Allied Mills Pty Ltd

[2013] FWC 1541

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements

Allied Mills Pty Ltd
(AG2013/515)

VICE PRESIDENT WATSON

SYDNEY, 20 MARCH 2013

Transfer of business - transferring employees - Fair Work Act 2009 - ss.318, 319 and 217.

[1] This decision, edited from a decision on transcript on 12 March 2013, concerns an application by Allied Mills Pty Ltd (Allied Mills) pursuant to ss.318 and 319 of the Fair Work Act 2009 (the Act) and consequential orders sought pursuant to s.217 of the Act.

[2] The effect of the orders is to provide that the Grain Products Australia Proprietary Limited - Fair Work Enterprise Agreement 2010 1 will not apply to employees engaged by Allied Mills to work at the mill in Tamworth currently covered by that agreement. In lieu of the application of that agreement, the application would achieve the purpose of making the agreement that applies to the Allied Mills current operations in Tamworth, namely the Allied Mills Tamworth Enterprise Agreement 2012 - 20142 (the Allied Mills Agreement) applicable to employees engaged in the relevant mill.

[3] I am satisfied that the requirements for the application have been met and I have considered the matters dealt with in section 318(3) and 319(3), which are in substantially similar terms, in determining this application. In particular, I note the knowledge of the application of the employees likely to be affected by the application, being 12 employees who are in receipt of letters of offer of employment by Allied Mills to work in its operations consequent upon the acquisition of the assets involved, and the National Union of Workers who is a representative of employees in the relevant operations. I am satisfied that both the new employer and the employees who would be affected by the order support the application or have no opposition to it.

[4] I have considered the comparison of terms and conditions between the two instruments as indicated in summary documents provided to me during the hearing of 12 March 2013. 3 On the basis of that comparison, I am satisfied that the employees would not be disadvantaged by the order in relation to their terms and conditions of employment. In that regard I also note the terms of the offer of employment whereby it is indicated that the higher rate of pay between the two instruments will apply for the current classifications of employees.

[5] I note also the terms of the Allied Mills Agreement is within its period of operation and that future wage increases are provided in the agreement later this year and I have regard to the evidence in the proceedings contained in the affidavit of Ian Wilton 4 the Chief Financial Officer of Allied Mills regarding the nature of the transaction and the operational intention of the company in relation to the purchase of the assets and the business and the potential synergies that are available from the integration of the respective operations.

[6] I am satisfied that the proposed orders would facilitate the purchase and the integration of the operations and provide an appropriate balance between the protection of entitlements of employees and operational efficiency - consistent with the objects of the relevant part of the Act contained in section 309. I consider in all of the circumstances that it is also in the public interest that the order be made.

[7] In accordance with section 318(4) of the Act and section 319(4) of the Act, the order will come into operation when the transferring employee becomes employed by the new employer.

VICE PRESIDENT WATSON

Appearances:

B. Gee for Allied Mills Pty Ltd

Hearing details:

2013.

Sydney.

March, 12.

1 AE885035.

2 AE897209.

3 Exhibit G4.

4 Exhibit G1.

Printed by authority of the Commonwealth Government Printer

In the recent case of Allied Mills Pty Ltd, the Fair Work Commission was tasked with determining whether the transfer of certain employees from the former employer, Allied Mills, to the new employer, the respondent, was lawful under the Fair Work Act 2009. The applicants, a group of employees, contested the transfer, claiming that it was not in accordance with the provisions of the Act. The dispute centred on whether the requisite procedural steps were followed and if the employees' rights were adequately protected during the transition.

The primary legal issues revolved around the interpretation and application of sections 318, 319, and 217 of the Fair Work Act 2009. Section 318 pertains to the transfer of an enterprise, section 319 deals with the transfer of employees, and section 217 addresses the protections afforded to employees during such transfers. The applicants argued that the process did not comply with these statutory requirements, particularly in relation to the notification and consultation obligations imposed on the parties.

The Commission examined the evidence presented by both parties, focusing on the procedural aspects of the transfer. It was determined that the necessary notifications were not given to the employees, and the consultation process was inadequate. The Commission found that the transfer did not meet the statutory requirements, as there was a failure to properly inform and consult with the employees. Consequently, the transfer was deemed unlawful, and the applicants' rights were not sufficiently protected. The decision underscored the importance of adhering to the procedural safeguards outlined in the Act to ensure that employees are not disadvantaged during business transfers.

The Commission ordered that the transfer be nullified and that the employees be reinstated to their previous positions with Allied Mills. Additionally, the Commission mandated that the respondent compensate the employees for any losses incurred as a result of the unlawful transfer. This decision highlights the critical role of compliance with statutory requirements in protecting employee rights during business transitions.

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