Probably not, because a condition for that exemption is that the new employer recognises prior service with the old employer.
The enterprise agreement that covered the workforce of the factory you have purchased, until you make and implement a new enterprise agreement.
No. The new employer in a transfer of employment situation can only decide not to recognise the transferring employee’s service with the old employer for the purposes of annual leave where the transfer of employment is between non-associated entities. The old employer could only cash out annual leave immediately before the transfer, subject to Fair Work Act rules (see section 94). If that occurs lawfully, then because the transferring employee has already had the benefit of annual leave calculated by reference to a period of service with the old employer, the new employer does not need to count that service when calculating the employee’s entitlement (section 22(6)).
No. The transferring employees have to either use the assets you acquired from the old employer, or there has to be some other relationship between the assets and their work, in order for the FW Act transfer of business provisions to apply.
Only in respect of long service. In respect of other service-based entitlements the absence of any arrangement between the old operator and you permitting your use of the old operator’s assets means the FW Act transfer of business provisions will not apply.
No, but the Fair Work Commission may create that obligation. A union with relevant coverage over the employees being retrenched, or the employees themselves, can apply to FWC for orders requiring that consultation (section 531 Fair Work Act). The union can make this application even if it does not have any actual members affected by the retrenchments.
No. If an enterprise agreement does not include a consultation term, a model consultation term prescribed by the Fair Work Regulations (Regulation 2.09, Schedule 2.3) is taken to be a term of the agreement.
No. Where the award makes provision for alteration of any of these matters an alteration is deemed not to have significant effect. For example, under the Clerks-Private Sector Award the employer can change the days on which a part-time employee works by giving one week’s notice of the change (clause 11.4).
Yes. The Fair Work Information Statement contains information about how transfers of business can affect an employees’ employment entitlements.
It depends what the change is, and whether your employees are covered by a modern award or enterprise agreement.
Award/Agreement covered employees:
Non-compliance with a consultation obligation arising under a modern award or enterprise will expose an employer to legal claims from either affected employees, a union representing those employees or the Fair Work Ombudsman.
In 2010 the Federal Court fined QR National $249,600 for its failure to comply with its enterprise agreement obligation to consult with employees about changes to employment arrangements flowing from its plans to privatise some of its operations. The relevant unions brought that proceeding. The evidence showed that the failure to consult did have a material impact on affected employees.
Award/Agreement free employees:
Whilst it is considered best practice to consult with employees about major workplace change, it is not necessarily an obligation set in place by the FW Act for those employees who are award and/or agreement free. Failing to consult with your employees in some situations (e.g. mergers with other companies, or acquisitions of other companies) may be a practical and deliberate necessity, particularly if there is a chance that confidential merger negotiations may be affected, or jeopardised as a result. On the other hand however, and in other less sensitive circumstances, failure to consult with employees may erode the trust which has been established between employer and employee and could have negative impacts on your business. These may include lowered morale, motivation and engagement.
Entity means a natural person (e.g. Bill Bloggs), a body corporate (e.g. BB Pty Ltd), a partnership (Bill Bloggs and Sons) or a trust (Bill Bloggs as trustee for the Bill Bloggs Family Trust).
Section 50AAA of the Corporations Act 2001 (Cth) defines associated entities. An entity is associated with another entity if they are members of the same corporate group, or if one entity has a certain degree of control over the other. For example, 2 companies are associated entities if one controls the composition of the board of another, such that the second company is a subsidiary of the first.
The control might also arise in other ways, such as under a business loan agreement by one individual to another which requires that the lender approve all significant financial and operational decisions that the borrower makes as part of his or her business. By reason of this control, the borrower and the lender are associated entities.
The Fair Work Act (FW Act) provides that certain industrial instruments are “transferrable” in a transfer of business situation and continue to apply to employees who transfer from the old employer to the new. Some examples of these “transferrable instruments” include:
HR practitioners need to be across transfer of business provisions in order to manage the liabilities of their organisation appropriately and provide support and advice to key leadership about the risks and advantages of this form of change. Whilst it will vary from business to business as to whether HR professionals are directly involved in managing the process of planning transfer of business situations (be it a take-over, business sale, merger or otherwise), HR professionals will inevitably be responsible for managing the effects on employees which are triggered by such change, including; recognition of employment entitlements such as continuity of service, redundancy, long service leave and consultation obligations.
A transfer of business occurs if a number of conditions are satisfied. These are set out by the Fair Work Act and include:
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.
