Transfer of biz proves complex under Fair Work Act


New <i>Fair Work Act 2009</i> will see significant changes in relation to the law governing transfer of business

The new Fair Work Act 2009 will see significant changes in relation to the law governing transfer of business, according to law firm Deacons.

Under the fresh legislation, following a hand-over of a business, the transferring employees will be covered by the old employer’s enterprise agreements, says Sydney partners Sally Woodward and Jessica Caban.

This will continue until the enterprise agreements and awards are terminated or replaced in accordance with their terms and the appropriate legislation.

The Act also states that after a transfer, new employees who are directed to complete duties performed by previous workers will also be covered by the former enterprise agreements.

However, Woodward says this only applies in circumstances where the new employer has no enterprise agreement or named award for employees carrying out the transferring work.

This poses some difficulties, they say, as employers can potentially be bound by different enterprise agreements in relation to employees performing the same work.

If enterprise agreements of the old employer and the new employer are both capable of covering the work, then the enterprise agreement (and named employer award) of the new employer will prevail in relation to non-transferring employees.

In addition, the enterprise agreement (and named employer award) of the old employer will prevail in relation to transferring employees.

The revised Fair Work Act will come in to effect on July 1, so Woodward cautions employers to be aware of the new provisions.

Businesses that would like to know more are advised to attend Deacon’s Fair Work Act seminars which are being held nationally.

The law firm is holding a session in Brisbane on June 17, at 7.30am. For more visit www.deacons.com.au.

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