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

Parkville Youth And Mental Health And Wellbeing Service

VICTORIAN PUBLIC MENTAL HEALTH SERVICES ENTERPRISE AGREEMENT 2020-2024

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

• [1] Parkville Youth and Mental Health Wellbeing Service (the Applicant) has applied for an order under s 319(1)(b) of the Fair Work Act 2009 (Cth) (the Act) that the Victorian Public Mental Health Services Enterprise Agreement 2020-2024[1] (the Mental Health Agreement) will cover any non-transferring employee who commences employment with it on or after the date of this decision and subsequent order.

• [2] The Mental Health Agreement was originally approved by the Commission on 17 June 2022[2] and reached its nominal expiry date on 31 December 2024. 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 that the Health and Community Services Union (HACSU) and the Australian Nursing and Midwifery Federation (ANMF) support the application, I have determined that the matter can be dealt with on the papers.

• [4] The Mental Health Agreement applies to employees engaged solely, or predominantly in the provision of Mental Health Services (defined as the delivery of human services concerned with the prevention of mental illness and the assessment, treatment, rehabilitation, maintenance and support of those persons who may be at risk of suffering from mental illness or psychiatric disability in a classification/occupation contained within the Mental Health Agreement by Employers listed in Schedule 1 of the Mental Health Agreement).

• [5] The Mental Health Agreement is a single-enterprise agreement covering 17 public health sector employers listed at Schedule 1 of the Mental Health Agreement. Each relevant employer operates within the umbrella of the Victorian public health system, subject to largely the same common Victorian and Commonwealth government funding arrangements, statutory obligations and policy requirements.

• [6] Following the recommendations of the Royal Commission into Victoria's Mental Health System, the Victorian Government is, amongst other things, realigning mental health services to provide a more accessible, responsive, and well-resourced mental health service delivery for Victorians in north and western metropolitan Melbourne.

• [7] Mental health services for people living in northern and western metropolitan Melbourne were until recently provided by NorthWestern Mental Health (NWMH); a division of Royal Melbourne Hospital (Melbourne Health). Those services are organised into local area mental health services and programs, spanning 32 sites across the north and west of Melbourne. The area mental health services and programs managed by NWMH prior to the Public Mental Health Service realignment included:

• North West Area Mental Health Service (NWAMHS);
• Northern Area Mental Health Service (NAMHS);
• Inner West Area Mental Health Service;
• Mid West Area Mental Health Service (MWAMHS);
• Aged Persons Mental Health Program (APMH);
• Orygen Specialist Program.

• [8] The first stage of the realignment took effect on 4 July 2022, with NWAMHS and NAMHS separating from Melbourne Health's NWMH and commencing to be operated by Northern Health.

• [9] The second stage of the realignment took effect on the 1 July 2023, with MWAHMS and APMH separating from Melbourne Health and commencing to be operated by Western Health For this to occur, Western Health became a designated mental health service under the Mental Health Act 2014 (Vic) and the relevant employees transferred.

• [10] The next stage of the realignment involves Melbourne Health Orygen Specialist Program Employees transferring from Melbourne Health to the Applicant on 1 July 2025. This has required the Applicant to also become a designated mental health service under the Mental Health Act 2014 (Vic).

• [11] At the time bargaining for the successor agreement to the Mental Health Agreement commenced in July 2024, and the single interest employer authorisation was subsequently sought and approved, it was anticipated that bargaining for the successor agreement would be complete by the nominal expiry date. This however has not been the case, so the Applicant will be able to be part of the successor agreement once it is finalised.

• [12] 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;

• [13] 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 the Applicant, it is necessary to establish whether the Mental Health Agreement is a transferrable instrument that would cover the Applicant and the Non-Transferring Employees, subject to any order of the Commission.

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

(i) The Applicant 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 the Applicant, the Award would otherwise apply to them (s 314(1)(d)).

• [15] As a consequence of the above, I am satisfied that the Mental Health Agreement will not cover the Applicant 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

• [16] The Applicant submits that it wishes to engage employees in classifications covered by the Mental Health Agreement on a common set of terms and conditions, regardless of whether they are transferring employees or non-transferring employees. The Applicant further submits, 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.

• [17] HACSU and the ANMF which are covered by the Mental Health Agreement, have advised that they support the application.

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

• [19] 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

• [20] While there are currently no non-transferring employees, I note that the terms and conditions of employment under the Mental Health 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

• [21] As noted above, the Mental Health Agreement reached its nominal expiry date on 31 December 2024. Given the successor agreement has not yet been resolved, there is utility in the orders sought given new non-transferring employees' terms and conditions will be safeguarded by the Mental Health Agreement until a successor agreement is finalised.

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

• [22] I accept the Applicant's 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 to its workforce. 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

• [23] It was not submitted and nor do I consider that the Applicant would incur significant economic disadvantage as a result of the Mental Health 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

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

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

• [26] 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 11 July 2025 or when non-transferring employees are employed by the Applicant and start to perform transferring work, whichever is the latter date.

[2] [2022] FWCA 1987.

[3] MA000027.

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

[5] PR789157.

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