Fair Work Act 2009

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

• [1] Estia Investments Pty Limited T/A Estia Health (the Applicant) has applied to the Fair Work Commission (the Commission) for an Order in relation to transfer of business pursuant to s.318 of the Fair Work Act 2009 (the Act). The application arises in the context of the Applicant entering into contingent agreements with:

(a) Mark Moran at Little Bay Pty Ltd (ABN 73 147 879 892) (MM Little Bay), an "Approved Provider" for the purposes of the Aged Care Act 1997 (Cth) (Approved Provider), for the purchase by the Applicant of the freehold interest in the property located at the Little Bay Facility;

(b) MM Little Bay for the purchase by the Applicant of the residential aged care business known as 'Mark Moran at Little Bay' (RACS ID 0804) operated at the Little Bay Facility (Little Bay Business);

(c) Mark Moran Warrawee Pty Ltd (ACN 621 448 780) as trustee for the Mark Moran Warrawee Unit Trust (ABN 72 219 027 917) for the purchase by the Applicant of the freehold interest in the property located at 1496 Pacific Highway, Warrawee NSW 2074 (Folio Identifier 1/873654) (Warrawee Facility), being a site at which Mark Moran Group Pty Ltd (ACN 151 245 957) (MMG) conducts business as an Approved Provider; and

(d) MMG for the purchase by the Applicant of the residential aged care business known as 'Mark Moran at Warrawee' (RACS ID 1117) operated at the Warrawee Facility (Warrawee Business).

• [2] On and from completion of the Transaction, the Applicant will own the Little Bay Facility and the Warrawee Facility and run the Little Bay Business and the Warrawee Business at each respective Facility.

• [3] Only Nursing Assistants, Registered Nurses and Enrolled Nurses employed by MM Little Bay are affected by this application (relevant transferring employees).

• [4] On 24 March 2025, the Applicant made offers of permanent or casual employment to each of the relevant transferring employees. Each offer of employment is for work at the Little Bay Facility that was the same as, or substantially similar to, the work the Relevant Employee was performing for MM Little Bay at the Little Bay Facility.

• [5] Under the terms of the offers of employment, the employees' employment with the Applicant will commence immediately following completion of the Transaction or, in the case of casual employees, upon commencement of their next worked shift following completion of the Transaction. Pursuant to the terms of the agreements documenting the sale of the Little Bay Facility and the Little Bay Business to the Applicant, the completion of the Transaction will occur on the later of:

(a) the first day of the month following satisfaction or waiver of all conditions to the agreements; or

(b) any other day as the seller and the buyer agree in writing,

but ideally will occur on 2 June 2025 (Completion).

• [6] The Applicant applies for the following orders under s.318(1) of the Act (the proposed orders):

1. That the transferrable instrument that would, or would be likely to, cover the Applicant and the relevant transferring employees employed at the Little Bay Facility, being the Mark Moran at Little Bay Pty Limited and NSWNMA/ANMF NSW Branch Enterprise Agreement, 2020 to 2023, does not, or will not, cover the Applicant or any relevant transferring employees.

1. That the Estia Health NSW Enterprise Agreement 2024, being the enterprise agreement which covers the Applicant in New South Wales, covers, or will cover, relevant transferring employees employed at the Little Bay Facility.

• [7] The Applicant filed submissions in support of the application. The application was also supported by an Affidavit of Mr Nicholas Gold, Head of Industrial Relations and Employee Relations.

"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;

(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;

• [9] The Commission may make orders under s.318 if there is, or is likely to be, a transfer of business from an 'old employer' to a 'new employer'.[1] Having considered the information in the application, further submissions of the Applicant and the Affidavit of Mr Nicholas Gold, Head of Industrial Relations and Employee Relations, I am satisfied that there is likely to be a transfer of business from MM Little Bay to the Applicant and that the Applicant is likely to be the new employer for the following reasons. First, the employment of relevant transferring employees of MM Little Bay has terminated or is likely to terminate, and within three months they will become employees of the Applicant. Secondly, the work to be performed by the transferring employees for the Applicant will be the same or substantially the same as the work they have performed for MM Little Bay at the Little Bay Facility. Finally, there is a 'connection' between the old employer (MM Little Bay) and the new employer (the Applicant) as described in s.311(3) of the Act, because there will be a transfer of assets between MM Little Bay and the Applicant, namely the MM Little Bay Business and the associated assets.

• [10] Next it is necessary to consider s.318(3), which states that, in deciding whether to make an order under s.318(1), the Commission must take into account certain matters that are set out in ss.318(3)(a) to (g).

The views of the new employer and the employees who would be affected by the order

• [11] The Applicant submitted that it wishes to apply uniform conditions of employment to existing and transferring employees within NSW to ensure consistency, foster an inclusive and equitable environment and avoid unnecessary administrative costs and challenges.

