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

Application by Horsham & District Kindergarten Association Inc Trading AS Emerge Early Years Services

Application for an order relating to instrument covering new employer and transferring employees.

• [1] Horsham & District Kindergarten Association Inc Trading as Emerge Early Years Services (EEYS) has applied to the Fair Work Commission (the Commission) for an order under s.318 of the Fair Work Act 2009 (Cth) (the Act) in relation to the Early Education Employees Agreement 2020 (the Early Education Agreement) and the Victorian Early Childhood Teachers and Educators Agreement 2020 (VECTEA).

• [2] The transferring employees are currently employed by the Yariambiack Shire Council (Yariambiack) to perform roles in early childhood education in Warracknabeal, Rupanyup and Minyip in Victoria.

• [3] The Early Education Agreement was approved by the Commission on 21 April 2021 and commenced on 28 April 2021. It is a transferable instrument for the purposes of s.312(1)(a) of the Act.

• [4] A transfer of business will have occurred by 19 December 2025 as the services will be handed over to the EEYS.

• [5] As of 17 November 2025, all 16 employees advised that they consent to the orders being sought in anticipation of accepting offers of employment with EEYS. The proposed transfer follows a similar transfer regarding early childhood education services formerly provided by Yariambiack in this town and Beulah.

• [6] This transfer of employment on 19 December 2025 provides for full recognition of service and a transfer of all accrued entitlements.

"318 Orders relating to instruments covering new employer and transferring employee

(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:

(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."

• [7] The power to make orders under s.318 of the Act is premised on the Commission being satisfied that there has been, or that there is likely to be a transfer of business for the purposes of s.311 of the Act. I am satisfied that there will likely be a transfer of business from Yariambiack to EEYS for the following reasons.

• [8] First, as per s.311(1)(a)-(b) of the Act, the employment relationship between Yariambiack and the transferring employees will terminate upon the transfer of business and, immediately following the termination of their employment, the transferring employees will be employed by EEYS from 19 December 2025.[1] Secondly, having regard to the information in the application and supporting materials, I consider that the work performed by the transferring employees for Yariambiack is the same as the work they will perform for EEYS (s.311(1)(c)) and that on the materials before me the condition in s.311(1)(d) is satisfied.

• [9] Next it will be necessary for me to consider s.318(3) which states that in deciding whether to make an order under s.318(1), the Commission must take certain matters into account.

The views of the new employer and affected employees - s.318(3)(a)

• [10] The view of EEYS, as the new employer who has made this application, is that it should be granted.

• [11] The views of the new proposed employer and the views of the transferring employees, which are in support of the application, weigh in favour of granting the order sought. Employees affected by the application were informed about the proposed transfer including through a document summarising the differences between the two enterprise agreements, and all have provided consent for the transfer as evidenced by their unanimous support for the consent orders sought by EEYS.

Whether any employee will be disadvantaged - s.318(3)(b)

• [12] The Commission must consider whether any of the transferring employees will be disadvantaged by the order sought in relation to their terms and conditions of employment.

• [13] EEYS submits that the transferring employees will be better off under the VECTEA. They submit that several provisions such as parental leave and personal leave are more favourable under the VECTEA.

• [14] The absence of any demonstrable disadvantage weighs in favour of granting the order sought.

The nominal expiry date of the agreements - s.318(3)(c)

• [15] If the application under s.318 relates to an enterprise agreement, the Commission must consider the nominal expiry date of the agreement. The nominal expiry date for the Early Education Agreement is 30 September 2024 and the expiry date for the VECTEA is 30 September 2024. I consider the nominal expiry dates to be a neutral factor.

• [16] The Act requires the Commission to consider whether the transferrable instrument would have a negative impact on the productivity of the new employer's workplace.

• [17] EEYS submits that the transferable instrument will impact on the productivity of the new employer's workplace because the management of employees on two (2) different agreements would not facilitate a streamlined approach to administration.

• [18] I consider employees being on different agreements to impact productivity and this factor weighs in favour of granting the orders sought.

Whether the new employer will incur significant economic disadvantage - s.318(3)(e)

• [19] The Act requires the Commission to consider whether the new employer will incur significant economic disadvantage if the transferable instrument continues to cover the transferring employees.

• [20] EEYS's submissions include that the management of employees on different agreements represents an increase in administrative costs.

• [21] Although there may be a cost in administering two agreements, I am not satisfied on the materials that this would result in a significant economic disadvantage to EEYS.

• [22] The Commission is required to consider the degree of business synergy between the transferrable instrument and any workplace instrument that already covers the new employer.

• [23] EEYS has outlined that it employs non transferring employees under the VECTEA, and that having employees covered by more than one industrial instrument would be inefficient. It may also cause some confusion at the workplace level.

• [24] This would suggest there is a lack of business synergy between the Early Education Agreement and the VECTEA and this factor weighs in favour of granting of the orders sought.

• [25] Section 318(3)(g) requires the Commission to consider "the public interest".

• [26] In the absence of any submissions on this factor, I consider this a neutral factor.

• [27] Having considered each of the requirements set out in s.318(3) of the Act with regard to the circumstances in front of me, I am satisfied that orders should be made with the following effect after the transferring employees cease to be employed by Yariambiack and become employed by EEYS:

1. The Early Education Employees Agreement 2020 will not cover EEYS and transferring employees; and

1. The VECTEA will cover the transferring employees.

• [28] An order to this effect coming into operation in accordance with s.314(4) of the Act will be separately issued along with this decision.

[1] Submissions on behalf of Horsham & District Kindergarten Association Inc trading as Emerge Early Years Services at [8]-[11] and Annexure A: Contract

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