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

Application for orders relating to transferrable instrument.

• [1] Uniting AgeWell Limited (Applicant) provides a number of aged care services, including relevantly operating residential facilities. This decision relates to a residential aged care facility in Wantirna South Victoria, previously operated by the Latvian Friendly Society Limited ("the LFS Facility"). Prior to the events described in this decision, the employees employed by the Latvian Friendly Society at the LFS Facility were covered by an enterprise agreement known as the Latvian Friendly Society Ltd Aged Care Agreement 2021[1] (the "LFS Agreement"), and the LFS Agreement applied to those employees.

• [2] The Applicant purchased and took over the operations of the LFS Facility on 13 June 2025. It made an application on 3 June 2025 for an order under subsection 318(1) of the Fair Work Act 2009 (Act) to prevent the LFS Agreement from continuing to apply to the transferring employees at the LFS Facility. The Applicant and its employees in other residential aged care facilities are and were covered by the Uniting AgeWell Victoria ANMF, HWU and ASU Enterprise Bargaining Agreement 2024[2] (the "UA Agreement") and the UA Agreement applies to them. The Applicant sought by its application to also ensure that the UA Agreement would apply to the transferring employees.

• [3] The Application was supported by the ANMF and the HWU, both of whom were also covered by the LFS Agreement and the UA Agreement. The Application was unable to be programmed for determination prior to date upon which transfer of business was due to take place. In the circumstances, I proposed, and the parties agreed that I would bring the matter on urgently for the purposes of determining whether an interim order might be issued. An interim order[3] was issued on 13 June following a brief hearing on that day. This decision deals both my reasons for making the interim order and with the final determination of the matter.

• [4] It was not in dispute that the circumstances of the Applicant purchasing and assuming the operations of the LFS facility amount to a transfer of business within the meaning of section 311 of the Act, and that the Applicant was the "new employer" in those circumstances. That being the case, the transferring employees engaged to perform work at the LFS facility would, in the ordinary course, continue to be covered by the LFS Agreement and the Applicant would become covered by it also.[4] Following a period of consultation with employees and the ANMF in particular, offers of employment were made to the transferring employees by the Applicant on the basis that the UA Agreement would apply to those employees together with the few more generous entitlements contained in the LFS Agreement. Additionally, it was agreed that for the few employees whose base rates of pay were higher under the LFS Agreement, those existing base rates would be preserved until overtaken by the applicable rate for the employee's classification under the UA Agreement. The parties are to be commended for their consultative and collaborative approach in preparing for the acquisition and in advancing the current application on a consensual basis.

• [5] The Applicant has standing to bring the application as the new employer, pursuant to section 318(2)(a) of the Act. The power to make an order under section 318(1) is discretionary, and requires at section 318(3) the following matters to be taken into account:

(a) the views of:

(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 transferrable 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 transferrable instrument covering the new employer;

(f) the degree of business synergy between the transferrable instrument and any workplace instrument that already covers the new employer;

(g) the public interest.

• [6] The application was detailed, comprehensive and accompanied by itemised comparisons of wages as conditions as between the UA Agreement and the LFS Agreement. The Application also identified the particular conditions from the LFS Agreement that the Applicant had undertaken to continue to provide the transferring employees, together with recognition of service.

• [7] The application and its annexures were tendered as evidence for the Applicant in the interim hearing on the basis that they had been prepared by the Applicant's solicitor and he was in a position to affirm that they were prepared on the basis of information provided by his client and he believed their contents were true. There was no dispute as to the facts.

• [8] The interim order[5] was determined on the basis of whether there was a prima facie case or serious question to be tried in relation to the Applicant's entitlement to the relief it was seeking, and whether the balance of convenience favoured the making of an interim order (there being no availability of damages in the present context).[6] The interim order annexed an undertaking from the Applicant concerning the additional entitlements referred to at paragraph [4] above. The only reason that I considered it inappropriate to proceed to determine the matter on a final basis is that I considered it prudent to take some steps to independently seek the view of the transferring employees who would be effected by the order sought, to supplement what had been said on information and belief by [7]he Applicant7 and the supportive submissions of the HWU and ANMF. Directions were issued together with the Interim Order requiring, inter alia, that the Interim Order, Directions and application be served on the transferring employees. The Directions provided an opportunity for any transferring employee to respond to the application (and any other material filed in support of it) or otherwise "give their views pursuant to section 318(3)". In the event, no material was received from the transferring employees. The applicant, the ANMF and the HWU subsequently indicated that they were content for the matter to be determined on the papers. Out of an abundance of caution, I required the employer to circulate to the transferring employees a copy of the transcript of the hearing relating to the making of the interim order, along with an invitation to those employees to give their views in relation to the substantive application directly to chambers within 10 days. No views were expressed in response to that invitation.

The views of the new employer and the views of the employees

• [9] The Applicant, being the new employer, is self-evidently supportive of the order being made. It seeks the order in an effort to apply uniform conditions of employment and avoid administrative burdens.[8]

• [10] The Applicant says that it has met with each of the transferring employees and explained the offers of employment it was making on the basis of the UA agreement and made its representative available to consult and answer any questions or concerns. As at 30 May 2025, four days before making the application, 65 of 80 employees (who would be transferring employees had the offers been accepted) had accepted those offers and none had expressed any dissatisfaction about the terms offered.

