Federal Court makes declaration regarding employee transfer

In brief 2 min read

The Federal Court has declared that the transfer of workers currently employed by Crown in Melbourne and Perth to new private gaming facilities in Sydney will not result in a 'transfer of business' under the Fair Work Act 2009 (Cth) (the FW Act).¹ As a result, enterprise agreements currently applicable to the Melbourne and Perth employees will not continue to apply if they transfer to Sydney.

Key takeaway

• This decision highlights that when determining whether a 'transfer of business' has occurred, factors other than the specific tasks performed by employees may be relevant. These factors may include the location of the new work, the nature of the facilities, and the nature of the enterprise in which the new work is to be performed.

Background

Crown is preparing to operate new 'members-only' gaming facilities through a subsidiary in Sydney. In order to staff the new facilities, Crown Sydney offered employment to 86 workers currently employed by separate Crown subsidiaries in Melbourne and Perth. Crown Sydney sought a declaration by the Federal Court that the transfer of employees would not constitute a 'transfer of business' under the FW Act. If a 'transfer of business' were to occur, enterprise agreements currently governing the employment of the workers in Melbourne and Perth would continue to apply to their employment after the transfer.

One of the requirements for a transfer of employees to constitute a 'transfer of business' under the FW Act is that the work an employee performs for a new employer (in this case, Crown Sydney) must be the same, or substantially the same, as the work the employee performed for the old employer (in this case, Crown Melbourne and Crown Perth).

The decision

The Federal Court said that the transfer of employees to Sydney was not a 'transfer of business' within the meaning of the FW Act, because the new work was not 'the same or substantially similar'. The court said:

• the concept of 'work' is not limited to the carrying out of tasks, but may include the location of work and other aspects related to the performance of the tasks;
• the tasks to be performed will be performed in a new facility in a new business enterprise, while the existing facilities and separate enterprises in Melbourne and Perth would continue to operate;
• the employees will not be transferring within an existing business to perform work at a nearby location in the same business;
• neither Crown Melbourne nor Crown Perth had an entitlement to direct the employees to perform work for Crown Sydney in the new location; and
• the facilities at Crown Sydney will not be available to the general public, and, as such, the facilities and tasks to be performed will be different from those performed for Crown Melbourne and Crown Perth.