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

Merri Community Health Services Limited Trading AS Holstep Health

Social, community, home care and disability services

Application for orders relating to transferrable instrument

[1] An application has been made for an order relating to the Victorian Community Legal Centres Multi-Enterprise Agreement 2024-2027 (the CLC MEA). The application was made pursuant to s.319 of the Fair Work Act 2009 (the Act). It has been made by Merri Community Health Services Limited T/A Holstep Health (the Applicant or Holstep Health).

[2] The Applicant seeks that the Commission make an order pursuant to s.319(1)(b) of the Act, that the CLC MEA will cover non-transferring employees who perform, or are likely to perform, transferring work in the Legal Services Program Area for Holstep Health. The CLC MEA has a nominal expiry date of 3 May 2027.

[3] Whilst the situation that has brought this matter to the Commission is somewhat novel and has previously been the subject of some contention, the application is not opposed and indeed the pursuit of the application is the product of a consensus position reached through consultation involving the Applicant, its affected employees and the Australian Servies Union (ASU). The parties are to be commended on finding a way forward that meets their respective needs.

[4] The novelty arises because there have in fact been two recent transfers of business involving the Applicant, and the instrument that the parties seek to apply to the employees at the centre of this application, being the CLC MEA, is an instrument that only has application to the Applicant because of one of those transfers of business.

[5] One of employers covered by the CLC MEA, as pursuant to clause 4 and Schedule 5 thereof, is Social Security Rights Victoria Incorporated (SRV). It is not in dispute that there was an acquisition of SRV by the Applicant. Nor is it in dispute that a consequence of that acquisition was that seven transferring employees performing legal services work commenced with the Applicant and continued to perform such work under the auspices of the CLC MEA from 1 July 2025, being a transferable instrument upon which section 313 of the Act operated.

[6] A statement of Ms Victoria Wright (Manager, People and Culture) for the Applicant was provided in support of the application. Whilst the application itself was detailed, Ms Wright's statement was comprehensive. The materials are not contested, and relevantly indicate that:

• Merri Community Health Services Limited (Merri Health) and Banyule Community Health (BCH) merged on 1 March 2025, becoming what is now known as Holstep Health, the Applicant.

• BCH and Merri Health entered into a Transfer Deed on 22 October 2024, requiring Merri Health to make offers of employment to all BCH employees (unless excluded in the Transfer Deed). The Transfer Deed further required that those offers of employment provide for continuation of the employee's roles, recognise prior service with BCH and require signed acceptance and resignation from their employment with BCH prior to the merger. A number of BCH employees who accepted offers of employment from Merri Health commenced with Holstep Health on 3 March 2025 (the Non-Transferring Employees).

• On 1 July 2025, Holstep Health began providing services previously provided by Social Security Rights Victoria (SSRV). A number of legal services employees who had previously been employed by SSRV commenced employment with Holstep Health on 1 July 2025 (the Transferring Employees). These Transferring Employees provide the same kind of work as the Non-Transferring Employees within the Legal Services Program Area for Holstep Health.

• Banyule Community Health was named as an employer covered by the Community Health Centre (Stand Alone Services) Social and Community Services Employees Multi Enterprise Agreement 2022 (2022 MEA). That agreement reached its nominal expiry date on 30 June 2025.
• Holstep Health made a single enterprise agreement known as the Holstep Health Enterprise Agreement 2024-2027 (Holstep SEA), which was approved on 17 April 2025 and commenced operation on 24 April 2025.
• Any BCH employees to whom the 2022 MEA applied and who transferred to Holstep Health continued to be covered by that agreement and it continued to apply to them by virtue of the provisions of Division 2 of Part 2 of the Act. After 30 June 2025, those employees became covered by the Holstep SEA, and that agreement applied to them, to the extent that it was expressed to cover those employees.

a) A transfer of business has occurred (as defined in s.311),

b) the CLC MEA is a transferable instrument (as defined in s.312),

1. transferring employees will continue to be covered by the Agreement (per s.313),

d) unless an Order is made under s.319, non-transferring and any new employees may otherwise be covered by either the 2022 MEA, the Holstep SEA or, or the CLC MEA, in accordance with s.314 and s. 58 of the Act (depending on the nature of work performed).

e) it is appropriate to make an Order under s.319 so that any transferring employees, non-transferring employees and any new employees performing the same work in the Legal Services Program area for Holstep Health are all covered by the same Agreement.

