s.318 - Application for an order relating to instruments covering new employer and transferring employees

Application for orders relating to transferable instrument.

• [1] IPLiving (IPL) is a new independent retirement community business. It is established as a joint venture between the Zig Inge Group and Palisade Impact Pty Ltd. IPL was established in November 2024 and currently operates three retirement communities in Victoria.

• [2] IPL proposes to acquire a retirement community called the Rosebud Village, located at 287-323 Bayview Road, Rosebud, Victoria. The Rosebud Village is owned by Baptist Village Baxter Limited trading as The Village Baxter.

• [3] The Village Baxter currently employs six employees who work at the Rosebud Village, who are proposed to transfer from The Village Baxter to RC Operations Pty Ltd, a wholly owned subsidiary of IPL, as part of the proposed acquisition (Transferring Employees). The Village Baxter, ANMF and HSU Enterprise Agreement 2017[1] (Village Baxter Agreement) covers and applies to the employment of the six Transferring Employees.

• [4] RC Operations is making offers of employment to the Transferring Employees. It filed an application in the Commission pursuant to s 318 of the Fair Work Act 2009 (Cth) (Act) seeking an order that the Village Baxter Agreement not cover it in relation to any of the Transferring Employees (s 318(1)(a)). The order is sought to commence operation from the time that the Transferring Employees become employed by RC Operations.

• [5] For the reasons that follow, I am satisfied that the order should be made.

• [6] RC Operations submits, and it is not in dispute, that the Commission has jurisdiction to make the order sought, as there is likely to be:

(a) a transfer of business from an old employer to a new employer in accordance with s 317 of the Act and within the meaning of Part 2-8 of the Act; and

(b) a transferable instrument within the meaning of s 312 of the Act that would, or would likely to, cover RC Operations and a Transferring Employee.

• [7] Having regard to the material before the Commission, including the evidence of the Chief Executive Officer of IPL Mr Mark Fay,[2] I am satisfied that there will likely be a transfer of business from The Village Baxter to RC Operations, as the new employer, within the meaning of s 311 of the Act. This is because it is proposed that once the proposed acquisition is finalised:

(a) the employment of the Transferring Employees with The Village Baxter will terminate;

(b) within three months of the termination, the Transferring Employees will become employed by the new employer, RC Operations;

(c) the work the Transferring Employees will perform for RC Operations is the same, or substantially the same, as the work the employee performs for The Village Baxter; and

(d) based on the proposed arrangement for The Village Baxter (or an associated entity of the old employer) to sell certain assets such as plant and equipment to RC Operations (or an associated entity), there is a requisite connection between the two parties, as described in subsections 311(1)(d) and 311(3) of the Act.

• [8] In light of these matters, if the transfer of business described above proceeds, each of the Transferring Employees will be a transferring employee in relation to the transfer of business, within the meaning of s 311(2) of the Act. Further, the Village Baxter Agreement is a transferable instrument within the meaning of s 312(1)(a) that will cover RC Operations and the Transferring Employees in relation to the transferring work, after the time that the Transferring Employees become employed by RC Operations (s 313(1)(a) of the Act).

• [9] RC Operations has standing to make this application in the Commission. In the circumstances described and pursuant to s 318(2)(a) of the Act, it is likely to be the new employer of the Transferring Employees.

• [10] In deciding whether to make the orders sought, I must take into account the matters set out in s 318(3) of the Act, which are considered in the analysis that follows.

The views of the new employer or a person who is likely to be the new employer and the views

of the employees who would be affected by the order (s 318(3)(a))

• [11] The Commission must take into account the views of the new employer and the employees who would be affected by the order.

