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5 Dec 12
Newsflash: Queensland public sector outsourcing and privatisation

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The new workplace relations laws affecting outsourcing and privatisation of Queensland (and other State) public sector jobs take effect on 5 December 2012.

The Fair Work Amendment (Transfer of Business) Act 2012 (Cth) (Act), which received royal assent on 4 December 2012, amends the Fair Work Act 2009 (Cth).  The Act applies where there is a ‘transfer of business’ from a State public sector employer to a national system employer, for example, where the Queensland government outsources a business unit to a private sector company, and employees transfer between the two employers.

A ‘transfer of business’ occurs where:

  • the employment of a State public sector employee is terminated, and within 3 months they are employed by the new employer, and
  • the work performed by the transferring employee for the new employer is the same, or substantially the same, as the work they performed for the State public sector employer, and
  • there is a ‘connection’ between the two employers, such as:
    • an arrangement under which the new employer is the owner or has the beneficial use of assets of the State public sector employer (e.g. under a sale of business agreement), or
    • an outsourcing arrangement

The new laws do not apply where a business transfers, but the new operator does not take on any public sector employees.

Where the new operator does take on public sector employees, the new laws impose obligations such as:

  • the awards, certified agreements and determinations that covered the public sector employees will bind the new employer and transferring employees; and
  • continuity of service is preserved for transferring employees, and the new employer will have to assume liability for some accrued entitlements (e.g. sick leave and long service leave).

This may act as a disincentive for an incoming operator to take on any public sector employees. Alternatively, it may mean that an incoming operator may seek to be compensated for the costs and liabilities it will incur by taking on those employees.

The application of these laws to any particular transaction will depend on whether the transaction fits the criteria under the Act.

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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