Fair Work Act 2009

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

Compass Group Healthcare Hospitality Services Pty Ltd Trading AS Medirest

HEALTH AND ALLIED SERVICES, MANAGERS AND ADMINISTRATIVE WORKERS (VICTORIAN PUBLIC SECTOR) (SINGLE INTEREST EMPLOYERS) ENTERPRISE AGREEMENT 2021-2025

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

• [1] Compass Group Healthcare Hospitality Services Pty Ltd Trading as Medirest (Medirest) has applied for an order under s 319(1)(b) of the Fair Work Act 2009 (Cth) (the Act) that the Health and Allied Services Managers and Administrative Workers (Victorian Public Sector) (Single Interest Employers Enterprise Agreement 2021 - 2025[1] (the Agreement) will cover any non-transferring employee who commences employment with it on or after the date of this decision and subsequent order at the New Footscray Hospital in Victoria. Medirest has been contracted to provide catering, cleaning and security services at the New Footscray Hospital.

• [2] The Agreement was originally approved by the Commission on 13 April 2022[2] and reaches its nominal expiry date on 30 June 2025. In the absence of an order in the form sought, the relevant non-transferring employees would otherwise be covered by the Health Professionals and Support Services Award 2020[3] (the Award).

• [3] Given the material that has been filed, the fact that there are currently no non-transferring employees, and the Health Workers Union support the application, I have determined that the matter can be dealt with on the papers.

• [4] Sections 317 and 319 of the Act relevantly provide:

"317 FWC may make orders in relation to a transfer of business

This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.

319 Orders relating to instruments covering new employer and non-transferring employees

(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.

(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).

(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 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;

• [5] The application for an order under s 319(1)(b) of the Act has been made by the new employer.[4] In deciding whether to make the order sought, I must take into account the matters outlined in s 319(3) of the Act. However, before turning to consider the orders sought by Medirest, it is necessary to establish whether the Agreement is a transferrable instrument that would cover Medirest and the Non-Transferring Employees, subject to any order of the Commission.

• [6] I am satisfied that the Agreement is a transferrable instrument pursuant to s 312(1)(a) of the Act. I am further satisfied that:

(i) Medirest will be engaging new employees that are not transferring employees (s 314(1)(b));

(ii) the non-transferring employees will be performing transferring work (s 314(1)(c)); and

(iii) at the time non-transferring employees are engaged by Medirest, the Award would otherwise apply to them (s 314(1)(d)).

• [7] As a consequence of the above, I am satisfied that the Agreement will not cover Medirest and non-transferring employees, subject to any order the Commission may make. I now turn to consider the matters set out in s 319(3) of the Act.

Section 319(3)(a) - views of the new employer and employees who would be affected

• [8] Medirest submit that it wishes to engage employees in classifications covered by the Agreement on a common set of terms and conditions, regardless of whether they are transferring employees or non-transferring employees. Medirest further submit, that if the order were not made, it would result in two sets of employment conditions for staff working side-by-side in the same roles resulting in unfairness to non-transferring employees.

• [9] The Health Workers Union (the HWU) which is covered by the Agreement, has advised that it supports the application.

• [10] There are currently no non-transferring employees engaged, and I note that the Agreement applies to transferring employees from the commencement of their employment with the new employer, pursuant to s 313(1) of the Act.

• [11] The above factors weigh in favour of granting the application.

Section 319(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

• [12] While there are currently no non-transferring employees, I note that the terms and conditions of employment under the Agreement are more favourable than those in the Award. I can discern no detriment and as such, this weighs in favour of granting the application.

Section 319(3)(c) - if the order relates to an enterprise agreement--the nominal expiry date of the agreement

• [13] As noted above, the Agreement reaches its nominal expiry date on 30 June 2025, which ensures that non-transferring employees will have an opportunity to participate in bargaining directed to the renewal of the Agreement within a reasonable period of time. Non-transferring employees will not be prejudiced in their bargaining rights. This is therefore a neutral consideration.

Sections 319(3)(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace

• [14] I accept the Medirest submission that the granting of the application is expected to enhance productivity, including by avoiding the practical and industrial difficulties associated with applying two sets of terms and conditions on the site. This weighs in favour of the application being granted.

Section 319(3)(e) - whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

• [15] It was not submitted and nor do I consider that Medirest would incur significant economic disadvantage as a result of the Agreement covering it in respect of non-transferring employees. This is therefore a neutral consideration.

Section 319(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

• [16] I note that there are differences between the Agreement and the Award, suggesting there would be reduced business synergy if both were to apply to Medirest. This weighs in favour of granting the application.

Section 319(3)(g) - the public interest

• [17] There are no public interest considerations that militate against the granting of the application.

• [18] Having considered each of the matters outlined in s 319(3) of the Act and the material that has been filed, I am satisfied that an order pursuant to s 319(1)(b) of the Act should be made. The Order[5] will take effect from 27 June 2025 or when non-transferring employees are employed by Medirest and start to perform transferring work at the Footscray Hospital site, whichever is the latter date.

[2] [2022] FWCA 1295.

[3] MA000027.

[4] s.319(2) of Fair Work Act 2009.

[5] PR788648.

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