• [12] Having made the application, RC Operations supports the order being made and submits that each of the six Transferring Employees are also supportive of the application. RC Operations says that it met with each Transferring Employee on 13 March 2025 with a copy of their proposed terms and conditions of employment with RC Operations, and a letter outlining the steps to be taken by RC Operations in relation to this application. The purpose the meeting was to provide a detailed explanation of the employment offers, outline the implications for the Transferring Employees if an order is made by the Commission, and seek the Transferring Employees' support for the application. By 24 March 2025, RC Operations had received signed consent letters from each Transferring Employee, as well as signed copies of their tailored proposed employment contract. All of the Transferring Employees are supportive of the application.[3]

• [13] The Commission issued directions in this matter on 4 April 2025 requiring RC Operations to provide the Transferring Employees and relevant employee organisations covered by the Village Baxter Agreement with:

(a) a copy of the directions;

(b) the Form F40 Application for orders in relation to a transfer of business filed in the Commission on 1 April 2025 and its attachments; and

(c) advice that they may make a submission or file materials in response to the application in writing to Chambers.

• [14] RC Operations submitted evidence of the service of this material on 8 April 2025. While no submissions were received directly from any Transferring Employees, the ANMF filed submissions on its own behalf and on behalf of two of the Transferring Employees (who are its members and whose industrial interests it represents). The position advanced by the ANMF was that following productive discussions with IPL regarding employment terms and conditions for its members, it does not oppose the application.[4]

• [15] I am satisfied that through the processes described, the employees who would be affected by the order have had an opportunity to express responsive views to the application. The views before the Commission weigh in favour of making the orders sought.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment (s 318(3)(b))

• [16] The Commission must consider whether any employee would be disadvantaged by the order in relation to their terms and conditions of employment. Before the Commission is a copy of the proposed employment contracts for the Transferring Employees, which:[5]

(a) offers a salary and an additional salary amount that is in excess of the wages that the Transferring Employees are entitled to receive under the Village Baxter Agreement, and in excess of what the Transferring Employees currently receive from The Village Baxter;

(b) provides for certain allowances in accordance with the applicable modern award;

(c) maintains beneficial paid personal leave, parental leave, long service leave and emergency services leave entitlements from the Village Baxter Agreement, which are significantly in excess of what the Transferring Employees would be entitled to receive under the applicable modern award or legislation; and

(d) recognises continuity of service for the purposes of all service-related entitlements.

• [17] Further, it has been agreed with the Transferring Employees that they will be entitled to overtime and public holiday entitlements in accordance with the terms of the applicable modern award (the Aged Care Award 2010/Nurses Award 2020) or the Village Baxter Agreement, whichever entitlement is higher.[6]

• [18] Having regard to these matters, I am satisfied that the Transferring Employees will not be disadvantaged in relation to their terms and conditions of employment if the order sought by RC Operations is made. I consider that this weighs in favour of making the order.

If the order relates to an enterprise agreement--the nominal expiry date of the agreement (s 318(3)(c))

• [19] The Village Baxter Agreement has passed its nominal expiry date of 31 July 2021.[7] I regard this to be a neutral consideration.

Whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace (s 318(3)(d))

• [20] The Act requires the Commission to consider whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace. RC Operations contends that it would for the following reasons:[8]

(a) the Village Baxter Agreement would impose a rigid set of terms and conditions that are suited to a high-care aged care business and not suited to a stand-alone retirement community business. This would include imposing obligations on RC Operations to, amongst other things, employ a full-time Director of Nursing or the equivalent, and make every practical effort to ensure than an additional registered nurse is employed to work on each shift in each facility; and

(b) RC Operations would be required to maintain the specific terms and conditions in the Village Baxter Agreement for the six Transferring Employees, including by configuring a 'stand-alone' payroll system just for those employees. Any new non-transferring employees who work at the Rosebud Village (for example, new employees or employees who transfer from IPL's other retirement communities) would be covered by either the Aged Care Award 2010 or the Nurses Award 2020 (together, the Awards). RC Operations submits that the additional administrative burden and duplication created by two systems would create significant inefficiencies and a negative impact on workplace productivity, and would not promote a cohesive workplace culture, particularly if two employees who perform the same work at Rosebud Village are subject to different industrial instruments.