[8] Part 2-8 of the Act describes when a transfer of business occurs. It also provides for the transfer of enterprise agreements from one employer to another in a transfer of business.

[9] Section 311(1) defines "transfer of business", and section 312 defines the types of "transferable instrument" that may transfer from one employer to another. Sections 317 and 319 of the Act empower the Commission to make orders in relation to a transfer of business, including orders that a transferable instrument will, or will not, cover the new employer in relation to non-transferring employees.

[10] In deciding whether to make orders of this kind, the Commission must take into account the factors set out in section 319(3) of the Act

[11] The Applicant submits that pursuant to s.311(1) of the Act, a transfer of business occurred on 1 July 2025, when Holstep Health commenced providing the services previously provided by SSRV and that:

a) the relevant former employees of SSRV (the transferring employees) are legal services employees, performing work providing these services for the new employer, Holstep Health, in its Legal Services Program area.

b) the transferrable instrument, the CLC MEA, transferred with the transferring employees.

1. any new employees employed by Holstep Health, performing transferring work will not be covered by the transferrable instrument.

d) non-transferring employees are not covered by the CLC MEA.

[12] The application was made on 31 October 2025, accompanied by relevant supporting materials. I conducted a brief case management conference in relation to the Application on 10 November 2025, with the Applicant and a representative of the Australian Services Union attending. Following the conference, I issued directions to the parties, requiring the Applicant to serve on all 'interested persons' (the non-transferring employees and the relevant employee association/s) a copy of the Application, the statement of Ms Wright and a copy of the directions, giving interested persons the opportunity to provide their views on the Application by no later than Friday, 21 November 2025. No responsive submissions were provided to the Commission. In reliance on this uncontested evidence, I am satisfied that a transfer of business has occurred.

[13] Pursuant to s.311 of the Act, I am satisfied that there has been a transfer of business, and the former legal services employees of SSRV are "transferring employees" within the meaning of the Act.

[14] I am also satisfied that the CLC MEA is a transferrable instrument that will cover Holstep Health and the transferring employees in accordance with s.313(1)(a).

[15] Section 314 of the Act provides for a transferrable instrument to cover other employees in certain circumstances as follows:

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

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

b) After the transferrable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and

1. 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 transferrable 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)."

[16] The Australian Services Union and the Applicant were in disagreement as to whether the 2022 MEA or the CLC MEA would or should otherwise apply to the non-transferring employees. The Applicant submits that it is seeking parity of terms and conditions within its workforce and for the instrument covering their terms of conditions of employment to reflect the reality of non-transferring employees performing the transferring work. Accordingly, Holstep Health seeks to apply the same minimum terms and conditions to all its employees who perform transferring work by means of this application for an Order under s.319(1)(b) of the Act.

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

[17] The Applicant's submissions in support of its application indicate that there are 11 non-transferring employees employed by the Applicant.

[18] The Applicant submits that on 30 January 2025, it held a consultation session in which 9 of the 11 non-transferring employees attended and indicated their intention to align with the CLC MEA and making it clear they did not want to be covered by the Holstep SEA. On 2 April, the Applicant then requested that the non-transferring employees vote for which of the two agreements they would prefer to be coved by, providing the employees with a copy of both agreements and a document comparing the two agreements. The Applicant submits that, at this time, it indicated to the employees that its preference was for the employees to be covered by the Holstep SEA, as it wanted to ensure alignment with employees in similar roles.

[19] On 17 April 2025, the ASU, on behalf of the non-transferring employees, noted that their preference was for the employees to be covered by the CLC MEA, where it extended to cover non-transferring employees who have a non-lawyer role.

[20] On 18 June 2025, the Applicant again requested that all non-transferring employees indicate which agreement they would prefer to apply to their employment. All 11 of the non-transferring employees indicated they preferred the CLC MEA.

[21] As noted at paragraph [12] above, I issued directions to the parties on 20 October 2025 requiring the Applicant to serve on all 'interested persons' (the non-transferring employees and the relevant employee association/s) a copy of the Application, the statement of Ms White and a copy of the directions, giving interested persons the opportunity to provide their views on the Application by no later than Friday, 21 November 2025. On 3 December 2025, the Applicant confirmed via email to my Chambers that it had served on the interested persons the material requested. No responsive submissions were provided to the Commission.