• [12] The Applicant submitted that its primary aims are to:

(a) avoid disparities in conditions of employment that could cause unfairness to transferring employees who undertake the same work as other employees of the Applicant working in NSW, but who would not receive the same benefits under the Estia Health EA;

(b) enable flexibility and mobility of staff across the Applicant's facilities within NSW to ensure quality care for residents; and

(c) avoid the administrative costs and issues associated with implementing and applying multiple industrial agreements, including both enterprise agreements and modern awards, to employees working across NSW.

• [13] I consider that these reasons weigh in favour of granting the application.

• [14] The Applicant submitted that it has taken "reasonable and practicable steps" to seek the views of the relevant transferring employees, the Australian Nursing and Midwifery Federation (ANMF) and the Health Services Union (HSU).

• [15] The Applicant submitted that from around 24 March 2025 to 4 April 2025, it consulted with the relevant transferring employees about the Transaction, the offers of employment made by the Applicant and this application pursuant to s.318 of the Act. The Applicant submitted that it sent correspondence to each of the relevant transferring employees, held consecutive meetings with the relevant transferring employees, had multiple informal discussions and meetings, and provided each relevant transferring employee with a feedback form to share their views. The Applicant submitted that it received 42 completed feedback forms by the requested deadline of 4 April 2025.

• [16] Further, the Applicant submitted that it has been consulting with the ANMF and HSU about the Transaction, the offers of employment and this application. Whilst the HSU is not a party to the Mark Moran at Little Bay Pty Limited and NSWNMA/ANMF NSW Branch Enterprise Agreement, 2020 to 2023 (MMLB EA), the Applicant submitted that it has consulted with the HSU to ensure transparency, particularly in circumstances where the HSU is a party to the Estia Health NSW Enterprise Agreement 2024 (Estia Health EA).

• [17] The ANMF provided submissions in this matter, advising that it had taken steps to consult with its affected members. At the date of filing its submissions, the ANMF advised that it had not received any concerns from its members.

• [18] In my view the relevant transferring employees have been afforded a reasonable opportunity to express their views. As no concerns have been raised, I consider that this weighs in favour of granting the application.

Whether any employees would be disadvantaged by the order

• [19] The Applicant submitted that it has undertaken comprehensive comparisons of the wages and allowances and the terms and conditions of the Estia Health EA and the MMLB EA. The comparisons were provided and annexed to the Affidavit of Mr Gold.[2]

• [20] As to the wages comparison, in summary, the Applicant provided:

"(a) approximately 116 Relevant Employees would receive a pay increase if the Estia Health EA applies to their employment instead of the MMLB EA...

(b) approximately 46 Relevant Employees would be paid less under the Estia Health EA compared to the rate currently paid by MM Little Bay. As set out in paragraph [32] and annexure NG-11 of the Gold Affidavit, the Applicant will undertake to create a separate payroll rule for any Relevant Employee who would be paid less under the Estia Health EA, and pay those employees what they would otherwise have been paid under the MMLB EA, until such time that any wage rate in the Estia Health EA, or in a future Estia Health enterprise agreement, is greater than the MMLB EA wage rate that applied to their comparable classification."

• [21] As to the allowances comparison, in summary, the Applicant provided:

"(a) the majority of allowances in the Estia Health EA are higher than the comparable allowances in the MMLB EA;

(b) the following additional allowances are provided in the Estia Health EA and not in the MMLB EA:

(i) Registered and Enrolled Nurses are provided with an hourly allowance if they hold a 'continuing education' qualification. The hourly rate varies depending on the qualification held;

(ii) all employees are provided with a shift allowance if they are required to be 'on call during a meal break';

(iii) all employees are provided with a uniform allowance if the employer does not provide a uniform; and

(iv) all employees are provided with an hourly allowance where they are required to handle nauseous linen;

(c) the following differences are noted between the allowances in the Estia Health EA and the MMLB EA:

(i) the MMLB EA provides Nursing Assistants with a medication allowance of $10 per shift. The Estia Health EA also provides Nursing Assistants with a medication allowance, but this is $1.15 per hour. If the allowances were compared over a 7.6 hour shift, the hourly allowance in the Estia Health EA would be lower than the allowance in the MMLB EA; and

(ii) the MMLB EA provides all employees with a meal allowance where required to work more than one (1) and four (4) hours of overtime. The allowance rates payable under the MMLB are $16.20 for finishing beyond one (1) hour and $14.60 for finishing beyond four (4) hours. The same allowance applies under the Estia Health EA, but the rates are $15.81 for finishing beyond one (1) hour and $14.54 for finishing beyond four (4) hours. This is an hourly difference of 39c and 6c respectively."

