What is a transfer of business?
A transfer of business occurs if a number of conditions are satisfied. These are set out by the Fair Work Act and include:
- There is a national system employee employed by a national system employer
- The employee ceases employment with the first employer (the old employer) and becomes employed by another national system employer (the new employer) within 3 months after ceasing employment with the old employer (transferring employee)
- The work the transferring employee performs for the new employer is the same, or substantially the same, as the work the employer performed for the old employer (transferring work).
- There is a relevant connection between the old employer and a new employer. Relevant connections include:
- Transfer of assets;
- Insourcing; and
- Associated entity relationship.
In order for the transfer of business provisions to apply, there must be at least one employee who has transferred from the old employer to the new employer.