[22] As a consequence, and in all the circumstances, I have formed the view that this factor weighs in favour of granting the Order sought.

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

[23] The Applicant submits that it considers that the CLC MEA may not offer the same benefits as the Holstep MEA for the non-transferring employees, however, notes that the non-transferring employees consider themselves to be better off under the CLC MEA.

[24] The Applicant notes that, in comparison with the Holstep SEA, employees under the CLC MEA will receive:

• lower pay rates for every classification level (i.e. level 1 to 8 and each pay point);

• a percentage increase in allowances as determined by the Fair Work Commission following the Annual Wage Review (which dependent on the Annual Wage Review, may be higher or lower than the Holstep SEA);

• if required to work during a meal break, a higher rate of overtime (in comparison to the Holstep SEA) for all time worked until the meal break;

• A 3 moth period to take any time off in lieu (rather than an agreed upon time between the employee and Holstep Health);

• the same amount of annual leave (i.e. 5 weeks);

• fewer days of purchased leave (i.e. 4 weeks instead of 8 weeks under the HH1);

• fewer days of compassionate leave (i.e. 3 days per occasion instead of 5 days per occasion under the HH1);

• a smaller accrual rate of long service leave (i.e. 3 months after 10 years of service and a further 1.5 months' leave per each additional 5 years, instead of 6 months after 15 years' continuous service and an additional 2 months per each additional 5 years under the HH1);

• a different entitlement to excessive annual leave, which must be taken within a smaller period of time (i.e. upon accruing over 4 weeks' instead of upon accruing more than 10 weeks' for employees); and

• three days paid leave during the period between Christmas Day and New Years Day each year.

[25] The Applicant nevertheless notes that, the non-transferring employee's preference is to be covered by the CLC MEA, as their preference is to be covered by an occupation-specific enterprise agreement.

[26] On the material before me, it is possible that the non-transferring employees may be disadvantaged by the Order sought, at least in some respects. This factor weighs against the granting of the Order sought.

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

[27] The nominal expiry date of the CLC MEA is 3 May 2027, while the nominal expiry date of the Holstep SEA is 1 August 2027.

[28] These dates are not significantly different. I treat this as a neutral factor.

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

[29] The Applicant submits that, if granted, the effect of the Order will be to assist in promoting workplace productivity in respect of the non-transferring employees. The Applicant has submitted that it has been notified by the ASU that the union will raise a formal dispute on behalf of the non-transferring employees if the order is not granted. Furthermore, it is clear on the materials that non-transferring employees will be disaffected and disappointed if their views are not given effect to by this decision. There is a significant risk of industrial disharmony that may have productivity impacts. It would certainly be difficult to quell such disharmony in circumstances where all relevant parties had put an agreed pathway forward and the Commission had refused it.

[30] This factor weighs in favour of granting the Order.

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

[31] The Applicant submits that it would not suffer economic disadvantage as a result of the granting of the proposed Order.

[32] Based on these submissions and the material presented, I have formed the view that this factor weighs in favour of granting the Order.

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

[33] The Applicant submits that the CLC MEA can co-exist with the other industrial instruments already applicable to Holstep Health and its application will ensure that all staff performing legal services work at Holstep Health are covered by the same instrument (the CLC MEA).

[34] I consider this factor weighs in favour of granting the Order sought.

[35] Based on the materials before me, I am satisfied that it would not be contrary to the public interest to make the Order sought and that that granting of the Order would provide more certainty and consistency in relation to employment conditions for both employees and the employer.

[36] It is not insignificant in this regard that the ultimate object to be served by the Act, as stated in section 3 thereof, is the provision of a framework for cooperative and productive workplace relations. The Applicant in this case was presented with a technically complex situation to navigate and potentially disparate terms and conditions of employment for employees performing the same work. It sought to solve the problem it faced by consulting with its workforce and their representatives, explaining its view, seeking their response and genuinely considering those responses. That consultation process opened up an opportunity for consensus. It is clearly in the public interest to give effect to that consensus absent any prohibition on doing so.

[37] 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 on balance an order pursuant to s.319 of the Act should be made in respect of this application.

• [38] The Order will be issued concurrently with this decision.[1]

[1] PR796875.

Printed by authority of the Commonwealth Government Printer