• [22] The Applicant submitted, taking into account that:

"(a) the majority of the Relevant Employees will be paid higher wage rates and allowances under the Estia Health EA;

(b) the remaining Relevant Employees who would not be paid a higher wage rate under the Estia Health EA will, on account of the Applicant's undertaking, be (sic) continue to be paid at least the wage rate that they are currently paid by MM Little Bay;

(c) the additional allowances provided for under the Estia Health EA (as noted at paragraph 25(b) above); and

(d) the more beneficial terms (as noted at paragraph 27(a) below),

... the Relevant Employees will not be worse off by reason of the particular allowance differences set out above."

• [23] In relation to the terms and conditions comparison, the Applicant acknowledged that there are "arguably some conditions conferred by the Estia Health EA that are less beneficial than the comparable conditions conferred by the MMLB EA". However, the Applicant submitted that taking into account the additional benefits that the Estia Health EA confers on the relevant transferring employees, its comparisons indicate that the Estia Health EA is, overall, more beneficial than the MMLB EA for the relevant transferring employees.

• [24] The Undertakings provided by the Applicant are annexed at Schedule A of this Decision.

• [25] Noting the Undertakings provided by the Applicant, the ANMF has advised that it consents to the Orders sought in the application.

• [26] Having reviewed the comparisons provided to the Commission, and based on the Undertakings provided by the Applicant, I consider that the relevant transferring employees will not be disadvantaged by the proposed orders. This consideration weighs in favour of granting the application.

• [27] The Applicant submitted that the MMLB EA nominally expired on 30 June 2023. The Estia Health EA was recently approved on 2 October 2024 and will nominally expire on 3 July 2026. I consider that this weighs in favour of granting the application.

Whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace

• [28] The Applicant submitted that the coverage provisions of the Estia Health EA prevent the agreement from applying at any Estia Health facility where another enterprise agreement applies. As a result of this, the Applicant submitted that the Estia Health EA will not apply to any employees who work for the Applicant at the Little Bay Facility if the MMLB EA continues to apply at the Little Bay Facility. The MMLB EA would apply to the relevant transferring employees. However, the Applicant submitted that any 'non-relevant transferring employees' (either transferring from MMLB, MMG, a new hire by the Applicant or an existing employee of the Applicant whom the Applicant transferred to work at the Little Bay Facility) would instead be covered by the Nurses Award 2020 (Nurses Award) or the Aged Care Award 2010 (Aged Care Award).

• [29] The Applicant submitted that having different industrial instruments apply to different groups of employees performing the same roles at the same facility would create a disparity not only in their pay, but also in general terms and conditions of employment. The Applicant submitted that this would likely have a negative impact on morale of all employees, including the relevant transferring employees, which may in turn impact their productivity and workplace culture.

• [30] I have taken these submissions into account, and consider that they weigh in favour of granting the application.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

• [31] The Applicant submitted that it would incur additional administrative costs if it had to apply multiple enterprise agreements and modern awards to different employees at the Little Bay Facility.

• [32] I consider this a neutral consideration.

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

• [33] The Applicant submitted that whilst the MMLB EA and the Estia Health EA have alignment in the types of employees they cover and their classifications, there is not complete synergy between the agreements. The Applicant submitted that there are a number of terms and conditions which differ, as addressed above. The Applicant submitted, importantly, the MMLB EA only covers Registered Nurses, Enrolled Nurses and Nursing Assistants, whereas the Estia Health EA covers these classifications and other aged care employees.

• [34] The Applicant submitted that business synergy would be achieved by having all of the Applicant's aged care employees in New South Wales working on the same, or substantially similar, terms and conditions under the Estia Health EA. The Applicant submitted that this is the case for the majority of the Applicant's current aged care employees across the country.

• [35] I consider that this weighs in favour of granting the application.

• [36] The Applicant submitted that it would be in the public interest to make the orders sought in this application because doing so would result in more beneficial conditions of employment for the vast majority of the relevant transferring employees.

• [37] The Applicant further submitted that making the orders sought would ensure consistency of terms for all of the Applicant's employees which, in turn, is likely to result in a smooth transition delivering increased morale, productivity and care for the vulnerable people living in the Little Bay Facility.

• [38] I consider that this weighs in favour of granting the application.

• [39] Having considered the matters required by s.318 of the Act, I am satisfied and find that the Applicant's case has been substantiated, and that the Estia Health NSW Enterprise Agreement 2024 will cover the relevant transferring employees employed at the Little Bay Facility.

• [40] An Order will be issued with this Decision in PR787322.

[1] Fair Work Act 2009 (Cth), s.311, s.317.

[2] Affidavit of Mr Gold, Annexures NG-10 and NG-12.

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