requirement to administer multiple and different industrial instruments within the workplace in respect of employees who perform the same (or identical) work, especially within the same location, will be burdensome.

• [40] The Applicant submits that should it be required to apply varying sets of conditions to its employees, it will be subject to increased administrative costs and associated burdens. Specifically, the payroll system in its current form would not be able to accommodate the differences in pay and conditions without reverting to manual processing for a select group of employees. As a result, additional resourcing would be required in order to apply two sets of pay rules for employees performing the same work, and to process and reconcile payments, on an ongoing basis.

• [41] In contrast, there are practical consequences that flow should the Order be granted, which will benefit both the Applicant and the transferring employees.

• [42] Whilst I accept the submissions of the Applicant that there may be some degree of economic burden on the Applicant, I am not satisfied that it would incur significant economic disadvantage. I consider this factor to be neutral in the consideration of whether the Orders sought should be made.

Section 318(3)(f) Degree of business synergy between the CM&GM Agreement and MACG Agreement

• [43] The Applicant submits that there is little business synergy between the CM&GM Agreement in comparison to the MACG Agreement.

• [44] They say that there are ample points of difference between the instruments, such that greater business synergy arises from the application of the MACG Agreement to the transferring employees. Ensuring that the transferring employees are covered by the MACG Agreement will allow for consistency across the Applicant's nursing and aged care workforce in Victoria. In other words, it would be incongruous for there to be a select group of employees of the new employer (i.e., the transferring employees) who would be covered by the CM&GM Agreement rather than the MACG Agreement.

• [45] I find the degree of business synergy to be a neutral factor in determining whether the Orders should be made.

• [46] This factor is informed by the objects of Part 2-8 of the Act, as stated under s.309 of the Act. More specifically, the public interest criterion requires that I consider the balance between the protection of employees' terms and conditions of employment under the enterprise agreements, with the interests of employers in running their enterprise efficiently.

• [47] The Applicant submits that the public interest is not agitated by this application.

• [48] I do not consider that it is contrary to public interest to grant the Orders sought. However, in the circumstances, I also do not consider that this factor carries any particular weight where the considerations and submissions referred to in this Decision have not been disputed between the parties. As such, I consider that this factor is a neutral consideration in terms of whether the Orders sought should be granted.

Having considered the matters above, the factors pursuant to s.318(3) of the Act either weigh towards the granting of the Orders or are neutral. I am satisfied that, in light of the factors considered above, that the Orders sought should be granted. An Order[1] to this effect will be issued with this Decision.

[1] PR794874.

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