• [11] Working with the ANMF, the Applicant had also agreed to the additional conditions referred to at paragraph [4] above. The ANMF and the HWU represent the industrial interests of transferring employees and are supportive of the application.

• [12] In light of these matters, and in the absence of any transferring employee expressing a contrary view having had the opportunity to do so, I am satisfied that the views before the Commission weigh in favour of making the orders sought.

• [13] The detailed comparison materials provided by the Applicant suggest that most transferring employees would be better off if the UA Agreement applied to them than if the LFS Agreement did. In any event, the offers of employment and additional conditions agreed with ANMF as reflected in the undertaking the Applicant gave in connection with the Interim Order leave no doubt that the transferring employees will not be disadvantaged. I consider that this weighs in favour of making the order.

• [14] The Applicant has indicated an intention to circulate to transferring employees some correspondence reflecting the commitments given and has supplied a copy of that correspondence to chambers. It is contented that such correspondence effects a variation of the transferring employees' contracts of employment, although the position is probably more specifically that the transferring employees continuing to work after receipt of that correspondence signifies their acceptance of the varied terms. Be that as it may, there are two items not specifically addressed in that correspondence, being those at paragraphs 11 and 12 of the undertaking provided at the time the Interim Order was obtained - which were concerned with classification translation and recognition of service respectively. Whilst the undertaking has no doubt been given effect to in full already, it would of benefit if the correspondence provided to the transferring employees informed them of this.

If the order relates to an enterprise agreement, the nominal expiry date of the agreement

• [15] The LFS Agreement reached its nominal expiry date on 31 March 2025. The UA Agreement will reach its nominal expiry date on 1 April 2028. I regard these as neutral matters in determining the current application.

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

• [16] The Applicant submits that there is at least a risk of negative productivity impact, as a secondary effect of workplace morale were the LFS Agreement apply to some employees working side by side with employees to who the UA Agreement applied.[9] As with all aspects of the Application, this proposition was not contested.

• [17] There is level of speculation associated with this submission. Certainly given the position ultimately taken by the HWU and ANMF in supporting the additional benefits that the Applicant is willing to provide, it might be assumed that had those additional benefits not been provided there would have been some degree of discontentment and agitation for change. It might however be a stretch to suggest that this dynamic would result in lesser output for the same quantity of staff. In the circumstances, I regard this a neutral consideration.

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

• [18] The central economic disadvantage associated with continuing to apply the LFS Agreement to the transferring employees relates to payroll systems. It is contended that existing payroll systems cannot accommodate the automation of some of the peculiarities of the LFS Agreement, such that manual processing would be required. The necessary manual processing was said to require the Applicant to take on additional resources.[10]

• [19] Whilst I accept the logic of the proposition advanced, there is simply insufficient information about scale of the associated costs in the context of the Applicant's overall operating budget upon which to satisfy me that the economic disadvantage in this instance would be "significant". In the circumstances, it is appropriate that I regard this as a neutral factor.[11]

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

• [20] Whilst it was not put so highly as to suggest that the LFS Agreement was entirely incompatible with the conduct of the Applicant's business under the UA Agreement, there are points of difference. These include in the classification structures, in the LFS Agreement adopting a narrower span of ordinary hours than the UA Agreement, in the LFS Agreement adopting a strict weekly limit of less than 38 hours for part time workers compared to the UA Agreement allowing 76 hours over a two week period and in the LFS Agreement containing discrete rostering and change of roster provisions not contained in the UA Agreement.

• [21] The above points of difference are sufficient to satisfy me that this consideration weights somewhat in favour of the order being granted.

• [22] The Applicant's position is that the public interest is a neutral factor in this matter.[12] This in my view sells the matter short.

• [23] The public interest is informed, among other things, by the objects of Part 2-8 of the Act as set out in section 309 and in the objects of the Act generally as set out in section 3. Section 309 relevantly sets out that the object of Part 2-8 is to provide a balance between the "protection of employees terms and conditions of employment under enterprise agreements..." and "the interests of employers in running their businesses efficiently". That balance is precisely what the parties to this matter have presented to the Commission, through "cooperative and productive workplace relations" as envisioned by section 3. They have engineered a transition that permits the Applicant to apply the UA Agreement while preserving key legacy benefits of the LFS agreement for transferring employees. The public interest weighs strongly in favour of the Application being granted.

• [24] Having taken into account all the matters required under section 318(3), I am satisfied that I should make the order sought.

• [25] An order giving effect to this decision is published separately.[13]

[1] [2022] FWCA 2223.

[2] [2024] FWCA 3947.

[3] PR788184.

[5] PR788184.

[6] See Australian Broadcasting Corporation v. O'Neill [2006] HCA 46.

[7] At paragraphs 16-20 of the Application (Exhibit IA1).

[9] Exhibit IA1 at paragraphs 32-32, PN63.

[11] RC Operations [2025] FWC 1198 at [23].

[13] PR790830.

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