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

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

• [1] KU Children's Services (Applicant) has made an application pursuant to s.319 of the Fair Work Act 2009 for orders relating to instruments covering a new employer and non-transferring employees.

• [2] The Applicant is the new employer of six early learning and child care centres, namely:

1. KU Knoxfield
2. KU Mariemont
3. KU FW Kerr
4. KU Alexander Magit
5. KU The Fields
6. KU Riddell Road

• [3] The Centres were previously operated by Knox City Council. Employees of the Centres whose employment were transferred to the Applicant are covered by the Early Education Employees Agreement 2020 (the Agreement). In accordance with s.313(1) of the Act, the Agreement, being a transferable instrument by virtue of s.312(1)(a), covers the Applicant and the transferring employees.

• [4] The Applicant seeks orders to the effect that the Agreement will also cover non-transferring employees who are engaged to perform the transferring work at the Centres. Absent the orders sought, the non-transferring employees will be covered by two other enterprise agreements that apply to the Applicant: KU Children's Services and Administrative Employees Enterprise Agreement 2013 and KU Children's Services - Teachers Enterprise Agreement 2019 (together, the 'KU Agreements').

• [5] The Australian Education Union and the United Workers' Union are the employee organisations covered by the Agreement. Both unions have indicated their support for the application and content for it to be determined on the papers.

• [6] Section 314 of the Act provides:

314 New non-transferring employees of new employer may be covered by transferable instrument

(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and

(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and

(c) the non-transferring employee performs the transferring work; and

(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;

then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.

(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.

(3) This section has effect subject to any FWC order under subsection 319(1).

• [7] Section 319(1) of the Act sets out the provisions for orders that the Commission may make in relation 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.

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.

• [8] Section 319(3) of the Act further sets out the matters that the Commission must take into account in deciding whether to make an order:

(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;

• [9] I am satisfied that the Applicant has standing to apply for the orders it seeks under s.319(2) of the Act. I now turn to deal with each of the matters set out in s.319(3) of the Act.

Views of the new employer- s.319(3)(a)(i)

• [10] The Applicant is the new employer and supports the application.

Views of the employees who would be affected by the order - s.319(3)(a)(ii)

• [11] The Applicant submits that it has consulted with all of its 13 non-transferring employees and all of them voted to be covered by the Agreement.

Whether any employees would be disadvantaged by the order - s.319(3)(b)

• [12] The Applicant submits that the Agreement contains more beneficial terms than the KU Agreements that would otherwise apply. The non-transferring employees would not be disadvantaged in relation to their terms and conditions of employment if the orders are made.

The nominal expiry date of the agreement - s.319(3)(c)

• [13] The Agreement has passed its nominal expiry date of 30 September 2024. It is submitted that a new enterprise agreement is currently in the process of being negotiated.

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

• [14] The Applicant submits that the Agreement would not have a negative impact on the productivity of the workplace.

Any significant economic disadvantage to the new employer - s.319(3)(e)

• [15] The Applicant submits that there would be no economic disadvantage if the orders are made. According to the Applicant, the Agreement aligns with the requirements for application for the Victorian Teacher Supplementary Funding which will allow the Centres to be economically viable in the Victorian children's services market.

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

• [16] The Applicant submits that the coverage of non-transferring employees by the same enterprise agreement as the transferring employees performing the same work will assist in providing harmony in the workplace and make operational decisions easier and more equitable.

The Public interest - s.319(3)(g)

• [17] The Applicant submits that it would not be contrary to the public interest if the orders are made.

• [18] I have considered the material provided by the Applicant and accept the submissions made in support of the orders sought.

• [19] Taking into account each of the matters set out in s.319(3) of the Act, I am satisfied that it is appropriate to grant the application. An Order in the terms sought will be issued with this decision.

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