Last updated August 2023
This chapter outlines the legal issues you must consider when transferring employees to or from another employer within a corporate group, or through insourcing or outsourcing arrangements.
Transferring employees to an associated entity
You may need to transfer employees from one company to another company within a corporate group. If you do, the Fair Work Act 2009 (Cth) (FW Act) will impose obligations on you. The FW Act obligations will only arise if the employment of an employee is transferred to another employer that is an associated entity within a corporate group.
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.
An entity will be an associated entity of your company if it:
- is a subsidiary of your company;
- is your holding company, or a subsidiary of your holding company;
- controls the composition of your board, or vice versa; or
- controls more than 50% of votes that can be cast at your annual general meeting, or vice versa.
A subsidiary under the Corporations Act 2001 (Cth) is a body corporate of a company that:
- controls the composition of its board of directors;
- controls more than 50% of votes at a general meeting or holds more than 50% of the company’s shares; or
- is a subsidiary of another company that is a subsidiary of your company by reason of the above.