• [21] I consider that the Village Baxter Agreement contains provisions that do not appear to be relevant to RC Operations given its business of operating a retirement community. For instance, RC Operations does not intend to provide advance care services such that it does not currently see a need to employ registered nurses. A requirement to adhere to the terms of the Village Baxter Agreement, including hiring registered nurses and establishing specific rostering requirements for a nursing workforce in circumstances where the residential community business does not offer or require these services to be provided this way,[9] may negatively affect the productivity of RC Operations' workplace. This weighs in favour of making the order.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer (s 318(3)(e))

• [22] RC Operations submits that it would incur significant economic disadvantage if the Village Baxter Agreement covered it and the employment of the Transferring Employees, for the following reasons:[10]

(a) to comply with the Village Baxter Agreement, RC Operations would be obligated to employ new staff in nursing roles at Rosebud Village, creating a significant labour cost; and

(b) RC Operations would need to implement a new payroll system to accommodate terms, conditions, classifications and pay rates in the Village Baxter Agreement. Establishing and maintaining such a system for six employees would create significant financial costs and other related disadvantages for RC Operations. This would include both internal costs (having a dedicated payroll team member to run a payroll just for the six Transferring Employees) and external costs (advice to configure and implement the system). These costs would potentially be recurring costs on an ongoing basis, if Transferring Employees remained in their employment with RC Operations.

• [23] While I accept that RC Operations may incur labour costs, potentially over an extended period of time as a consequence of the ongoing administration of multiple instruments, there is insufficient information presently before the Commission to satisfy me that any economic disadvantage in this instance will be significant. I therefore regard this factor to be a neutral consideration.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer (s 318(3)(f))

• [24] The Commission is required to consider the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer. RC Operations contends that there is a lack of business synergy between the Village Baxter Agreement and the Awards, for the following reasons:[11]

(a) while the Village Baxter Agreement applies to employees who would otherwise be covered by either of the Awards, it is a 'one size fits all' instrument that prescribes that all facilities be treated as high-care facilities that employ the relevant nursing workforce. By comparison, the Awards regulate minimum terms and conditions of employment for the particular employees covered by them; and

(b) the Village Baxter Agreement includes complex classification structures and rostering provisions that are not relevant to Rosebud Village. This lack of business synergy would create both operational and administrative complexities if compliance is required.

• [25] On the material before the Commission, there appears to be little business synergy between the Village Baxter Agreement and the Awards. This consideration weighs in favour of the order being made.

• [26] Section 318(3)(g) requires the Commission to consider the public interest. The notion of public interest is informed by the objects of Part 2-8 as set out in s 309, and the objects of the Act more generally under s 3. This entails a concern for the protection of transferring employees' conditions of employment and the importance of an employer being able to run its enterprise efficiently.[12]

• [27] RC Operations submits that this criterion is a neutral consideration. It says that making the order would provide an appropriate balance between the protection of the Transferring Employees' terms and conditions of employment under the Village Baxter Agreement against the interests of RC Operations in the efficient operation of its enterprise. I agree.

• [28] In deciding whether to make the order, I am required to take into account all the matters in s 318(3) of the Act. I am satisfied on the basis of the matters set out in this decision that I should make the order sought.

• [29] I will order that pursuant to s 318(1)(a) of the Act, that the Village Baxter Agreement does not, or will not, cover RC Operations or the Transferring Employees in relation to the employment of the Transferring Employees by RC Operations.

• [30] For the purposes of s 318(4) of the Act, the order will come into operation in respect of a Transferring Employee on the date that the Transferring Employee becomes employed by RC Operations.

• [31] An order giving effect to this decision is issued separately in PR786756.

[1] [2019 FWCA 2221; AE502687

[2] Witness statement of Mark Simon Fay dated 1 April 2025 (Fay witness statement)

[3] Fay witness statement at [22]-[28] and Attachments 2, 3 and 4

[4] Correspondence from the Australian Nursing and Midwifery Federation to Chambers dated 23 April 2025

[5] Fay witness statement at [31] and Attachment 2

[6] Fay witness statement at [31(c)] and [31(e)]

[7] Village Baxter, ANMF and HSU Enterprise Agreement 2017 [2019] FWCA 2221; AE502687 at [6]

[8] Fay witness statement at [13]-[18]

[9] Fay witness statement at [15]-[16]

[10] Fay witness statement at [19]-[20]

[11] Fay witness statement at [13]-[18]

[12] See AustralianSuper Pty Ltd [2024] FWC 734 at [23] (per Colman DP)

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